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.  "Leaseholder" does not include a 
  1.24  person with an easement against the property within the 
  1.25  right-of-way. 
  1.26     Subd. 4.  [RAILROAD INTEREST.] "Railroad interest" includes 
  2.1   a railroad corporation, its trustee or successor in interest, a 
  2.2   railroad corporation which is in proceedings for bankruptcy 
  2.3   under federal law, and a nonrailroad holding corporation that 
  2.4   owns a controlling interest in a railroad, and a person or 
  2.5   entity who owns or controls real property on or adjacent to a 
  2.6   railroad right-of-way prior to transfer to a leaseholder. 
  2.7      Subd. 5.  [RIGHT-OF-WAY.] "Right-of-way" has the meaning 
  2.8   given it in section 222.63, subdivision 1. 
  2.9      Subd. 6.  [NONRAILROAD LESSOR.] "Nonrailroad lessor" means 
  2.10  one who has granted to a lessee leaseholder an interest in 
  2.11  property within a right-of-way and who is neither (1) an 
  2.12  operator of a railroad on the right-of-way, nor (2) an owner of 
  2.13  a controlling interest in or under common control with a 
  2.14  railroad that operates on the right-of-way. 
  2.15     Sec. 2.  Minnesota Statutes 1998, section 222.632, is 
  2.16  amended to read: 
  2.17     222.632 [RIGHT OF FIRST REFUSAL.] 
  2.18     The legislature finds that facilities constructed by 
  2.19  private parties within the right-of-way are part of the public 
  2.20  purpose of the railroad itself and retaining those facilities at 
  2.21  those locations enhances the public good.  A railroad interest 
  2.22  that is in bankruptcy proceedings or a nonrailroad lessor may 
  2.23  not sell or offer for sale or lease or offer to lease an 
  2.24  interest in real property that is within the right-of-way, a 
  2.25  railroad interest that is abandoning a railroad line may not 
  2.26  sell or offer for sale or lease or offer to lease an interest in 
  2.27  real property within the right-of-way to be abandoned, and a 
  2.28  nonrailroad lessor may not sell or offer for sale or lease or 
  2.29  offer to lease an interest in real property within the 
  2.30  right-of-way with respect to which it is a nonrailroad lessor, 
  2.31  unless it first extends a written offer to sell or lease that 
  2.32  interest at a fair market value price to each person who is a 
  2.33  leaseholder with respect to the property.  Leaseholders must 
  2.34  respond to the offer within 60 days of receipt of the notice and 
  2.35  the railroad interest must negotiate in good faith with an 
  2.36  interested leaseholder for a period of 90 days following the 
  3.1   leaseholder's response.  After the 90-day negotiation period, 
  3.2   either party may file a notice of dispute with the commissioner 
  3.3   of transportation under section 222.633.  The property may not 
  3.4   be sold or leased to a party other than the leaseholder during 
  3.5   the response and negotiation periods or while a dispute is 
  3.6   pending before the commissioner.  The parties to a dispute 
  3.7   before the commissioner shall jointly, in equal shares, pay to 
  3.8   the commissioner a fee of $....... to reimburse the commissioner 
  3.9   for the costs of the dispute resolution.  Fees shall be 
  3.10  deposited in the trunk highway fund.  This section does not 
  3.11  apply to a sale of an entire operating railroad line by one 
  3.12  operating railroad to another for the purpose of operating a 
  3.13  railroad. 
  3.14     The railroad interest must provide a notice with any offer 
  3.15  under this section that states the following:  "THE PROPOSED 
  3.16  SALE OR LEASE OF PROPERTY WITHIN A RAILROAD RIGHT-OF-WAY IS 
  3.17  SUBJECT TO MINNESOTA STATUTES, SECTIONS 222.631 TO 222.633.  YOU 
  3.18  MUST RESPOND TO THE WRITTEN OFFER WITHIN 60 DAYS AFTER THE 
  3.19  RECEIPT OF THIS NOTICE.  THE RAILROAD INTEREST IS REQUIRED TO 
  3.20  NEGOTIATE IN GOOD FAITH FOR A PERIOD OF 90 DAYS FOLLOWING YOUR 
  3.21  RESPONSE.  AFTER THE 90-DAY PERIOD, EITHER PARTY MAY FILE WITH 
  3.22  THE COMMISSIONER OF TRANSPORTATION A PETITION TO RESOLVE ANY 
  3.23  DISPUTES REGARDING FAIR MARKET VALUE OR OTHER TERMS OF THE 
  3.24  NEGOTIATION.  ALL PARTIES TO THE DISPUTE WILL BE REQUIRED TO 
  3.25  SHARE THE COST OF THE DISPUTE RESOLUTION.