HBA-MPA H.B. 3116 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3116 By: Swinford Transportation 4/23/1999 Introduced BACKGROUND AND PURPOSE The history of the regulation of railroads in Texas began with the state providing land for tracks to be built and the railroad companies being told where they could run and how they had to serve the people of Texas. Deregulation of railroads in Texas during the 75th Legislature ushered in a new era of competition in railroads. In 1998 the Railroad Advisory Committee was formed to look into problems caused by deregulation. Their findings, in the form of a resolution, devised a definition of service, set standards for service, and consequences for failing to provide service. H.B.3116 establishes procedures for rural rail transportation districts. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 1, Article 6550c, V.T.C.S., to revise and update the legislative findings by emphasizing the efficiency, safety and environmental advantages of railroads, the importance of railroads to industry and agriculture in small towns and rural areas, the importance of competition in strengthening rail service, and the safety advantages of diverting freight traffic off of the highway system, and deletes the word "rural" from several of the findings. SECTION 2. Amends Section 2, Article 6550c, V.T.C.S., to redefine "rail facilities," and defines "intermodal equipment," "intermodal terminals," "rail-served industrial park," and "transload facilities and reload centers." Makes conforming changes. SECTION 3. Amends Section 3(a), Article 6550c, V.T.C.S., to make a conforming change. SECTION 4. Amends Section 3A(a), Article 6550c, V.T.C.S.,to make a conforming change. SECTION 5. Amends Section 5, Article 6550c, V.T.C.S., by amending Subsections (a), (1), and (n) and adding Subsection (r), as follows: (a) Makes a conforming change. (1) Authorizes rural rail transportation district (district) to sell, lease convey or dispose of rights, interests, properties or leases not needed for the continue operation and maintenance of its principal rail lines, rather than efficient operation and maintenance of the system, and by order may do so if not needed for continued provision of rail service on its principal lines. Authorizes the district to sell its principal rail lines and associated properties to a railroad company if it gives the district the right of first refusal to reacquire that property if the railroad company or its successors file for abandonment of those lines. Provides that a railroad company that intends to file for abandonment of a rail line acquired under this section must notify the district and the Railroad Commission of Texas at least 90 days before filing notice of abandonment. (n) Prohibits a lease or operating contract under this subsection from exceeding 20 years, unless the lease or operating contract requires the lessee or operator to make a capital investment in specified permanent components of the rail facility. Provides that any lease or operating contract must obligate the lessee or operator to interchange traffic with other railroads at junctions specified by the shipper, but only with a division of the revenue that adequately compensates the lessee or operator for all costs incurred and provides a reasonable profit. (r) Authorizes a district to construct, own, operate, or lease a rail-served industrial park, if the rail traffic to and from the industrial park will ensure the economic viability of a rail line owned by the district. Authorizes the district to lease sites or facilities within the rail-served industrial park only to a party that uses rail transportation for the movement of a preponderance of its inbound materials or outbound products. Authorizes the district to exercise the power of eminent domain to acquire land for development of a rail-served industrial park only if the land sought is not being developed for another industrial purpose. SECTION 6. Amends Section 6A(a), Article 6550c,V.T.C.S., to prohibit the district from levying or collecting ad valorem taxes to finance rail facilities of the district, unless approved at an election by a majority of the voters in each county compromising the district. SECTION 7. Effective date: September 1, 1999. SECTION 8. Emergency clause.