both of us are very interested in concerning a Conservation Corps bill which might play a somewhat major role in Alaska.

I doubt it very much, though, because of the appropriation process, but it is important.

I believe, Nelson, you are first. Go right ahead.

PANEL CONSISTING OF NELSON ANGAPAK, CHAIRMAN OF THE BOARD, ALASKA FEDERATION OF NATIVES, INC.; GEORGE KRISTE, EXECUTIVE VICE PRESIDENT, COOK INLET REGIONAL CORP.; DAN ALEX, PRESIDENT, EKLUTNA, INC., AND CHAIRMAN, ALASKA NATIVE LAND MANAGERS ASSOCIATION; AND DON MITCHELL, COUNSEL, ALASKA FEDERATION OF NATIVES

Mr. ANGAPAK. Thank you, Mr. Chairman, and members of the subcommittee.

My name is Nelson Angapak, chairman of the board, Alaska Federation of Natives.

Mr. Chairman, I have submitted our written statement to the subcommittee and I would request that statement be included as part of the printed record for this hearing.

Mr. Chairman, I would also request that the hearing record be left open for a reasonable period of time so the village and regional corporations who are not testifying today may have an opportunity to supplement their views in writing.

Mr. YOUNG. There being no objection, that will be done.

Mr. ANGAPAK. On behalf of the Alaska Federation of Natives, I would like to express our appreciation for the opportunity to testify today.

Since its first operation began in 1923, the Alaska Railroad has been one of the most important parts of Alaska's transportation system. And if Alaska's economic destiny is to be realized in the years ahead, the Alaska Railroad must continue to operate both along its existing right-of-way and elsewhere in the State as the need arises.

Consequently, the Alaska Federation of Natives, its member corporations and their shareholders support the continued operation of the Alaska Railroad and the transfer of the railroad into State ownership with one caveat. So long as the property interests of the Native community are protected. On behalf of the entire Native community, I would like to commend Senator Stevens and McCloskey and yourself, Congressman Young, for the efforts that you have taken to achieve this important goal.

Recently, the State Commerce Committee reported an amended version of S. 1500 which authorizes the Secretary of Transportation to transfer the Alaska Railroad to the State of Alaska without requiring the State to reimburse the Federal Government for any of the railroad properties which it will receive as part of the transfer. Several weeks ago, House Energy and Commerce Committee reported H.R. 6308 which authorizes the Federal Government 75 percent of the net liquidation value of the railroad property.

The Alaska Federation of Natives opposes the provision of H.R. 6308 which requires the State to compensate the Federal Government for railroad properties.

For most of the past 50 years of its operation the Alaska Railroad has been subsidized by large Federal subsidies.

The Department of Transportation has asked the State to take over the operation of the railroad so the Federal Government can stop its financial support. Continued operation of the railroad will require the State to spend tens of millions of dollars to upgrade the infrastructure and rolling stock.

Alaska's abundant natural resources are largely undeveloped. In the years ahead, development projects will require a transportation system to deliver materials to the project and to move Alaska's resources to the market. Alaska Railroad is a transportation system which can accomplish this task with the least damage to Alaska's nationally important fish and game resources and habitat. It would be a very ironic and perhaps even tragic mistake if the Alaska Railroad is abandoned because of the reimbursement issue. Consequently, as long as the State agrees to operate the Alaska Railroad, railroad properties should be transferred to the State without reimbursement to the Federal Government.

Mr. Chairman, a major concern with respect to this important legislation is to be sure that the transfer of the railroad to the State of Alaska does not transfer lands which Congress directed the Secretary of Interior to convey to our Native and regional corporations.

Of the approximately 38,000 acres of lands reserved for Alaska Railroad the corporations have selected approximately 4,000 acres. In addition, another 4,000 acres of railroad right-of-way runs through the corporation lands of several villages.

However, none of the corporations expect to receive all of the 4,000 acres which we have elected. Only those lands which were not actually used in connection with the administration of the railroad are to be transferred.

Lands which were not validly selected are available for immediate transfer to the State but like valid selections of all of our village and regional corporations, equitable title to lands which were validly selected vested at the time of selection, these lands are not available and should not be available for transfer to the State.

However, when a particular tract of land was or was not used by the Alaska Railroad is a question of fact. In October 1980, the Bureau of Land Management published a series of regulations which established the standards and procedures for deciding this issue.

Yesterday, Under Secretary Bill Horn stated that the Department of Interior supports those regulations. However, the validity of Native selections of railroad lands has not yet been determined with respect to most of the tracts now under consideration for transfer to the State.

Validity of those Native land selections must be determined on the side of the Natives. Once the validity of those selections is decided, I am confident that very few of the tracts of land which were validly selected would be found to conflict with the operation of the railroad.

Whatever conflicts do arise will be site specific and can be easily. resolved by the State in the affected corporations without congressional involvement. And, indeed, Mr. Chairman, the Alaska Native

community looks forward to working closely with the State of Alaska in the years ahead to make sure that its management and operation of the railroad is successful.

Mr. Chairman, that concludes my verbal statement.

I thank you.

Mr. YOUNG. Thank you, Nelson.

We will not ask questions until the chairman gets back.

Mr. Kriste?

Mr. KRISTE. Mr. Chairman, and other members of the subcommittee, my name is George Kriste and I am executive vice president of Cook Inlet Region, an Alaska Native regional corporation, organized under the terms of the Alaska Native Claims Settlement Act.

I am pleased to testify before this committee concerning section 507 of H.R. 6308 and related proposed legislation pending in the U.S. Senate.

This committee has had the responsibility, at least for the last 20 years, of studying and considering the process of transition in Alaska from a territory that was a province of the Federal Government to a State that is strong and vibrant, that contributes greatly to the national economy, and that recognizes and respects the property rights of Native and non-Native people.

In the view of Cook Inlet region, the Alaska Railroad transfer legislation is another chapter in this long story.

Transfer of the railroad to the State without additional financial costs is, we believe, an important ingredient in maintaining effective, long-term operation of this basic utility in our State economy.

That goal is important not only to the future growth of the State, but also to realization of reliable national energy and resource supplies, and realization of the fundamental objectives of the Alaska Native Claims Settlement Act-the future economic prosperity of the Alaska Native corporation.

In particular, the fate of the Alaska Railroad, like the fate of Native claims and the resolution of the Alaska national interest lands debate, presents an important opportunity to appropriately resolve property rights, public purpose concerns and the future the economy of the State in order to strike a proper balance between these concerns.

This balancing process, including consideration of legitimate Native claims and economic strengthening of the State, has always been at the heart of this committee's deliberations.

We think it must be reflected in the legislation that you will endorse.

Our corporation has learned from the responsible way in which this committee has dealt with these often competing concerns in the past and the manner in which you will undoubtedly deal with. them with respect to this legislation.

In our 10 years of life under the Alaska Native Claims Settlement Act, we have recognized that due attention must be given to all of these concerns.

We have recognized that Native rights will be strongest and most enduring in a State that has a successful economy and one which pays due attention to the future of the land and its resources.

In our view, the legislation pending before the U.S. Senate meets these objectives.

At the beginning of the deliberations over the future of the Alaska Railroad, one of the great issues was the question whether Native corporations had rights that might be taken by Federal legislation transferring Alaska Railroad lands to the State of Alaska. We felt quite strongly that such rights were in fact in jeopardy. Too many years had gone into the passage of the Alska Native Claims Settlement Act for us to take lightly the question of renewed extinguishment of rights created under the act.

And for Cook Inlet Region the question was even sharper. We had worked for 5 years for passage of the Cook Inlet Region settlement which itself created rights that would have been extinguished by a pure transfer.

Not only Cook Inlet Region, but the State attorney general and the Solicitor's Office of the Department of the Interior shared our

concerns.

Yet, we recognized that Cook Inlet Region is served well by a resolution which benefits the Native community, the State, and the Federal Government.

We therefore determined that it would be appropriate to sit down with the State and the Federal Government and attempt to fashion a resolution which would be mutually beneficial.

We believe the current Senate proposed legislation encompasses such a resolution. In the bill, Cook Inlet Region waives certain valuable rights it has under the Cook Inlet settlement to lands that are now claimed by the Alaska Railroad but could be mandated under previous legislation for Cook Inlet Region.

We feel that if the State is to make a success of the railroad, it should be as unencumbered as possible by litigation and competing claims.

Like the other Native corporations, we have agreed to a swift resolution of other claims that Native corporations might have to such lands.

Further, we support the efforts of the State of Alaska to obtain a reasonable right-of-way over Federal and other lands to assist in the future growth of the railroad.

Again, we do not view the State as an adversary in this matter. Our lands and our future is, in large part, a function of the State's future and prosperity.

As a consequence, we have been anxious to work with the State and with our congressional delegation in developing a properly stated right-of-way that adequately considers environmental consequences, Native rights, and the needs of the State.

In the last months, Cook Inlet Region has worked closely with the Department of Natural Resources of the State of Alaska, in the Alaska Legislature, with members of this Congress, and with the Bureau of Land Management to obtain legislative proposals which will be mutually beneficial.

We believe we have succeeded and we hope these proposals will become law.

Mr. ALEX. One of the things I want to say is that I am going to give you a statement today which will be supplemented with additional backup material at a future date.

I will go ahead with my testimony.

Mr. Chairman, members of the subcommittee, I am Dan Alex, president of Eklutna, Inc. Eklutna is a Native village corporation located near the city of Anchorage.

I also am testifying in my capacity as chairman of the Alaska Native Land Managers Association.

I am pleased to have this opportunity to testify on a matter which is of critical importance to my village corporation as well as to other Native corporations with interests which may be affected by the transfer of the Alaska Railroad to the State of Alaska.

First, I want to make clear that we fully support the basic objective of the legislation: the transfer of the railroad to State ownership.

The railroad is a critical component of the State's transportation system and its continuing existence is essential to the economic future of the Native corporations, as well as the State.

We welcome the commitment of the State to maintain the railroad and urge Congress to transfer full operational control to the State as expeditiously as possible.

However, while we endorse the basic objective of the legislation, we do have some rather fundamental concerns about the bills which have been reported by the House and Senate Commerce Committees because of the adverse impact they may have on vested property interests under the Alaska Native Claims Settlement Act and the Alaska National Interest Lands Conservation Act of 1980.

Mr. Chairman, my testimony before this subcommittee during its oversight hearings a month ago identified our primary concerns with the legislation.

At that time, I noted that section 5 of S. 1500, as it originally was introduced, extinguished Eklutna's vested property rights to conveyance of lands selected by our corporation under ANCSA.

I also noted that we believed the bill violated the fifth amendment by taking property interests without compensation.

Since that testimony, an amended version of S. 1500 has been reported by the Senate Commerce, Science and Transportation Committee.

In addition, the House Energy and Commerce Committee included its version of the Alaska Railroad transfer authority in H.R. 6308, which it reported on May 18, 1982.

Although these bills represent an improvement over the original version of the legislation, our analysis of the two bills reported by the House and Senate Commerce Committees suggests that each could still have the same effect: the extinguishment of vested Native property interests.

Mr. Chairman, we appreciate your interest in this legislation and urge that this committee amend H.R. 6308 to insure that these Native interests are protected.

Mr. Chairman, we understand that although H.R. 6308 is technically the bill before this subcommittee, we also were asked to comment on S. 1500, as reported.