3 give the Railroad away or seek compensation for it. According to the Federal Railroad Administration during the Senate hearings on S. 1500, the total value of the Alaska Railroad as of July 1981 was $456 million. S. 1500 would give the Railroad to the State free of charge. H. R. 6308 provides that the transfer of the Railroad to the State "...shall be made for consideration to the United States equal to 75 per centum of the net liquidation value of such rail properties." Of these two conflicting approaches, H.R. 6308's provision more nearly approaches a measure of compensation that is in the national interest. Under any circumstances, it seems reasonable for Congress to insist upon some consideration in return for turning over to any party a half-billion dollar federal facility. There are two aspects of H.R. 6308's compensation provision that I would like to comment on: what should be the amount of consideration and what that consideration should consist of. H.R. 6308 calls for the State to offer 75% of the net liquidation value of the Railroad, or in other words, it offers the State a 25% discount. This 75% formula, which was adopted at the urging of Representative Moffett, is the same as that used in the Northeast Rail Service Act. In the context of northeast rail policy, a discount is a proper incentive for potential purchasers of railroads to continue rail service. But in Alaska no such incentive is needed. On the contrary, the State is eager to accept title and is looking towards eventually extending the line to regions of the State which some think contain coal, grain, hard rock minerals, and other resources. A link-up with a British Columbia Railroad is also under consideration by the State. Furthermore, the State is fully able to offer 100% of fair market value for the Railroad. Although recent State spending goals have exceeded oil and gas revenues, the State expects to receive approximately $3 billion from Prudhoe Bay oil and gas taxes and royalties in 1982. In future years, State revenues can be expected to increase once more, as world oil prices resume their upward trend. As the Chairman pointed out in yesterday's Subcommittee briefing, an excellent indication of the State's ability to offer compensation for the Railroad is its intent to give its 419,600 citizens $1,000 each this year in the event that the U.S. Supreme Court rules against an earlier State plan to distribute $50 to each Alaskan for every year that person has lived in Alaska. I don't have a figure for the total amount of the $50/year residency plan, but the $1,000 back-up plan works out to $419.6 million, or nearly the value of the Alaska Railroad at $456 million. On the form of the compensation, we recommend that the State be given the option of offering State inholdings within conservation system units, other inholdings within the units the State could acquire, or other State lands valuable for national conservation purposes. An example of State inholdings are the State lands in the heart of the Wrangell-St. Elias National Park and Preserve, as noted by the Chairman at yesterday's Subcommittee briefing. -4 An example of non-State inholdings the State could acquire for exchange with the federal government are the Ahtna regional corporation lands inside the Wrangell-St. Elias Park. Ahtna has expressed interest in a land exchange which would add its inholdings to the Park in return for more accessible, economically valuable lands outside the Park. Another example is the 20,000 acre tract within Admiralty Island National Wilderness Monument selected by the Shee Atika Native corporation, and slated for clear-cut logging. In the category of other State lands valuable for national conservation purposes, I would include the example of State-owned timberland in the Chugach region which could resolve the festering Chugach land exchange problem in both the national and Native interest. In the Kenai National Wildlife Refuge, the U.S. Fish and Wildlife Service is now proposing a land exchange with the Kenai Native Association which the Service earlier found to be incompatible with the purposes of the Refuge. State lands on the Kenai Peninsula could contribute to a more satisfactory exchange. Land exchanges as envisioned by Congress in ANILCA are one of the primary tools for eliminating inholdings in conservation system units. But the various unfortunate constraints in ANILCA on federal land acquisition authority, and the unwillingness of the Watt administration to pursue a land exchange policy designed to improve conservation system units has forced the Park, Fish and Wildlife, and Forest Services into some proposed land exchanges that will damage the federal lands these agencies are charged with administering. Under these circumstances, it makes no sense at all from the national interest point of view to transfer such a valuable federal asset as the Alaska Railroad to the State free of charge. The Railroad is a major federal resource in the continuing effort to see ANILCA implemented in the manner intended by Congress. Thank you for considering our views on these public land issues. NINETY-SEVENTH CONGRESS MORRIS K. UDALL, ARIZ CHAIRMAN PHILLIP BURTON, CALIF. ROBERT W. KASTENMEIER, WIS. JAMES WEAVER, ORES. RAY KOGOVSEX, COLO. PAT WILLIAMS, MONT. DALE E. KILDCE, MICH TONY COELHO CALIF BEVERLY 8. BYRON, MD. ROH DE LUGO, V.I. SAMUEL GEJDENSON, CONN. CHARLES CONKLIN STAFF DIRECTOR STANLEY SCOVILLE ASSOCIATE STAFF DIRECTOR LEE MC ELVAIN GENERAL COUNSEL TIMOTHY W. GLIDDEN Honorable James G. Watt Dear Mr. Secretary, As you know, the Subcommittee on Public Lands and National Parks currently is considering section 507 of H.R. 6308, which provides for transfer of the Alaska Railroad to the State of Alaska. On June 7, we were briefed on this proposal by the Departments of the Interior and Agriculture. On June 8, we held a hearing at which testimony was received from the Department of Transportation, the State of Alaska, the Alaska Federation of Natives and several Native Corporations. The briefing and hearing have clearly demonstrated that the claims of several Native Corporations under the Alaska Native Claims Settlement Act and other federal law for lands held by the railroad present major problems which should be resolved if the Congress is to develop comprehensive and fully effective legislation to provide for this transfer. Statements by federal officials, State officials, and representatives of the Native Corporations also indicated that there is at least a possibility that these problems can be greatly lessened or even eliminated through discussions and agreement among the interested parties. In my opinion, the presence in Washington at this time of respon-. sible and informed representatives of the State, the federal agencies, and the Native community provides an opportunity for such discussions and agreements which should not be wasted. Therefore, I urge you to direct your representatives to meet with representatives of the other parties to explore the possibilities for resolving or narrowing the problems presented by these claims. Because it is my intention to convene the Subcommittee to markup the bill now before us as soon as that can be arranged, these discussions should begin without delay. I have instructed the Subcommittee staff to be available to assist the parties in any way that may contribute to the conduct and successful results of such discussions. United States Department of the Interior OFFICE OF THE SECRETARY This is in response to your letter of June 9, 1982, regarding the transfer of the Alaska Railroad to the State of Alaska. I apologize for the long delay in responding to you on this important issue, but would note that this interim period has been beneficially used and quite productive. We appreciate your keen interest in this issue and your efforts to resolve the differences of opinion which still exist. As our June 7, 1982, testimony before your Subcommittee indicates, we fully recognize the significant State, Native, Federal and private party issues which need to be resolved if Congress is to develop effective legislation to provide for the transfer of the railroad. We believe transfer of a functioning transportation system is vital to continued rail service in Alaska. It is the Department's position that we can accomplish the "adjustments" necessary to recognize valid Native interests, as well as valid private interests and valid non-railroad interests of the Federal Government, and to assure smooth transfer of good title to the State at minimum cost, without impairing the State's interest in acquiring a viable railroad. S. 1500, as reported by the Senate Commerce Committee, and your Subcommittee's amendments under H.R. 6308 provide significantly different treatment of Native claims than does the original Administration bill. For this reason, and because of the many interests involved here, we fully agree with you that discussions should be initiated without delay, in order to resolve problems and work out differences of opinion on these matters. We have now agreed with the Department of Transportation and the Office of Management and Budget (OMB) that the Interior Department will initiate formal negotiations on the subjects of third party claims to railroad lands and the best way to effect a transfer of the railroad. We believe these negotiations will continue the significant progress made to date in meetings with the OMB, Department of Transportation, State of Alaska, Cook Inlet Region, Incorporated, and other interested parties. It is our opinion that frank and open negotiations at this time, while opinions and legislative positions are still flexible, will minimize adversarial approaches to the bill and facilitate the enactment of mutually acceptable legislation. Title XIV of the Alaska National Interest Lands Conservation Act of 1980 was developed in precisely this manner, and we believe that very positive experience can be repeated here. Your offer to make Subcommittee staff available to assist in this process is greatly appreciated, and we stand ready to help in any way we can. |