SENATE BILL REPORT

SB 5458

BYSenators Tanner, Conner, DeJarnatt, Rasmussen and Newhouse

Requiring proof of financial responsibility by short line railroads.

Senate Committee on Transportation

Senate Hearing Date(s):February 18, 1987

Senate Staff:Gene Baxstrom (786-7303)

AS OF FEBRUARY 18, 1987

BACKGROUND:

Railroad companies operating within the state are not required by state law to have proof of financial responsibility either in the form of a secured deposit of funds or an insurance policy.  Although classified as common carriers, the railroads are not subject to state law requiring liability and property damage insurance or a deposit of security as are motor freight carriers.

The two major railroads operating in the state are self-insured, having substantial assets to cover liability and property damage claims which may be filed.  Smaller railroads, although not required by law to have proof of financial responsibility, normally have some type of liability and property damage insurance policies having various monetary limits.  This coverage is necessary in the private market to do business with the major railroads and it is an accepted business practice.

SUMMARY:

Short line railroads are totally or nearly totally operated or confined within the state.  Operators of any short line railroad must file proof of financial responsibility in the form of a liability and property damage insurance policy or a deposit of security with the Washington Utilities and Transportation Commission.

Proof of financial responsibility shall be in an amount and terms prescribed by the Commission to provide reasonable protection to the public.

Fiscal Note:      none requested