Legislature(2025 - 2026)
05/15/2025 01:00 PM House JUD
Audio | Topic |
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Start | |
HB64 | |
HB136 | |
HB24 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 136-RAILROAD UTILITY CORRIDORS 1:50:34 PM CHAIR GRAY announced that the next order of business would be HOUSE BILL NO. 136, "An Act relating to use of railroad easements." [Before the committee was CSHB 136(TRA).] 1:50:47 PM The committee took a brief at-ease at 1:50 p.m. 1:51:18 PM REPRESENTATIVE KOPP, as prime sponsor, presented CSHB 136(TRA). He directed attention to a PowerPoint presentation on HB 136 [hard copy included in the committee packet], beginning on slide 2, "Purpose of HB 136," which read as follows [original punctuation provided]: HB 136 affirms Alaska's right to set management policies for the Alaska Railroad Easement REPRESENTATIVE KOPP continued to slide 3, "What HB 136 does not do," which read as follows [original punctuation provided]: HB 136 does not amend AS 42.40.420, the statute that enables the Alaska Railroad to permit public projects within the right of way 1:54:40 PM CHAIR GRAY asked whether the bill would prevent the installation of the Fish Creek Trail connector. REPRESENTATIVE KOPP stated the bill has no impact on that trail. 1:55:19 PM REPRESENTATIVE KOPP moved to slides 4-5, "How did we get here?" Which showed a historical timeline of railroad rights-of-way and easements in the U.S. 2:00:03 PM CHAIR GRAY asked about fee interest. REPRESENTATIVE KOPP defined fee interest as "owning outright." He resumed the presentation on slide 5 which an explanation of Reeves v. Godspeed and Alaska Railroad Corporation v. Flying Crown Homeowners' Association, which brought legal uncertainty when the railroad asserted the right to fence off several homes that encroached on the easement despite the homeowners' land patent making no mention of the railroad. 2:04:08 PM REPRESENTATIVE KOPP moved to slide 6 and discussed the intent of Alaska Railroad Transfer Act (ARTA). He shared his belief that the Ninth Circuit Court of Appeals misapplied the law in Alaska Railroad Corporation v. Flying Crown Homeowners' Association when asserting that the railroad had the right to absolutely exclude, even for noninterfering uses. In 2018, Congressman Young, the only living member of Congress who debated on the passage of ARTA, gave a written statement clarifying ARTA did not intend to authorize the transfer of privately owned property interest. 2:05:57 PM CHAIR GRAY asked about if the railroad had built a fence on those homeowners' property, whether they would have the right to do things that did not interfere with the railroad on their property. REPRESENTATIVE KOPP answered in his view, yes, which the bill would make clear. 2:07:11 PM REPRESENTATIVE KOPP continued to slide 7, "What is a Railroad 'right-of-way," which defined "right-of-way as the right of passage through the public lands of the United States. He advanced to slide 8, "What is an 'easement'?" Slide 8 read as follows [original punctuation provided]: A non-possessory right to use property owned by another for a specific purpose - Marvin Brandt Revocable Trust v. United States, 572 U.S. 93 (2014) The Railroad right of way becomes an easement when it crosses another person or entity's private property i.e., Homestead patented lands REPRESENTATIVE KOPP moved to slide 9, "Exclusive Use for Railroad, Telegraph and Telephone only," which read as follows [original punctuation provided]: • The right to exclude is the essence of ownership, conversely, to the extent one does not have exclusion rights, one does not have property • Exclusivity has many meanings and applies to the easement holder, not the landowner • An easement that permits the holder to exclude the underlying landowner is no longer an easement but is full ownership REPRESENTATIVE KOPP turned to slide 10, "Homestead Land Patents," which read as follows [original punctuation provided]: These are privately owned lands over which much of the Railroad easement crosses. More than 142.34 miles of track in Alaska crosses lands that are patented to individuals* These patents cite a reservation to the U.S. government of a right of way for rail, telegraph, and telephone * USRA Valuation of the Alaska Railroad Sep. 1983 REPRESENTATIVE KOPP continued to slide 11, which stated that the railroad right of way was reserved for "railroad, telegraph, and telephone." He advanced to slide 12, "Why does HB 136 matter?" Slide 12 read as follows [original punctuation provided]: The 9th Circuit's 2023 ruling in Alaska Railroad Corporation v. Flying Crown held the ARC possesses an "exclusive use" easement in the entire right of way, which conflicts with significant U.S. Supreme Court and Alaska Supreme Court rulings on the general nature of the property interest that railroads possess in their easement over private property 2:14:19 PM CHAIR GRAY questioned why the Ninth Circuit Court of Appeals held that ARRC possesses an exclusive use easement. REPRESENTATIVE KOPP said the court argued that ARRC had "something special," and while not explicitly stated in the 1914 Railroad Act, Congress intended for it to be exclusive use. However, because of the legal uncertainty now due to the Ninth Circuit's ruling left unchallenged, the railroad can exclude all noninterfering uses and they are the sol arbiter of what to exclude. Fortunately in the Flying Crown Homeowners Association's case, a land use agreement was negotiated that said ARRC would not stop land owners from using the air park until the case was finally resolved. REPRESENTATIVE KOPP moved to slide 13, "What's the harm?" Slide 13 read as follows [original punctuation provided]: • The Alaska Railroad does not own the land over which more than half of the railroad right of way traverses* • The Alaska Railroad wrongly asserts a fee interest in the easement over these private lands • This policy allows the Alaska Railroad discretion to deny safe, noninterfering landowner uses of land within the easement • The Alaska Railroad restricts access via onerous fees, permits, and crossing restrictions to property owners whose land is bisected by the railroad easement 2:17:16 PM CHAIR GRAY asked why ARRC would assert a fee interest and what it would allow the corporation to do with the land that they wouldn't otherwise be able to do with an easement. REPRESENTATIVE KOPP said it would allow for monetization. Furthermore, it would impact the resale value of these properties. He stressed that the goal of the bill is not to stop ARRC from excluding any interfering use that would prohibit them from safely operating the right-of way; however, it's important that the railroad does not have the discretion to deny safe, noninterfering landowner uses of land within those easements. He added that ARRC can restrict access with onerous fees, permits, and crossing restrictions to property owners whose land is bisected by the railroad easement. CHAIR GRAY asked why a person can't just walk across the track and why a fee would be levied. REPRESENTATIVE KOPP explained that property owners must pay a fee to build a crossing and maintain it even if they own the land on both sides of the track. 2:21:15 PM REPRESENTATIVE KOPP transitioned to slide 14, "Examples," which read as follows [original punctuation provided]: • Homestead properties being charged for access to their own property, or road access blocked • Private property owners being charged for utilities buried on their property • Business owners denied the opportunity to use or develop their commercial properties • Municipalities denied access to lands and charged large sums of money to maintain road crossings • Utility companies charged exorbitant fees to access the right of way • Homeowner Associations being sued • Outdoor recreationists being denied access to public property REPRESENTATIVE KOPP continued to slide 15, "Crossing Fees," which read as follows [original punctuation provided]: • The State is forced to pay the Railroad to access and maintain its own public roads. • In FY2025, DOT&PF paid over $453,000 to the Alaska Railroad in annual signal crossing maintenance fees for just 23 highway and pedestrian crossings. • In FY2025, ARRC charged DOT&PF approx. $1.6 million for signal maintenance projects and crossing repair, including steep overhead markups. • A project repairing the Parks Highway Milepost 235 railroad crossing cost the state $931,230 in FY 2025, with $380,955 charged as overhead alone. 2:24:41 PM REPRESENTATIVE KOPP moved to slide 16, "Crossing Fees Cont'd," which read as follows [original punctuation provided]" • The House Transportation Committee recognized that ARRC's current fee practices resemble private-sector profiteering, despite its status as a state-owned corporation. • Private landowners subject to the railroad easement have faced similar unreasonable fees, with no statutory check on ARRC's discretionary authority. • To protect Alaskans' property rights and prevent financial exploitation, the Committee amended the bill to require that crossing fees assessed against private landowners be revenue-neutral limited to actual cost recovery. REPRESENTATIVE KOPP turned to slide 17, "A matter of justice," which read as follows [original punctuation provided]: Under due process, the Government cannot give or sell the same parcel of property to two different owners. "Unlawful acts, performed long enough and with sufficient vigor, are never enough to amend the law." - Justice Gorsuch -McGirt v. Oklahoma U.S. Supreme Court July 9, 2020 2:29:30 PM REPRESENTATIVE VANCE sought to better understand the difference between the corridor, rights-of-way, and easements. REPRESENTATIVE KOPP said the ARRC transportation corridor is a creature of statute that was added when Alaska took possession of the federal railroad to make clear that more uses of the easement were permitted. REPRESENTATIVE VANCE asked what ARRC would consider "unreasonable interference" with regard to easements. REPRESENTATIVE KOPP said it would come down to a commonsense decision regarding potentially derailment in high-speed areas. He added that landowners are some of the best protectors of the easement because they understand the danger and the beauty of the railroad. 2:36:17 PM REPRESENTATIVE VANCE asked about liability with permits and whether issuance of a permit transfers liability if something were to happen on that area of the easement. REPRESENTATIVE KOPP confirmed that crossings require a permit, and permits make clear that the railroad is not responsible for that private crossing. REPRESENTATIVE VANCE asked who has liability on the easements. REPRESENTATIVE KOPP said the liability falls on both. The landowner is responsible for noninterfering use, and if interfering use results in injury, they would be held liable to the railroad. He added that the question of liability is addressed in the permit and agreed to by both parties, whereas the fee issue is the real area if concern for landowners. 2:39:25 PM REPRESENTATIVE EISCHEID asked whether a non-exclusive easement would conflict with the federal law that allows the corporation to fence the easements. REPRESENTATIVE KOPP answered no. He said ARTA never gave the railroad an exclusive license to the right-of-way. He explained that homestead patent landowners were never notified that their properties could be impacted by ARTA because their interests were never to be affected by the act, as they held "perfect title" to the land. However, the government was concerned that those with contested title would not be able to stop the railroad from using the corridor. He said the bill narrowly focused on non-exclusivity where the railroad crosses homestead patent lands because it was never Congress's intent to claw back their fundamental property interests. 2:43:04 PM CHAIR GRAY asked whether the bill would prevent the railroad from asserting its right to put a fence in. REPRESENTATIVE KOPP said absolutely, without the bill, the railroad does not need to claim interference to exclude. The bill would make clear that the policy of the state is to avoid fencing people off and disallowing safe noninterfering uses of their property when the easement crosses their land. 2:44:48 PM IVAN LONDON, Senior Attorney, Mountain State Legal Foundation, provided invited testimony. He stated that he is a constitutional and property rights attorney. He noted that he has experience litigating easements with state and federal legislative authority. He opined that the railroad is an entity that can be governed by the legislation because the legislature created ARRC; therefore, giving it the right to govern and regulate it. He continued that the proposed legislation would not change the nature of the property rights. 2:48:39 PM HUGH ASHLOCK, Owner, Diamond Center Mall, LLC;, Diamond Center Holdings, LLC, provided invited testimony. He explained that his parents originally built the Diamond Mall, and it is the highest trafficked facility in the state. He explained that the mall is located on a former homestead property that his family purchased as a direct transfer from the original owner. He suggested that the right-of-way on the property is the most valuable piece of right-of-way in the state. He stated that the right-of-way is subject to only rail, telegraph, and telephone use. He expressed the desire to build a culvert on the right- of-way and create a parking lot, housing, or other mixed-use projects in the area, and this would be without interrupting the railroad's usage. He stated that in 2005 he received $3 million, per a bill sponsored by Alaska's Congressional Delegation, to implement intermodal transportation, with a train/bus combination. He explained that this resulted in a bus station in the Diamond Mall parking lot; however, the railroad was not interested in participating in the project. MR. ASHLOCK stated that after the multimodal project, he had a national chain restaurant interested in the Diamond Center location, but he needed 5,000 square feet of the right-of-way for landscaping. He noted that he was quoted an exorbitant price; however, now he understands that he would have been paying for the use of his own land. After relaying this story, he said, "I have run into some bad actors over the years." He continued by expressing the desire to create an intermodal station or create a new parking lot, as the easement property is worth "a lot of money." 2:53:23 PM JOE MATHIS, property owner, provided invited testimony on HB 136. He shared that his family has owned a 160-acre homestead in the state for 69 years. He stated that the parcel is bisected by the Alaska Railroad right-of-way, which is contained in the patent for the land. He said that before state ownership of the railroad, his relatives had helped install the rail crossing on the property; however, since the ownership transferred to the state, annual permit fees for crossing and contract renewal fees have continually increased. He added that an underground electric line was installed by the family at its own expense, with no maintenance cost and no liability to the railroad; however, this requires an additional annual $500 fee to ARRC. 2:58:38 PM JOHN PLETCHER, property owner, provided invited testimony. He shared that his family moved to their property in Anchorage in 1981, and since that time, they have maintained a large garden in the easement. He stated that the parcel of land has not caused problems; however, they do not want to be continually threatened by ARRC's permit requirements. Regarding a residential use policy, he stated that he received a letter informing him that he needed a permit, which he declined. After this, ARRC threatened to put a lien on the property. He stated that, per the exclusive use provision, the railroad wanted to charge $2,200 annually. He discussed the details of the exclusive use provision, of which will be published in an article on the website, www.railroadedalaska.com. He shared his understanding of what the courts have said about the exclusive use provision. He noted that there is nothing in the property patent about ARRC's exclusive use. MR. PLETCHER stated that his community has created a railroad committee, of which he chairs. He advised the committee members to go to its website [listed above] and visit the document's page. He cited that the legislature has directed policy on ARRC in the past, and he noted these sections in the statute. Concerning the comment made by Mr. O'Leary that the railroad paid all the legal fees in the Flying Crown case, he said, "The governor forced them to do it." He added, "The railroad's got more money than God." 3:06:45 PM CHAIR GRAY asked Mr. London whether there is some expectation that affected homeowners have some understanding about the legal rights of the railroad. MR. LONDON emphasized that the bill has nothing to do with property rights or expectations, and instead, outlines how the state will let ARRC operate. 3:10:30 PM The committee took an at-ease from 3:10 p.m. to 3:14 p.m. 3:14:47 PM CHAIR GRAY opened public testimony on HB 136. 3:15:05 PM MEGHAN CLEMENS, External Affairs Directo, Alaska Railroad Corporation, said while she agrees with many of the comments made today, she disagrees on some key items, such as the nature of the exclusive use easement. She said the augments presented today were heard and analyzed by the district court and the Ninth Circuit Court of Appeals, and the opinions offered by those courts do a good job of explaining how they came to be fully in favor of ARRC and the need for the exclusive use easement, as well as a clear legal case of how that was transferred from the federal government. 3:17:26 PM CHAIR GRAY questioned Judge Kindred's reasoning for the greatest exclusive use finding. MS. CLEMENS referred to a PowerPoint, titled "HB 136: Railroad Utility Corridors," and explained that the courts approached determining the nature of the property interest by answering the nature of the interest reserved by the federal government, as well as the interest in the right-of-way that was conveyed to the railroad by ARTA. She acknowledged that the 1914 act that reserved the right-of-way for the railroad did not fully define the nature of the property interest, so to answer that question, the court considered the legal precedent for Lower-48 railroads, and how the original federal ownership of the Alaska Railroad at impacts this consideration. She continued to slide 4, "What is Standard for Lower 48 Railroads?" Slide 4 read as follows [original punctuation provided]: •Prior to 1875 General Railroad Right-of-Way Act, railroads were granted ROW in fee simple by federal government •1875 Act granted easement, not fee. Two Supreme Court rulings related to limits of 1875 Act easements: •1875 Act railroads do not possess subsurface mineral rights Great Northern Railway Company v United States •If 1875 Act railroad abandons ROW, the court confirmed reversionary rights to underlying property owner Marvin M. Brandt Revocable Trust v. United States •Tenth Circuit ruled 1875 Act railroads had the right to exclude from ROW under the 1875 Act, in congruence with Great Northern and Brandt, because "[a] railroad easement is exclusive in character" LKL Associates., Inc., v. Union Pacific Railroad Co. MS. CLEMENS continued to slide 5, "Does original federal ownership affect consideration?" Slide 5 read as follows [original punctuation provided]: •The Alaska Railroad was unique: the only railroad in the country wholly owned and operated by the federal government •In 1914 Act, federal government was reserving ROW to itself •Difficult to imagine the federal government would have reserved a lesser property interest for itself than that granted to 1875 Act railroads •Established precedent: where land grants are ambiguous, such ambiguity must be resolved in favor of the sovereign grantor the federal government •1982 Congress clearly found the federal government held either fee simple or exclusive use easement in ROW MS. CLEMENS turned to slide 6, "What interest in the ROW did Congress convey to ARRC?" Slide 6 read as follows [original punctuation provided]: 1982 Alaska Railroad Transfer Act: "the Congress finds that exclusive control over the right-of-way by the Alaska Railroad has been and continues to be necessary to afford sufficient protection for safe and economic operation of the railroad." Congress is unambiguous in reserving and defining exclusive use easement in ARTA: ARTA specifies that the federal government must grant the State an easement that is "not less than an exclusive-use easement" ARTA Definition: ''exclusive-use easement'' means an easement which affords to the easement holder the following: (A) the exclusive right to use, possess, and enjoy the surface estate of the land subject to this easement for transportation, communication, and transmission purposes and for support functions associated with such purposes; (B) the right to use so much of the subsurface estate of the lands subject to this easement as is necessary for the transportation, communication, and transmission purposes and associated support functions for which the surface of such lands is used; (C) subjacent and lateral support of the lands subject to the easement; and (D) the right (in the easement holder's discretion) to fence all or part of the lands subject to this easement and to affix track, fixtures, and structures to such lands and to exclude other persons from all or part of such lands; 3:21:42 PM CHAIR GRAY asked, in the case of Flying Crown, why ARRC was asserting the right to build fence. MS. CLEMANS did not know the answer. She referenced the ARRC right-of-way residential use policy, which charged fair market value for residential uses of the right-of-way. The policy lacked public support and was subsequently rescinded; nonetheless, the homeowners association demanded that the railroad relinquish any claim to an exclusive use easement within the right-of-way. She said the exclusive use easement is very important to ARRC's ability to operate a safe and efficient railroad. She added that active airstrips in the right-of-way are uncommon; nevertheless, ARRC does its best to be a good neighbor, but by virtue of managing the railroad, property owners are not always given the answer they want. 3:23:57 PM CHAIR GRAY asked whether Ms. Clemens supports or opposes the bill. MS. CLEMANS stated that the bill language looks similar to current practices and reiterated that ARRC does not charge for residential lawn or gardening uses within the right-of-way if it does not interfere with the purposes of the corridor. She clarified that fee structures are defined to be revenue neutral across departments. She summarized slide 9, "HB 136," which read as follows [original punctuation provided]: Proposed bill language: "The corporation shall allow an owner of real property subject to an easement in favor of the corporation? to use the property in a manner that does not unreasonably interfere with the corporation's use of the property. The corporation may require the owner of real property subject to an easement in favor of the corporation to obtain a permit from the corporation to construct a railroad crossing within the easement and may charge the owner a revenue-neutral fee associated with issuing the permit and developing and maintaining the crossing." Bill Sponsor's presentation implied the above bill language would: •Undermine ARRC's exclusive use easement •Require ARRC to assume the expense of road crossings burdening the rail line even when permitted to entities without property interests in the ROW •Allow ARRC to use ROW for Railroad, Telegraph and Telephone purposes only (ARTA allows for Transportation, Communication and Transmission) •Address "Outdoor recreationists being denied access to public property" 3:28:16 PM VICE CHAIR KOPP asked whether there's anything ARRC could do to help Mr. Mathis maintain his private crossing in a revenue neutral capacity. He added that an annual fee of $1,000 is a lot for a family on Social Security. MS. CLEMANS said she's not prepared to fully answer for the maintenance and operations of that particular crossing; but it's unusual for a crossing owner to personally maintain the crossing, as ARRC owns the regulatory obligation and usually oversees the work with reimbursement requests to ensure that it meets industry standards. 3:30:52 PM VICE CHAIR KOPP commented that the bill is trying to set a management policy, not relitigate the issue. 3:31:57 PM DIANA RHOADES, Program Director, Anchorage Park Foundation, testified in opposition to HB 136. She said the foundation is one of the lead advocates for the connection of the Fish Creek Trail to the Tony Knowles coastal trail in the Alaska Railroad right-of-way for one mile. She opined that CSHB 136(TRA) would still cause legal uncertainty for the Fish Creek Trail, adding that the exclusive use is what allows the trail to be built in the right-of-way. She further posited that the existing right- of-way is not wide enough for future uses that might benefit the public. She expressed concern that the legislation may have unintended consequences. 3:35:37 PM ALEXA DOBSON, Executive Director, Bike Anchorage, testified in opposition to HB 136. She stated that Bike Anchorage is a nonprofit organization working to make Anchorage more bike friendly. She argued that the proposed legislation would threaten the trail projects along the railroad corridors across the state. She noted that she has not reviewed Version H. She expressed the understanding that some believe the proposed bill is not about the Fish Creek Trail; however, she argued that the bill has been supported by the interest of those wanting to stop this and other trails. She pointed out that during the 04/01/25 hearing of HB 136, Hugh Ashlock, Ivan London, John Pletcher, and Joe Mathis, were invited to testify. She expressed the understanding that they were all involved with the Flying Crown case, of which the sponsor has cited as the impetus for HB 136. She argued that the reason for this would be to set precedent for private landowners along the railroad. She expressed the understanding that the bill sponsor's firm was hired to lobby against the Fish Creek Trail extension project, which is also connected with the Flying Crown case concerning easement usage. She reiterated that the proposed legislation might not mention trails; however, she argued that individuals with known interest in stopping trails are advancing it. She pointed out that many of the most promising trail corridors in the state align with the railroad. She argued that if the proposed bill passes, it could cause legal delays for trail projects, or stoppage all together. She urged the committee to oppose the proposed legislation and support the state's "world-class" trail network. 3:37:38 PM CHAIR GRAY announced that public testimony on HB 136 would be kept open and the bill would be held over.
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