(a) The corporation may delineate a proposed transportation corridor between the existing railroad utility corridor of the Alaska Railroad and the border of Alaska and Canada. The transportation corridor shall be 500 feet wide except where, in the corporation's discretion, physical obstacles or private land ownership patterns make a narrower transportation corridor appropriate. The transportation corridor may be designated for a use identified under AS 38.35.020(a) or AS 42.40.350(b), and, subject to this section, other transportation and utility uses. The corporation may also identify land for use as rail land that can be developed for terminal, station, and maintenance facilities, switching yards, and other purposes associated with the transportation corridor. The corporation shall prepare a complete legal description of the proposed transportation corridor and the rail land identified under this subsection.

(b) In performing the work authorized by (a) of this section, the corporation, in consultation with interested parties, shall consider the following factors:

(1) safety;

(2) grade and alignment standards that are commensurate with rail and utility construction standards and that minimize the prospect of at-grade railroad and highway crossings;

(3) availability of construction materials;

(4) effects on and service to adjacent communities and potential intermodal transportation connections;

(5) environmental concerns;

(6) use of public land to the maximum degree possible;

(7) minimization of probable construction costs;

(8) the location of and the opportunity to obtain access to identified natural resources that could contribute significantly to the economic development of the state and Canada;

(9) avoidance of possibly unstable ground due to thawing of frozen soils; and

(10) prior and established traditional uses.

(c) If the corporation identifies all or a portion of the proposed transportation corridor or associated rail land and if the Department of Natural Resources, after consultation with the corporation and potentially affected parties, finds that the location of the proposed transportation corridor and associated rail land minimizes adverse effects on existing and potential rights-of-way and land uses associated with the location, construction, and operation of a gas pipeline in a manner that is in the best interest of the state,

(1) the Department of Natural Resources shall reserve the transportation corridor and associated rail land across state land identified by the corporation, subject to valid existing rights and provisions of this section;

(2) the department shall continue to manage the land reserved under (1) of this subsection; the department shall consult with the corporation before disposing of an interest in land within the transportation corridor and associated rail land; the department shall condition authorizations for activities on the reserved land to protect the right of the corporation to construct the railroad or other uses identified for the land;

(3) the department and the corporation shall cooperate to identify, on a continuing basis and to the extent practicable, the potential crossings for economic development and public access along the land reserved for the transportation corridor and associated rail land; and

(4) while the land is reserved for the transportation corridor and associated rail land under this subsection, the department may retain money received from disposal or third-party use of the land.

(d) If the corporation notifies the Department of Natural Resources that the corporation will begin construction of a railroad improvement on a segment of the transportation corridor or associated rail land and the corporation has identified a source of funding for the construction, then, as of the beginning of construction of that segment, the department shall delegate authority to manage land within that segment of the transportation corridor and associated rail land to the corporation, including the authority to authorize or permit use of the land by third parties under the provisions of this chapter, subject to

(1) valid existing rights; and

(2) the authority of the department

(A) to identify and reserve rights-of-way for potential future crossings under (g) of this section; and

(B) after consultation with the corporation, to identify, reserve, authorize, and manage land within the transportation corridor and associated rail land for future right-of-way leases and uses under AS 38.35.

(e) Upon completion of construction of the railroad improvement on all or a portion of the reserved transportation corridor or associated rail land,

(1) the corporation shall, without cost to the Department of Natural Resources, provide the department with a survey of the state land within a 200-foot corridor, 100 feet on each side of the as-built centerline of track, and the associated rail land;

(2) the Department of Natural Resources shall convey the state's entire interest in the land within the boundaries of the survey to the corporation, subject to valid existing rights, and reserving to the state (A) the interests required by AS 38.05.125; (B) the right of the department to identify and reserve rights-of-way for potential future crossings under (g) of this section; and (C) the authority of the department to identify, reserve, authorize, and manage land within the transportation corridor and associated rail land for future right-of-way leases and uses under AS 38.35; the conveyance of land under this paragraph shall be without cost to the corporation except for the direct administrative costs of the department;

(3) the Department of Natural Resources shall assign any existing contracts within that segment of the transportation corridor and associated rail land to the corporation; the corporation may thereafter retain the revenue from the conveyed land; the department shall prorate revenue from contracts affecting both conveyed and unconveyed land;

(4) the remaining state land in a segment of the transportation corridor in which the corporation has received a conveyance under this section shall be managed by the Department of Natural Resources as a transportation corridor unless the department determines the land is no longer needed for that purpose; and

(5) the remaining segments of the transportation corridor in which the corporation has not completed construction and any associated state land designated as rail land shall continue to be managed by the Department of Natural Resources as a transportation corridor and associated rail land under (c) and (d) of this section.

(f) Notwithstanding other provisions of this section, before the Department of Natural Resources grants a gas pipeline right-of-way lease under AS 38.35.020(a) across a transportation corridor or associated rail land delineated, identified, reserved, or conveyed under this section, the department shall consult with the corporation; if a railroad improvement has not been constructed on a segment of the transportation corridor or associated rail land that is crossed by the proposed gas pipeline right-of-way, the department may adjust the location of the transportation corridor or associated rail land if the department finds that relocation of the transportation corridor or associated rail land to accommodate the proposed gas pipeline right-of-way is in the best interest of the state.

(g) In delegating management authority over or conveying all or a portion of state land to the corporation, the Department of Natural Resources shall reserve the right to authorize, by lease, permit, or other method, a person to cross or construct access across the transportation corridor and associated rail land; however, before authorizing a crossing or construction of access, the department shall obtain concurrence from the corporation that the proposed crossing or construction is consistent with applicable safety standards and, to the extent practical, minimizes effects on railroad operating efficiency. Neither the corporation nor the state is liable for claims arising from public use of the transportation corridor and associated rail land, except to the extent the claims arise from the gross negligence of the state, the corporation, their employees, or their contractors, respectively. The department shall indemnify the corporation consistent with AS 42.40.420(1) - (3) for claims or related litigation arising from an authorization issued by the department under this section, except to the extent the claims arise from the gross negligence of the corporation, its employees, or its contractors.

(h) The corporation shall,

(1) as the corporation considers appropriate, exercise its authority under this chapter to acquire rights-of-way across land within the transportation corridor and associated rail land that is subject to the corporation's power of eminent domain;

(2) upon delineation of the transportation corridor and identification of associated rail land, expeditiously work with federal officials to secure reclassification and withdrawal of federal land for reservations and rights-of-way across the federal land for use as transportation corridor and rail land; and

(3) before undertaking acquisition of federal land, prepare a report evaluating the effects of construction of an extension of the Alaska Railroad across federal land; the statement must satisfy the requirements for an environmental impact statement under 42 U.S.C. 4332.

(i) The requirements of AS 38.04.065 and 38.05.300, relating to classification and reclassification of land, are inapplicable to actions taken by the Department of Natural Resources under this section.

(j) The Department of Natural Resources shall retain the classifications and reservations of land identified for use as a proposed utility corridor and railroad right-of-way under former AS 19.05.122 until the corporation informs the department in writing that the land is not needed by the corporation for a utility corridor. If, under (a) of this section, the corporation includes land identified under former AS 19.05.122 as part of the proposed transportation corridor, the department shall manage that land under provisions of this section.

(k) To complete the work authorized by this section, the corporation may enter into agreements relating to the work with the federal government, an agency or instrumentality of the state, a municipality, or a private organization.