HBA-LJP C.S.H.B. 1125 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 1125
By: Swinford
Land & Resource Management
4/19/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, a railroad right-of-way is reserved to any railroad
company to the extent of one hundred feet on each side of a road that
crosses over or extends through any land granted or that may be granted to
the railroad company by the legislature.  When a railroad company receives
permission from the federal Surface Transportation Board to abandon a rail
line, the right-of-way and all improvements are typically sold to a salvage
company.  Many railroad right-of-ways have structures, installed equipment,
and other types of leasehold improvements made by political entities,
public utilities, pipeline operators, or communications companies under an
agreement with the railroad company.  When the railroad right-of-way is
sold or abandoned, the persons or entities that make these leasehold
improvements may lose investments made in the railroad right-of-way.
C.S.H.B. 1125 requires a railroad company to give such a person or the
state the right to first refusal to purchase at the fair market value the
railroad right-of-way or adjoining property. 

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. 

ANALYSIS

C.S.H.B. 1125 amends V.T.C.S. to require a railroad company that intends to
abandon or offer for sale any of the railroad company's right-of-way to
give any person who has constructed a building or other structure,
installed equipment, or made any other type of leasehold improvement on the
railroad right-ofway of the company or adjoining railroad property the
right of first refusal to purchase at the fair market value the
right-of-way or adjoining property where the structure, equipment, or other
improvement is located.  The bill provides that the land subject to
purchase is that which is necessary for unrestricted use of the structure,
equipment, or other leasehold improvement and requires that the transfer of
ownership be at no cost to the person buying the land.  If the state has
authority to acquire such property, the bill requires that the state be
given the right of first refusal to acquire the property before a person
who holds a leasehold improvement on the same railroad right-of-way. 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1125 amends the original to remove provisions relating to the
ownership and transfer of the title to a right-of-way and easements
regarding the right-of-way after the abandonment of a railroad right-ofway.
The substitute removes provisions regarding the date that a railroad
right-of-way is considered abandoned, the required filing and notice of
abandonment of a railroad right-of-way by a railroad company, the
certification by the Railroad Commission of Texas (commission) of the
required notice, and the occupancy by certain entities of an abandoned
railroad right-of-way under an existing easement agreement,  lease,
license, or other agreement.  The substitute removes provisions regarding
the sale of a nonreversionary right-of-way fee title in a county with a
population of 250,000 or less to a tenant under a lease and other persons
and entities.  The substitute removes the rulemaking authority of the
commission to adopt rules necessary to implement provisions relating to the
ownership, transfer, or sale of the title to an abandoned railroad
right-of-way. 

The substitute sets forth provisions regarding the right of a person or the
state to first refusal to purchase at the fair market value the railroad
right-of-way or adjoining property.