RALEIGH — The state-owned N.C. Railroad would be required to sell off some real estate, pay millions of dollars in dividends to the state, and submit to more thorough state oversight under legislation filed last week in the General Assembly.
A legislative staff report last year concluded that the N.C. Railroad has benefited since the state became its sole stockholder in 1998, but the state has not profited from the relationship. Sixty freight trains and 10 passenger trains run each day on NCRR tracks that curve across the state for 317 miles, from Charlotte through the Triangle to Morehead City.
Sen. Fletcher L. Hartsell Jr., a Republican from Concord, filed a bill Jan. 31 that would implement legislative staff recommendations to:
• Collect a one-time $15.5 million dividend from the railroad by June 30.
• Collect annual dividends in future years worth 25 percent of the trackage fees paid to the N.C. Railroad by Norfolk-Southern Railway – about $3.7 million a year.
• Require the N.C. Railroad to set strategic objectives and create a performance management system.
• Require new, detailed financial reporting from the railroad, including the Form 10-K information that publicly held companies report to the U.S. Securities and Exchange Commission.
• Have two railroad directors who also are members of the state Board of Transportation.
• Require the railroad to sell 14 parcels valued at $6 million that lie outside the rail corridor, and give the proceeds to the state.
Some of these sites generate rental income for the railroad – in all, nearly $100,000 a year. Most of the real estate is in Carteret and Craven counties.
The list includes the former sites of two 19th century train depots in the Triangle: a 5-acre tract in Hillsborough that includes a gravel parking lot for nearby businesses, and a 0.3-acre lot in Morrisville.
Hartsell is co-chairman of a joint House-Senate committee that endorsed the staff recommendations in October. Some legislators have said the state should sell the railroad itself, but committee members said it should remain in state hands.
“The proposed bill would give us a little more information as shareholders, and the corporation would get a little more direction from its shareholders,” Hartsell said Friday. “It’s really to enhance economic development and the function of the railroad.”
The legislature stopped collecting dividends from the railroad several years ago and told railroad officials instead to spend the money on tracks, bridges and other improvements to the rail corridor. More than $150 million in investments are planned over the next decade, including $100 million to double-track the rails in Raleigh from downtown to the Beltline in southeast Raleigh, and from Cary to Morrisville.
Scott Saylor, the railroad president, told Hartsell’s committee in October that the railroad might have to scale back its capital improvement plans if it is required to pay dividends to the state.