03/08/2018 03:15 PM House STATE AFFAIRS

          HJR 38-AK RAILROAD TRANSFER ACT; CONVEYANCES                                                                      
                                                                                                                              
4:07:04 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  announced that  the next order  of business                                                               
would  be HOUSE  JOINT  RESOLUTION NO.  38,  Relating to  certain                                                               
conveyances to  the Alaska Railroad Corporation  under the Alaska                                                               
Railroad Transfer Act of 1982.                                                                                                  
                                                                                                                                
4:07:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHUCK KOPP,  Alaska State  Legislature, as  prime                                                               
sponsor  of   HJR  38,  relayed  that   the  proposed  resolution                                                               
represents a "singular voice" of  the legislature to comment on a                                                               
matter of  such an  important public  policy as  property rights.                                                               
He referred to  the testimony of the  Alaska Railroad Corporation                                                               
(ARRC)  [Andy Behrend,  Chief Counsel,  ARRC]  during the  3/1/18                                                               
House  State Affairs  Standing  Committee  meeting, which  stated                                                               
that there was  no connection between the Alaska  Railroad Act of                                                               
1914 ("1914  Act") and the  General Railroad Right-of-Way  Act of                                                               
1875  ("1875 Act").    He said,  "That's  a profoundly  important                                                               
statement, because it is profoundly wrong."                                                                                     
                                                                                                                                
REPRESENTATIVE KOPP  referred to the  1982 decision of  the [U.S.                                                               
Department  of  Interior's  (USDOI's)]  Interior  Board  of  Land                                                               
Appeals (IBLA),  included in the committee  packet [IBLA 81-426].                                                               
The Alaska Railroad (ARR) appealed  a selection of state lands on                                                               
the ARR right-of-way (ROW) asserting  that this property had been                                                               
appropriated, reserved, or  otherwise set aside based  on what it                                                               
had claimed  was a fee  simple interest ownership;  therefore, it                                                               
was not  available for  state appropriation.   The  IBLA decision                                                               
reported the following:  the  page labeled 65 IBLA 376 summarizes                                                               
ARR's claim that the property was  set aside; the page labeled 65                                                               
IBLA 377 mentions  the Alaska Statehood Act of  1958 allowing for                                                               
the selections  of these lands  along the Fairbanks  meridian and                                                               
comments  that the  initial [USDOI]  Bureau of  Land Management's                                                               
(BLM's)  decision  stated  that  the  lands  were  available  for                                                               
appropriation by  the state; they  were entirely  appropriate for                                                               
the ROW;  and they could  be acquired  as state property;  and it                                                               
also states that this determination was made under the 1914 Act.                                                                
                                                                                                                                
REPRESENTATIVE KOPP  quoted from  the pages  labeled 65  IBLA 377                                                               
and 65  IBLA 378 of  the IBLA  decision, beginning with  the last                                                               
sentence on the first of the two pages, which read:                                                                             
                                                                                                                                
     The issue  raised by  this appeal  is whether  the land                                                                    
     within the right-of-way granted  to the Alaska Railroad                                                                    
     is occupied, appropriated, and/or  reserved so as to be                                                                    
     exempt  from  State   selection.  Neither  counsel  for                                                                    
     appellant  nor counsel  for the  State  of Alaska  have                                                                    
     cited any cases on point and  this appears to be a case                                                                    
     of first impression.                                                                                                       
                                                                                                                                
REPRESENTATIVE KOPP  said that IBLA  then addressed the  issue by                                                               
citing cases;  he referred  to the first  paragraph under  [1] on                                                               
the page labeled 65 IBLA 378, which read in part:                                                                               
                                                                                                                                
          [1] Consideration  of the nature of  the right-of-                                                                    
     way granted by similar  statutes provides guidance. The                                                                    
     General Railroad  Right of  Way Act  of March  3, 1875,                                                                    
     ch. 152,  18 Stat.  482 (1875),  2/ granting  a similar                                                                    
     right-of-way  for  railroad  across  the  public  lands                                                                    
     outside  Alaska  has  been   held  to  convey  only  an                                                                    
     easement and not a fee interest in the land.                                                                               
                                                                                                                                
REPRESENTATIVE KOPP stated that IBLA  also cited the U.S. Supreme                                                               
Court  case of  1942, Great  Northern Railroad  Co. v.  U.S.   He                                                           
continued  quoting the  first  paragraph of  [1],  which read  in                                                               
part:                                                                                                                           
                                                                                                                                
     The Court  held that the  reserved right to  dispose of                                                                    
     the lands  subject to the right-of-way  is inconsistent                                                                    
     with the grant  of a fee and persuasive  that the grant                                                                    
     of an easement was the intent of the statute.                                                                              
                                                                                                                                
REPRESENTATIVE  KOPP  relayed  that   in  this  case,  the  court                                                               
concluded  that even  under a  more  restrictive standard,  which                                                               
existed before the  1875 Act, it was the intent  of Congress that                                                               
the state - in this case the  State of Wyoming - would be allowed                                                               
to take  the subsections in its  statehood appropriations subject                                                               
to the ROW.   He added that under the ROW Acts  of 1862 and 1864,                                                               
there  were limited  fee  interests and  railroads  did own  some                                                               
land.                                                                                                                           
                                                                                                                                
REPRESENTATIVE KOPP quoted from the  third paragraph under [1] of                                                               
the IBLA decision, on the page labeled 65 IBLA 379, which read:                                                                 
                                                                                                                                
     These cases  decided under other  railroad right-of-way                                                                    
     statutes  persuade  us  that   the  lands  embraced  in                                                                    
     appellant's  right-of-way should  not be  considered to                                                                    
     be  appropriated  or  reserved  at the  time  of  State                                                                    
     selection so as to  be excluded therefrom. The decision                                                                    
     correctly held  that a right-of-way for  railroad shall                                                                    
     be reserved in any State selection patent issued.                                                                          
                                                                                                                                
REPRESENTATIVE KOPP explained that  IBLA directly referred to the                                                               
1875 Act,  under which  Congress ended  land grant  railroads and                                                               
allowed  only   surface  easements   for  rail,   telegraph,  and                                                               
telephone.  He  asserted, "That was the easement ...  of the 1914                                                               
Alaska Railroad Act."                                                                                                           
                                                                                                                                
4:12:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP relayed that HJR  38 would not have an impact                                                               
on federal  property already in  a federal interest; but  only on                                                               
property upon  which there  was an  unlawful infringement  in the                                                               
transfer.    He  stated  that the  federal  government  owned  an                                                               
exclusive-use  easement  in  Denali National  Park  and  Preserve                                                               
(DNPP)  and  an  exclusive-use  easement on  Native  lands  under                                                               
contested  land   claims.    He   emphasized  that   the  federal                                                               
government  never owned  an exclusive-use  easement on  Homestead                                                               
Act [1862] ("homestead") patent properties.                                                                                     
                                                                                                                                
REPRESENTATIVE KOPP said  that the ARRC's position  is that there                                                               
is settled law in the matter:   railroads have either full simple                                                               
title or an exclusive-use easement.   He emphasized that there is                                                               
no settled  law in that  regard; 80  percent of railroads  in the                                                               
U.S. have a  simple easement only, a claim supported  by the U.S.                                                               
Supreme Court three  years ago in Brandt Revocable  Trust v. U.S.                                                             
The court  ruled that a railroad  ROW granted under the  1875 Act                                                               
is an easement; therefore, if  a railroad abandons such easement,                                                               
the landowner  regains his/her  unburdened use of  the land.   He                                                               
stated that it is difficult  to understand why a limited interest                                                               
surface  easement, which  ARR  has, is  insufficient  for ARR  to                                                               
safely operate, like most other railroads in the country.                                                                       
                                                                                                                                
REPRESENTATIVE  KOPP stated  that whatever  property the  federal                                                               
government lawfully  owned at  the time of  the transfer  [to the                                                               
state in 1982] would not be affected  by HJR 38.  He relayed that                                                               
HJR 38  would only apply to  right titles and interests  owned by                                                               
other parties;  it is  focused on the  homestead patentees  and a                                                               
claim of ARRC to  own more than it owns.  He  offered that he has                                                               
requested from  ARRC a list  of conflicting land claims  that the                                                               
secretary  of  USDOI has  adjudicated  to  demonstrate that  ARRC                                                               
followed due process when  taking exclusive-use easement interest                                                               
on  all homestead  patent properties;  ARRC  maintained it  would                                                               
respond.  He added that he  has no indication of conflicting land                                                               
claims  other than  those in  DNPP  and those  for which  village                                                               
corporations  and  other Native  claimants  were  competing.   He                                                               
expressed his  belief that the  secretary of USDOI has  made some                                                               
determinations on those lands.                                                                                                  
                                                                                                                                
REPRESENTATIVE KOPP  asserted that  homestead patents  were never                                                               
subject  to competing  claims; they  were entirely  owned by  the                                                               
homesteaders;  the  federal  government had  completely  divested                                                               
itself  of ownership  in those  lands.   He relayed  that HJR  38                                                               
would make it clear that if an  entity says it has title to land,                                                               
then it should  prove that title; any lawyer would  tell a client                                                               
to  clear his/her  title  unless  the title  is  not  clear.   He                                                               
maintained that every lawyer he  has consulted in this matter has                                                               
informed him that  the extent of the ROW must  be determined on a                                                               
case-by-case,  parcel-by-parcel basis;  and  the title  recording                                                               
system can provide with certainty  the history of the interest of                                                               
any parcel.                                                                                                                     
                                                                                                                                
4:15:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOPP concluded  that ARRC  has made  a "sweeping"                                                               
claim  to  an  exclusive-use  easement  without  doing  the  work                                                               
necessary  to  justify  that  the  federal  government  had  that                                                               
interest  to give  to the  state  at the  time of  transfer.   He                                                               
referred to Section 1202(10) of  the Alaska Railroad Transfer Act                                                               
(ARTA)  of  1982 [45  USC  Ch.  21],  included in  the  committee                                                               
packet, which states  that the definition for  rail properties of                                                               
ARR includes the exclusive-use easement  within DNPP.  He offered                                                               
that  there  would be  no  reason  to specifically  mention  this                                                               
exclusive-use easement  if it  was de facto  for the  entire ROW.                                                               
He  added  that  exclusive-use   easement  on  federal  lands  is                                                               
specified  three times  [in ARTA].    He maintained  that it  was                                                               
clearly  never the  intent  of  Congress to  impose  that on  the                                                               
homestead patent properties.                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP referred to  testimony by Bill O'Leary, Chief                                                               
Executive  Officer (CEO),  ARRC, during  the House  State Affairs                                                               
Standing Committee meeting of 3/1/18,  who quoted Alaska's former                                                               
U.S. Senator  Ted Stevens as  saying that the interest  along the                                                               
ROW  would be  an  exclusive-use easement.   Representative  Kopp                                                               
said  that the  quote was  out of  context; Senator  Stevens said                                                               
that the interest on federal lands  - lands for which the federal                                                               
government had the  interest to give - would  be an exclusive-use                                                               
easement.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KOPP  maintained that  a disagreement  exists, and                                                               
ARRC recommends resolving it in  court.  He offered that "justice                                                               
is not free."  The ARRC  has asserted that the federal government                                                               
is bound  to defend claims  against the  ROW; however, it  is not                                                               
clear if that would involve all  claims.  He expressed that it is                                                               
upsetting to hear testimony that  the legislature does not have a                                                               
legitimate role in addressing matters  of such serious importance                                                               
to the state and that affect  so many land owners; any individual                                                               
land owner  would be financially  destitute upon pursuing  such a                                                               
case [in court].                                                                                                                
                                                                                                                                
REPRESENTATIVE KOPP  maintained that  the legislature has  a duty                                                               
and responsibility  to disclaim any unlawfully  acquired property                                                               
that was  transferred; the legislature  would not  be identifying                                                               
that  land, but  merely asking  for proof  of ownership  for land                                                               
claimed.   He stated,  "We're not  going to aid  and abet  in any                                                               
unlawful  taking of  property.   It's  the  most important  thing                                                               
Alaskans  have."   He said  that  under HJR  38, the  legislature                                                               
would be  asking ARRC  to prove that  the federal  government had                                                               
the exclusive-use easement  at the time of the  land transfer, if                                                               
ARRC is making a claim of property ownership based on that.                                                                     
                                                                                                                                
4:19:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  stated  that   he  supports  the  proposed                                                               
resolution  and maintained  that the  issue has  been "unfinished                                                               
business" for  many years.  He  mentioned that there has  been an                                                               
attempt  on the  municipal level  to resolve  the issue,  and the                                                               
legislature  is  the  appropriate  body to  put  forward  such  a                                                               
resolution.                                                                                                                     
                                                                                                                                
4:19:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL moved to report  HJR 38 out of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.   There being no  objection, HJR  38 was reported  from the                                                               
House State Affairs Standing Committee.