```

[House Report 104-691]
[From the U.S. Government Publishing Office]

104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-691
_______________________________________________________________________

 
  VALIDATION OF CERTAIN LAND CONVEYANCES IN RENO, NEVADA AND TULARE, 
                               CALIFORNIA

                                _______
                                

 July 18, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________

  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            DEMOCRATIC VIEWS

                        [To accompany H.R. 1784]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 1784) to validate certain conveyances made by the 
Southern Pacific Transportation Company within the cities of 
Reno, Nevada, and Tulare, California, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. LEGALIZATION OF CERTAIN CONVEYANCES.

    (a) In General.--Notwithstanding any other provision of law, and 
subject to subsections (c) and (d), the following conveyances are 
hereby validated to the extent that the conveyances would have been 
legal or valid if all right, title, and interest of the United States 
had been held by the Southern Pacific Transportation Company at the 
time of such conveyances:
          (1) Conveyances of parcels from the lands described in 
        subsection (b) made by the Southern Pacific Transportation 
        Company or its subsidiaries, predecessors, successors or 
        assigns, on or before January 1, 1995.
          (2) Conveyances of parcels from the lands described in 
        subsection (b) made after January 1, 1995, by the Southern 
        Pacific Transportation Company, or its successors or assigns, 
        to the Redevelopment Agency of the city of Tulare or the 
        Redevelopment Agency of the city of Reno.
    (b) Lands Described.--The lands referred to in subsection (a) are 
the lands that--
          (1) formed part of a railroad right-of-way granted to the 
        Central Pacific Railroad Company of California or the Southern 
        Pacific Railroad Company, or their successors or assigns, by 
        the Federal Government; and
          (2)(A) are located within the boundaries of the Downtown 
        Redevelopment Area of the city of Reno, Nevada; or
          (B) are located within the boundaries of Amended Urban 
        Renewal Plan for California A-8-1 (the Downtown Plan) adopted 
        by the city of Tulare.
    (c) Minerals.--(1) The United States hereby reserves any federally-
owned minerals that may exist in land that is conveyed pursuant to this 
Act, including the right of the United States, and its assignees or 
lessees, to enter upon and utilize as much of the surface of such land 
as is necessary to remove minerals under the laws of the United States.
    (2) Any and all minerals reserved by paragraph (1) are hereby 
withdrawn from all forms of entry, appropriation, and patent under the 
mining, mineral leasing, and geothermal leasing laws of the United 
States.
    (d) Takings of Private Land.--If the validation of any conveyance 
pursuant to subsection (a) would constitute a taking of the private 
property within the meaning of the Fifth Amendment to the United States 
Constitution, the validation of the conveyance shall be effective only 
upon payment by the Southern Pacific Transportation Company (or its 
subsidiaries, successors or assigns) to the Secretary of the Treasury 
of the fair market value of the property taken.

                          PURPOSE OF THE BILL

    The purpose of H.R. 1784 is to validate certain conveyances 
made by the Southern Pacific Transportation Company within the 
cities of Reno, Nevada, and Tulare, California.

                  BACKGROUND AND NEED FOR LEGISLATION

    From 1862 through 1871, Congress adopted the Pacific 
Railroad Acts (The Charter Acts) to establish a system of 
railroads in the western United States. The Charter Acts gave 
railroads a right-of-way to strips of land 200 feet wide on 
each side of the railroad tracks where the tracks were laid 
along routes established in the Charter Acts.
    The right-of-way for the railroad tracks and a strip 200 
feet wide on either side within the Downtown Redevelopment Area 
of the City of Reno and a strip 220 feet wide on either side 
within the Downtown Redevelopment Area of the City of Tulare 
(Railroad Right-of-Way) was granted to the Central Pacific 
Railroad Company of California and the Southern Pacific 
Railroad Company under the Charter Acts in 1862.
    Currently, the railroad rights-of-way through Reno and 
Tulare are an active and essential part of the railroad 
corridor. There is only a remote possibility that the railroad 
tracks through downtown Reno and Tulare will ever be abandoned; 
however, that possibility means title to eight parcels of land 
is somewhat clouded and could be impaired or lost. 
Congressional action is the only relief to clear title to the 
eight parcels.
    Under the bill, Congress corrects the problem by validating 
and confirming title to the eight parcels in accordance with 43 
U.S.C. 912, with an act similar to Public Law 326 of the Sixty-
Third Congress. In addition, on seven previous occasions 
Congress has validated similar conveyances under the same 
authority.

                            COMMITTEE ACTION

    H.R. 1784 was introduced on June 7, 1995, by Congresswoman 
Barbara F. Vucanovich (R-NV) for herself and Congressman 
William M. Thomas (R-CA). The bill was originally referred to 
the Committee on Transportation and Infrastructure. On July 11, 
1995, that Committee was discharged and the bill was rereferred 
to the Committee on Resources, and within the Committee to the 
Subcommittee on National Parks, Forests and Lands. On July 20, 
1995, the Subcommittee held a hearing on H.R. 1784, where Mrs. 
Vucanovich and Mr. Thomas testified in support of the bill. On 
October 17, 1995, the Subcommittee met to mark up H.R. 1784. No 
amendments were offered and the bill was ordered favorably 
reported to the Full Committee by voice vote. On November 15, 
1995, the Full Resources Committee met to consider H.R. 1784. 
Congressman James V. Hansen (R-UT) offered an amendment in the 
nature of a substitute. To the amendment in the nature of a 
substitute, Congressman George Miller (D-CA) offered an 
amendment to require the railroad company to pay fair market 
value to the U.S. Treasury if it is shown that any conveyance 
by the company validated under the Act resulted in a private 
property taking under the Fifth Amendment of the U.S. 
Constitution; the amendment was adopted by voice vote. 
Congressman Miller then offered an amendment to require that 
fair market value be paid for the United States' interests that 
are conveyed by the Southern Pacific Transportation Company; 
the amendment failed on a recorded vote of 10-17, as follows:

                 committee on resources--104th congress

                             rollcall no.1

    Bill: H.R. 1784, Pacific Railroad Land Conveyance.
    Amendment or matter voted on: Miller No. 2.

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Tauzin.....................  ........        X   .........  Mr. Miller.......        X   ........  .........
Mr. Hansen.....................  ........        X   .........  Mr. Rahall ......  ........  ........  .........
Mr. Saxton.....................  ........        X   .........  Mr. Vento........  ........  ........  .........
Mr. Gallegly...................  ........  ........  .........  Mr. Kildee.......        X   ........  .........
Mr. Duncan.....................  ........  ........  .........  Mr. Williams.....        X   ........  .........
Mr. Hefley.....................  ........  ........  .........  Mr. Gejdenson....        X   ........  .........
Mr. Doolittle..................  ........        X   .........  Mr. Richardson...  ........  ........  .........
Mr. Allard.....................  ........  ........  .........  Mr. DeFazio......        X   ........  .........
Mr. Gilchrest..................  ........  ........  .........  Mr. Faleomavaega.  ........  ........  .........
Mr. Calvert....................  ........        X   .........  Mr. Johnson......  ........  ........  .........
Mr. Pombo......................  ........        X   .........  Mr. Abercrombie..  ........  ........  .........
Mr. Torkildsen.................  ........        X   .........  Mr. Studds.......  ........  ........  .........
Mr. Hayworth...................  ........  ........  .........  .................  ........  ........  .........
Mr. Cremeans...................  ........        X   .........  Mr. Ortiz........  ........  ........  .........
Mr. Cubin......................  ........        X   .........  Mr. Pickett......  ........  ........  .........
Mr. Cooley.....................  ........  ........  .........  Mr. Pallone......        X   ........  .........
Mrs. Chenoweth.................  ........  ........  .........  Mr. Dooley.......  ........        X   .........
Mrs. Smith.....................  ........        X   .........  Mr. Romero-              X   ........  .........
                                                                 Barcelo.                                       
Mr. Radanovich.................  ........        X   .........  Mr. Hinchey......        X   ........  .........
Mr. Jones......................  ........        X   .........  Mr. Underwood....  ........  ........  .........
Mr. Thornberry.................  ........  ........  .........  Mr. Farr.........        X   ........  .........
Mr. Hastings...................  ........        X   .........                                                  
Mr. Metcalf....................  ........        X   .........                                                  
Mr. Longley....................  ........  ........  .........                                                  
Mr. Shadegg....................  ........        X   .........                                                  
Mr. Ensign.....................  ........        X   .........                                                  
----------------------------------------------------------------------------------------------------------------

    Congressman Miller offered and withdrew an amendment to 
delete the prospective portion of the bill. The Hansen 
amendment in the nature of a substitute, as amended, was 
adopted by voice vote. the bill, as amended, was then ordered 
favorably reported by a roll call vote of 17-10, as follows:

                 committee on resources--104th congress

                             rollcall no. 2

    Bill: H.R. 1784, Pacific Railroad Land Conveyance.
    Amendment or matter voted on: Final passage.

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present 
----------------------------------------------------------------------------------------------------------------
Mr. Tauzin.....................        X   ........  .........  Mr. Miller.......  ........        X   .........
Mr. Hansen.....................        X   ........  .........  Mr. Rahall.......  ........  ........  .........
Mr. Saxton.....................        X   ........  .........  Mr. Vento........  ........  ........  .........
Mr. Gallegly...................        X   ........  .........  Mr. Kildee.......  ........        X   .........
Mr. Duncan.....................  ........  ........  .........  Mr. Williams.....  ........  ........  .........
Mr. Hefley.....................        X   ........  .........  Mr. Gejdenson....  ........        X   .........
Mr. Doolittle..................        X   ........  .........  Mr. Richardson...  ........  ........  .........
Mr. Allard.....................        X   ........  .........  Mr. DeFazio......  ........        X   .........
Mr. Gilchrest..................  ........  ........  .........  Mr. Faleomavaega.  ........  ........  .........
Mr. Calvert....................        X   ........  .........  Mr. Johnson......  ........        X   .........
Mr. Pombo......................        X   ........  .........  Mr. Abercrombie..  ........        X   .........
Mr. Torkildsen.................        X   ........  .........  Mr. Studds.......  ........  ........  .........
Mr. Hayworth...................  ........  ........  .........  .................  ........  ........  .........
Mr. Cremeans...................  ........  ........  .........  Mr. Ortiz........  ........  ........  .........
Mrs. Cubin.....................        X   ........  .........  Mr. Pickett......  ........  ........  .........
Mr. Cooley.....................  ........  ........  .........  Mr. Pallone......  ........        X   .........
Mrs. Chenoweth.................  ........  ........  .........  Mr. Dooley.......  ........  ........  .........
Mrs. Smith.....................        X   ........  .........  Mr. Romero-        ........        X   .........
                                                                 Barcelo.                                       
Mr. Radanovich.................        X   ........  .........  Mr. Hinchey......  ........        X   .........
Mr. Jones......................        X   ........  .........  Mr. Underwood....  ........  ........  .........
Mr. Thornberry.................  ........  ........  .........  Mr. Farr.........  ........        X   .........
Mr. Hastings...................        X   ........  .........                                                  
Mr. Metcalf....................        X   ........  .........                                                  
Mr. Longley....................  ........  ........  .........                                                  
Mr. Shadegg....................  ........  ........  .........                                                  
Mr. Ensign.....................        X   ........  .........                                                  
----------------------------------------------------------------------------------------------------------------

                      SECTION-BY-SECTION ANALYSIS

Section 1. Legalization of certain conveyances

    Certain land conveyances described in the bill and made by 
the Southern Pacific Transportation Company, or its 
subsidiaries, predecessors, successors or assigns, are 
validated.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of Rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                     INFLATIONARY IMPACT STATEMENT

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 1784 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                        COST OF THE LEGISLATION

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 1784. However, clause 7(d) of that Rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     COMPLIANCE WITH HOUSE RULE XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.R. 
1784 does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 1784.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
1784 from the Director of the Congressional Budget Office.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, December 6, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 1784, a bill to validate certain conveyances made 
by the Southern Pacific Transportation Company within the 
cities of Reno, Nevada, and Tulare, California, and for other 
purposes, as ordered reported by the House Resources Committee 
on November 15, 1995. Enacting H.R. 1784 could affect direct 
spending if a taking of private property were later determined 
to result from any conveyances made pursuant to this bill. 
Therefore, pay-as-you-go procedures would apply to the bill. 
CBO cannot estimate the likelihood or the year-by-year 
magnitude of any budgetary effects that might result from 
enacting this bill, but we estimate that any such changes would 
net to zero over time.
    H.R. 1784 would give the Southern Pacific Transportation 
Company the right to convey title to certain lands that form 
part of a railroad right-of-way previously granted by the 
federal government. Hence, the bill would validate land 
conveyances where the federal government owns the underlying 
title and the railroad controls the right-of-way. The bill 
would apply to both past and future conveyances.
    Whether the federal government actually holds title to some 
of the lands within the railroad right-of-way not be certain, 
however. In some cases, the right to ownership should the 
easements lapse might revert to a third party. If a conveyance 
of any such lands results in a taking of private property, then 
the bill provides that such conveyances would be valid only if 
the Southern Pacific Transportation Company reimburses the 
government for the cost of any takings compensation.
    Federal Budgetary Impact.--The bill would provide that if 
any conveyance validated by the bill is determined to be a 
taking of private land because of disputed ownership rights, 
then the Southern Pacific Transportation Company must pay the 
federal government the fair market value for that conveyance. 
The bill does not state how such funds are to be used, but if 
the federal government were required to compensate a third 
party for the fair market value of land under a takings 
decision, then this provision would likely have the effect of 
requiring the Southern Pacific Transportation Company to 
reimburse the federal government for the costs of such 
compensation. Although CBO cannot estimate the likelihood or 
magnitude of any such takings claims, the net budgetary impact 
over time should be zero because the bill would require that 
the railroad reimburse the federal government for any takings 
compensation.
    Impact on State and Local Governments.--H.R. 1784 would 
apply to lands that lie within railroad rights of way in the 
cities of Tulare, California, and Reno, Nevada, and that were 
conveyed to any party before January 1, 1995, or are conveyed 
to the redevelopment agencies of these cities after that date. 
The bill would benefit the city of Tulare and Washoe County 
(which includes Reno) by clearing the title to parcels of land 
purchased by those governments. Both cities have plans to make 
additional purchases to further their redevelopment goals, but 
can only do so if Southern Pacific is able to make valid 
conveyances.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO contacts are Victoria V. Heid 
and, for state and local impacts, Marjorie Miller.
            Sincerely,
                                              James L. Blum
                                    (For June E. O'Neil, Director).
                              ----------                              

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 10, 1996.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office (CBO) 
has reviewed H.R. 1784, a bill to validate certain conveyances 
made by the Southern Pacific Transportation Company within the 
cities of Reno, Nevada, and Tulare, California, and for other 
purposes, as ordered reported by the House Committee on 
Resources on November 15, 1995. This letter conveys CBO's 
determination regarding intergovernmental and private-sector 
mandates in the bill. Our estimate of the federal budgetary 
impact was transmitted to the committee on December 6, 1995.
    H.R. 1784 contains no intergovernmental mandates as defined 
in Public Law 104-4 and would impose no costs on state, local, 
or tribal governments. H.R. 1784 would apply to lands that lie 
within railroad rights of way in the cities of Tulare, 
California, and Reno, Nevada, and that were conveyed to any 
party before January 1, 1995, or are conveyed to the 
redevelopment agencies of these cities after that date. The 
bill would benefit the city of Tulare and Washoe County (which 
includes Reno) by clearing the title to parcels of land 
purchased by those governments. Both cities have plans to make 
additional purchases to further their redevelopment goals, but 
can only do so if Southern Pacific is able to make valid 
conveyances.
    CBO estimates that H.R. 1784 contains no private-sector 
mandates exceeding the annual threshold as defined in Public 
Law 104-4. H.R. 1784 could only impose private-sector mandates 
in the unlikely event that a private party claims ownership of 
the land to be conveyed and is successful in pressing that 
claim. In that case, the federal government would compensate 
the private party, Southern Pacific would be forced to 
reimburse the Treasury, and thus the railroad would bear the 
cost of the mandate.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO contacts are Majorie Miller 
for state and local impacts and Amy Downs for private-sector 
impacts.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                    COMPLIANCE WITH PUBLIC LAW 104-4

    H.R. 1784 contains no unfunded intergovernmental mandates 
or any private sector mandates over the threshold set by Public 
Law 104-4.

                        CHANGES IN EXISTING LAW

    If enacted, H.R. 1784 would make no changes in existing 
law.

                          DEPARTMENTAL REPORTS

    The Committee has received the following departmental 
report dated November 8, 1995, on H.R. 1784.

                        Department of the Interior,
                                   Office of the Secretary,
                                  Washington, DC, November 8, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: Thank you for the opportunity to provide 
the views of the Department of the Interior (DOI) on H.R. 1784, 
a bill to validate certain conveyances made by the Southern 
Pacific Transportation Company within the cities of Reno, 
Nevada and Tulare, California. A preliminary review of the 
facts and records available to the DOI reveals a very complex 
set of issues regarding the ownership and title status of these 
lands. Many issues related to these conveyances cannot be 
resolved without a complete title search of Federal and State 
title records. We have, however, identified a number of 
problems with the bill and would oppose enactment of H.R. 1784 
unless amended as suggested below.

                               background

    The interest of the Southern Pacific Transportation Company 
(SPT) in the lands that are the subject of the bill originates 
from a right-of-way granted under the Pacific Railroads Act of 
July 1, 1862, ch. 120, 12 Stat. 489, as amended. Section 2 of 
the Act granted a 400 foot-wide right-of-way through the public 
lands of the United States ``[F]or the construction of a 
railroad and a telegraph line.'' In Northern Pac. Ry. v. 
Townsend, 190 U.S. 267, 271 (1903), the right-of-way grant was 
characterized as a limited fee made on an implied condition of 
reverter in the event that the railroad ceased to use the 
right-of-way for the purpose for which it was granted. 
Operationally, in the event that the railroad ceases use of the 
right-of-way, and a forfeiture is declared by the Congress or a 
judicial proceeding initiated by the Attorney General of the 
United States, the interest of the railroad is forfeited. In 
United States v. Union Pacific Railroad Company, 353 U.S. 112 
(1957), the Supreme Court also determined that the grants made 
under Section 2 of the Act did not include a conveyance of the 
mineral rights.
    Records of the Bureau of Land Management (BLM), Nevada 
State Office indicate that the lands which include the right-
of-way were subsequently patented to third parties, which took 
title subject to the railroad's limited fee.
    The DOI maintains no records or information as to 
subsequent conveyances following the granting of the right-of-
way and the issuance of patents.

                               H.R. 1784

    The stated purpose of H.R. 1784 is to validate certain 
conveyances made by the SPT to third parties. Section 1(a) of 
the bill validates those conveyances to the extent that they 
would have been legal or valid if the land had been held by SPT 
under absolute fee-simple title. Section 1(a)(1) validates 
conveyances made by SPT for certain lands on or before January 
1, 1995.
    We assume that the intent of Congress is to relinquish 
whatever interest the United States now has in the subject 
lands. The language in Section 1(a) could be construed to do 
more. Confirming the conveyances as if the SPT has full fee 
title may interfere with the property rights of other parties 
who may claim an interest in the land. We therefore suggest 
that Section 1(a) be amended to read:

          (a) In General.--Notwithstanding any other provision 
        of law, and subject to section 2, the following 
        conveyances are hereby validated to the extent that the 
        conveyances would have been legal or valid if all 
        right, title or interest of the United States had been 
        held by the Southern Pacific Transportation Company at 
        the time of such conveyances:

    In the alternative, the Congress could simply enact 
language that terminates the limitations on use as provided in 
the 1862 Act as to those lands that are the subject of the 
bill. This would act to terminate the possibility of reverter 
as well.
    Section 1(a)(2) purports to validate conveyances 
prospectively after January 1, 1995. It is our understanding 
that the purpose of this bill is to protect and assist grantees 
of the SPT who were unaware of the limitations on use and 
reversionary interest of the United States. We have no 
objection to including any of those grantees in section 1(a) of 
the bill. However, any prospective conveyances would be made 
with full knowledge by the parties of the limitations on the 
railroad interest and we question why those conveyances would 
need to be protected under this bill.
    Section 1(b) describes the lands referred to in subsection 
(a). Section 1(b)(2)(A) describes lands ``located within the 
boundaries of the Downtown Redevelopment Area of the city of 
Reno, Nevada (as defined and determined by the Secretary of the 
Interior, in consultation with the appropriate official of the 
city of Reno, Nevada);'' It is our understanding that the City 
of Reno, by ordinance, has established and defined its Downtown 
Redevelopment Area. We don't believe that it is appropriate for 
the Secretary of the Interior to become involved in defining 
and determining the boundaries of a city's redevelopment area 
when the city has already established it by ordinance. We 
suggest that this reference and the similar parenthetical 
reference in section 1(b)(2)(B) be deleted.
    Section 2 requires the Secretary of the Interior to file 
for recordation in the County records of Tulare County, 
California, and Washoes County, Nevada, such instruments as are 
necessary to document the legal interests validated under 
section 1. We believe that this section establishes a bad 
precedent in that the United States does not pay for filing 
costs and record documents in County offices for the benefit of 
grantees. In the usual course of business, the grantee, as the 
benefited party, takes such action. Furthermore, this section 
is contrary to the long-standing requirement that the legal 
repository for records of conveyance documents issued by the 
Secretary of the Interior is the appropriate Bureau of Land 
Management office and not the County Recorder's Office. We 
believe that such action is unnecessary because the bill itself 
confirms conveyancing documents that already exist rather than 
creates new conveyances. Creation of new coveyancing documents 
might be confusing and contrary to the objectives of this bill.
    Finally, we have noted over the years, a number of 
legislative initiatives to correct title problems that occur as 
a result of purchasers taking deeds from railroads, only to 
discover that the railroads have conveyed questionable titles. 
Congress enacted legislation in 1922 with this concern in mind. 
See 43 U.S.C. 912. The Congress recently recognized the value 
of railroad rights-of-way when it enacted Section 9 of the 
National Trails System Act (16 U.S.C. 1248). This statute 
provides for Federal ownership of abandoned or forfeited 
railroad rights-of-way. It, in part, supersedes the 1922 
legislation. The pending bill does not take the policy of 
section 9 into account.
    Therefore, if the Congress would like to provide for 
validation of conveyances in section 1(a) of the bill, and any 
future conveyances, we recommend that the validation be subject 
to the payment by the railroad companies of fair market value 
for the United States' or other interests that are purportedly 
conveyed.
    The continuing practice of railroad companies to purport to 
convey valid titles to purchases and then look to the Congress 
in order to validate such conveyances is contrary to the intent 
of the National Trails Systems Act, is contrary to the spirit 
of the acts which granted rights-of-way for railroad purposes 
only, and is inconsistent with the notion that the American 
people should realize fair market value for interests in 
publicly-owned land.
    The Office of Management and Budget advised that there is 
no objection to the presentation of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                             Bob Armstrong,
              Assistant Secretary for Land and Minerals Management.
                            DEMOCRATIC VIEWS

    There are several areas of concern with H.R. 1784.
    The process used by the Committee during consideration of 
H.R. 1784 was unusual and yielded little information to 
Committee Members. A hearing was held by the Subcommittee on 
National Parks, Forests and Lands on July 20, 1995, yet no 
witnesses appeared to give testimony to the Subcommittee on the 
bill. Only the bill's sponsors, Reps. Vucanovich and Thomas, 
spoke on the bill. The Administration was not prepared to 
testify but subsequently submitted its views in opposition to 
the bill on November 8, 1995; however, the Subcommittee met and 
marked up the bill on October 17, 1995. The Resources Committee 
reported this bill on November 15, 1995.
    The Committee considered this legislation without benefit 
of receiving input from the Southern Pacific Transportation 
Company; the affected cities of Reno, Nevada, or Tulare, 
California; those who paid Southern Pacific for the 
conveyances; adjacent landowners; or supporters of rails to 
trails programs. The lack of information was evident during the 
full committee markup of the bill where Members asked several 
questions and stated that it was not clear what specific land 
sites would be covered by the legislation.
    Southern Pacific Transportation Company received an 
interest in the lands that are the subject of H.R. 1748 through 
a right-of-way granted under the Pacific Railroads Act of July 
1, 1862, ch. 120, 12 Stat. 489, as amended. Section 2 of the 
Act granted a 400 foot-wide right-of-way through the public 
lands of the United States ``For the construction of a railroad 
and telegraph line.''
    In Northern Pac. Ry. v. Townsend, 190 U.S. 267, 271 (1903), 
the right-of-way grant was characterized as a ``limited fee 
made on an implied condition of reverter'' in the event that 
the railroad ceased to use the right-of-way for the purpose for 
which it was granted. If the railroad ceases use of the right-
of-way, and a forfeiture is declared by the Congress or a 
judicial proceeding initiated by the Attorney General of the 
United States, the railroad loses its interest in the land. In 
United States v. Union Pacific Railroad Company, 353 U.S. 112 
(1957), the Supreme Court also determined that the grants made 
under Section 2 of the Act did not include a conveyance of the 
mineral rights.
    Because the United States has a reversionary interest in 
railroad rights-of-way, the railroads exceed their ownership 
rights when they purport to transfer these properties to other 
entities for non-transportation uses. Congress has validated 
some such transfers in the past, but we are concerned that 
repeated validation of transfers will encourage railroads to 
sell property they do not entirely own, with the expectation 
that Congress will grant a post hoc validation of the transfer. 
Such transfers can be highly profitable; in this case the 
purchasers paid more than $10 million for the property rights 
transferred in Reno. Giving away the government's interest in 
these valuable properties clearly violates the taxpayers' 
interest in receiving fair market value for Federal property.
    Under previous Congressional validations very small parcels 
of land had been conveyed to private landowners who had 
inadvertently encroached on the right-of-way land. Often the 
landowner was unaware of the encroachment until sale of the 
property showed a clouded title. Support for validating such a 
conveyance was done to assist the landowner and allow a clear 
title to proceed.
    H.R. 1784 is not similar to previous Congressional 
validations because this bill uses such validations for 
commercial redevelopment of the cities of Reno and Tulare. Use 
of Congressional validation for this purpose runs counter to 
the intent of Section 9 of the National Trails System Act (16 
U.S.C. 1248), which provided for Federal ownership of railroad 
rights-of-way that are forfeited or abandoned. If Congress 
wants to amend or discontinue the effects of the National 
Trails System Act, it should do so by addressing the Act 
directly.
    Further, H.R. 1784 is dissimilar to previous Congressional 
validations in that it would prospectively validate sales. The 
legislation would automatically clear titles to all future 
sales by the Southern Pacific Transportation Company allowing 
them to sell land within what the cities of Reno and Tulare 
consider to be redevelopment areas without restriction. This 
adds an entirely new aspect to the handling of conveyance 
validations which Congress has approved in the past. Taking 
such action would give a clear signal to the railroad companies 
that continued sale of these properties is acceptable to 
Congress regardless of location. If enacted, this legislation 
would result in Southern Pacific Transportation Company reaping 
huge financial gains, and some potential opportunity for the 
Cities of Reno and Tulare to benefit, while the Federal 
government relinquishes all its rights without compensation.
    In a letter to the Committee regarding this legislation, 
the Bureau of Land Management (BLM) wrote of the very complex 
set of issues regarding ownership of title to these lands, 
which it stated could only be resolved with a complete title 
search. Further, BLM reported, ``The continuing practices of 
railroad companies to purport to convey valid titles to 
purchasers and then look to the Congress in order to validate 
such conveyances is contrary to the intent of the National 
Trails Systems Act, is contrary to the spirit of the acts which 
granted rights-of-way for railroad purposes only, and is 
inconsistent with the notion that the American people should 
realize fair market value for interests in publicly-owned 
land.''
    H.R. 1784 as introduced may also create a situation where 
the federal government may be directly taking private property. 
The main purpose of the bill is to validate property claims 
where there is a cloud on the title. The cloud results from the 
``reversionary'' interests of the U.S. government and third 
parties--that is, a right to have the property revert to others 
when the land ceases to be used for railroad purposes. The 
right is generally held by the federal government for lands 
granted to the railroads from the public domain. However, the 
provisions of a 1922 law and patents to mining companies under 
the 1872 Mining Law have created a number of situations where 
private landowners hold the reversionary interest.
    In other words, the purpose of the bill is to extinguish 
property rights that interfere with the title granted Southern 
Pacific Transportation Company. Extinguishing those rights if 
they are owned by private parties, is a straightforward taking 
of private property. The property owners whose rights were 
extinguished would have a clear claim for reimbursement from 
the Treasury under the Fifth Amendment.
    In order to address this takings problem, Rep. George 
Miller offered an amendment which was adopted during full 
Committee markup of the bill. Mr. Miller's amendment would 
require Southern Pacific Transportation Company to pay fair 
market value to the U.S. Treasury if it is shown that any 
conveyance by the company validated under this Act resulted in 
a private property taking under the Fifth Amendment of the U.S. 
Constitution.
    During Committee consideration of the bill, Rep. Neil 
Abercrombie (D-HI) raised a concern relating to the specific 
language in H.R. 1784 as it relates to reservation of federal 
mineral rights. Mr. Abercrombie, as ranking Democrat on the 
Energy and Mineral Resources Subcommittee, correctly noted that 
the language in the bill as introduced and as in the Hansen 
substitute does not conform with prior laws. In the past, with 
withdrawals from the mining laws, Congress has most commonly 
stated that the lands in question are no longer subject to 
appropriation from such law, and normally Congress has made 
this withdrawal subject to valid existing rights. With respect 
to the mineral leasing laws, the withdrawal is often stated as 
the lands are no longer subject to disposition or the operation 
of such laws. [See for example sec. 9(a)(iii) of the Wild and 
Scenic Rivers Act of sec. 4(d)(3) of the Wilderness Act].
    At other times, Congress has phrased withdrawals from the 
mining laws to state that the lands are no longer subject to 
entry under the mining laws (there are examples where this term 
is also used in conjunction with appropriation, i.e., ``entry 
or appropriation under the mining law'') or to location (of 
claims) under the mining laws (there are other examples where 
this term in used in conjunction with entry, i.e., ``entry or 
location under the mining law'').
    H.R. 1784 incorrectly makes the ``minerals closed to 
further entry'' which is not consistent with the mining laws 
since it is the lands that should be closed from entry, not the 
minerals. In a colloquy with Rep. Hansen during Committee 
consideration of the bill, Rep. Abercrombie was assured that 
his concerns relating to the language in the bill as introduced 
would be resolved as a technical amendment subsequent to 
Committee consideration and prior to House action. This has not 
occurred. The Minority requested that the bill, as amended and 
reported by the Committee, be further modified to replace 
subsection (c) with language that more closely conforms with 
prior laws, such as P.L. 99-543. The intent of both provisions 
is the same: to reserve to the United States all minerals 
located in the lands in question.
    Since the Committee reported the bill, we have heard from 
landowners in Reno, Nevada regarding potential problems they 
face. Conveyances made by Southern Pacific have included city 
streets and sidewalks abutting private property. These property 
owners may be left landlocked and at the mercy of the new 
owners. In at least one instance ``air rights'' were sold; in 
another, an underground vault was conveyed which had always 
been considered part of one owner's building. Property taxes 
and street assessments over the years have been paid by the 
private owners or lessees. These concerns should be addressed 
before this bill moves forward.

                                   George Miller.
                                   Bruce Vento.
                                   Neil Abercrombie.
                                   Dale Kildee.
```