THE ATTORNEY GENERAL
OF TEXAS
March 3, 1988
Honorable Jim Nugent Opinion No. JM-867
Chairman
Railroad Commission of Texas Re: Whether the Railroad
P. 0. Drawer 12967 Commission is prohibited
Capitol Station by federal law from exer-
Austin, Texas 78711 cising its jurisdiction
under article 6498,
V.T.C.S., to grant rail-
road discontinuances
(RQ-1312)
Dear Mr. Nugent:
You ask whether the Staggers Rail Act of 1980, Public
Law 96-448, deprives the Railroad Commission of jurisdic-
tion to consider applications submitted by railroads pro-
viding intrastate service in Texas for authority to
discontinue "agencies" established under article 6498,
V.T.C.S. That statute provides:
Each railroad company in this State shall
provide and maintain adequate, comfortable
and clean depots and depot buildings at
their several stations for the accommodation
of passengers, and keep said depot buildings
well lighted and warmed for the comfort and
accommodation of the traveling public. They
shall keep and maintain apartments in such
depot buildings for the use of passengers,
and keep and maintain adequate and suitable
freight depots and buildings for receiving,
handling, storing and delivering of all
freight handled by such roads, and the Com-
mission shall require railroad companies to
comply fully with the provisions of this law
under such regulations as said Commission
may deem reasonable.
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Honorable Jim Nugent - Page 2 (JM-867)
V.T.C.S. art. 6498 (formerly V.T.C.S. art. 6693). We
conclude that the Railroad Commission has, at present, no
authority to consider applications for the discontinuance ?
of agencies.
Until 1980, state regulatory authorities, such as the
Texas Railroad Commission, had at least initial jurisdic-
tion to regulate intrastate aspects of rail transportation
furnished by interstate carriers. Of course, the federal
government possesses the power to preempt state regulation
of -state commerce to protect the free flow of inter-
state commerce. See Houston and Texas Railwav v. United
States, 234 U.S. 342 (1914) (the Shre eo r-t Rate Cases).
In the Staggers Rail Act of 1980, Pub: L: No. 96-448 94
Stat. 1895 (codified in scattered sections of titles' 11,
45, and 49 of the United States Code), Congress adopted a
new national rail transportation policy designed both to
reduce government regulation of railway companies and to
allow the industry to earn "adequate revenues. 'a See
oenerallv Staggers Rail Act of 1980, Rub. L. No. 96-448,
1980 U.S. Code Cong. & Admin. News (94 Stat.) 3978; 49
U.S.C. §lOlOla(3).
Congress directed the Interstate Commerce Commission
both to llcooperate with the States on transportation
matters" and to "assure that intrastate regulatory juris-
diction is exercised in accordance with the standards
established" in the Staggers Act. 49 U.S.C. §lOlOla(9).
The Staggers Act provides for the possible preemption of
state jurisdiction in three different, but interrelated,
ways :
(1) It preempts all state jurisdiction over certain
general intrastate rate increases:
(2) It prohibits a state from exercising any juris-
diction over intrastate rail transportation provided bv
an interstate ca& unless the state "exercises such
jurisdiction exclusively in accordance with the provisions
of" the Staggers Act: and
(3) It preempts m state regulation of any aspect of
intrastate rail transportation provided by an interstate
carrier unless the federal government certifies that state
regulatory standards and procedures are in accord with the
Staggers Act.
See 49 U.S.C. 511501(b)(l), (b) (3) (A), (b) (4) (A), and
(b) (6) - ?
p. 4204
Honorable Jim Nugent - Page 3 (JM-867)
The last provision is the most important in
considering the Railroad Commissiongs authority to grant
agency discontinuances. In particular, the Staggers Rail
Act requires the Interstate Commerce Commission to
affirmatively certify that a state regulatory program for
intrastate rail transportation provided by an interstate
carrier is in compliance with the Act. In relevant part,
the Staggers Act provides:
Any State authority which is certified by
the Commission . . . may use its standards
and procedures in exercising jurisdiction
over intrastate rail rates, classifications,
rules, and practices during the 5-year
period commencing on the date of such
certification. Anv State authoritv which is
. . .
denied certrflcatlon . . . av t exercise
anv iurisdiction over intras&e rates.
classifications. rules. and vractices until
it receives certification. . . . (Emphasis
added.)
49 U.S.C. 911501(b)(4)(A). We note that "rules and
C practices" of rail carriers are defined, in part, to mean
rules and practices on matters related to
. . . transportation or service, including
rules and practices on . . . (D) facilities
for transportation.
49 U.S.C. 510702(a)(2). Additionally, a V*railroad'U is
defined in the Interstate Commerce Act to include:
a freight depot, yard, and ground, used or
necessary for transportation.
49 U.S.C. §10102(21)(c). Finally, the Act defines
Vransportation" to include
(4 . . . properfy, facilit[ies], instru-
mentalit[ies],or equipment of any kind
related to the movement of passengers or
property . . .; and
p. 4205
Honorable Jim Nugent - Page 4 (JM-867)
(B) services related to that movement. . . .
49 U.S.C. §10102(26).1
Thus, in order for the Railroad Commission to be able
to exercise the authority to grant agency or depot discon-
tinuances, under article 6498, V.T.C.S., the State must be
certified by the Interstate Commerce Commission to
regulate intrastate rail transportation provided by inter-
state carriers. Texas has failed to earn that certifica-
tion. Hx Parte No. 388 (Sub-No. 31) State Intrastate
Rail Rate Authoritv - Texas (served ApLil 20 1984) aff'd
sub nom. Railroad Commission of Texas v. &ited States,
765 F.2d 221 (D.C. Cir. 1985). See also State of Texas v.
United States, 730 F.2d 409 (5th Cir. 1984), Ngdified on
rehearinq, 749 F.2d 1144 (5th Cir.), cert. denied, 472
U.S. 1032 (1985); State of Texas v. United States, 730
F.2d 420 (5th Cir. 1984). Additionally, an attack by
Texas on the constitutionality of the provisions of the
Staggers Act preempting regulation by noncertified states
failed. State f Texas v. United States, 730 F.2d 339
(5th Cir.), cerz. denied, 469 U.S. 893 (1984); see f&~
Illinois Commerce Commission Interstate Commerce
Commission, 749 F.2d 875, 885-87ViD.C. Cir. 1984), cert.
denied, 474 U.S. 820 (1985).
In the decision in Railroad Commission of Texas,
sunra, the Court of Appeals for the District of Columbia
Circuit noted that Texas had failed to obtain the
certification required under the Staggers Rail Act to
enable it to regulate intrastate rail transportation
provided by interstate carriers, thus leaving "the Texas
regulatory apparatus out in the cold." 765 F.2d at 226.
We find no basis to question either the findings of the
Interstate Commerce Commission or the several appellate
courts which have rejected the Railroad Commission's
several attempts to avoid the preemption of its authority
to regulate intrastate rail transportation provided by-
interstate carriers. Until the federal government grants
the Texas Railroad Commission the necessary authority to
regulate intrastate rail transportation provided by
interstate carriers, the Railroad Commission is without
1. The Railroad Commission retains authority to
regulate the safety of railways in Texas, as permitted by
the Rail Safety Act of 1970, 45 U.S.C. 5421 et seq.
p. 4206
4
Honorable Jim Nugent - Page 5 (JM-867)
P
jurisdiction to act on agency discontinuances, or any
other matter preempted by the federal government.
The Texas Railroad Commission's authority
to regulate agency discontinuances, see
article 6498, V.T.C.S., has been preempted
by the federal government, insofar as the
agencies are maintained by interstate
carriers providing intrastate services.
~Jg$.%&
MATTOX
Attorney General of Texas
NARYKELLER
First Assistant Attorney General
LOU MCCREARY
C.
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Don Hustion
Assistant Attorney General
p. 4207