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105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-171
_______________________________________________________________________


 
 TO VALIDATE CERTAIN CONVEYANCES IN THE CITY OF TULARE, TULARE COUNTY, 
                               CALIFORNIA

                                _______
                                

  July 8, 1997.--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

                            ADDITIONAL VIEWS

                        [To accompany H.R. 960]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 960) to validate certain conveyances in the City of 
Tulare, Tulare County, 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. FINDINGS.

  The Congress finds that:
          (1) It is in the Federal Government's interest to facilitate 
        local development of jobs in areas of high unemployment.
          (2) Railroad interests in rights-of-way prevent local 
        communities from obtaining clear title to property for 
        development unless the city also obtains the Federal 
        reversionary interest in those rights-of-way.
          (3) For development purposes, in order to secure needed 
        financing, the City of Tulare Redevelopment Agency requires 
        clear title to certain parcels of land within the city's 
        business corridor that are part of a railroad right-of-way.

SEC. 2. TULARE CONVEYANCE.

  (a) In General.--Subject to subsections (c) and (d), all conveyances 
to the Redevelopment Agency of the City of Tulare, California, of lands 
described in subsection (b), heretofore or hereafter, made directly by 
the Southern Pacific Transportation Company, or its successors, are 
hereby validated to the extent that the conveyances would be legal or 
valid if all right, title, and interest of the United States, except 
minerals, were held by the Southern Pacific Transportation Company.
  (b) Lands Described.--The lands referred to in subsection (a) are the 
parcels shown on the map entitled ``Tulare Redevelopment Agency-
Railroad Parcels Proposed to be Acquired'', dated 5/29/97, that formed 
part of a railroad right-of-way granted to the Southern Pacific 
Railroad Company, or its successors, agents, or assigns, by the Federal 
Government (including the right-of-way approved by an Act of Congress 
on July 27, 1866). The map referred to in this subsection shall be on 
file and available for public inspection in the offices of the Director 
of the Bureau of Land Management.
  (c) Preservation of Existing Rights of Access.--Nothing in this 
section shall impair any existing rights of access in favor of the 
public or any owner of adjacent lands over, under or across the lands 
which are referred to in subsection (a).
  (d) Minerals.--The United States disclaims any and all right of 
surface entry to the mineral estate of lands described in subsection 
(b).

                          purpose of the bill

    The purpose of H.R. 960 is to validate certain conveyances 
in the City of Tulare, Tulare County, California.

                  background and need for legislation

    From 1862 to 1871, Congress passed the Pacific Railroad 
Acts to promote a system of railroads in the western United 
States. The Acts granted the Southern Pacific Railroad Company 
a right-of-way along the route where the railroad tracks were 
eventually laid. In Tulare, California, this right of way 
measures 220 feet on both sides of the tracks, and falls within 
the city's Downtown Redevelopment Area.
    The courts have characterized this right-of-way grant as a 
``limited fee made on an implied condition of reverter'' if the 
Railroad ceased to use the right-of-way for the purpose for 
which it was granted. If the Railroad ever forfeited or 
abandoned the land for railroad purposes, ownership of the land 
would revert to the United States. The Bureau of Land 
Management (BLM) would then manage these areas.
    Over 100 years have passed since the Railroad started using 
this right-of-way and its successor Union Pacific still runs 
over 30 trains per day through the city. However, because the 
Railroad is technically unable to pass clear title to the land 
within the right-of-way, development along the tracks is 
practically impossible. Consequently, the City of Tulare has a 
barren strip of weeds, sand and abandoned buildings 200 feet 
wide on both sides of the tracks.
    H.R. 960 will facilitate redevelopment of the City's 
downtown area by effectively transferring the federal 
reversionary interest in 12 parcels of property (including one 
the City already attempted to purchase) from the Southern 
Pacific Railroad to the Tulare Redevelopment Agency so that the 
Agency can pursue a ten-year redevelopment program. Commercial 
development currently stops at the eastern border of the 
parcels addressed by the bill and the railroad right of way. To 
proceed with financing, marketing and other redevelopment 
activities, the Agency must have the ability to acquire title 
to all of these parcels without the incumberance of the federal 
reversionary interest. The presence of a federal reversionary 
interest in these lands prevents the Agency from dealing with 
the current railroad to carry out its redevelopment plans.
    The lands addressed by the bill are not attractive to the 
BLM, which has indicated that it would seek to transfer them to 
the City if the parcels were to return to full federal control. 
The Committee recommends that the reversionary interest covered 
by the bill be transferred as the bill allows, so that the 
Agency and Railroad can begin discussion of ways to facilitate 
development without the federal reversionary interest standing 
in the way of any options either party may wish to discuss.

                            committee action

    H.R. 960 was introduced on March 5, 1997, by Congressman 
William Thomas (R-CA). The bill was referred to the Committee 
on Resources, and within the Committee to the Subcommittee on 
National Parks and Public Lands. On May 20, 1997, the 
Subcommittee held a hearing on H.R. 960, where the 
Administration testified in support of H.R. 960 if certain 
changes were made to the bill as introduced. On June 19, 1997, 
the Subcommittee met to mark up H.R. 960. An amendment in the 
nature of substitute was offered by Congressman James V. Hansen 
(R-UT) which eliminated any waivers of other laws, clarified 
the language that will transfer the reversionary interest to 
the Tulare Redevelopment Agency, and preserved the mineral 
interest ownership with the Federal Government. The amendment 
was adopted by voice vote and the bill, as amended, was then 
ordered favorably reported to the Full Committee. On June 25, 
1997, the Full Resources Committee met to consider H.R. 960. A 
technical amendment to correct the date of the referenced map 
was offered by Congressman George Radanovich (R-CA), and 
adopted by voice vote. The bill, as amended, was then ordered 
favorably reported to the House of Representatives by voice 
vote.

            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.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Article I, section 8 and Article IV, section 3 of the 
Constitution of the United States grant Congress the authority 
to enact H.R. 960.

                        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. 960. 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. 
960 does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in tax 
expenditures. According to the Congressional Budget Office, if 
H.R. 960 is enacted, the bill could affect revenues but that 
the likelihood of any revenue to the U.S. Treasury from the 
sale of the land underlying the rights-of-way transferred under 
this bill ``is small.''
    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. 960.
    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. 960 
from the Director of the Congressional Budget Office.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 3, 1997.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 960, a bill to 
validate certain conveyances in the city of Tulare, Tulare 
County, California, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Victoria V. 
Heid (for federal costs) and Marjorie Miller (for the state and 
local impact).
            Sincerely,
                                          Paul Van de Water
                                   (For June E. O'Neill, Director).
    Enclosure.

H.R. 960--A bill to validate certain conveyances in the city of Tulare, 
        Tulare County, California, and for other purposes

    H.R. 960 would give the Southern Pacific Transportation 
Company or its successors the right to convey title to certain 
lands in the city of Tulare, California, that form part of a 
right-of-way previously granted to the railroad 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. CBO estimates that enacting 
H.R. 960 would have little or no impact on the federal budget.
    If the railroad ceased to operate on the right-of-way, then 
land comprising the right-of-way would revert to federal 
ownership. According to the Bureau of Land Management (BLM), if 
the agency were to receive the land it would have no interest 
in retaining ownership and would either sell it, exchange it, 
or transfer it to local government. BLM estimates that the 
portion of the right-of-way that would be affected by H.R. 960 
has a market value of about $300,000.
    Enacting H.R. 960 would affect direct spending if property 
that would have reverted to the federal government and been 
sold under current law is instead not sold because of 
conveyances made pursuant to this bill. Because the bill could 
affect direct spending, pay-as-you-go procedures would apply. 
But the likelihood of any income to the Treasury from sale of 
the affected property over the next 10 years is small.
    H.R. 960 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
and would impose no costs on state, local, or tribal 
governments. The bill would benefit the city of Tulare by 
clearing the title to one parcel of land already purchased by 
the city and allowing the Tulare Redevelopment Agency to 
purchase and develop several additional parcels.
    The CBO staff contacts for this estimate are Victoria V. 
Heid (for federal costs) and Marjorie Miller (for the state and 
local impact). This estimate was approved by Paul N. Van de 
Water, Assistant Director for Budget Analysis.

                    compliance with public law 104-4

    H.R. 960 contains no unfunded mandates.

                        changes in existing law

    If enacted, H.R. 960 would make no changes in existing law.

                            ADDITIONAL VIEWS

    The United States gave Southern Pacific Transportation 
Company an interest in the lands that are the subject of H.R. 
960 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. Under these conditions, if the railroad 
were to cease use of the right-of-way, and a forfeiture were 
declared by the Congress or a judicial proceeding initiated by 
the Attorney General of the United States, the railroad would 
lose its interest in the land, which would revert to the 
federal government.
    The National Trails System Act (16 U.S.C. 1241) provides 
that ``* * * all right, title, interest, and estate of the 
United States in all rights-of-way * * * shall remain in the 
United States upon the abandonment of forfeiture * * *''. This 
Act establishes a mechanism by which the reverted land can be 
used for recreation trails. H.R. 960 would preempt the National 
Trails System Act by eliminating the reversionary interest.
    The City of Tulare wants to buy the right-of-way land 
alongside the railroad to sell or lease through the City of 
Tulare Redevelopment Agency. The railroad, however, does not 
own the land (the taxpayers do), and so the title is not 
cleared to convey. One parcel in the City of Tulare has already 
been sold by the railroad despite the fact it did not own the 
land. This legislation would validate title to the parcel 
already sold as well as prospectively extinguishing federal 
reversion rights on all lands within the redevelopment plan 
area, thereby giving Southern Pacific Transportation Company 
clear title to sell the lands and to profit from their 
disposal.
    In the past Congress has validated some limited conveyances 
in situations where the new owner purchased the land in good 
faith without realizing there was a reversion interest to the 
federal government. Parcels approved in the past have been of 
little monetary value and were mostly used for private housing. 
This legislation will mark the first time that Congress 
prospectively validated parcels in this manner before they were 
sold and before any party was misled about the title of land 
which it had purchased.
    Enactment of this legislation will be the first time the 
United States relinquishes its interest in railroad rights-of-
way lands for the purpose of community redevelopment. By all 
accounts the City of Tulare is in need of revitalization. 
Extinguishing federal rights to this land may help the 
redevelopment of the area. How much profit Southern Pacific 
Transportation Company realizes from selling the federal 
interest will presumably be determined through price 
negotiations with the City of Tulare.
    It should be noted that this legislation responds to a 
specific and unique set of circumstances in the City of Tulare. 
In this instance, the federal government has determined that if 
the railroad right of way lands were to revert, the federal 
government would not be interested in managing the lands. 
Passage of this legislation should not be perceived as 
endorsing the concept of the federal government giving away 
public rights without just compensation.
                                   George Miller.
                                   Eni Faleomavaega.