Article X, Section 2 of the Texas Constitution
As amended November 4, 1890:
Railroads heretofore constructed or which may hereafter be constructed in this state are hereby declared public highways and railroad companies common carriers. The legislature shall pass laws to regulate railroad freight and passenger tariffs, to correct abuses, and prevent unjust discrimination and extortion in the rates of freight and passenger tariffs on the different railroads in this state, and enforce the same by adequate penalties; and to the further accomplishments of these objects and purposes may provide and establish all requisite means and agencies invested with such powers as may be deemed adequate and advisable.
As adopted in 1876, this section read: "Railroads heretofore constructed, or that may hereafter be constructed in this State, are hereby declared public highways, and railroad companies common carriers. The Legislature shall pass laws to correct abuses and prevent unjust discrimination and extortion in the rates of freight and passenger tariffs on the different railroads in this State; and shall from time to time pass laws establishing reasonable maximum rates of charges for the transportation of passengers and freight on said railroads, and enforce all such laws by adequate penalties."
The section has been amended once. The 1890 amendment, approved by seventy-one percent of the voters, authorized the Legislature to create the Railroad Commission of Texas.
The United States Supreme Court subsequently ruled that the state's new regulatory agency did not violate the federal constitution. See Reagan v. Farmers' Loan & Trust Co., 154 U.S. 362, 393-94 (1894) ("[T]here can be no doubt of the general power of a state to regulate the fares and freights which may be charged and received by railroad or other carriers, and that this regulation can be carried on by means of a commission.").
For some insight into the Railroad Commission of the early 1900s, review Lewis H. Haney, Railway Regulation in Texas, 19 J. Pol. Econ. 437, 455 (1911) ("From the point of view of the public, the results are, on the whole, good. Discrimination has been largely removed, population distributed, and undue concentration of power in a few urban centers checked. The commission's activity in regulating train service has also been salutary.").
Without question, this section of the state constitution is historically significant. However, as a matter of constitutional law, the section, like the others in Article X, is properly categorized as "deadwood."
The Railroad Commission was the state's first regulatory agency. For 100 years, its central purpose has been to regulate the state's oil and gas industry. In 2005, its last railroad duties were transferred.
In the late 1800s, it was thought prudent to constitutionally authorize the Railroad Commission. But modern separation-of-powers jurisprudence clearly does not require that it have constitutional status.
- Texas Coast Utils. Coal. v. Railroad Comm'n, 423 S.W.3d 355, 359-60 (Tex. 2014) (citations omitted) ("As a statutorily created body, the Commission has no inherent authority, and instead has only the authority that the Legislature confers upon it. Its authority includes the powers that a statute expressly grants (express authority) and also the powers 'reasonably necessary to carry out the express responsibilities given to it by the Legislature' (implied authority). But 'reasonably necessary' does not mean merely 'expedient.' The Commission 'may not . . . exercise what is effectively a new power, or a power contradictory to the statute,' even if it 'is expedient for administrative purposes.'")
- Railroad Comm'n v. City of Austin, 524 S.W.2d 262, 267 (Tex. 1975) ("The Legislature did create such an agency,—the Railroad Commission. At an early date, it was contended that since the Commission was constitutionally conceived to regulate railroads, it could not be delegated the power to regulate gas utilities; and hence the whole Cox Act, regulating gas utilities and not railroads, was an . . . . The other side of that coin, however, is that the Commission's power is not derived from the Constitution. It comes from legislative grants of powers and jurisdiction. This Court has generally held that the Commission has only such powers as are specifically delegated to the Commission.")
- Corzelius v. Harrell, 186 S.W.2d 961, 964 (Tex. 1945) ("By the use of the broad language used in Article XVI, Section 59a, the Legislature is authorized to . . . . In view of the broad provisions of Article XVI, Section 59a, authorizing the Legislature to pass all laws that may be appropriate for the conservation and development of all natural resources, and in view of the fact that the statutes provide for a full review in the courts of all orders entered by the Railroad Commission, we are of the opinion that the statutes which authorize the Railroad Commission to adjust correlative rights of owners in a common gas reservoir do not violate the provisions of Article II, Section 1, of the Constitution.")
- City of Denison v. Municipal Gas Co., 3 S.W.2d 794, 797 (Tex. 1928) ("In view of the wording of section 2, art. 10, the amendment definitely provided a constitutional grant and authority for these powers to be exercised by a body or agency other than the Legislature itself, and solved the vexing question . . ., that the Legislature was required to do and perform these duties by its own actions. The fact that it makes certain that means and agencies of government with powers to fix and regulate rail rates and prevent abuses, etc., may be created by law, does not create a body over which the jurisdiction of the lawmaking body is limited to the making of rates and matters pertaining to railroads.")
- Herring v. Hous. Nat’l Exch. Bank, 253 S.W. 813, 816 (Tex. 1923) ("Our Texas Railroad Commission was a pioneer in this field of governmental activity. It exercises governmental functions pertaining, perhaps, to each or all of the three divisions of government. In its rate-making powers it invaded the legislative prerogatives; its powers of adjusting rates were at least quasi judicial; and in the administration of its great powers it exercised executive functions. Its political status being novel, and its powers and their exercise yet to be determined by the courts . . . . It is a matter of common knowledge that the state, through its Legislature, has zealously guarded the Railroad Commission.")
- Houston & T.C. Ry. Co. v. Rust & Dinkins, 58 Tex. 98, 110 (1882) ("The organic law, together with the legislation had upon the subject, though not affecting . . ., are here quoted and referred to, to show in this connection that the constitutional direction given to the law department of government, as well as the legislative mind, both coincide in defining the meaning of the term 'discrimination,' and in the meaning contemplated in the prohibition against 'discrimination,' with the general qualifications on the subject which we have pointed out as existing under decisions in America and in England. It is not mere discrimination that is rendered obnoxious and unlawful, but it is 'unjust' discrimination.")
- Vernon's Annotated Constitution of the State of Texas (this multi-volume and up-to-date resource is available at all law libraries and many municipal libraries)
- The Texas State Constitution: A Reference Guide (this one-volume resource is available at most law libraries and some municipal libraries)
- The Constitution of the State of Texas: An Annotated and Comparative Analysis (this two-volume resource is available at most law libraries and some municipal libraries)
- Constitution of the State of Texas (1876) (this resource is published and maintained by the University of Texas School of Law)
- Amendments to the Texas Constitution Since 1876 (this resource is published and regularly updated by the Legislative Council)
- Reports Analyzing Proposed Amendments (this resource is published and regularly updated by the Legislative Reference Library)