Senator Derrin R. Owens proposes the following substitute bill:




Chief Sponsor: Derrin R. Owens

House Sponsor: Mike Schultz


8     General Description:
9          This bill enacts provisions related to railroads, fencing of railroad rights-of-way, and
10     liability for damage to livestock.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     requires a railroad to report livestock strikes;
15          ▸     clarifies liability for damages to livestock caused by railroad operations;
16          ▸     creates a process for a livestock owner to be compensated for livestock damaged by
17     a railroad;
18          ▸     provides an appeal process regarding the actual fair market value of damaged
19     livestock;
20          ▸     modifies and clarifies requirements regarding a railroad's duty to construct and
21     maintain fencing along railroad rights-of-way;
22          ▸     requires each railroad to pay a fee based on mileage to cover damages to livestock
23     caused by railroad operations;
24          ▸     allows the Department of Agriculture to pay for costs of administration and staff
25     salary related to the administration of livestock damage claims from fees paid by

26     railroads;
27          ▸     grants rulemaking authority to the Department of Agriculture and Food regarding
28     compensation for livestock damaged by a railroad;
29          ▸     prohibits a railroad from entering into an indemnification agreement related to
30     damages to livestock; and
31          ▸     makes technical changes.
32     Money Appropriated in this Bill:
33          None
34     Other Special Clauses:
35          None
36     Utah Code Sections Affected:
37     AMENDS:
38          4-2-103, as last amended by Laws of Utah 2022, Chapters 68, 79
40          56-1-12, as last amended by Laws of Utah 2018, Chapter 148
41          56-1-13, as Utah Code Annotated 1953

43     Be it enacted by the Legislature of the state of Utah:
44          Section 1. Section 4-2-103 is amended to read:
45          4-2-103. Functions, powers, and duties of department -- Fees for services --
46     Marketing orders -- Procedure -- Purchasing and auditing.
47          (1) The department shall:
48          (a) inquire into and promote the interests and products of agriculture and allied
49     industries;
50          (b) promote methods for increasing the production and facilitating the distribution of
51     the agricultural products of the state;
52          (c) (i) inquire into the cause of contagious, infectious, and communicable diseases
53     among livestock and the means for their prevention and cure; and
54          (ii) initiate, implement, and administer plans and programs to prevent the spread of
55     diseases among livestock;
56          (d) encourage experiments designed to determine the best means and methods for the

57     control of diseases among domestic and wild animals;
58          (e) issue marketing orders for any designated agricultural product to:
59          (i) promote orderly market conditions for any product;
60          (ii) give the producer a fair return on the producer's investment at the marketplace; and
61          (iii) only promote and not restrict or restrain the marketing of Utah agricultural
62     commodities;
63          (f) administer and enforce all laws assigned to the department by the Legislature;
64          (g) establish standards and grades for agricultural products and fix and collect
65     reasonable fees for services performed by the department in conjunction with the grading of
66     agricultural products;
67          (h) establish operational standards for any establishment that manufactures, processes,
68     produces, distributes, stores, sells, or offers for sale any agricultural product;
69          (i) adopt, according to Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
70     rules necessary for the effective administration of the agricultural laws of the state;
71          (j) when necessary, make investigations, subpoena witnesses and records, conduct
72     hearings, issue orders, and make recommendations concerning matters related to agriculture;
73          (k) (i) inspect any nursery, orchard, farm, garden, park, cemetery, greenhouse, or any
74     private or public place that may become infested or infected with harmful insects, plant
75     diseases, noxious or poisonous weeds, or other agricultural pests;
76          (ii) establish and enforce quarantines;
77          (iii) issue and enforce orders and rules for the control and eradication of pests,
78     wherever they may exist within the state; and
79          (iv) perform other duties relating to plants and plant products considered advisable and
80     not contrary to law;
81          (l) inspect apiaries for diseases inimical to bees and beekeeping;
82          (m) take charge of any agricultural exhibit within the state, if considered necessary by
83     the department, and award premiums at that exhibit;
84          (n) provide for the coordination of state conservation efforts, including by:
85          (i) assisting the Conservation Commission in the administration of Chapter 18,
86     Conservation Commission Act;
87          (ii) implementing Chapter 46, Conservation Coordination Act, including entering into

88     agreements with other state agencies; and
89          (iii) administering and disbursing money available to assist conservation districts in the
90     state in the conservation of the state's soil and water resources;
91          (o) participate in the United States Department of Agriculture certified agricultural
92     mediation program, in accordance with 7 U.S.C. Sec. 5101 and 7 C.F.R. Part 785;
93          (p) promote and support the multiple use of public lands;
94          (q) ensure that any training or certification required of a public official or public
95     employee, as those terms are defined in Section 63G-22-102, complies with Title 63G, Chapter
96     22, State Training and Certification Requirements, if the training or certification is required:
97          (i) under this title;
98          (ii) by the department; or
99          (iii) by an entity within the department; [and]
100          (r) administer the requirements described in Section 56-1-12 pertaining to livestock
101     damaged by railroad operations; and
102          [(r)] (s) perform any additional functions, powers, and duties provided by law.
103          (2) The department, by following the procedures and requirements of Section
104     63J-1-504, may adopt a schedule of fees assessed for services provided by the department.
105          (3) (a) A marketing order issued under Subsection (1)(e) may not take effect until:
106          (i) the department gives notice of the proposed order to the producers and handlers of
107     the affected product;
108          (ii) the commissioner conducts a hearing on the proposed order; and
109          (iii) at least 50% of the registered producers and handlers of the affected products vote
110     in favor of the proposed order.
111          (b) (i) The department may establish boards of control to administer marketing orders
112     and the proceeds derived from any order.
113          (ii) A board of control shall:
114          (A) ensure that proceeds are placed in an account in the board of control's name in a
115     depository institution; and
116          (B) ensure that the account is annually audited by an accountant approved by the
117     commissioner.
118          (4) Money collected by grain grading, as provided by Subsection (1)(g), shall be

119     deposited into the General Fund as dedicated credits for the grain grading program.
120          (5) In fulfilling the department's duties in this chapter, the department may:
121          (a) purchase, as authorized or required by law, services that the department is
122     responsible to provide for legally eligible persons;
123          (b) take necessary steps, including legal action, to recover money or the monetary value
124     of services provided to a recipient who is not eligible;
125          (c) examine and audit the expenditures of any public funds provided to a local
126     authority, agency, or organization that contracts with or receives funds from those authorities or
127     agencies;
128          (d) accept and administer grants from the federal government and from other sources,
129     public or private; and
130          (e) fund grants using money appropriated by the Legislature or money received from
131     any other source.
132          Section 2. Section 56-1-12 is repealed and reenacted to read:
133          56-1-12. Injury to livestock -- Notice.
134          (1) As used in this section:
135          (a) "Actual fair market value" means the actual value of damages to livestock as
136     determined by the Livestock Damages Board.
137          (b) "Damage" means injury or loss to livestock resulting from a strike by a railroad
138     operation.
139          (c) "Department" means the Department of Agriculture and Food created in Section
140     4-2-102;
141          (d) "Estimated market value" means the market value of livestock as determined in
142     rules made in accordance with Subsection (8).
143          (e) "Indemnification provision" means a covenant, promise, agreement or
144     understanding in, in connection with, or collateral to a railroad contract requiring the other
145     entity to insure, hold harmless, indemnify, or defend a railroad against liability if:
146          (i) the damages arise out of:
147          (A) damage to property, including livestock; or
148          (B) other related economic loss; and
149          (ii) the damages are caused by or resulting from the fault, in whole or in part, of the

150     railroad or the railroad's agents or employees.
151          (f) "Law enforcement agency" means the same as that term is defined in Section
152     53-1-102;
153          (g) "Livestock" means the same as that term is defined in Section 4-1-109.
154          (h) "Livestock Damages Board" means the Livestock Damages Board created in
155     Subsection (9).
156          (i) "Railroad" means the same as that term is defined in 49 C.F.R. Sec. 200.3.
157          (j) "Railroad Livestock Damage Fund" or "fund" means the Railroad Livestock
158     Damage Fund created in Subsection (7).
159          (k) "Statewide railroad engineer" means the statewide railroad engineer within the
160     Department of Transportation.
161          (2) Each railroad that operates in this state shall provide to the department current
162     contact information suitable for communication between the department and the railroad
163     regarding injury to livestock caused by a railroad.
164          (3) (a) A railroad operator that strikes, injures, or kills livestock during the operation of
165     an engine or car shall:
166          (i) immediately record the location of the strike; and
167          (ii) within 24 hours of the strike, notify and provide pertinent information to the
168     department and the statewide railroad engineer.
169          (b) (i) If a railroad fails to report a strike as required in Subsection (3)(a), the railroad is
170     liable for a civil penalty of at least $5,000 per incident.
171          (ii) It is prima facie evidence that a railroad has failed to report if:
172          (A) an investigation described in Subsection (3)(c) determines that livestock was struck
173     by railroad;
174          (B) the investigation under Subsection (3)(c) resulted from a notification from a
175     livestock owner of a potential strike as described in Subsection (4)(c); and
176          (C) the railroad has not reported a corresponding strike under Subsection (3)(a).
177          (iii) If the department determines that a railroad has failed to report as described in
178     Subsection (3)(b)(ii):
179          (A) the department shall notify the railroad and assess a civil penalty; and
180          (B) the railroad shall pay the civil penalty assessed by the department.

181          (iv) The department shall deposit into the Railroad Livestock Damage Fund any money
182     received for a civil penalty under this Subsection (3)(b).
183          (v) Payment of a civil penalty described in this Subsection (3)(b) does not release a
184     railroad from liability for damage to livestock.
185          (c) After receiving the notification described in Subsection (3)(a), the department shall:
186          (i) notify the relevant law enforcement agency with jurisdiction over the location of the
187     livestock strike; and
188          (ii) in consultation with the relevant law enforcement agency and the statewide railroad
189     engineer, make reasonable efforts to:
190          (A) investigate the scene of the strike;
191          (B) identify the livestock that was struck;
192          (C) determine ownership of the livestock that was struck;
193          (D) assess the state of repair of the fences along the railroad right-of-way; and
194          (E) document and preserve relevant evidence of the scene of the strike.
195          (d) (i) After the investigation described in Subsection (3)(b), if possible, the
196     department and relevant law enforcement agency shall notify the owner of the livestock that
197     was struck.
198          (ii) The department shall create and maintain a website to document and provide notice
199     and information to the public regarding livestock strikes within this state.
200          (iii) If the relevant law enforcement agency and department are unable to identify the
201     owner of the injured livestock as described in Subsection (3)(b), the department shall post and
202     maintain relevant information regarding the strike on a website to provide notice to the public
203     regarding each livestock strike.
204          (4) (a) If livestock is struck by an implement of railroad operations, the owner of the
205     livestock may receive compensation for the estimated market value or the actual fair market
206     value of the damage.
207          (b) To obtain compensation, the owner of the damaged livestock shall notify the
208     department as soon as possible after discovering the damage.
209          (c) A livestock owner shall notify the department each time the owner believes
210     livestock has been damaged by railroad operations.
211          (5) A livestock owner shall file a proof of loss form, provided by the department, no

212     later than 30 days after the date of the original notification livestock damage:
213          (a) has been received by the livestock owner pursuant to Subsection (3)(c); or
214          (b) has been received by the department pursuant to Subsection (4)(c).
215          (6) The department shall:
216          (a) within 30 days after the day the department receives a proof of loss form from a
217     livestock owner, either accept or deny the claim for damages to livestock; and
218          (b) to the extent money is available in the Railroad Livestock Damage Fund created in
219     Subsection (7), pay all accepted claims in accordance with the livestock estimated market value
220     established pursuant to Subsection (8).
221          (7) (a) There is created an expendable special revenue fund called the Railroad
222     Livestock Damage Fund.
223          (b) The fund shall consist of:
224          (i) deposits by the Legislature;
225          (ii) an initial deposit by each railroad as described in Subsection (7)(c);
226          (iii) periodic payments by each railroad as required in Subsection (7)(d);
227          (iv) annual deposits by each railroad for administrative costs as provided under
228     Subsection (7)(e);
229          (v) money deposited by the department from a civil penalty described in Subsection
230     (3);
231          (vi) other donations or deposits into the fund; and
232          (vii) interest earned on the balance of the fund.
233          (c) Before December 31, 2023, each railroad shall pay into the Railroad Livestock
234     Damage Fund:
235          (i) an initial, one-time fee of $150 per mile of railroad track owned by the railroad in
236     this state, in accordance with rules made under Subsection (8)(b), to capitalize the fund for
237     payment of claims as provided in this section; and
238          (ii) an initial, one-time fee of $75 per mile of railroad track owned by the railroad in
239     this state, in accordance with rules made under Subsection (8)(b), to pay for staff salaries and
240     other costs to administer the fund and the department responsibilities under this section.
241          (d) (i) If the department issues payment from the fund in accordance with Subsection
242     (6), the department shall notify the relevant railroad that is liable for the damage.

243          (ii) The department shall include in the notice to the railroad described in Subsection
244     (7)(d)(i) relevant information, including:
245          (A) the date or approximate date that the damage occurred;
246          (B) the location where the damage occurred;
247          (C) the type of livestock that was damaged;
248          (D) the name of the owner of the livestock that was damaged; and
249          (E) the estimated market value of the damage for which the railroad is responsible.
250          (iii) Within 30 days of the date the railroad receives the notice described in Subsection
251     (7)(d)(i), the railroad shall remit to the department the value of the damage.
252          (iv) If a railroad fails to remit to the department the value of the damage as required in
253     Subsection (7)(d)(i), the department may impose a civil penalty up to $10,000:
254          (A) for the failure to pay within 30 days as described in Subsection (7)(d)(iii); and
255          (B) for every additional 30-day period of delinquency.
256          (v) Payment of a civil penalty described in Subsection (7)(d)(iv) does not release a
257     railroad from liability for damage to livestock.
258          (e) (i) Between July 1, 2023, and December 31, 2023, the department shall gather data
259     from livestock strikes reported as required in this section to determine how many livestock
260     strikes occurred during that six months.
261          (ii) Based on the information gathered under Subsection (7)(e)(i) and extrapolated and
262     adjusted to estimate annual strike rates, beginning on July 1, 2024, the department shall
263     establish and charge an administrative fee for each claim the department processes under this
264     section sufficient to cover the staff salary and other administrative costs directly related to the
265     administration of this section.
266          (iii) The department shall establish and publish the fee amount in rules made pursuant
267     to Subsection (8).
268          (iv) The department may not charge more than necessary to cover the costs of salary
269     and administration directly related to the duties under this chapter.
270          (f) In addition to payment of claims for damage to livestock as described in this
271     section, the department may use money in the Railroad Livestock Damage Fund to pay for the
272     costs of administration, staff salary, and other support related to the Railroad Livestock
273     Damage Fund and administration of this section.

274          (8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
275     department shall make rules necessary to implement and enforce this section, including rules to
276     establish the:
277          (a) estimated market value of each type of livestock;
278          (b) official mileage calculation for each railroad for the fee established in Subsection
279     (7)(c); and
280          (c) administrative fee per claim as described in Subsection (7)(e).
281          (9) (a) A livestock owner may appeal the estimated market value granted by the
282     department for damage to livestock by appealing to the Livestock Damages Board.
283          (b) There is created the Livestock Damages Board, which shall consist of three
284     members appointed as described in Subsection (9)(c).
285          (c) The commissioner of the department shall appoint three members to the Livestock
286     Damages Board as follows:
287          (i) one member who owns or administers a livestock auction;
288          (ii) one member who owns livestock and is engaged in a livestock business; and
289          (iii) one member who works for the department.
290          (d) Except as described in Subsection (9)(e)(ii), a member of the Livestock Damages
291     Board may serve for up to two terms of four years.
292          (e) (i) The commissioner shall appoint the first members to the Livestock Damages
293     Board on or before January 1, 2024.
294          (ii) The commissioner shall stagger the initial terms of the members of the Livestock
295     Damages Board appointed on or before January 1, 2024, by:
296          (A) designating one appointee to serve an initial term of five years; and
297          (B) designating one appointee to serve an initial term of three years.
298          (f) (i) The Livestock Damages Board may convene twice each year to hear appeals
299     regarding the value of livestock damaged by a railroad operation.
300          (ii) If a livestock owner provides clear and convincing evidence that the value of the
301     damage to livestock caused by a railroad operation exceeds the estimated market value
302     established pursuant to Subsection (8), the Livestock Damages Board may issue payment from
303     the fund at the actual fair market value amount established in the hearing.
304          (10) An indemnification provision in a contract between a railroad and another entity

305     that operates on a railroad facility is against public policy and is void and unenforceable to the
306     extent the indemnification provision is related to damages to livestock or another provision in
307     this section.
308          Section 3. Section 56-1-13 is repealed and reenacted to read:
309          56-1-13. Fencing right-of-way -- Gates.
310          (1) As used in this section:
311          (a) "Livestock" means the same as that term is defined in Section 4-1-109.
312          (b) "Railroad" means the same as that term is defined in 49 C.F.R. Sec. 200.3.
313          (2) Each railroad shall erect and maintain a fence on each side of any railroad
314     right-of-way owned or operated by the railroad that passes through:
315          (a) land owned by a private owner; or
316          (b) public land upon which grazing of livestock occurs.
317          (3) A railroad shall ensure that a fence required under Subsection (2) is:
318          (a) at least four and one-half feet high;
319          (b) constructed with barbed or other fencing wire, with at least five wires;
320          (c) constructed with substantial posts no more than 16.5 feet apart; and
321          (d) reasonably constructed to ensure livestock are unable to pass through the fence.
322          (4) A railroad shall ensure that fences required under Subsection (2) include proper
323     gates and cattle guards at each private crossing.
324          (5) A railroad is liable to a livestock owner for all damages to livestock resulting from
325     a railroad's failure to construct or maintain a fence as required in this section.
326          (6) (a) If a fence falls into disrepair or is damaged, the railroad shall ensure that the
327     fence is repaired as soon as possible, but not later than 30 days after the date the railroad
328     receives notice of the disrepair or damage.
329          (b) To recover damage to livestock caused by a damaged fence as described in this
330     section, a livestock owner shall follow the procedures described in Section 56-1-12.
331          (7) (a) If a railroad fails to repair a fence within 30 days after the date the railroad
332     receives notice as described in Subsection (6)(a), the owner of the adjacent property may
333     construct or repair the fence.
334          (b) If a land owner repairs a fence as described in Subsection (7)(a):
335          (i) the railroad is liable for the full value of the work and materials for the construction

336     or repair; and
337          (ii) if the railroad fails to timely reimburse the land owner, the land owner may file a
338     civil action in a court of competent jurisdiction.
339          (8) Any work by a land owner to repair a fence required by this section does not:
340          (a) shift liability for damage to livestock as described in Section 56-1-12 to the land
341     owner; or
342          (b) relieve the railroad from liability for damage to livestock as described in Section
343     56-1-12.