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Juneau, Alaska – The Alaska House of Representatives Tuesday unanimously passed legislation aimed at keeping the Alaska Railroad Corporation’s (ARRC) passenger services on track and avoid costly penalties by the Federal Railroad Administration.
House Bill 140, by House Finance Co-Chair Steve Thompson, authorizes the ARRC to issue up to $37 million in tax-exempt bonds backed by Federal Transit Administration formula funds received annually by the corporation. The bonds would be used to continue the implementation of Positive Train Control which was mandated by the federal Rail Safety Improvement Act in 2008.
“Positive Train Control is a federal mandate to which the Alaska Railroad must adhere to in order to keep its current level of passenger services,” Thompson, R-Fairbanks, said. “Over the last couple years the legislature has appropriated money to the railroad to cover this project; now, our current fiscal situation doesn’t allow for that luxury. Allowing the ARRC to go out and bond using its assets seems like the appropriate way to go about it right now.”
Under AS.42.40.285, ARRC is required to receive legislative approval to issue bonds. In no event will the general credit of the State of Alaska or ARRC be pledged for the repayment of these bonds. AS.42.40.500 requires that all liabilities incurred by ARRC shall be satisfied exclusively from the assets or revenue of ARRC and not the State.
ARRC also proposes to refinance $66 million in existing bonds and extend the repayment date, as well as issuing an additional $37 million in bonds to pay for a major portion of the remaining $55 million in Positive Train Control costs. The total estimated cost for the project is $158 million.
Positive Train Control is a technology designed to stop or slow a train before human-error causes an accident to occur. In 2008, the federal Rail Safety Improvement Act required certain railroads to install a fully functional Positive Train Control system by the end of 2015, by extension, the new deadline is 2018. Because of its passenger service, ARRC is subject to this requirement. Positive Train Control must reliably prevent train to train collisions, over speed derailments, trains entering maintenance by way of work zone limits, and train movement through a main line switch in an improper position.
HB 140 now moves to the Alaska Senate for consideration.