BILL REQ. #:  H-1676.2 

Read first time 02/24/2003.   Referred to Committee on Transportation.

     AN ACT Relating to a state produce railcar pool; amending RCW 47.76.250; adding new sections to chapter 47.76 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   FINDINGS AND INTENT. The legislature finds that an actively coordinated and cooperatively facilitated railcar pool for transportation of perishable agricultural commodities is necessary for the continued viability and competitiveness of Washington's agricultural industry. The legislature also finds that the rail transportation model established by the Washington Grain Train program has been successful in serving the shipping needs of the wheat industry.
     It is, therefore, the intent of the legislature to authorize and direct the Washington department of transportation to develop a railcar program for Washington's perishable commodity industries to be known as the Washington Produce Railcar Pool. This railcar program should be modeled from the Washington Grain Train program, but be made flexible enough to work with entities outside state government in order to fulfill its mission, including, but not limited to, the federal and local governments, commodity commissions, and private entities.

NEW SECTION.  Sec. 2   DEPARTMENTAL AUTHORITY. In addition to powers otherwise granted by law, the department may:
     (1) Establish a Washington Produce Railcar Pool to promote viable, cost-effective rail service for Washington produce, including but not limited to apples, onions, pears, and potatoes;
     (2) Operate the Washington Produce Railcar Pool program while working in close coordination with the department of agriculture, interested commodity commissions, and port districts;
     (3) Purchase used refrigerated railcars, or accept donated refrigerated railcars;
     (4) Refurbish and remodel the railcars.

NEW SECTION.  Sec. 3   FUNDING. The department shall fund the program as follows:
     (1) The department may accept funding from the state and the federal government, or other public or private sources, to refurbish and remodel the railcars.
     (2) The program must be funded at a level suitable for the departments of transportation and agriculture, or such entity as they may wish to designate, to facilitate and coordinate the program.
     (3) The department may contribute the efforts of a short line rail-financing expert to find funding for the project to help interested short line railroads in this state to accomplish the necessary operating arrangements once the railcars are rebuilt.

NEW SECTION.  Sec. 4   RAILCAR REFURBISHMENT. The department or any other entity, including but not limited to a short line railroad, may dismantle some cars to obtain parts to put other cars in operating condition, or may totally rebuild some cars. As used in sections 1 through 6 of this act "short line railroad" means a Class II or Class III railroad as defined by the United States Surface Transportation Board.

NEW SECTION.  Sec. 5   FLEET MANAGEMENT. (1) The fleet must be managed over the life of the cars so that the railcars will be evenly distributed to railroads and port districts around the state for produce loadings as market conditions warrant or periodically to other users during times of excess capacity.
     (2) The department shall act in an oversight role to verify that the car fleet is managed in accordance with subsection (1) of this section.
     (3) The department shall work with affected stakeholders, including but not limited to short line railroads, commodity commissions, and port districts, to hire a transportation management firm to manage the day-to-day operations of the cars, such as monitoring where the cars are located, getting them back to this state, distributing them, arranging for pretrips and repairs, and arranging for per diem, mileage allowances, and other freight billing charges with the railroads.

NEW SECTION.  Sec. 6   REPAYMENT OF PROGRAM START-UP COSTS. (1) The transportation management firm employed under section 5(3) of this act is responsible for repaying any loans used in the rebuilding process from revenue derived from the per diem charges, mileage charges, and freight billing charges paid by the railroads and shippers that use the cars.
     (2) Interest may be charged at a rate similar to the federal discount rate.

Sec. 7   RCW 47.76.250 and 1996 c 73 s 2 are each amended to read as follows:
     (1) The essential rail assistance account is created in the state treasury. Moneys in the account may be appropriated only for the purposes specified in this section.
     (2) Moneys appropriated from the account to the department of transportation may be used by the department or distributed by the department to cities, county rail districts, counties, economic development councils, and port districts for the purpose of:
     (a) Acquiring, rebuilding, rehabilitating, or improving rail lines;
     (b) Purchasing or rehabilitating railroad equipment necessary to maintain or improve essential rail service;
     (c) Constructing railroad improvements to mitigate port access or mainline congestion;
     (d) Construction of loading facilities to increase business on light density lines or to mitigate the impacts of abandonment;
     (e) Preservation, including operation, of light density lines, as identified by the Washington state department of transportation, in compliance with this chapter; or
     (f) Preserving rail corridors for future rail purposes by purchase of rights of way. The department shall first pursue transportation enhancement program funds, available under the federal surface transportation program, to the greatest extent practicable to preserve rail corridors. Purchase of rights of way may include track, bridges, and associated elements, and must meet the following criteria:
     (i) The right of way has been identified and evaluated in the state rail plan prepared under this chapter;
     (ii) The right of way may be or has been abandoned; and
     (iii) The right of way has potential for future rail service.
     (3) The department or the participating local jurisdiction is responsible for maintaining any right of way acquired under this chapter, including provisions for drainage management, fire and weed control, and liability associated with ownership.
     (4) Nothing in this section impairs the reversionary rights of abutting landowners, if any, without just compensation.
     (5) The department, cities, county rail districts, counties, and port districts may grant franchises to private railroads for the right to operate on lines acquired under this chapter.
     (6) The department, cities, county rail districts, counties, and port districts may grant trackage rights over rail lines acquired under this chapter.
     (7) If rail lines or rail rights of way are used by county rail districts, port districts, state agencies, or other public agencies for the purposes of rail operations and are later abandoned, the rail lines or rail rights of way cannot be used for any other purposes without the consent of the underlying fee title holder or reversionary rights holder, or until compensation has been made to the underlying fee title holder or reversionary rights holder.
     (8) The department of transportation shall develop criteria for prioritizing freight rail projects that meet the minimum eligibility requirements for state assistance under RCW 47.76.240. The department shall develop criteria in consultation with the Washington state freight rail policy advisory committee. Project criteria should consider the level of local financial commitment to the project as well as cost/benefit ratio. Counties, local communities, railroads, shippers, and others who benefit from the project should participate financially to the greatest extent practicable.
     (9) Moneys received by the department from franchise fees, trackage rights fees, and loan payments shall be redeposited in the essential rail assistance account. Repayment of loans made under this section shall occur within a period not longer than fifteen years, as set by the department. The repayment schedule and rate of interest, if any, shall be determined before the distribution of the moneys.
     (10) The state shall maintain a contingent interest in any equipment, property, rail line, or facility that has outstanding grants or loans. The owner may not use the line as collateral, remove track, bridges, or associated elements for salvage, or use it in any other manner subordinating the state's interest without permission from the department.
     (11) Moneys distributed under this chapter should be provided as loans wherever practicable. Except as provided by section 3, chapter 73, Laws of 1996, for improvements on or to privately owned railroads, railroad property, or other private property, moneys distributed shall be provided solely as loans.

NEW SECTION.  Sec. 8   Section captions used in this act are not part of the law.

NEW SECTION.  Sec. 9   Sections 1 through 6 of this act are each added to chapter 47.76 RCW.