FINAL BILL REPORT

SSB 5147

                                   C 16 L 88

BYSenate Committee on Transportation (originally sponsored by Senators Hansen, Rasmussen, Bauer, Barr, Patterson, Johnson and Pullen)

Repealing authority for public utility and transportation corridors.

Senate Committee on Transportation

House Committe on Transportation

SYNOPSIS AS ENACTED

BACKGROUND:

The United States Congress adopted a law in 1976 to encourage public acquisition and use of abandoned property.  When a railroad determines that any of its properties are no longer economically viable and the Interstate Commerce Commission (ICC) authorizes their abandonment, the commission must determine whether such properties are suitable for public use.  Congress enumerated public purposes as highways, other forms of mass transportation, conservation, energy production or transmission, and recreation.

If the ICC finds that the abandoned property is suitable for public use, an order is entered prohibiting any disposal of the property for a period of up to 180 days, unless the properties have been offered first, on reasonable terms, for public purpose sale.  In attempting to take advantage of federal provisions, public entities acquiring abandoned rail rights of way frequently encounter legal claims from private parties seeking to enforce reversionary clauses or similar real property interests in the same property.

The 1984 Legislature declared it to be in the public interest that abandoned railroad operations properties should retain their public use character as utility and transportation corridors.  Such properties were to be made available for public purposes including highways, other forms of mass transportation, conservation, energy production or transmission, and recreation.

In the event the ICC authorizes abandonment of railroad property, enters a finding of suitability for public use, and the property is acquired as a utility and transportation corridor, it is declared to continue its public use character.  Such property would not be subject to reversion, adverse possession or other similar interests of third parties which might otherwise ripen on the cessation of railroad operations.

Property owners with reversionary rights to abutting railroad rights of way which have been or are likely to be abandoned challenged the constitutionality of the state legislation.

In 1986, the Washington State Supreme Court ruled that just compensation be given for the taking of property.  In reaching its conclusion, the court determined that reversionary interests in land are vested property rights and may not be affected by legislation.  An easement granted "for railroad purposes only" does not encompass recreational use and upon abandonment, the easement is extinguished and the property reverts to the grantor free of the easement.  The court also ruled that federal law in this area does not preempt state law regarding abandonment of railroad rights of way because property interests are determined by state law.

The public interest in maintaining railroad rights of way as public thoroughfares was not found to be unconstitutional.  The court did reject any suggestion, however, that converting abandoned rail corridors to trails is a permissible change in use.

The practical effect of the case is that in order to acquire abandoned railroad rights of way, just compensation must be paid when the easement or grant is not broad enough to encompass recreational use, and there are ascertainable persons holding valid reversionary interests in the land.

SUMMARY:

State policy declaring it to be in the public interest that abandoned railroad corridors retain their public use character is clarified to specify that nothing authorizes a public agency or utility to acquire reversionary interests in public utility or transportation corridors without payment of just compensation.

Language is repealed which provides that a public utility and transportation corridor retains its public use character when owned by a public agency or utility and is not subject to reversion upon the cessation of railroad operations.

VOTES ON FINAL PASSAGE:

      Senate    45     0

      House 90   8

EFFECTIVE:June 9, 1988