Both houses of the Alaska Legislature have passed bills that could clear the way for an extension of the Alaska Railroad to Fort Greely and beyond.

By a 14-5 vote, the state Senate passed a bill Friday authorizing the Alaska Railroad Corp. to sell up to $500 million in revenue bonds to finance an extension to Greely, which would be used by the military to shuttle vehicles to Army training grounds south of the Tanana River and personnel to the Greely missile defense site.

The bill, which was put together by Senate President Gene Therriault, R-North Pole, passed 16-4 in a revote on Saturday, and now goes to the state House.

"It's a step toward the (Canadian) border, and of course there's a long term desire to see a rail link with the Lower 48," Therriault said last month about the extension. "It helps link Delta and Fairbanks together, it helps with economic activity in Delta Junction."

The bill grew out of a recent meeting between missile defense officials and Alaska Railroad Corp. President and CEO Pat Gamble, at which Gamble said the officials showed interest in financing an extension to allow missile defense personnel to live in the Fairbanks area and commute by train to the missile defense site near Delta.

"They said, we really want to sit down and talk in more detail with you, this is a very attractive proposition," Gamble said.

That would require a roughly 80-mile extension of the railroad from its terminus at Eielson Air Force Base, which Gamble estimated would cost $450 million to $500 million.

Under the proposal passed by the Senate, that would be paid for through revenue bonds backed by guaranteed military contracts. The state could only sell the bonds if contracts with the military for use of the railroad were signed that would underwrite all the bond costs, including interest.

The bill originally also contained a clause that would have exempted the railroad corporation from all local planning, platting, and land use regulations, which grew out of a recent court decision that left the railroad's status in the area unclear. But concern about that proposal led to the clause being dropped, and the bill now creates a task force of state legislators, local officials and one railroad official to make recommendations to the Legislature on the issue.

On the House side, a bill was passed early Saturday morning that allows the Alaska Railroad Corp. to begin plotting out a railroad extension to the Canadian border. The bill passed the Senate last month and can now go to the governor for ratification.

The bill allows the railroad corporation to delineate a 500-foot-wide corridor running the roughly 270 miles to the border from Eielson. The state Department of Natural Resources would hold onto the state land within that corridor, then turn it over to railroad management when the corporation has plans to begin construction and the funding to do it.

If and when an extension is built, the corporation would be granted ownership of a 200-foot wide corridor within the 500-foot corridor, with the rest reverting to the DNR. The bill also gives the railroad corporation the power to investigate an extension of the railroad through Canada, and to acquire land or interests in land in Canada to that end. The House passed the bill by a 36-0 vote.