As you know, the Public Lands and National Parks Subcommittee
will hold a hearing June 8 on H.R. 6308 which provides, in
relevant part, for the transfer of the Alaska Railroad to
the State of Alaska. Although the State did not seek to
acquire the railroad, we accept the conclusion that continued
federal operation is no longer appropriate. The importance
of the railroad to the State presently and in the future is
undeniable. Accordingly, the leadership of the State Legis-
lature and I have been working with the federal Administra-
tion and our Congressional Delegation to provide for the
transfer on mutually acceptable terms.

The transfer, as originally proposed to us, did not involve
payment by the State for the railroad. Quite simply, the
"cost free" transfer is, and always has been, a misnomer.
In fact, the proposed transfer involves very real and cal-
culable costs to the State. In addition to assuming certain
federal liabilities, the State inherits a railroad badly in
need of substantial capital investment (well in excess of
$100 million) to recover deferred maintenance and other
capital expenditures and to achieve full compliance with
rail safety and related statutes. The State-owned railroad,
in contrast to the current situation, would be fully subject
to Interstate Commission regulations and the federal anti-
trust laws. The transfer is subject to costly employee
protection conditions. It also seems likely to be made
subject to valid, existing claims to railroad lands which,
upon final adjudication, could diminish the rail properties
received. These substantial obligations, when considered
along with the losses associated with mere operation of the
railroad, currently should be sufficient to dissuade anyone
of the notion that the State would receive the railroad
"cost free."

May 28, 1982
Page 2

I am advised that three other issues are of particular concern to members of your Subcommittee. These include the railroad presence within the Denali National Park, future extension of railroad right-of-way, and Native claims against railroad lands. Although the testimony the State will provide will address these issues in greater detail, I thought it would be useful to speak to them in this correspondence as well.

With respect to Denali National Park, the State is content to retain only railroad right-of-way and rail-related improvements and to subject such holdings to regulation by the Secretary of the Interior, with State concurrence that it would not impair railroad operation.

Although the railroad presently serves the majority of Alaska's citizens and its larger communities, extension of the railroad will be necessary and desirable in the future. Because the federal government remains the largest landowner in the state, future rights-of-way almost inevitably will traverse federal holdings. The 1914 enabling legislation established the standards for Alaska Railroad rights-of-way. Assuming these basic characteristics are received for consistency with existing rights-of-way, the State currently feels that existing law (specifically, the Alaska National Interest Land Conservation Act and the Federal Land Policy and Management Act) provides adequate processes for securing future rights-of-way.

One of the more controversial aspects of the transfer legislation involves the question of outstanding claims to railroad land. With respect to the Alaska Native Claims Settlement Act (ANCSA), I would point out that the U.S. Justice Department has determined twice in the last year that there are no valid existing claims. We hold this is an appropriate interpretation; nevertheless, the State suggests that, if such claims are made, Congress should provide for the U.S. Court of Claims to hear those petitions, and for the federal government to provide what the Court may determine to be just compensation. I would also point out that, if the opinions of Justice are correct, the federal government will be incurring no additional monetary liability by this approach. While the State disputes the assertion of some that ANCSA vested valid existing rights to some railroad lands, if Congress concludes to the contrary, the State urges that the following conditions prevail:

May 28, 1982
Page 3

(a)

(b)

(c)

The State strongly opposes any loss of land which will impair the economic viability or operating authority of the railroad.

We define econmic viability to include, but not to be limited to, lands needed both for current operations and anticipated development.

The State should be given full administrative standing within any conflict resolution process regarding specific disputes.

I hope these comments will be helpful to you in your review of the transfer legislation. The State very much appreciates your timely consideration of the legislation and stands ready to provide you with whatever information you may require about the State's position regarding transfer of the Alaska Railroad.

Thank you for your interest in the Alaska Railroad.

Sincerely,

Jay S. Hammond
Governor

STATEMENT OF JACK HESSION

ALASKA REPRESENTATIVE, SIERRA CLUB

ON H.R. 6308, A BILL TO TRANSFER THE

ALASKA RAILROAD TO THE STATE OF ALASKA

before the

SUBCOMMITTEE ON PUBLIC LANDS AND NATIONAL PARKS

U.S. HOUSE OF REPRESENTATIVES

WASHINGTON, D.C.

JUNE 8, 1982

Mr. Chairman and members of the Subcommittee, I am Jack Hession, Alaska representative of the Sierra Club. I appreciate this opportunity to present the views of the Sierra Club on the public land issues associated with proposed legislation to transfer the Alaska Railroad to the State of Alaska.

The Sierra Club is a national environmental organization with over 300,000 members. Our Alaska Chapter has approximately 1,200 members. The Sierra Club's interest in federal land policy for Alaska goes back over 100 years when John Muir began Alaska explorations in 1879 which led to the establishment of Glacier Bay National Monument. Most recently, our organization made passage of the Alaska Lands Act its highest priority.

Let me state at the outset that we agree with the conclusions of the recent University of Alaska and General Accounting Office reports on the Railroad that the federal role is no longer necessary, and that the State or a private entity should assume ownership and control.

Our interest in the proposed legislation is in provisions of H.R. 6308 or S. 1500 on the disposition of Denali National Park lands used by the Railroad; the transportation process (Title 11) of the Alaska National Interest Lands Conservation Act (ANILCA); the State's land entitlement under the Alaska Statehood Act; and the form of the compensation to the United States in return for the Railroad

Denali National Park lands

Under ANILCA, the Railroad right-of-way and other lands within Denali National Park are Park lands, but also remain withdrawn for Railroad purposes. These lands are jointly managed by the Secretaries of Interior and Transportat

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ion.

H.R. 6308 would give the State title to all Railroad lands within the Park, and thus create a substantial State inholding.

S. 1500 would transfer to the State title to all Railroad lands inside the Park with the exception of certain properties in the Park headquarters area near McKinley Station. S. 1500 also amends ANILCA by striking the provision for joint Interior-Transportation management.

We recommend that the Subcommittee add the Railroad lands to the Park, and give the State an easement for the use of the existing right-of-way and facilities. This is the surest way to guarantee the protection of Park values and purposes.

Transportation Process of ANILCA

H.R. 6308 does not include a provision on future rights-of-way for the Railroad across federal lands.

S. 1500 amends ANILCA by requiring that any future right-of-way granted under the transportation process carry with it certain far-reaching stipulations governing State use of the federal lands in the right-of-way corridor. For example, one of these stipulations would require the federal government to "grant to the State or the State-owned railroad exclusive rights to use, quiet enjoyment, and management of the surface and subsurface lands within the rightof-way for transportation, communication and transmission purposes."

Another would allow the State to give private transportation interests the right to use the State's right-of-way for their own transportation systems. This provision would effectively circumvent the transportation process of ANILCA, and could lead to major damage to conservation system units through the concentration of transportation system facilities in a single corridor at the discretion of the State.

We urge the Subcommittee to affirm in H. R. 6308 that ANILCA and other applicable laws such as the Federal Land Policy and Management Act shall apply when future rights-of-way across national conservation system units are proposed. State Land Entitlement

Both H.R. 6308 and S. 1500 would convey fee simple title to approximately 38,000 acres of some of the most economically valuable federal lands in Alaska. This acreage should be charged against the State's entitlement under the Alaska Statehood Act.

Compensation to the United States

According to a recent General Accounting Office study of the Alaska Railroad, a basic issue of the proposed transfer is whether Congress should