fer held up, would it not be possible to work it out so that whether it was in cash or in land, it would be something to be negotiated?

Mr. HORN. I'm speaking personally here, but I think the preferred course would be to treat this and make it available to the State under its Statehood Act selection entitlement. That would be the simpler way to handle it. It would just be withdrawing the Federal reservation and making those lands available to the State.

Mr. SEIBERLING. Certainly that would be one way to pay for it, if it was to be paid for, to simply charge it against their entitlement. However, I don't know how you do that with respect to the nonland portions. How do you evaluate the rolling stock? How do you charge that off against the land entitlement?

Mr. HORN. I don't think you do. However, in some respects it has been pretty clear. I think the Department of Transportation can speak to this, that we, in some respects are unloading the liability on the State.

Mr. SEIBERLING. They made a profit of about $8 million last year. Mr. HORN. For at least 1 year.

Mr. SEIBERLING. And I presume it has a book value. I don't think the State would want it if it was just a white elephant.

Mr. HORN. I think you are right on that.

Mr. SEIBERLING. That is a subject we can get into, but it does seem to me that this might be a means for helping us to solve some other problems with the State such as the holdings in the Wrangells-St. Elias National Park. Is that being negotiated with the State now?

Mr. HORN. Yes, sir, it is still being negotiated.

Mr. SEIBERLING. Would this not help expedite the matter?

Mr. HORN. We think we are fairly close to having something worked out on that issue independently of this.

Mr. SEIBERLING. The trouble is that from our previous oversight hearing, it looked like one of the ways of working it out is to give them some other land inside a national park. I don't think that's a very happy result.

Mr. HORN. We are giving land on the periphery that did not cause us any management problems.

Mr. SEIBERLING. I would suggest you consider this as one of the things that might be done. We would hope you might see your way to support some such provision, not on a mandatory basis but permissive. If you decided you did not want to do it and it was not practical, you would not have to, but I think it is one more option which might actually help get you by some impasses instead of complicating matters.

OK. Any other questions?

[No response.]

Mr. SEIBERLING. Thank you very much, gentlemen. I think it has been very worthwhile testimony. It is a very important matter and we appreciate your help and advice.

We will now adjourn until 9:45 a.m., tomorrow.

[Whereupon, at 11:10 a.m., the subcommittee adjourned, to reconvene at 9:45 a.m., Tuesday, June 8, 1982.]

PUBLIC LAND MANAGEMENT POLICY

Transfer of the Alaska Railroad to the State of Alaska

TUESDAY, JUNE 8, 1982

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON PUBLIC LANDS AND NATIONAL PARKS,

COMMITTEE ON INTERIOR AND INSULAR Affairs,
Washington, D.C.

The subcommittee met, pursuant to call, at 9:45 a.m., in room 340, Cannon House Office Building, Hon. John F. Seiberling (chairman of the subcommittee) presiding.

Mr. SEIBERLING. The Subcommittee on Public Lands and National Parks will come to order.

This morning we are meeting for a hearing on section 507 of H.R. 6308. That section deals with the proposed transfer of the Alaska Railroad to the State of Alaska. H.R. 6308 has already been reported by the Committee on Energy and Commerce. On May 18, the Speaker referred the bill to this committee for consideration of those portions of section 507 which are within our jurisdiction under the rules of the House. The referral is limited to the period ending June 24.

Yesterday, we were briefed by the Departments of the Interior and Agriculture concerning the Alaska Railroad, which passes. through a national forest and a national park as well as several areas of public lands managed by the Bureau of Land Management. That briefing provided essential background information for our use in considering the bill before us, and will also be helpful should we be called upon to consider any Senate-passed legislation on this subject.

I should point out that while the present bill is before us on a sequential referral, Chairman Udall has requested that we have a joint referral of any Senate bill for the transfer of the railroad.

As I mentioned yesterday, whether or not the Alaska Railroadnow federally owned-should be transferred to the State of Alaska is a question primarily for consideration by the Committee on Energy and Commerce prior to it coming before the House as a whole. However, as Chairman Udall noted in making the request for the sequential referral, our committee does have some serious concerns about the possible implications of any such transfer. Our purpose today is not to address the question of whether the railroad should be transferred, but rather to gain a better understanding of how such a transfer might affect matters for which our committee has responsibility, so that we will be in a position to make

an informed decision about any terms and conditions which should be attached to such a transfer.

Today, we will hear from the Department of Transportation, which presently administers the railroad, concerning the administration's position on this matter. We will also hear from the State of Alaska and other interested parties.

At this time, I wish to announce to members that it is my intention to proceed to markup of the bill before us as soon as possible, so that we will be in a position to bring the matter before the full committee in sufficient time for us to meet the deadline imposed by the Speaker. Members will be notified of the time and place of the markup session as soon as that information is available.

We will now proceed to hear from our witnesses, the first being Mr. Robert Blanchette, Administrator of the Federal Railroad Administration, Department of Transportation.

Mr. Blanchette?

[Prepared statement of Hon. Robert W. Blanchette may be found in appendix II, under date of June 8, 1982.]

STATEMENT OF HON. ROBERT W. BLANCHETTE, ADMINISTRATOR, FEDERAL RAILROAD ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION

Mr. BLANCHETTE. Thank you, Mr. Chairman.

It is a pleasure to appear before this subcommittee.

I would like to introduce my colleague, Mr. Fred Millhiser, who is with our Chief Counsel's Office and is assisting me with the legal aspects of this transfer.

Mr. Chairman, I would ask that my written testimony be lodged with the record of these proceedings and I will summarize my testimony.

Mr. SEIBERLING. Fine, without objection, that will be done.

Mr. BLANCHETTE. Obviously, many of the legitimate issues before this subcommittee are beyond my expertise, certainly and indeed, institutionally of the Federal Railroad Administration. I do think, however, that I can sketch the contours of the administration's policy here.

Essentially, the proposal to transfer the Alaska Railroad to the State of Alaska is an administration initiative prompted by an underlying policy that the Government ought to get out of the railroad business.

We have, in other legislation enacted last year, secured the consent of the Congress that Conrail, for example, be transferred to the private sector. While this is a smaller illustration of that policy, it is a manifestation of it.

Clearly, the Federal Government or any employer or owner cannot own and operate a railroad from a distance of 6,000 miles. Clearly, the sensitivities, the local community interests, as well as the State interests of the Alaska Railroad, are more adequately served on the local level. We cannot pretend to understand the forces that drive a business enterprise such as the Alaska Railroad from this distance and from our perspective. Therefore, we have proposed that the railroad be transferred.

That transfer raises a host of issues which I am loath to call ancillary, but which are secondary in the opinion of the FRA, of course, to the overall policy objective. We have attempted to work with the State and the other interested parties to accommodate these disparate interests. We hope that has been done successfully, but we are pleased to continue to work with this subcommittee and with the other interested committees of the Congress in aid of the underlying policy objectives.

I should be pleased to answer your questions, Mr. Chairman.
Mr. SEIBERLING. Thank you, Mr. Blanchette.

Am I correct in understanding that the President's budget requests envisioned no further Federal funding for the Alaska Railroad after the current fiscal year?

Mr. BLANCHETTE. That is correct, sir.

Mr. SEIBERLING. What will be the cost to the Federal Government if they simply shut down this railroad and walk away from it?

Mr. BLANCHETTE. That has not been quantified in any way by the FRA and, to my knowlege, by any other agency of the executive branch because it, to me, is just not fathomable to entertain the concept of an abandonment and liquidation of the Alaska Railroad. For that reason, we have not engaged in a liquidation scenario for this railroad.

Mr. SEIBERLING. It seems to me that it is highly relevant to the question of what, if any, the State of Alaska should pay the Federal Government for this property. I understand that you expect the State of Alaska to assume the pension obligations of the railroad, is that correct?

Mr. BLANCHETTE. Yes; pension and other employee rights.

Mr. SEIBERLING. What are the unfunded pension obligations to date?

Mr. BLANCHETTE. We can ascertain that for you and furnish it for the record, sir.

Mr. SEIBERLING. You don't have that figure?

Mr. BLANCHETTE. I don't have that immediately at hand.

Mr. SEIBERLING. But you do have it in your office somewhere? Mr. BLANCHETTE. I don't think we have it, but we will prepare it and submit it.

Mr. SEIBERLING. That is a pretty important piece of information. We would like to have that. How soon can you get it to us?

Mr. BLANCHETTE. I think you will have it before the week is out. Mr. SEIBERLING. All right.

[EDITOR'S NOTE.-In response to Mr. Seiberling's request, the Department subsequently submitted the following information:]