             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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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) -                                                                  ?




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          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




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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.




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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




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