HJR 38-AK RAILROAD TRANSFER ACT; CONVEYANCES    3:40:40 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. 3:41:01 PM REPRESENTATIVE CHUCK KOPP, Alaska State Legislature, as prime sponsor of HJR 38, relayed that he has been working on the issue addressed by HJR 38 with many Alaskan residents, from south of the Denali Borough down through the Matanuska-Susitna ("Mat-Su") Valley into Palmer, Anchorage, and Seward. The issue impacts thousands of Alaskans. He referred to his PowerPoint presentation, entitled "HJR - Restoring Property Rights," and pointed out the quote by John Locke on slide 1, which read: "Government has no other end, but the preservation of property." REPRESENTATIVE KOPP turned to slide 2, entitled "What's the Harm?" and relayed that the harm that is being addressed by HJR 38 is that there was a property interest that was taken from landowners along the Alaska Railroad (ARR) right-of-way (ROW) in a way that circumvented the [U.S. and Alaska] Constitutions and due process in the rule of law. Hundreds of landowners along the ARR ROW now have a cloud on their property titles due to an unlawful "exclusive-use easement" claim to the entire ROW. The exclusive-use easement claim does not exist for any other railroad in America. REPRESENTATIVE KOPP continued by saying that in 1875, Congress announced that the U.S. government would no longer grant general land grant railroads [General Railroad Right-of-Way Act of 1875 ("1875 Act")]. Land had been granted to the Union Pacific Railroad (UPRR) to incentivize its east-west route; that lead to huge tracks of divided land; industry and farming could not cross the rail belt without tariffs and fees; and it resulted in a great deal of corruption. He relayed that beginning in 1875, all railroads had surface easements only. REPRESENTATIVE KOPP relayed that the Alaska Railroad Corporation (ARRC) acted in violation of AS 42.40.285 in 2005 and 2006, when it approached the Bureau of Land Management (BLM) in the U.S. Department of the Interior (USDOI) without notifying the legislature or governor of Alaska or any of the affected landowners along the ROW and obtained an exclusive-use easement patent on all the Homestead Act [1862] ("homestead") properties along the ROW. REPRESENTATIVE KOPP referred to slide 5, entitled "A Brief History," and to the continuation on slide 6. He reminded the committee that the ARR was formed by an Act of Congress in 1914; between 1914 and 1982, there were hundreds of homestead patents issued by the federal government to private landowners along the ARR ROW; during that time, the federal government completely divested itself of all ownership in that land and the land went into private hands. He said that the only land that the U.S. government reserved for itself was a ROW - a surface easement for rail, telegraph, and telephone - consistent with all other railroad easements in the country post 1875. 3:45:00 PM REPRESENTATIVE KOPP referred to slide 7, entitled "What is a standard railroad 'easement'?" and explained that the easement is a 200-foot easement that extends 100 feet on either side of the track; this is a limited surface easement; and according to the 1875 Act, this was all railroads were to have from that time forward. He directed the committee's attention to the document included in the committee packet, entitled "HJR 38 Overview and Backdrop," which gives a historical background. He stated that today, the limited interest ROW - or surface easement - provides the foundation for 80 percent of all the track mileage in the nation. REPRESENTATIVE KOPP relayed that using principles established in the 1875 Act, the Alaska Railroad Act of 1914 ("1914 Act") authorized the creation of ARR. He said that 1982 was the first time the easement became an issue, and the following questions were raised: "What does this easement mean?" "How exclusive is it?" "Does the railroad actually have a fee simple interest in the land?" He explained that under the Alaska Statehood Act [of 1958], the state selected ROW lands; ARRC claimed it owned the land; the Interior Board of Land Appeals (IBLA) ruled that the railroad did not own the land, but a surface easement only. The ruling was based on a U.S. Supreme Court case in 1942, Great Northern Railway Co. v. U.S., in which the court declared that a railroad only has a surface easement, not fee ownership of the land; that is, it does not have any outright ownership of the land. The ruling was confirmed by the U.S. Supreme Court in 2014 [Brandt Revocable Trust v. U.S.]. REPRESENTATIVE KOPP cited the 2014 U.S. Supreme Court Case Brandt Revocable Trust v. U.S. ruling: "The right of way was an easement that was terminated by the railroad's abandonment, leaving the property owner's land unburdened." The ruling went on to say that the 1875 Act, upon which IBLA based its decision, clearly states that the railroad only has an easement and nothing more. He stated that the court adopted the U.S. government's previous argument in full, which was that a railroad only has a surface easement. He quoted from the ruling, which read, "It found the 1875 Act's text 'wholly inconsistent' with the grant of a fee interest." He explained that a fee interest refers to owning land outright. The court declared that the railroad does not have a fee interest; it does not own the land; it has a surface easement only. 3:47:56 PM REPRESENTATIVE KOPP relayed that the opinion was dated March 10, 2014. Less than one month later, ARRC authored a ten-page legal response to a constituent in Anchorage about concerns of the railroad's fee interest claim in the ROW, as well as exclusive- use easement allowing it to fence off all adjoining property owners on homestead patent lands. He related that the ARRC told the constituent that it had previously addressed the constituent's concerns in a comprehensive memorandum explaining that ARRC holds fee simple interest in most ARR ROWs and at least an exclusive-use easement in all ROWs. Representative Kopp exclaimed, "That is outrageous!" He stated that it was in direct violation of the U.S. Supreme Court ruling. REPRESENTATIVE KOPP continued by saying that in 2017, the Alaska Supreme Court ruled in Reeves v. Godspeed L.L.C that a surface easement must allow the holder of that easement all necessary control to safely conduct its operations but may not deny the landowner proper use of the easement, if it doesn't interfere with the holder's operations. He added that the case did not involve a railroad, but it did address easements; the principle is the same and continues as a legal basis. He maintained that no credible argument can be made that an exclusive-use easement belongs to ARRC without establishing what the private parties owned when the federal government made the transfer to the State of Alaska [under the Alaska Railroad Transfer Act (ARTA) of 1982]. REPRESENTATIVE KOPP referred to slide 8, entitled "What is an 'exclusive use easement'?" and said, "You may ask yourself, 'Why is this such a big deal with the exclusive-use easement?'" He relayed that the exclusive-use easement allows ARRC to fence off and exclude any adjoining landowner for any purpose whatsoever. He explained that doing so allows ARRC to build a fence through the back yard of any properties built next to the ROW - many of them built 40-50 years ago under original homestead patents. Many of these properties have immaculately maintained yards along the ARR ROWs or a boat or trailer in the yard that homeowners would not be able to access. He stated that ARRC claims that it needs to have the exclusive-use easements for safety, but Representative Kopp maintained that the safety problems have almost always occurred on public crossings and in areas of public land use. The private property owners are some of the best caretakers of the ROWs and the first to report a problem to ARRC, because it is their land and they want it protected. 3:51:21 PM REPRESENTATIVE KOPP relayed that ARRC has not always maintained that it had the exclusive-use easement right. He stated that ARRC's lead counsel, Ms. Phyllis Johnson, argued on June 25, 1996, before the Alaska Legislative Budget & Audit (LBA) Committee that the federal government owns less than originally thought. She reported that the issue should be researched on a parcel-by-parcel basis to determine whether ARRC has all those rights from the transfer [to the state]; property owners were there first, and the ROWs went across private property not federal land. He offered that ARRC does have an exclusive-use easement on federal lands as authorized by ARCA - the Denali National Park and Preserve (DNPP) and federal lands under competing Native land claims in Northern Alaska. Wherever the federal government owned land, the exclusive-use easement could be transferred to the state; however, the federal government may not transfer anything to the state that it does not own. He emphasized that the issue was, What did the federal government actually own at the time of the transfer and what could it actually send to the state? 3:52:55 PM REPRESENTATIVE KOPP referred to slides 9-19 to examine the details of HJR 38. He cited page 1, lines 4-7, of HJR 38 [shown on slide 9], which states that ARR was created under the 1914 Act, which directly granted interests in federal land for railroad ROWs for the construction of the standard easement, that is, for railroads and telegraph and telephone lines. He added that this standard easement was in place beginning in 1875, and it is the only easement that Congress authorized. REPRESENTATIVE KOPP cited page 1, lines 10-15 [shown on slide 10], which states that before and after completion of ARR, the federal government conveyed into private ownership land affected and burdened by the ROWs. He explained that these lands refer to the homestead patents. He offered that about 60 percent of the 500 miles of tract are homestead patents - in the municipalities, Palmer, Anchorage, the Denali area, Cantwell, and Seward - and are in private hands. He said that homestead patent owners had railroad tracts reserved across their properties before ownership was transferred to the state in 1983. REPRESENTATIVE KOPP cited page 2, lines 3-6 [shown on slide 11], which states that the state acquired ARR from the federal Government in 1983 and created ARRC to oversee operations as an instrumentality of the state. REPRESENTATIVE KOPP cited page 2, lines 7-13 [shown on slide 12], which states that ARCA provided for the transfer of all rail properties of ARR from the federal government to the State of Alaska; that is, all right, title, and interest of the U.S. in those properties. He emphasized that only the interest owned by the federal government was transferred; it could not transfer an interest it did not own. He continued by saying that on January 14, 1983, ARRC reserved and owned ROW interests on private properties - homestead properties - provided for in patents and other conveyance documents; those interests represented the rail, telegraph, and telephone ROW. REPRESENTATIVE KOPP cited page 2, lines 14-17 [shown on slide 13], which stated that if all right, title, and interest of the U.S. in the ROWs did not include at a minimum an exclusive-use easement as defined in ARTA, the easement could not have been included in the transfer under the plain language of ARTA. He explained that there are two places in ARTA where the exclusive- use easement is mentioned: competing land claims among Alaska Native corporations and village corporations; and in Denali Borough. He offered that those two places are where the federal government did have an exclusive-use easement that it could pass on to the state; however, it never claimed to have that easement across all the homestead patent properties. He added that in December 2015, Alaska U.S. Congressman Don Young proclaimed that ARTA would have never passed Congress had vested property rights been contemplated to be changed by the transfer; in other words, there was never an intent to change vested property rights. 3:56:30 PM REPRESENTATIVE KOPP cited page 2, lines 18-25 [shown on slide 14], which stated that during the transfer of rail properties under ARTA, USDOI erroneously issued and ARRC accepted an interim conveyance of interests in real property not owned by the federal government, including exclusive-use easements. He stated that this interim transfer speaks to how the whole process happened: first there was a license issued by the federal government for ARR; then there was an interim conveyance. He explained that "interim" conveyance means it is temporary and conditional. It was realized that there were many properties that needed to be researched to discover the interest that the federal government was passing on to the state. The federal government was not familiar with all the properties it had; over 500 miles of track needed to be researched. The interim conveyance was not made final until 2005 and 2006. REPRESENTATIVE KOPP relayed that before 2005 and 2006, the Alaska State Legislature started to get nervous: residents from Whittier, Palmer, Anchorage, and all over the state were complaining that ARRC was incrementally ratcheting down on the ROWs and fencing off adjoining landowners when for decades, it had never been an issue. He cited page 3, lines 1-4 [shown on slide 16], which stated that the legislature specified that under AS 42.40.285, ARRC must receive legislative approval before accepting any conveyances of land - land grants, titles, interests. He added that complaints from the City of Whittier was the "final straw"; residents maintained they were being run out of town by the ARRC's assumption of exclusive-use. REPRESENTATIVE KOPP cited page 3, lines 5-8 [shown on slide 16], which stated that the legislature listed, as an exception, properties that are consistent with any right, title, or interest that the federal government had a right to bestow; for those, ARRC would not need to receive legislative approval. He reiterated that an exclusive-use easement was not something the federal government had in their possession to give if it was across private homestead patent properties; AS 42.40.285 specifically states that to be true in a municipality. He mentioned that most of the homesteads are in municipalities; therefore, Anchorage, Palmer, and the Mat-Su Valley are all affected. REPRESENTATIVE KOPP continued that in 2005 and 2006, ARRC approached BLM and received patents of exclusive-use easement; it claimed it was only getting what it was promised in 1985. Representative Kopp emphasized that ARRC was never promised those patents to the entire ROWs; it would be an outrageous unconstitutional theft of property rights without due process of law. Residents were unaware of the transfer until ARRC began to institute the Residential Right-Of-Way Use Permit Program to monetize the railroad. He offered that to ARRC's credit, it discontinued the practice. He mentioned that he does not completely blame ARRC for what happened, as USDOI improperly allowed it to happen when it gave ARRC the 2005 and 2006 patents of exclusive-use easement across hundreds of miles of private property. He stated that the property interests that were given to ARRC are the same as fee interests; it is outright ownership; and the U.S. Supreme Court has ruled that no longer may railroads have them. He said that in the Brandt Revocable Trust v. U.S. ruling, the Supreme Court mentioned other cases that it had ruled on, [Stalker] v. Oregon Short Line R. Co. [1912] and Great Northern Ry. Co. v. Steinke [1923] - disputes dealing with competing land claims to acquire and develop tracks of land. The Supreme Court made it clear that any implication that the interest is something more than a surface easement would not have survived the court's unequivocal statement to the contrary. 4:01:22 PM REPRESENTATIVE KOPP referred to slide 19, which cites page 3, lines 28-31, of HJR 38. He stated that the intent of HJR 38 is to give the Alaska State Legislature the opportunity to comment on what it believes is clearly the law. If there was a misapplication of ARTA regarding exclusive-use easements affecting many hundreds or thousands of property owners, then under HJR 38, Alaska would disclaim any property interests that were taken contrary to law and ask its Congressional delegation to work with the legislature to right this egregious wrong. 4:02:35 PM EPRESENTATIVE LEDOUX stated that Representative Kopp has given very impassioned legal arguments and asked why this issue would not be dealt with in court. REPRESENTATIVE KOPP answered that ARTA was written so that the U.S. Solicitor General is bound to defend any claim on the ROW forever; therefore, someone would have to be very wealthy to sue the federal government and take them to court; it would be a difficult task. He maintained that a resolution is a way for the State of Alaska to speak strongly about an egregious wrong that has been committed to Alaska land owners. He mentioned that the new Assistant Secretary for USDOI is aware of this issue and is assisting to resolve it. He asserted that it is the state's duty to disclaim and "walk away" from stolen property. The state should not stand quietly by abating and abetting the taking of property it doesn't own; by law, that is theft by receiving. He concluded that for the individual landowner, the cost of litigation is prohibitive. He expressed that he would welcome a large public interest law firm taking on this issue; however, there is much the legislature can do. 4:04:46 PM EPRESENTATIVE LEDOUX asked whether such a lawsuit would be considered a public interest lawsuit; if so, those type of lawsuits are attractive to attorneys and bring generous attorney fees when won. REPRESENTATIVE KOPP maintained that many people have tried to get the attention of public interest law firms; pursuing that is an ongoing effort; however, he advocates acting when possible rather than waiting for a law firm to take the case. He reiterated that court action would involve suing the federal government. The proposed resolution would make it very clear that Alaska does not support any interest that was not originally owned by the federal government. He emphasized that HJR 38 does not state that ARR does not have a ROW or the right to safety conduct a ROW. He offered that ARRC has police officers that can issue citations for trespassing; they have full legal authority for protecting the ROW. He maintained that ARRC does not need an exclusive-use [easement] to make a safe ROW; it is an unsupportable claim legally and is contrary to the interest of every land owner on the ROW. 4:06:27 PM REPRESENTATIVE KNOPP asked for a history lesson on why Representative Kopp is pursuing this issue so aggressively. REPRESENTATIVE KOPP explained that in South Anchorage and other districts, homes built near the ROW have been there since the '50s and '60s. When ARRC started advancing its residential use permit, many property owners received notices that they would be charged per square foot for their lawns or gardens. These residents had thought that they were the landowners and ARR had a ROW. He relayed that no one had an issue with ARRC preventing anything hazardous to the movements of the trains; however, at that point they realized their ROWs were being monetized. He referred to the Flying Crown airpark in South Anchorage; about 40 pilots have used a portion of it as a taxiway for an airfield since the '50s, that is, almost 70 years of continuous use as an airpark. He stated that some of the homes in the area have hangars big enough for an airplane; now residents are faced with a fence that could prevent them from driving airplanes out of their hangars. He maintained that the airpark, which has been in continuous operation for 65-plus years and in which there is shared use of a small portion of the ROW, now has fences on a small sliver at the very end of the 1,500-foot strip. Significant fees are being charged to the entire group of homes in that area. He added that to its credit, ARRC has discontinued doing this. He asserted that this issue needs to be pursued until there is a final solution recognizing simply that the federal government could not have passed to the state an interest that it never owned. 4:09:06 PM REPRESENTATIVE KNOPP offered his understanding that landowners were being denied access to their property. REPRESENTATIVE KOPP replied that there were landowners who were denied access to the back yards of their properties; concrete barriers were erected by the railroad in Oceanview that blocked residents from access to their boats. He relayed that he worked with ARRC to remove those barriers; ARRC always offered reasons why it could not do so; and in the end, the situation became untenable. He referred the committee to letters included in the committee packet from residents and businesses who are negatively impacted. He stated that the owner of Red Robin in Anchorage had his land trespassed on, his trees cut down, and a fence erected on his property; ARRC was mistaken as to the location of the ROW. This person conflicted with ARRC when he plowed snow onto a small section of the ROW and ARRC objected. Representative Kopp asserted that the disagreement was fair, but ARRC putting a fence in the individual's yard was unfair and was done without notification. He further referred to Hugh Ashlock, the owner of Dimond Center, who has had a very difficult circumstance with ARRC; he would like 20 more parking spaces but to obtain them, he would have to part with a "fortune of spaces" that impede slightly into an ARR ROW that he has improved immensely. He reiterated that all these lands are homestead patent lands, and this is an issue that runs through Anchorage and up and down the Railbelt. He declared that the issue is ARRC claiming a fee interest in the land and an exclusive-use easement to the entire ROW; he maintained that ARRC has neither, except in areas that the federal government originally owned. 4:11:49 PM REPRESENTATIVE BIRCH expressed his appreciation for the proposed resolution and confirmed that it has been a long-standing concern. He offered that when he served in municipal government, it was a concern but could not be resolved at the municipal level. He supported the legislature addressing it through the proposed resolution. 4:12:42 PM REPRESENTATIVE TUCK also thanked Representative Kopp for introducing the proposed resolution. He maintained that ARRC is creating miles of borders blocking access to the railroad. He stated that in Anchorage, the beach is cut off from the coastal trail. 4:13:27 PM REPRESENTATIVE WOOL asked for confirmation that the easement was 100 feet on each side of track; ARRC is preventing people from the area 100 feet from the center line; and fences are being erected and blocking people from accessing property on the other side of the track. REPRESENTATIVE KOPP answered yes and added that there are many property owners for which this is the case; if the railroad assumed the exclusive-use easement on the homeowners' properties, they would be cut off from both sides of their own land. He added that also people who abut the track may be cut off from access to public land areas because of the fencing. He said that ARRC's argument is always safety, but in the name of safety, people's rights are being "run over." REPRESENTATIVE WOOL asked whether the fencing is recent. REPRESENTATIVE KOPP responded that the erection of fencing became very aggressive in 2012. He referred to page 4, paragraph 3, of the document, entitled "HJR 38 Overview and Backdrop," included in the committee packet, and stated that it highlights six critical situations in the Municipality of Anchorage. He apologized that he did not include the list of grievances from Palmer. He relayed that ARRC fenced off access to the Fish Creek estuary in the Turnagain area forcing a utility to erect a $114,000 fence near Westchester Lagoon as a precondition to entering and repairing sewer mains. The ARRC installed concrete barricades and steel posts blocking access to the ROW in a residential area in Oceanview. He mentioned again the ROW Use Permit Program as further evidence of ARRC's infringement. 4:16:18 PM REPRESENTATIVE WOOL asked whether many of the original homesteads still exist or have been subdivided. REPRESENTATIVE KOPP replied that all the homesteads still exist as federal patents; he conceded that the homesteads have been divided into multiple successors but maintained that homestead patents don't "go away." He relayed that all the way up the track are large homesteads still recognized in titles searches; the original landowners have subdivided the land; and the current landowners are considered successors in interest to the homestead and carry with the land the property interest that came with that homestead patent property. 4:17:33 PM CHAIR KREISS-TOMKINS announced HJR 38 would be held over. 4:18:22 PM REPRESENTATIVE WOOL mentioned that ARRC owns other lands that are not easements or ROWs; he asked for clarification that the resolution addresses only ROWs and easements. REPRESENTATIVE KOPP replied that the proposed legislation does not refer to other lands that ARRC lawfully owns; it is focused on the ROW and what is viewed as unconstitutional claims to property interests in the ROW.