1.1                          A bill for an act 
  1.2             relating to railroads; extending right of first 
  1.3             refusal to leaseholders of real property in railroad 
  1.4             right-of-way; requiring railroad interests to provide 
  1.5             notice; making technical changes; amending Minnesota 
  1.6             Statutes 1998, sections 222.631; and 222.632. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 222.631, is 
  1.9   amended to read: 
  1.10     222.631 [DEFINITIONS.] 
  1.11     Subdivision 1.  [TERMS.] For purposes of sections 222.631 
  1.12  to 222.633, the following terms have the meanings given them. 
  1.13     Subd. 2.  [FAIR MARKET VALUE.] "Fair market value" means 
  1.14  the price negotiated between the parties under section 222.632, 
  1.15  or the market value of the property minus the value of any 
  1.16  leasehold improvements, as determined by independent 
  1.17  appraisers.  Fair market value must consider the type of title 
  1.18  being transferred. 
  1.19     Subd. 3.  [LEASEHOLDER.] "Leaseholder" means a person who 
  1.20  holds a lease, license, or permit with respect to use property 
  1.21  within a right-of-way, and who has erected eligible owns 
  1.22  leasehold improvements on the property with a total fair market 
  1.23  value of $7,500 or more. 
  1.24     Subd. 4.  [RAILROAD INTEREST.] "Railroad interest" includes 
  1.25  a railroad corporation, its trustee or successor in interest, a 
  1.26  railroad corporation which is in proceedings for bankruptcy 
  2.1   under federal law, and a nonrailroad holding corporation that 
  2.2   owns a controlling interest in a railroad, and a person or 
  2.3   entity who owns or controls real property prior to transfer to a 
  2.4   leaseholder. 
  2.5      Subd. 5.  [RIGHT-OF-WAY.] "Right-of-way" has the meaning 
  2.6   given it in section 222.63, subdivision 1. 
  2.7      Subd. 6.  [NONRAILROAD LESSOR.] "Nonrailroad lessor" means 
  2.8   one who has granted to a lessee leaseholder an interest in 
  2.9   property within a right-of-way and who is neither (1) an 
  2.10  operator of a railroad on the right-of-way, nor (2) an owner of 
  2.11  a controlling interest in or under common control with a 
  2.12  railroad that operates on the right-of-way. 
  2.13     Sec. 2.  Minnesota Statutes 1998, section 222.632, is 
  2.14  amended to read: 
  2.15     222.632 [RIGHT OF FIRST REFUSAL.] 
  2.16     Subdivision 1.  [OFFERS TO SELL OR LEASE.] A railroad 
  2.17  interest that is in bankruptcy proceedings or a nonrailroad 
  2.18  lessor may not sell or offer for sale, or lease or offer to 
  2.19  lease, an interest in real property that is within the railroad 
  2.20  right-of-way, a railroad interest that is abandoning a railroad 
  2.21  line may not sell or offer for sale an interest in real property 
  2.22  within the right-of-way to be abandoned, and a nonrailroad 
  2.23  lessor may not sell or offer for sale an interest in real 
  2.24  property within the right-of-way with respect to which it is a 
  2.25  nonrailroad lessor, to a person who is not a leaseholder with 
  2.26  respect to the property unless it first extends a written offer 
  2.27  to sell or lease that interest at a fair market value price to 
  2.28  each person who is a leaseholder with respect to the property.  
  2.29     Subd. 2.  [RESPONSES TO OFFERS TO SELL OR LEASE.] 
  2.30  Leaseholders must respond to the offer within 60 days of receipt 
  2.31  of the notice and the railroad interest must negotiate in good 
  2.32  faith with an interested leaseholder for a period of 90 days 
  2.33  following the leaseholder's response.  After the 90-day 
  2.34  negotiation period, either party may file a notice of dispute 
  2.35  with the commissioner of transportation under section 222.633.  
  2.36  The property may not be sold or leased to a party other than the 
  3.1   leaseholder during the response and negotiation periods or while 
  3.2   a dispute is pending before the commissioner.  
  3.3      Subd. 3.  [NOTICE.] A railroad interest or nonrailroad 
  3.4   lessor making an offer to a leaseholder under subdivision 1 must 
  3.5   provide with the offer a notice that states the following: "THE 
  3.6   PROPOSED SALE OR LEASE OF PROPERTY WITHIN A RAILROAD 
  3.7   RIGHT-OF-WAY IS SUBJECT TO MINNESOTA STATUTES, SECTIONS 222.631 
  3.8   TO 222.633.  YOU MUST RESPOND TO THE WRITTEN OFFER WITHIN 60 
  3.9   DAYS AFTER THE RECEIPT OF THIS NOTICE.  THE RAILROAD INTEREST IS 
  3.10  REQUIRED TO NEGOTIATE IN GOOD FAITH FOR A PERIOD OF 90 DAYS 
  3.11  FOLLOWING YOUR RESPONSE.  AFTER THE 90-DAY PERIOD, EITHER PARTY 
  3.12  MAY FILE WITH THE COMMISSIONER OF TRANSPORTATION A PETITION TO 
  3.13  RESOLVE ANY DISPUTES REGARDING FAIR MARKET VALUE OR OTHER TERMS 
  3.14  OF THE NEGOTIATION." 
  3.15     Subd. 4.  [NONAPPLICABILITY.] This section does not apply 
  3.16  to a sale of an entire operating railroad line by one operating 
  3.17  railroad to another for the purpose of operating a railroad.