SENATE BILL REPORT

SB 5556

BYSenators Sellar, Hansen and Barr

Giving leaseholders of railroad right of way property the right of first refusal.

Senate Committee on Transportation

Senate Hearing Date(s):February 23, 1989

Senate Staff:Gene Baxstrom (786-7303)

AS OF MARCH 7, 1989

BACKGROUND:

In association with railroad services, individuals or corporations may lease portions of railroad right of way to construct facilities associated with handling commodities to be loaded on rail lines.  Bulk cargo facilities such as grain elevators are a common example of that type of facility. 

When a railroad sells a right of way, ownership of the land upon which the facilities are constructed may be in question.

SUMMARY:

A railroad may not sell an interest in real property that is within the right of way unless it extends an offer to sell that interest at fair market price to each person who is a leaseholder with respect to the property.  Leaseholders must respond to the offer within 60 days.  The railroad must negotiate in good faith with interested leaseholders for a period of 90 days following the leaseholder's response.

After the mandated 90-day negotiated period, either the railroad or the leaseholder may file a notice of dispute with the Utilities and Transportation Commission.  The commission's findings which resolve a dispute concerning fair market value or other terms arising from negotiations are final.  Judicial review of the commission's decision is limited to a determination of whether substantial evidence exists to support the commission's decision.

The commission is directed to adopt regulations within one year to implement this act.  Regulations must define terms, establish a procedure to resolve disputes, and provide for the use of independent appraisers.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested