UPR Memorandum of Understanding

MEMORANDUM OF UNDERSTANDING BETWEEN THE STATE OF TEXAS ACTING THROUGH THE TEXAS DEPARTMENT OF TRANSPORTATION AND THE UNION PACIFIC RAILROAD FOR A COOPERATIVE PARTNERSHIP TO ADDRESS FREIGHT RAILROAD RELOCATION ISSUES IN THE STATE OF TEXAS

WHEREAS, the Governor of Texas, on behalf of the citizens of the State of Texas, acting through the Texas Department of Transportation (TxDOT), plays a key role in transportation planning and the impact such planning has on communities and citizens all across the state of Texas; and

WHEREAS, TxDOT is authorized to participate in the planning, design, and development of multiple modes of transportation within the state; and

WHEREAS, investments in the state's rail freight system can be leveraged to provide major public benefits and can play a significant role in addressing growing transportation demands and related public issues such as automobile congestion, pollution, safety, and energy; and

WHEREAS, in many communities across the State of Texas development has occurred that has placed businesses and homeowners directly adjacent to pre-existing Railroad corridors that have often been in existence for well over 100 years; and

WHEREAS, in certain cases existing Freight Rail Corridors could be available for alternate uses, including service to local Freight Customers, if and when the existing Through Freight Rail operations could be relocated to new corridors where rail infrastructure has been put in place to accommodate Through Freight Operations, and

WHEREAS, Union Pacific Railroad (UP) owns and operates rail freight transportation services within the state of Texas; and

WHEREAS, UP believes that certain rail relocation projects may be achieved through public-private partnerships and offer important opportunities to improve the state and national freight rail system; and

WHEREAS, UP and the State of Texas believe that there are locations and communities in Texas where the relocation of existing Through Freight rail corridors could indeed create significant Public Benefits for Citizens in the State of Texas.

WHEREAS, UP and the State of Texas agree that feasible proposals to relocate existing rail operations planned or developed as a result of this Memorandum of Understanding (MOU) will adhere to five basic principles identified as:

Public-private rail relocation projects undertaken within the scope of this MOU must be voluntary for both parties and will be contingent upon the parties entering into definitive agreements; furthermore, it is understood that TxDOT is responsible for protecting the public interest and investments, while UP is responsible for protecting the interests of its customers, shareholders and employees; and
Investment by Texas to fund any rail relocation project considered under this MOU must be commensurate with the benefit the public derives from the project. The source of such public funds should be from existing funds or some other general revenue source, and will not be funded by a user charge, additional taxes, or new fees levied on the rail industry in the State; and
Any UP contribution toward any rail relocation project considered under this MOU must be commensurate with the private benefit, if any, it derives from the project; and
Planning for rail relocation projects considered under this MOU must be coordinated among stakeholders to insure appropriate investments result from the public-private partnership process. UP will continue to work with TxDOT on such efforts and will supply reasonable input to the process. Planning and project implementation must take place in a manner that preserves the existing rail industry regulatory regime as well as ownership rights; and
The State will not expend public funds for any rail relocation project that would alter the existing competitive relationships between and among the railroads.

NOW THEREFORE, we declare to work together in a cooperative manner and in accordance with the five principles enunciated herein, and direct our respective planning and development personnel to work in a cooperative partnership to identify potential rail relocation projects which will improve safety and facilitate mobility within the state of Texas, and which will benefit the transportation system of Texas and the people of the state.

By: ________________________
RICK PERRY
Governor of Texas

Date: _________________________

By: ________________________
Richard Davidson
Chairman & Chief Executive Officer
Union Pacific Railroad

Date: _________________________

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