                                             July 14, 1999

The Honorable RenC 0. Oliveira                 Opinion No. JC-0076
Chair, Ways and Means Committee
Texas House of Representatives                 Re: Whether a transit authority created under chapter
P.O. Box 2910                                  45 1 of the Transportation Code may purchase a railroad
Austin, Texas 78768-2910                       line, part of which extends beyond the transit
                                               authority’s territory, and related question (RQ-946)

Dear Representative   Oliveira:

         A transit authority created under chapter 45 1 of the Transportation Code may acquire any
property “necessary, convenient, or useful” to providing mass transit. Your predecessor in office
asked whether a metropolitan-rapid-transit       authority created under chapter 451 may purchase a
railroad line and right-of-way that lies outside the system’s service area. He also asked whether a
transit authority may purchase a “rail freight common carrier obligation” on the railroad line. We
conclude that chapter 451 permits the transit authority to purchase a railroad line lying outside the
authority’s service area, but only ifthe authority has found that the property is necessary, convenient,
or useful to providing mass transit within the authority’s service area. In answer to the second
question, we cannot conclude as a matter of law fhat a rail-freight-common-carrier       obligation is not
necessary, convenient, or useful to atransit authority. Rather, the matter is for the transit authority’s
governing body to decide in the first instance.

         We understand these questions arise from a situation involving Capital Metropolitan
Transportation Authority (“Capital Metro”), the City of Austin’s metropolitan-rapid-transit  authority.
Your predecessor’s letter suggests that Capital Metro was established in accordance with chapter 45 1
of the Transportation Code, and we assume for purposes of this opinion that this assertion is correct.
See Letter from Honorable Tom Craddick, Chair, House Ways & Means Committee, to Honorable
Dan Morales, Attorney General (June 26, 1997) (on file with Opinion Committee) [hereinafter
“Request Letter”]. Apparently, Capital Metro intends to purchase from the City of Austin a 162-
mile railroad line running from the City of Giddings through Austin to the City of Llano. See Jim
Phillips, Preservation group ‘s railroad bid thwarted, AUSTINAMERICANSTATESMAN,July 9,1997,
at Bl, B5 [hereinafter “Phillips article”]. We understand the City of Austin purchased the railroad
line as a single piece and plans to sell it undivided. See Letter from Myra A. McDaniel, Bickerstaff,
Heath, Smiley, Pollan, Kever & McDaniel, L.L.P., to Joe Ramirez, Manager, Railroad Right-Of-
Way & Projects, Capital Metropolitan Transportation Authority (June 25, 1996) (on tile with
Opinion Committee). Capital Metro plans to use at least the middle portion of the line, which runs
from Leander to downtown Austin, to establish a passenger-rail service. See Phillips article, supra,
at Bl. But the line’s extremities, which measure approximately          100 miles, lie beyond Capital
Metro’s service area. See id. Thus, your predecessor asked whether Capital Metro may purchase
that portion of the railroad line lying beyond its service area. See Request Letter, supra. This
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opinion uses the term “service area” to denote the area Capital Metro serves under chapter 45 1 of
the Transportation Code or by contract with other governmental entities. See TEX. GOV’T CODE
ANN. ch. 791 (Vernon 1994 & Supp. 1999) (Interlocal Cooperation Act); Tex. Att’y Gen. LO-92-82,
at 3 (determining that City of Socorro and City of El Paso may contract for delivery of mass-transit
services).

         Chapter 45 1 of the Transportation Code pertains generally to metropolitan-rapid-transit
authorities.   While the chapter nowhere states its purpose, the 1973 act adopting chapter 451’s
statutory predecessor recognized “a pressing need for efficient and economical rapid transit facilities
in metropolitan areas of the state and for relief from the harmful effects of air pollution and traffic
congestionin [those] areas.” See ActofMay 15,1973,63dLeg.,R.S.,            ch. 141,s 20,1973 Tex. Gen.
Laws 302, 315; see also id. 5 1, 1973 Tex. Gen. Laws 302, 302-03 (listing legislative findings).
Chapter 451 accordingly facilitates the creation of municipal transit authorities to provide mass
transit in the metropolitan areas, and it is to be “construed liberally to carry out its purposes.” TEX.
TRANSP. CODE ANN. 5 45 1.002 (Vernon 1999). Chapter 451 limits the term “transit authority
system” to property held only for mass-transit purposes and situated on authority property for mass-
transit purposes. Id. 5 451.001(S). The term “mass transit” encompasses only the transportation of
passengers and the transportation        of passengers’ hand-carried packages or baggage.            Id.
 5 451.001(4).

         Chapter451 bestows broadpowersonatransitauthoritytoaccomplishthechapter’spurpose.
In general, an authority has “any power necessary or convenient” to providing mass transit to
persons within its service area. See id. § 45 1.054(a). Moreover, with respect to the acquisition of
property, licenses, rights, or other interests, a transit authority may acquire any interest “necessary,
convenient, or useful” to exercising its statutory powers. Id. 4 451.054(d). The authority may sell
interests that are unnecessary for, or if a lease, are “inconsistent with,” the operation and
maintenance of the transit authority system. Id. 3 45 1.054(d), (e).

         We believe chapter 45 1 grants a transit authority sufficient power to purchase real property
beyond its service area, but only if the authority determines that the acquisition is “necessary,
convenient, or useml” to providing mass transit to persons in its service area. See id. 5 45 1.054(d).
The authority’s determination is subject to review by a court, which will consider whether the
authority’s determination is reasonable. See Dallas Area Rapid Transit v. Plummer, 841 S.W.2d
870, 872 (Tex. App.-Dallas 1992, writ denied) (applying substantial evidence standard to review
of Dallas Area Rapid Transit Trial Board decision).

          The terms “necessary, convenient, or useful” provide an authority substantial discretion. The
 Texas Supreme Court defines the word “necessary” in context: “‘The word “necessary” has not a
 fixed meaning or character peculiar to itself. It is flexible and relative. It is an adjective expressing
 degrees, and may express mere convenience or that which is indispensable or an absolute physical
 necessity.“‘Scott   v. Walden, 165 S.W.2d 449,451-52 (Tex. 1942) (quoting Chicago, I. &L. R. Co.
 v. Baugh, 94 N.E. 571,573 (Ind. 1911)). The term “convenient” denotes accordance or suitability.
 See III OXFORDENGLISHDICTIONARY861 (2d ed. 1989) (defining “convenient”). The term “useful”
 signifies the quality ofbeing suitable, or advantageous, profitable, or beneficial. See XIX OXFORD
 ENGLISH DICTIONARY 356 (2d ed. 1989) (defining “useful”).                Taken as a whole, the phrase
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“necessary, convenient, oruseful”permits     a transit authority to acquireproperty, licenses, rights, and
other interests if the transit authority’s governing body finds that the acquisition will advance its
effort to accomplish its statutory purpose. TEX. TRANSP.CODE ANN. 5 451.054(d) (Vernon 1999).
Nevertheless, the acquisition must be consistent with the transit authority’s statutory purpose. Id.

         In response to your predecessor’s first question, a transit authority reasonably might tind that
the purchase of the property at issue is “necessary, convenient, or useful” to providing mass transit
to persons within the service area, particularly where the seller will sell the property only in an
undivided state and where part ofthe property will be used to transport persons within the authority’s
service area. See id. 5 45 1.054(a). Moreover, nothing in chapter 45 1 limits a transit authority to
purchasing real property within its service area. Compnre Tex. Att’y Gen. Op. No. H-392 (1974)
at 2 (determining that, depending upon use to which land will be put, constitution and statutes may
not preclude county commissioners court from acquiring land outside county) with Tex. Att’y Gen.
LO-94-01 8, at 3 (concluding that statute forbids Harris County to acquire land outside county for
use as park). Consequently, assuming Capital Metro has determined that the purchase of those
portions of the railroad line lying outside its service area is necessary, convenient, or useful to
providing mass transit to persons within the service area, we believe Capital Metro may acquire the
line’s extremities.

         The second issue your predecessor raised is a closer question. Your predecessor asked,
presumably premised upon our answering your first question in the affirmative, whether Capital
Metro may purchase a rail-freight-common-carrier          obligation that is imposed upon the entire railroad
line. See Request Letter, supra. Although your predecessor did not define the term “rail-tieight-
common-carrier obligation,” it appears to refer to the transportation of freight (other than passengers’
hand-held packages and baggage). We understand the obligation attaches to the whole right-of-way.
See Letter from Myra A. McDaniel, Bickerstaff, Heath, Smiley, Pollan, Kever &McDaniel, L.L.P.,
to Honorable Dan Morales, Attorney General (July 25, 1997) (on file with Opinion Committee)
[hereinafter “McDaniel letter”].         We have been told the obligation is necessary to control
the operations on the right-of-way, and if Capital Metro camiot control the operations, then its mass-
transit services will be subservient to the rail-freight operations.            See id. “[IIf Capital Metro
does not own the entire Right-of-Way, the rail freight operator for the remaining portions of
the Right-of-Way will be setting time tables, operating speeds and schedules that affect the entire
Right-of-Way        . to serve those shippers who make a ‘reasonable request’ to it. [See 49 U.S.C.
 5 11101(a) (Supp. II 1996) (requiring rail carrier providing transportation or service to provide such
transportation or service “on reasonable request”).] The time tables, operating speeds and schedules
set by the rail freight operator, if the rail freight operator is not Capital Metro, inevitably will conflict
with the time tables, operating speeds and schedules that Capital Metro seeks to set for mass transit
 service.” McDaniel letter, supra.

         Apparently, Capital Metro cannot acquire the rail line, which has existing freight services,
without also acquiring the common-carrier obligation. See id. A rail carrier that provides common-
carrier-railroad transportation for compensation and is part of the “general system of rail trans-
portation,” 49 U.S.C. 4 10102(5) (Supp. II 1996) (defining “rail carrier”), must receive the approval
of the federal Surface Transportation Board, see id. 4 10 102( 1) (defining “Board”), to abandon any
part of its railroad lines or discontinue operation on any part of its railroad lines. Id. 5 10903(a)(l),
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(b)(l), (d). The Surface Transportation Board will deny an application to abandon track or
discontinue service if it finds that public convenience and necessity do not justify the abandonment
or discontinuance.  Id. 5 10903(e)(2). The City of Austin, which currently owns the track and the
common-carrier obligation, sought an exemption from continuing rail-freight operations onthe right-
of-way, but the predecessor to the Surface Transportation Board denied the City’s request. See
McDaniel letter, supra.

          While a transit authority, such as Capital Metro, generally may purchase any property or
interest that the authority finds necessary, convenient, or useful to exercising its statutory powers,
chapter 45 1 of the Transportation Code restricts a transit authority to transporting individuals. See
TEX. TRANSP. CODE ANN. 5 451.001(4), (8) (Vernon 1999) (defining “mass transit” and “transit
authority system”). A transit authority may transport freight only to the extent that the freight
consists of‘hand-carried    packages or baggage of a passenger.” See id. $45 l.OOl(4) (defining “mass
transit”). Consequently, a transit authority’s acquisition ofacommon-carrier-freight    obligation does
not appear to be consistent with its statutory authority, much less necessary, convenient, or useful
to exercising its statutory powers.

        But we cannot say as a matter of law that acquiring a common-carrier obligation is never
necessary, convenient, or useful to the operation of a mass-transit authority. Rather, the question,
like the first issue your predecessor raised, must be determined in the first instance by Capital
Metro’s governing body. Here, Capital Metro apparently cannot purchase the railroad it seeks
without the common-carrier obligation, the purchase of the rail presumably will cost considerably
less than building a parallel rail line without a common-carrier         obligation, and the federal
government’s     approval is required to abandon or discontinue rail-carrier service, see 49 U.S.C.
4 10903(a)(l), (b)( 1), (d) (Supp. II 1996). Additionally, Capital Metro cannot control the rail line’s
usage and schedule without the common-carrier obligation. It is, therefore, conceivable that Capital
Metro’s governing body may find the acquisition to be necessary, convenient, or useful to the
accomplishment     of its mass-transit purposes.

         Of course, Capital Metro may not carry freight itself. See TEX. TRANSP. CODE ANN.
5 451.001(4) (Vernon 1999) (defining “mass transit”). Nevertheless, it may contract with another
entity to fulfill the common-carrier      obligations, see id. $5 451.055(a), .056(a)(3) (authorizing
authority to enter contracts generally and to lease all or part of transit authority system or contract
for operation of all or part of transit authority system), just as the City currently meets its common-
carrier obligation through a contract with the Longhorn Railway Company. See McDaniel letter,
supra.
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                                         SUMMARY


                        A metropolitan      transit authority may purchase property
                beyond its service area if the authority determines that the acquisition
                is “necessary, convenient, or useful” to providing mass transit to
                persons in its service area. Likewise, a transit authority may purchase
                a rail-freight-common-canier        obligation   if the authority     has
                determined that the acquisition is “necessary, convenient, or useful”
                to providing mass-transit services.




                                                 Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Opinion Committee

 Prepared by Kymberly K. Ohrogge
 Assistant Attorney General
