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S.F. No. 877 - Establishing Requirements for Utilities Crossing Railroad Rights-of-Way (First Engrossment)
Author: Senator Dan Sparks
Prepared By: Krista Boyd, Senate Fiscal Analyst (651/296-7681)
Date: March 11, 2016


Section 1 is a new section of statute dealing with utilities crossing or paralleling railroad rights-of-way.

Subdivision 1 defines terms for the purpose of this section.

  • “Crossing” is a utility facility being placed over, under, or across a railroad right-of-way, including longitudinal occupancy of railroad right-of-way.
  • “Facility” is personal property over, across, or under for storing or conveying enumerated items or products.
  • “Parallel” or “paralleling” refers to a utility facility running alongside railroad lines for up to one mile or another agreed-upon distance.
  • “Railroad” means an entity that operates a common carrier by rail, manages crossings, or collects crossing fees.
  • “Utility” means one of the enumerated entities.

Subdivision 2 applies this section to a crossing previously in existence but no longer subject to agreement.  In this case, if the $750 fee has been paid, no additional fee is due.  It also applies to a crossing commenced on or after August 1, 2015, the effective date of the section.

Subdivision 3 requires a utility that wants to cross or parallel a railroad right-of-way to complete a crossing application and submit it to the railroad by certified mail, return receipt requested, along with the required crossing fee and certificate of insurance.

Subdivision 4 allows the utility to begin construction of the crossing 30 days after the railroad has received the application, fee, and insurance certificate, unless the railroad has notified the utility in writing that the crossing would be a serious threat to the safe operation of the railroad or to the current use of the railroad right-of-way.

Subdivision 5 sets the standard fee for a utility to cross a railroad right-of-way at $750, in lieu of all other fees except for reimbursement to the railroad for any reasonable flagging expense associated with the crossing.  There is no fee if the crossing is within a public right-of-way. 

Subdivision 6 establishes minimum required levels of commercial general liability insurance for a municipality, for any other utility, and for a gas or hazardous materials pipeline utility.  The utility may choose an insurer when submitting a certificate of insurance.

Subdivision 7 allows the railroad to submit, by certified mail with return receipt requested, to the utility an objection to the proposed crossing, due to a threat to safe operations of the railroad.  If the parties, after good faith effort, cannot resolve the objection, either party may petition the Public Utilities Commission (PUC) to mediate or arbitrate the disputed crossing application.  The PUC must issue an order within 120 days and may assess costs of the petition equitably among the parties.  The order may be appealed.

Subdivision 8 allows the utility to resort to the PUC when the railroad imposes additional conditions, unrelated to safe operations of the railroad, on the utility.  The subdivision provides for notice and opportunity for hearing, after which the PUC must issue an order within 120 days, assessing costs equitably.  The order may be appealed.

Subdivision 9 provides that the railroad and utility may continue an existing agreement or otherwise negotiate a new agreement, notwithstanding this section.  The section does not prevent the utility from exercising eminent domain to create an easement.

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