Revised
February, 2004
Administration: These sections relate to the Light-Density Rail Line Assistance Act. The Nebraska Railway Council is created by this act. A representative from the Nebraska Department of Agriculture is to be named to this council.
Revisions: The provisions of these statutes were revised during the 2003 session of the Nebraska Legislature.
Rules: The Department of Agriculture has no authority to promulgate regulations under these statutes.
74-1401 Legislative findings and intent.
74-1402 Definitions; where found.
74-1402.01 Acquiring carrier, defined.
74-1403 Acquisition project, defined.
74-1404 Benefit-cost methodology, defined.
74-1405 Council, defined.
74-1405.01 Divesting carrier, defined.
74-1405.02 Division, defined.
74-1405.03 Facilities, defined.
74-1406 Federal act, defined.
74-1407.01 Light-density rail line, defined.
74-1408 Operation project, defined.
74-1410 Plan, defined.
74-1410.01 Railbanking, defined.
74-1411 Rail carrier, defined.
74-1411.01 Rail facility construction project, defined.
74-1412 Rehabilitation or improvement project,
defined.
74-1412.01 Revolving fund, defined.
74-1413 Nebraska Railway Council; created;
members; qualifications; terms; vacancies; transition from Branch Rail Revitalization Council;
per diem; expenses; immunity from liability; when.
74-1414 Council; duties.
74-1415 Council; powers; enumerated.
74-1415.01 Projects; council; investment of funds; powers and
duties; hearing; investment committee; authorized; expenses; acquiring carrier; duty; annual
report; contents.
74-1415.03 Fair rate of return; required.
74-1415.04 Security; required.
74-1415.05 Independent certified appraiser; verification required;
cost.
74-1415.06 Trade secrets and other information; confidentiality;
exceptions.
74-1419.02 Division; duties; Department of Roads; rules and
regulations.
74-1420 Light-Density Rail Line Assistance Cash
Fund; created; use; investment.
74-1420.01 Light-Density Rail Line Assistance Revolving Fund;
created; use; investment.
74-1420.02 Federal funds; solicitation and expenditure.
74-1420.03 Gifts and services, acceptance.
74-1427 Political subdivision; expend local tax funds;
election; procedure.
74-1428.01 Council; bond issuance; powers.
74-1428.02 Bonds; general obligation of council; additional
security.
74-1428.03 Bonds; not obligation of state; statement
required.
74-1429 Act, how cited.
74-1401. Legislative findings and intent. (1) The
Legislature finds that:
(b) In some cases the railroads owning light-density rail lines are not financially able to
rehabilitate or improve them or there is not sufficient economic incentive for the railroads to
rehabilitate or improve them;
(c) The present condition of certain light-density rail lines imperils the public safety and well-
being;
(d) Continued use of properly maintained and operated light-density rail lines is necessary for the
economic and physical well-being of the citizens of this state;
(e) Properly maintained and operated light-density rail lines will contribute significantly to the
conservation of limited energy resources;
(f) Properly maintained and operated light-density rail lines can avoid significant increased
maintenance and construction costs on state highways and county roads caused by increased
truck traffic resulting from shipments diverted if light-density rail lines are abandoned;
(g) There are light-density rail lines outside this state which connect with and provide substantial
overhead traffic to light-density rail lines within the state, and because of the revenue provided
by this overhead traffic, the continued existence of these out-of-state lines may be vital to the
long-term viability of some of Nebraska's light-density rail lines;
(h) There are light-density rail lines which may need to be railbanked so the right-of-way may be
used for future rail or other transportation purposes; and
(i) There may be a need for rail facility construction, including new connections between two or
more existing rail lines, intermodal freight terminals, industrial sidings, and relocation of existing
rail lines for the purpose of improving the quality and efficiency of rail freight service.
(3) The Legislature has identified approximately eight hundred thirty miles of light-density rail
lines on which the benefits of expending public funds to maintain rail service potentially
outweigh the associated costs.
(4) The Legislature hereby declares that acquisition, rehabilitation or improvement, and operation
of the light-density rail lines and construction of rail facilities in Nebraska through the
encouragement of private investments and the use of federal and state funds is a public purpose
and use for which public money provided by the sale of bonds and appropriations of the
Legislature may be borrowed, expended, advanced, loaned, or granted. Such activity is a proper
governmental function and can best be accomplished by the creation of a Nebraska Railway
Council with the powers and duties specified in the Light-Density Rail Line Assistance Act. The
necessity for the provisions of the act to protect the health, safety, and general economic welfare
of all the people of this state is hereby declared as a matter of legislative determination.
74-1402. Definitions; where found. For purposes of
the Light-Density Rail Line Assistance Act, the definitions found in sections 74-1402.01 to
74-1412.01 shall be used.
74-1402.01 Acquiring carrier, defined. Acquiring
carrier means a business entity which acquires by purchase, lease, or otherwise a light-density rail
line, except carriers acquiring an abandoned rail line, with the intent of operating the
light-density rail line for the purpose of continuing the commercial transportation of goods or
passengers over such light-density rail line.
74-1403. Acquisition project, defined. Acquisition
project means a project to acquire, by purchase, lease, or other appropriate method, a line of
railroad or other rail properties or an interest in a line of railroad or other rail properties for
existing or future rail freight service or to maintain existing transportation corridors for future rail
or other transportation uses.
74-1404. Benefit-cost methodology, defined.
Benefit-cost methodology means the methodology to be used for calculating the ratio of benefits
to costs of the projects considered for financial assistance as established by the Federal Railroad
Administration on July 1, 1990, pursuant to 49 U.S.C. app. 1654(N).
74-1405. Council, defined. Council means the
Nebraska Railway Council.
74-1405.01. Divesting carrier, defined. Divesting
carrier means a common carrier or business entity engaged in the transportation of goods by rail
which divests itself of a light-density rail line by sale, lease, or otherwise.
74-1405.02. Division, defined. Division means the
area of responsibility for rail planning activities within the Department of Roads.
74-1405.03. Facilities, defined. Facilities mean the
track, ties, roadbed, and related structures, including terminals, team tracks and appurtenance,
bridges, tunnels, and other structures used or usable for rail service operations.
74-1406. Federal act, defined. Federal act means the
Department of Transportation Act, Public Law 89-670, which act also includes the Railroad
Revitalization and Regulatory Reform Act of 1976, Public Law 94-210, and all amendments to
the Department of Transportation Act, or any federal act providing for the assistance of local
light-density rail lines.
74-1407.01. Light-density rail line, defined.
Light-density rail line means any rail line classified as a light-density line by the United States
Department of Transportation pursuant to the federal act or by the division under the
Light-Density Rail Line Assistance Act.
74-1408. Operation project, defined. Operation
project means a state-funded project to assist a rail carrier in financing the operation of a rail line.
74-1410. Plan, defined. Plan means the current state
rail system plan and any additions to the plan promulgated by the division with the advice of the
council.
74-1410.01. Railbanking, defined. Railbanking
means the purchase of abandoned light-density rail lines for future rail or other transportation
purposes.
74-1411. Rail carrier, defined. Rail carrier means a
person or entity providing railroad transportation for compensation who or which is subject to the
jurisdiction of the Interstate Commerce Commission under subchapter 1 of 49 U.S.C. chapter
105.
74-1411.01. Rail facility construction project, defined.
Rail facility construction project means the construction of rail or rail-related facilities,
including new connections between two or more existing lines, intermodal freight terminals,
sidings, and relocation of existing lines, for the purpose of improving the quality and efficiency
of rail freight service.
74-1412. Rehabilitation or improvement project, defined.
Rehabilitation or improvement project means a project for replacing, repairing, or
upgrading, to the extent necessary to permit adequate and efficient rail freight service, facilities
needed to provide service on a rail line.
74-1412.01. Revolving fund, defined. Revolving
fund means the Light-Density Rail Line Assistance Revolving Fund.
74-1413. Nebraska Railway Council; created; members;
qualifications; terms; vacancies; transition from Branch Rail Revitalization Council; per diem;
expenses; immunity from liability; when. (1) The Nebraska Railway Council is
created as a body politic and corporate, not a state agency, but an independent instrumentality.
The State of Nebraska shall not be responsible for the debts, contracts, general obligations, or
liabilities of the council or its members or agents, including tort claims. The council shall consist
of eight members to be appointed by the Governor with the approval of a majority of the
Legislature as follows:
(b) One railroad management employee;
(c) One public service commissioner;
(d) Two members of the general public. One member from the general public shall be a person
experienced in private or public finance, and the other member from the general public shall be a
person experienced in marketing;
(e) One railroad maintenance-of-way employee;
(f) One representative from the Department of Economic Development; and
(g) One representative from the Department of Agriculture.
(2) The Governor shall appoint council members for four-year terms. In appointing the original
council members, the Governor shall (a) appoint the light-density rail line shipper and one of the
members of the general public for one-year terms, (b) appoint the railroad management employee
and one of the members of the general public for two-year terms, (c) appoint the public service
commissioner and the railroad maintenance-of-way employee for three-year terms, and (d)
appoint the representatives from the Department of Agriculture and the Department of Economic
Development for four-year terms. The Governor shall fill vacancies caused by any reason,
except that an appointment to fill a vacancy shall be only for the remainder of the unexpired
term. The Governor may remove any council member for just cause.
(3) The council members shall have an interest in and knowledge of railroads and railroad-related
functions. A council member shall abstain from voting on any decision or policy of the council if
the decision or policy will result in any financial benefit or detriment to him or her, any member
of his or her family, or any business with which he or she is associated and the benefit or
detriment is distinguishable from the effects of the actions on the public generally or a broad
segment of the public.
(4) To assist the transition from the Branch Rail Revitalization Council to the Nebraska Railway
Council, each member of the Branch Rail Revitalization Council serving on September 6, 1991,
shall serve after such date as a member of the Nebraska Railway Council until a successor is
nominated, approved, and acting as a member of the Nebraska Railway Council.
(5) Members of the council who are not employed by the State of Nebraska may receive a per
diem of sixty dollars, not to exceed six thousand dollars in any one year, and all members of the
council shall be reimbursed for their actual and necessary expenses as provided in sections 81-
1174 to 81-1177.
(6) There shall be no liability for damages on the part of and no cause of action in tort of any
nature shall arise against the council or its agents or employees for any action taken by any of
them in the performance of their powers and duties under the Light-Density Rail Line Assistance
Act, unless the action is grossly negligent.
74-1414. Council; duties. The council shall be
responsible for administering programs and funds for light-density rail line acquisition,
rehabilitation or improvement, operation, and rail facility construction projects implemented
pursuant to the Light-Density Rail Line Assistance Act and the federal act.
74-1415. Council; powers; enumerated. The council
may do all things necessary to implement the Light-Density Rail Line Assistance Act, including,
but not limited to:
(1) Entering into agreements and contracts for the sale, lease, or purchase of tangible, intangible,
real, and personal property;
(2) Suing and being sued in its own name;
(3) Hiring a director and necessary staff personnel;
(4) Entering into agreements and contracts with state and federal agencies, political subdivisions,
railroads, and other person;
(5) Collecting, administering, and expending funds;
(6) Issuing bonds;
(7) Borrowing or lending money;
(8) Loaning federal funds, state funds, or both for approved projects;
(9) Purchasing shares of stock or otherwise investing in light-density rail line acquisition,
rehabilitation or improvement, or rail facility construction projects;
(10) Purchasing and entering into agreements for the operation of a light-density rail line; and
(11) Entering into agreements and performing necessary functions to grant or loan federal funds
for local rail freight assistance projects pursuant to 49 U.S.C. app. 1654.
The council shall not obligation or expend state funds for repayment of federal funds granted or
loaned to a rail carrier pursuant to 49 U.S.C. app. 1654.
74-1415.01. Projects; council; investment of funds; powers and
duties; hearing; investment committee; authorized; expenses; acquiring carrier; duty; annual
report; contents. (1) The council may invest funds for a light-density rail line
acquisition, rehabilitation or improvement, operation, or rail facility construction project after the
council finds, based upon the findings of the benefit-cost study and such additional investigation
as the council makes and the council incorporates in its minutes, that:
(b) The proceeds of the investment will be used only to facilitate light-density rail line
acquisition, rehabilitation or improvement, operation, or rail facility construction projects;
(c) The project has a reasonable chance of success;
(d) Participation by the council is necessary to the success of the project or the retention of
associated rail service in the state;
(e) The project has the reasonable potential to create or maintain employment within the state;
(f) Others have already made or are contractually committed to make a substantial financial and
time commitment to the project;
(g) There is a reasonable possibility that the council will recoup at least its initial investment; and
(h) Binding commitments have been made to the council for adequate reporting of financial data
as determined by the council and for such control on the part of the council as is considered
prudent over the management of the project so as to protect the investment, including, in the
discretion of the council, the right of access to financial and other records relating to the project.
(3) After receiving information from the division on the feasibility of a project pursuant to
section 74-1419.02, the chairperson of the council shall designate one or more members of the
council to personally inspect the fragment, section, or line to be acquired, rehabilitated or
improved, operated, or constructed and report to the council. The inspection shall take into
consideration the following factors: Cost of maintenance, estimated cost of future
improvements, a description of traffic service provided, whether other facilities provide
comparable service, and the relationship of the fragment, section, or line to an integrated light-
density rail line system.
(4) Prior to the council make a decision on a project, it may hold a public hearing on the
proposed project. The council shall give written notice of the time and place of the hearing, not
less than two weeks prior to the time of the hearing, to the political or governmental subdivisions
or public corporations affected by the proposal.
(5) In carrying out its functions under this section, the council shall create an investment
committee to assist in evaluating potential investments. The membership of the investment
committee may include both members and staff of the council and persons drawn from sources
other than the council who are recognized for outstanding knowledge and leadership in their
fields, all of whom shall serve at the pleasure of the council. Members of the investment
committee shall be reimbursed for their actual and necessary expenses as provided in sections
81-1174 to 81-1177.
(6) The council shall not make an investment in any light-density rail line rehabilitation or
improvement project in excess of the amount necessary to own more than seventy percent of
such project. This subsection shall not apply to the outright purchase and operation of a
light-density rail line by the council.
(7) The council shall adopt procedures to carry out this section.
(8) An acquiring carrier using funds pursuant to the Light-Density Rail Line Assistance Act shall
give priority in hiring to employees of the divesting carrier performing service in connection with
the affected light-density rail line. To assert priority, the employee shall be qualified by
experience and training to perform the available job.
(9) The council shall submit an annual report to the Legislature detailing investments and
purchases made pursuant to this section. The report shall include a statement for each project of
the current amount invested in each light-density rail line, (a) the current market value of assets
of the company operating each light-density rail line and the current salvage value of each such
line, (b) the market value of the assets of the company operating each light-density rail line, (c)
the salvage value of each light-density rail line at the time of the initial investment by the council,
and (d) the number and market value of any light-density rail line being operated by the council.
74-1415.03. Fair rate of return; required. Any
lease agreement or option to buy entered into pursuant to the authority granted in the
Light-Density Rail Line Assistance Act shall provide for a fair rate of return as determined by
reasonable commercial standards in the industry.
74-1415.04. Security; required. No loan for any
acquisition, rehabilitation or improvement, operation, or rail facility construction project shall be
approved by the council unless the borrower provides a guarantee and collateral for the loan
which is acceptable to the council as sufficient security to protect the interests of the council.
74-1415.05. Independent certified appraiser; verification required;
cost. The council shall not acquire any property or loan funds in any
acquisition, rehabilitation or improvement, operation, or rail facility construction project unless
an independent certified appraiser verifies that the value of the property proposed to be acquired
or to be held as security is at least equal to the amount the council determines is sufficient to
protect the interests of the council. The council shall select the independent certified appraiser.
The entity requesting the financial assistance shall bear the cost of the appraisal.
74-1415.06. Trade secrets and other information; confidentiality;
exceptions. Trade secrets and other proprietary or commercial information
which may be filed with an application for a grant or loan or other financial assistance pursuant
to the Light-Density Rail Line Assistance Act shall not be considered public records as defined in
section 84-712.01 if the release of such trade secrets or information would give advantage to
business competitors and serve no public purpose. Any person seeking release of the trade
secrets or information as a public record shall demonstrate to the satisfaction of the council that
the release would not violate this section.
74-1419.02. Division; duties; Department of Roads; rules and
regulations. (1) The division shall conduct research on basic railroad problems,
plan and assist in the development of rail transportation, develop and maintain a federal-state
relationship with regard to programs relating to railroads, assist any public or private agency or
corporation in coordinating railroad services with those of other transportation modes, and
recommend, prepare, and review plans and specifications for any project to be proposed to the
council.
(2) The division shall:
(b) Advise the public regarding the policies, conditions, and activities of the division;
(c) Hold hearings, make investigations, studies, and inspections, and do all other things necessary
to carry out the duties imposed upon it by law;
(d) Advance information and advice conducive to providing adequate and safe railroads in the
state;
(e) Submit to the council its written advice regarding the feasibility of the acquisition,
rehabilitation or improvement, or operation of a fragment or section of light-density rail line or of
an entire light-density rail line or a rail line facility construction project when proposed by the
division;
(f) Furnish necessary assistance to the council in making its inspection and study of any proposed
project;
(g) Perform all planning functions required for participation in the federal act; and
(h) Make data and information of the division available to the council.
74-1420. Light-Density Rail Line Assistance Cash Fund; created; use;
investment. (1) There is hereby created the Light-Density Rail Line Assistance
Cash Fund which shall be used by the council to carry out its responsibilities under the
Light-Density Rail Line Assistance Act. The fund may be used:
(b) To purchase shares of stock or otherwise invest to facilitate light-density rail line acquisition
or rehabilitation or improvement projects;
(c) To purchase and enter into agreements for the operation of a light-density rail line; and
(d) To carry out the purposes described in section 74-1415.01.
74-1420.01. Light-Density Rail Line Assistance Revolving Fund;
created; use; investment. (1) There is hereby created the Light-Density Rail
Line Assistance Revolving Fund which shall be used by the council to carry out its
responsibilities under the Light-Density Rail Line Assistance Act. The revolving fund shall
consist of any money credited to the revolving fund pursuant to section 74-1420, any loan
repayment money received, any interest received on such money, and other funds as the council
may designate. Any money in the fund available for investment shall be invested by the state
investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds
Investment Act.
(2) The revolving fund may be used to carry out the purposes of the Light-Density Rail Line
Assistance Act.
(3) State and federal light-density rail line assistance funds shall not be commingled. The use of
federal funds held in the revolving fund is restricted by rules and regulations of the Federal
Railroad Administration. No loans or grants using the revolving fund shall be disbursed until
written approval is received from the Federal Railroad Administration.
74-1420.02. Federal funds; solicitation and expenditure.
The division is encouraged to solicit and may expend any federal funds which may
become available for program administration or any light-density rail line projects allowable
under the federal act.
74-1420.03. Gifts and services, acceptance. The
council may accept gifts, donations, money, and services, including in-kind resources, for any
purpose allowable under the Light-Density Rail Line Assistance Act.
74-1427. Political subdivision; expend local tax funds; election;
procedure. (1) If the governing body of a political subdivision determines that it
is necessary or beneficial to expend local tax funds for acquisition, rehabilitation or
improvement, or operation of a light-density rail line or rail facility construction, including the
issuance of bonds for the purposes set forth in the Light-Density Rail Line
Assistance Act, the governing body shall by resolution place the proposition for such expenditure
or bond issue on the general or primary election ballot or in odd-numbered years only call for a
special election in such political subdivision for the purpose of approving such expenditure of
local tax funds.
(2) The resolution calling for the election and the election notice shall show the proposed
purpose for which such local tax funds will be expended and the amount of money sought.
(3) Notice of the election shall state the date the election is to be held and the hours the polls will
be open. Such notice shall be published in a newspaper that is published in or of general
circulation in such political subdivision at least once each week for three weeks prior to such
election. If no such newspaper exists, notice shall be posted in at least three public places in the
political subdivision for at least three weeks prior to such election.
(4) The proposition appearing on the ballot in any election shall state the purpose for which such
local tax funds will be spent, the amount of local tax funds to be so expended, and the source
from which the revenue will be raised. Such proposition shall be adopted if approved by a
majority of those voting in such election.
(5) If a special election is called the governing body shall prescribe the form of the ballot to be
used.
74-1428.01. Council; bond issuance; powers. The
council shall have the power to issue from time to time bonds to renew or to pay bonds,
including the interest on such bonds, and whenever it deems refunding expedient, to refund any
bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured,
and to issue bonds partly to refund outstanding bonds and partly for any other of its corporate
purposes. The refunding bonds may be sold and the proceeds applied to the purchase,
redemption, or payment of the bonds to be refunded or exchanged for the bonds to be refunded.
74-1428.02. Bonds; general obligation of council; additional
security. Except as may otherwise be expressly provided by the council, every
issue of its bonds shall be general obligations of the council payable solely out of any revenue or
money of the council, subject only to any agreements with the holders of particular bonds
pledging any particular money or revenue. The bonds may be additionally secured by a pledge of
any grant or contribution from the federal government or any corporation, association, institution,
or person or a pledge of any money, income, or revenue of the council from any source.
74-1428.03. Bonds; not obligation of state; statement
required. No bonds issued by the council under the Light-Density Rail Line
Assistance Act shall constitute a debt, liability, or general obligation of the state or a pledge of
the faith and credit of the state but shall be payable solely as provided by section 74-1428.02.
Each bond issued under the act shall contain on the face thereof a statement that neither the faith
and credit nor the taxing power of this state is pledged to the payment of the principal of or the
interest on such bond.
74-1429. Act, how cited. Sections 74-1401 to
74-1429 shall be known and may be cited as the Light-Density Rail Line Assistance Act.
(a) Within the State of Nebraska light-density rail lines exist which are in need of rehabilitation
or improvement;
(2) It is the intent of the Legislature, pursuant to the findings of subsection (1) of this section, to
create a mechanism for the public purpose of acquiring, rehabilitating or improving, and
operating light-density rail lines and providing light-density rail facility construction which will
serve the public and will allow such mode of transportation to remain viable in the private and
public sectors of the economy. The Legislature intends that such mechanism serve the public
purpose by balancing the needs of carriers, shippers, and the public, promote adequate and
efficient rail, highway, and county road transportation services, and increase the attractiveness of
investing in light-density rail lines and rail-service-oriented enterprises relating to light-density
rail line operations. The Legislature encourages efforts to restructure the light-density rail line
system on an economically justified basis through financing mechanisms that will assure
adequate acquisition, rehabilitation or improvement, operation, and construction of facilities.
(a) One light-density rail line shipper;
The Director-State Engineer shall serve as an ex officio member of the council.
(a) The project has a ratio of benefits to costs which is greater than one as calculated in
accordance with the benefit-cost methodology;
(2) The council shall request a business plan, including a description of the project and its
management, a proposed operating plan, and a statement of the amount, timing, and projected
use of the capital required.
(a) Conduct studies and investigations and act in an advisory capacity to the council in the
establishment of broad policies for carrying out the Light-Density Rail Line Assistance Act;
(3) The Department of Roads shall adopt and promulgate rules and regulations necessary for the
division to carry out its duties under the Light-Density Rail Line Assistance Act and to
participate in the federal act.
(a) To defray the expenses of the council;
(2) The State Treasurer shall credit to the fund any money (a) appropriated to the fund by the
Legislature, (b) donated as gifts, bequests, grants, or other contributions to the fund from public
or private sources, and (c) received pursuant to section 74-1415.01. Money made available by
any department or agency of the United States may also be credited to the fund if so directed by
the Director-State Engineer or may be credited to the revolving fund pursuant to section
74-1420.01. Any money in the Light-Density Rail Line Assistance Cash Fund available for
investment shall be invested by the state investment officer pursuant to the Nebraska Capital
Expansion Act and the Nebraska State Funds Investment Act.