Surface Transportation: Issues Related to Preserving Inactive Rail Lines as Trails

Published by the Government Accountability Office on 1999-10-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States General Accounting Office

GAO             Report to the Honorable
                Sam Brownback, U.S. Senate

October 1999
                Issues Related to
                Preserving Inactive
                Rail Lines as Trails

                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Resources, Community, and
                   Economic Development Division


                   October 18, 1999

                   The Honorable Sam Brownback
                   United States Senate

                   Dear Senator Brownback:

                   The Congress, in 1983, amended the 1968 National Trails System Act to
                   give interested parties the opportunity to negotiate agreements with rail
                   carriers to use railroad rights-of-way (the property used for rail lines) for
                   trails.1 The amendments provided rail carriers with an alternative, referred
                   to as “rail banking,” to abandoning unused rights-of-way. When
                   rights-of-way are abandoned, they are no longer part of the national
                   transportation system and, depending on how state law would apply, may
                   revert to landowners with underlying rights to them. In contrast to formal
                   abandonment, rail banking preserves a right-of-way for the possible
                   restoration of rail service in the future and, in the interim, makes the
                   property available for use as a trail. The Surface Transportation Board (the
                   Board) administers the rail-banking program under which a trail sponsor
                   assumes full managerial, financial, and legal responsibility for a
                   right-of-way.2 Concerns have been raised, however, by some landowners
                   adjoining these rights-of-way about the lack of opportunity for them to
                   either recover the use of that property or to express their views about how
                   the property is being used, among other issues.

                   In response to these concerns, this report describes (1) the
                   implementation process for rail banking, including whether it protects the
                   various interests of landowners, communities, rail carriers, and those
                   interested in converting the rights-of-way to trails; (2) the extent to which
                   rail-banked property has returned to use as rail lines and the potential for
                   future reactivation of rights-of-way for rail service; and (3) whether rail
                   banking facilitates the return of these rights-of-way to rail service.

                   Rail banking is a voluntary agreement between a rail carrier proposing to
Results in Brief   abandon a right-of-way and a party interested in converting it to a trail
                   (trail sponsor). During the abandonment process, a trail sponsor submits a

                    The 1983 National Trails System Act Amendments (Trails Act Amendments) are codified at 16 U.S.C.
                   1247(d). Trails can be used for recreation or other purposes.
                    The Board is an independent adjudicatory agency that is administratively housed in the Department of
                   Transportation. It took on many of the core rail functions and certain other functions of the Interstate
                   Commerce Commission, which was abolished by the Congress through the Interstate Commerce
                   Commission Termination Act of 1995.

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request to the Board to use the right-of-way as a trail. In this request, the
trail sponsor must agree that (1) the use of the right-of-way is subject to
the restoration of rail service and (2) it will assume all managerial,
financial (including payment of property taxes), and legal responsibility
for the right-of-way, including any liability arising out of its use as a trail. If
the Board determines that the right-of-way can be abandoned and if the
rail carrier agrees to negotiate, the Board will issue trail use authority to
the trail sponsor to allow the parties to negotiate a trail use agreement. If a
rail-banking agreement is reached between the parties, it may be
implemented without any analysis or approval by the Board. Approval of
the trail use agreement is not required from the landowners that may have
underlying rights to the property, the local community, or any other entity.
Because rail-banked properties are not considered to be abandoned under
the law, the rights-of-way remain intact and adjoining property owners do
not have use of the rights-of-way. However, landowners, communities,
trail users, or others with concerns about whether a trail sponsor is
meeting the two requirements above can petition the Board to address
these concerns. In 1990, the Supreme Court upheld the constitutionality of
the rail-banking statute and held that landowners may seek compensation
in federal courts if they believe their property was taken without
compensation by rail banking.

While the Board has received about 300 requests to use rights-of-way as
trails since the Trails Act Amendments of 1983, the number of rail-banked
rights-of-way is not known because the Board does not monitor what
happens to these rights-of-way once the trail sponsors enter into
negotiations with the rail carriers. However, the Rails-to-Trails
Conservancy, a nonprofit organization that promotes the nationwide
development of trails over former rail lines (including rail-banked lines),
has identified approximately 147 trails established or being developed on
these rail-banked rights-of-way. Of the rights-of-way that have been rail
banked, three have been returned to rail service. Officials with four of the
largest rail carriers (in terms of their revenues) and trail sponsors told us
that the likelihood of additional rail-banked rights-of-way returning to rail
service in the near future is low. Officials with two of these rail carriers
told us they are only rail banking those rights-of-way for which they see
little to no future potential for the reactivation of rail service; concerns
over limited system capacity, potential delays in restoring rail service, and
public challenges to the removal of popular trails are drawbacks to these
rail carriers’ participation in rail banking.

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             Concerning whether rail banking facilitates the return of rights-of-way to
             rail service, rail banking offers carriers some advantages over abandoning
             unused rights-of-way. For example, while returning rail-banked
             rights-of-way to rail service may require some environmental studies, rail
             carrier officials told us the carriers can avoid the cost of repurchasing or
             condemning land (which may have reverted to adjoining landowners upon
             abandonment) to reassemble or reconstruct a rail line. In addition, these
             officials noted that the costs of reconstructing a line are less than if the
             property was abandoned because rail banking does not permit a trail
             sponsor to take any action that would impede the restoration of rail
             service—which may not be the case if the property was abandoned and
             thereby made available for other types of development.

             To establish a nationwide system of nature trails, the Congress enacted the
Background   National Trails System Act of 1968 (Trails Act). As originally enacted, the
             Trails Act made no specific provision for the conversion of abandoned
             railroad rights-of-way to trails. The Congress’s first effort to encourage this
             type of action appeared in the Railroad Revitalization and Regulatory
             Reform Act of 1976, which authorized rights-of-way that would have been
             abandoned to instead be offered for acquisition for public purposes
             (including recreational use). To further encourage the development of
             trails, the Congress passed the Trails Act Amendments of 1983, which
             stated that if a rail right-of-way proposed for abandonment is instead used
             as a trail and the right-of-way is preserved for future rail service, then the
             right-of-way would not be considered abandoned. In passing the
             amendments, the Congress intended to eliminate a problem with the 1976
             act—namely, that once rights-of-way were abandoned, the property
             comprising the rights-of-way would revert to any landowners with
             underlying rights to it, thus making it potentially unavailable for use as a

             Many rail carriers do not own the land on which their tracks lie.
             Sometimes adjoining property owners may have what is commonly called
             a reversionary interest in the land, meaning that when a right-of-way is
             fully abandoned, the land may then be available for the full, unencumbered
             use by the landowner and is, therefore, not necessarily available for use as
             a trail.3 Under some states’ laws, when rail use terminates, the land on
             which a rail line sits may pass to the adjoining landowners. Whether the
             land reverts to the adjoining landowners depends on state laws, the nature

              The Board refers to landowners along a rail right-of-way as adjoining property owners. Property laws
             differ from state to state.

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of the particular property interest conveyed to the railroad, and the
sequence of private and regulatory actions that have taken place.

In some cases, rail carriers own the land on which their track sits outright
and can dispose of it as they wish after the Board authorizes the
abandonment of rail service. Once a rail right-of-way is abandoned, the
Board no longer has jurisdiction over the corridor; appropriate state laws
and property interests would then determine whether an abandoned
right-of-way can be converted into a trail. Trails have been established on
some rights-of-way that have been abandoned. According to data compiled
by the Rails-to-Trails Conservancy, 930 trails have been developed over
approximately 8,900 miles of abandoned rail rights-of-way outside of the
rail-banking program.

The Trails Act Amendments directed the Board, the Department of
Transportation, and the Department of the Interior to encourage state and
local agencies and private interests to establish trails where appropriate.
The federal agencies’ roles differ, with the Board having the primary
responsibility. The Board administers the rail-banking provisions of the
Trails Act as a part of its railroad abandonment proceedings and has
developed procedures for interested parties to participate in rail banking.
The Department of Transportation’s Federal Highway Administration
(FHWA) provides technical assistance to those interested in constructing
trails, including rail-banked trails, and administers the funding programs
that can be used to develop trails. Finally, the Department of the Interior’s
National Park Service provides information to the public, in various
publications and seminars, about rail-banking procedures and
opportunities for creating trails.

Rail-banked trails are eligible to receive federal funds for trail
construction; however, the states, rather than FHWA, determine which trail
projects will receive funding. Under FHWA’s Federal-Aid Highway Program,
it is the responsibility of state (and sometimes local) governments to
develop transportation plans that may or may not include rail-banked
trails. An FHWA official estimated that approximately 90 percent of all
rail-trail projects (whether rail banked or not) are funded from
Transportation Enhancement funds, a subset of the Surface
Transportation Programs funds. Other FHWA programs through which
rail-banked trail projects may be funded include the regular Surface

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                       Transportation Program, the Congestion Mitigation and Air Quality
                       Improvement Program, and the Recreational Trails Program.4

                       In administering the rail-banking program, the Board has established
The Statutory          specific procedures for allowing interim trail use. Rail banking is a
Requirements of the    voluntary agreement between a rail carrier proposing to abandon a
Rail-Banking Process   right-of-way and a potential trail sponsor. During the abandonment
                       process, a trail sponsor submits a request to the Board to use a
Are Limited and Do     right-of-way as a trail. In this request, the trail sponsor must agree to meet
Not Address All        the two requirements of the rail-banking amendments: (1) the use of the
                       right-of-way is subject to the reactivation of rail service and (2) the trail
Concerns of Various    sponsor assumes all liability for the property’s management, taxes, and
Parties                legal responsibilities. If the Board determines that the right-of-way can be
                       abandoned and the two requirements of the statute are met, the Board
                       authorizes the rail carrier and the trail sponsor to enter into negotiations
                       on the use of the right-of-way as a trail. If a rail-banking agreement is
                       reached, it may be implemented without any analysis or approval by the
                       Board. Approval of the agreement is not required from adjoining
                       landowners, communities, or others. However, landowners or others who
                       are concerned that the trail sponsor is not meeting the two requirements
                       can petition the Board to look into the matter. Because the Board’s role is
                       limited, landowners, communities, and trail sponsors must rely on other
                       federal, state, or local laws for resolution of any issues relating to trail
                       development, trail maintenance, and compensation for any taking of

                        Rail-banked trails can also be funded through a variety of nonfederal sources. For example, state and
                       local agencies, such as departments of natural resources or local parks and recreation departments,
                       may administer funds that can be used for the acquisition and construction of trails. Nongovernmental
                       funding may also be obtained from individuals, foundations, and corporations. Trail user fees are
                       collected on some trails to pay for maintenance. Some trail sponsors use the proceeds from the
                       salvage of rail equipment, such as track and ties, as a funding source. Income for the trail sponsor may
                       also be available from utilities using the rights-of-way, for example, for telecommunications lines.

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The Board’s Role and         Before rail banking can begin, a rail carrier must initiate abandonment
Responsibilities Under the   procedures by seeking authority for abandonment from the Board and
Rail-Banking Process Are     notifying various individuals, significant users of the rail line, and state and
                             federal agencies. It must also publish notices in local newspapers.5 To
Limited                      begin the rail-banking process, a trail sponsor must file a trail use request
                             in the abandonment proceeding initiated by the rail carrier. This request
                             must include (1) a map that clearly identifies the rail corridor proposed for
                             trail use; (2) a statement of willingness to accept financial responsibility,
                             manage the trail, pay the property taxes on the trail, and accept
                             responsibility for any liability arising from the use of the right-of-way as a
                             trail; and (3) an acknowledgment that the use of the right-of-way for a trail
                             is subject to the sponsor’s continuing to meet its obligations and that
                             future reactivation of rail service on the right-of-way is possible. Only after
                             the Board has determined that an abandonment will be permitted will it
                             then consider any requests for trail use.

                             Because the rail-banking process is voluntary, a rail carrier seeking to
                             abandon a right-of-way must notify the Board about whether it is willing to
                             negotiate a trail use agreement. If the rail carrier declines to negotiate, the
                             abandonment will proceed as if no trail use request was ever filed. If the
                             rail carrier does agree to negotiate and no offer of financial assistance
                             from another rail carrier to continue rail service on the line is received, the
                             Board will issue trail use authority to the trail sponsor, who then has 180
                             days to negotiate an agreement with the rail carrier to rail bank the
                             right-of-way and permit it to be used as a trail.6

                             The Board has no involvement in the negotiations between the rail carrier
                             and the trail sponsor. While the Trails Act Amendments state that a
                             right-of-way may be preserved through donation, transfer, lease, or sale to
                             the trail sponsor, the Board does not analyze, approve, or set the terms of
                             trail use agreements. According to Board officials, the Board does not
                             receive copies of these agreements, and no approval is required from the
                             landowners that may have underlying rights to the property, from the local

                              The rail carrier is required to notify the following individuals and organizations of its intent to
                             abandon a right-of-way (including its possible interim use as a trail): significant users of the line, the
                             governor of the state, the state public service commission, the designated state agency, the State
                             Cooperative Extension Service, the Federal Railroad Administration, the Department of Defense, the
                             National Park Service, the U.S. Railroad Retirement Board, Amtrak, the Railroad Labor Executives’
                             Association, the Forest Service, and all labor organizations with employees on the affected line. While
                             the Board found actual notice to landowners to be impractical, in an attempt to notify all potentially
                             interested parties, the Board requires that notices be placed in the local newspapers of each county in
                             which the right-of-way lies. The Board also publishes a notice in the Federal Register.
                              The Board will often grant an extension of that period at the request of both the rail carrier and the
                             trail sponsor.

                             Page 6                                    GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails

community, or from any other entity. If a trail use agreement is reached,
the parties may implement it without further action by the Board. If no
trail use agreement is reached, the trail use authority expires, and the
right-of-way may be fully abandoned.7

According to the National Park Service, although no approval of
rail-banking agreements is required from the public, many rail
rights-of-way are rail banked or managed by local or state governments
that are held accountable by their citizens. In addition, the National Park
Service noted that trail development on rights-of-way rail banked by local
governments typically involves a public review process, which, in many
states, is required when FHWA funds are used for trail development. Finally,
the National Park Service emphasized that communities often receive
benefits from the development of rail-banked trails, such as an improved
quality of life and increased economic development.

As shown in table 1, since 1987, trail use requests (that is, opportunities to
negotiate rail-banking agreements with the rail carriers abandoning
rights-of-way) have been sought for 395 of 1,747 (about 23 percent) of the
railroad rights-of-way that have been proposed for abandonment. The
Board approved 288 of the 395 (about 73 percent) requests to allow trail
sponsors and rail carriers to negotiate rail-banking agreements. The Board
can deny a trail use request only if the rail carrier refuses to participate in
the rail-banking program; if the potential trail sponsor does not undertake,
or is unable, to pay taxes and assume liability for the right-of-way; or if the
trail sponsor does not agree to rail banking.8

 In the event that the trail sponsor cancels the trail use agreement and the rail carrier does not want to
reinstitute service, the Board will reopen the abandonment proceeding and authorize a complete
abandonment of the right-of-way.
 Trail use requests also cannot be authorized if the Board determines that it no longer has jurisdiction
over the property in question.

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Table 1: Abandonments and Trail Use
Requests Made and Granted, Fiscal                                      Abandonments                             Trail use requests
Years 1987 Through 1998                                          Cases                                      Cases
                                      Fiscal year                 filed      Granted           Miles         filed      Granted           Miles
                                      1987                           189            96         1,301             18              6          264
                                      1988                           172           152         2,881             20            11           425
                                      1989                           198           180         2,232             22            15           457
                                      1990                           143           134         1,607             19            16           229
                                      1991                           122           121         1,893             14            12           387
                                      1992                           117           104         1,725             19            14           488
                                      1993                           147           138         1,896             44            34           904
                                      1994                           161           139         2,138             37            33           710
                                      1995                           154           141         1,994             34            30           569
                                      1996                           142           135         2,245             49            39           788
                                      1997                           106            91         1,253             60            36           430
                                      1998                            96           106         1,080             59            42           746
                                      Total                       1,747          1,537        22,245           395            288         6,397
                                      Notes: Abandonments include applications filed, exemption petitions filed, and exemption notices

                                      Fiscal year 1987 was the first year for which complete Trails Act data are available.

                                      Source: Surface Transportation Board.

                                      According to a Board official, the actual number of rail-banking
                                      agreements (and the corresponding miles of rail-banked rights-of-way)
                                      that resulted from the 288 trail use requests that were granted is not
                                      known because the Board does not maintain this information. According
                                      to a Board official, if the rail carrier and trail sponsor do not come to
                                      terms on a rail-banking agreement, the rail carrier could abandon the
                                      right-of-way. For those agreements that are reached, the trail sponsor may
                                      later decide not to keep the property and notify the Board that it has
                                      canceled the trail use agreement. In addition, the Board does not have
                                      information on which entities hold these agreements.9 According to a rail
                                      carrier official, if a rail-banking agreement contains provisions that would
                                      allow the right-of-way to be transferred, the initial trail sponsor could
                                      transfer the banked right-of-way to another party. The Board frequently
                                      grants requests for such transfers but does not maintain data on the extent
                                      to which they take place.

                                       Statistics maintained by the Board include some of this information but only for the initial trail use
                                      filings submitted during the abandonment proceedings.

                                      Page 8                                    GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails

                           While the Board does not maintain information on the extent to which
                           trails are developed on rail-banked rights-of-way and has no list of open
                           trails or trail projects underway, the Rails-to-Trails Conservancy maintains
                           some information on which rail-banked rights-of-way have been developed
                           into trails. According to its records, the 288 trail use requests that have
                           been granted have resulted in 61 open trails in 19 states and the District of
                           Columbia, representing approximately 1,758 miles of rail-banked
                           rights-of-way. The Conservancy has identified an additional 86 trail
                           projects under development in 21 states, comprising approximately 1,750
                           rail-banked miles.

While the Rail-Banking     Although the Board has a limited role in administering the rail-banking
Process Does Not Protect   program, the Board has made it clear that when it is presented with
Some Interests of          serious questions from landowners, communities, or others about whether
                           the two statutory conditions of rail banking are being met, it will look into
Landowners and Others,     the matter. For example, landowners or other members of the public may
Their Concerns May Be      petition the Board if they believe that a trail sponsor has no intent of using
Addressed Under Federal,   a right-of-way as a trail or that the trail sponsor is not meeting its financial
State, or Local Laws       and liability obligations. If the Board determines that the trail sponsor is
                           not meeting the statutory requirements, the interim trail use authority may
                           be revoked and the right-of-way may be declared fully abandoned, at
                           which point the right-of-way would no longer be part of the national
                           transportation system and the property would revert to any landowners
                           with underlying rights to it. According to Board officials, the Board has
                           received fewer than 10 such petitions since the rail-banking program
                           began, but in no case has the Board (or its predecessor, the Interstate
                           Commerce Commission [ICC]) been presented with evidence that the two
                           conditions for interim trail use were not being met by the trail sponsor.

                           For example, some landowners have petitioned the Board to require a trail
                           sponsor to provide evidence that it is financially fit before the Board
                           grants trail use authority. According to the Board, the prospective trail
                           sponsor files a statement that it consents to take on this responsibility and
                           uphold the requirements for interim trail use. Under the statute, a
                           prospective trail sponsor—which may be a state or local government
                           agency or a qualified private organization—may acquire a right-of-way as
                           long as the financial and rail-banking requirements of the statute are met.
                           The Board has determined that to be a qualified private organization, an
                           organization must be willing to assume responsibility for the right-of-way
                           and agree to rail banking. The Board defers to the rail carrier’s decision to
                           negotiate a rail-banking arrangement to determine whether the

                           Page 9                          GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails

prospective trail sponsor is financially responsible. The Board’s position is
that if a rail carrier does not believe a trail sponsor is likely to meet its
obligations, the rail carrier will not conclude an agreement. The Board has
stated that requiring the sponsor to provide detailed financial information
or to pass a fitness test before the Board issues trail use authority could
deter or delay trail use, which would be contrary to the Congress’s intent
to facilitate and encourage rail banking.

Landowners who believed their land was taken from them because of rail
banking sought to have the statute declared unconstitutional. The U.S.
Supreme Court, in a 1990 decision on a case involving Vermont property
owners, upheld the constitutionality of the Trails Act Amendments.10 The
Court stated that the Constitution does not prohibit the taking of private
property, only the taking of property without just compensation. The
Court decided that landowners who believe their property has been taken
for rail banking may seek compensation in federal courts.11 Whether rail
banking involves a taking of property in a particular case turns on the
nature of the particular property interests involved, state law, and the
private and regulatory actions preceding the alleged taking. For example,
if the rail carrier entering into an agreement under the Trails Act owns its
right-of-way outright, there is no taking. Over 20 takings cases are
currently pending in federal courts involving trails in 11 states. One
class-action suit involving a trail in Missouri has been certified and others
seeking class certification are pending.

Because the Board can only address those concerns that pertain to the
two rail-banking requirements, landowners, communities, trail users, or
others must rely on state and local laws, not on the Board, for the
resolution of other types of problems. For example, some landowners and
trail advocates have voiced concerns that some trail sponsors are not
developing trails adequately or are allowing utility companies to use the
rail-banked rights-of-way instead of developing them as trails. However,
the Board does not set rules on the type of trail to be constructed or on
how long a trail sponsor should take to develop a trail. The Board has
noted that there can be differing types or levels of trail use; for example,
nothing in the rail-banking statute or the Board’s regulations precludes a
right-of-way from being developed for a mixed use, that is, combining a
recreational trail with a highway or light rail line. Similarly, the Board has
noted that a trail sponsor’s receipt of revenues from a utility company
maintaining transmission lines along the right-of-way is not, in and of

  Preseault v. ICC, 494 U.S. 1 (1990).
  See the Tucker Act (28 U.S.C. 1491(a)) and the Little Tucker Act (28 U.S.C. 1346(a)(2)).

Page 10                                   GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails

                     itself, impermissible. The arrangement could simply be a way for the trail
                     sponsor to obtain funds for the maintenance of the right-of-way and for
                     liabilities and taxes and may not substantively affect the trail use or rail

                     In addition, the Board has stated that there is no need for it to issue
                     maintenance standards for rail-banked trails because, in general, trails
                     must be maintained according to state and local land use plans, zoning
                     ordinances, and public health and safety legislation. Landowners allegedly
                     harmed by improperly maintained trails can present their complaints to
                     the appropriate state, regional, and local entities. The Board has stated
                     that state and local entities are attuned to the specific interests and needs
                     of their communities and that nothing in its Trails Act rules or procedures
                     is intended to usurp the rights of these entities from imposing appropriate
                     regulations on trails.

                     While the Board has no information on the number of rights-of-way that
Few Rail-Banked      have been rail banked out of the 288 requests for trail use it has granted,
Rights-of-WAY Have   the Board is aware of three rights-of-way returning to rail service after
Returned to Rail     being rail-banked. The first case, filed in 1990, involved a small part (350
                     feet out of 64.5 miles) of a right-of-way in Iowa that had been rail banked
Service, and It Is   the previous year. The second case, filed in 1993, involved 9.1 miles of a
Unlikely That Many   right-of-way in Ohio that had been rail banked 3 years earlier; according to
                     the Rails-to-Trails Conservancy, this right-of-way had never been
More Will Do So      developed as a trail. The third case, filed in 1997, involved a 1,100-foot
                     portion of 6.2 miles of right-of-way in Missouri that had been rail banked in

                     Similarly, the likelihood of additional banked rights-of-way being returned
                     to rail service in the near future is low, according to rail carrier officials.
                     An official with Union Pacific Railroad told us that it is not likely that the
                     rail carrier will convert any of its banked corridors back to rail use unless
                     a major change occurs in the business opportunities available along the
                     rights-of-way—such as a large shipper deciding to relocate to one of the
                     banked corridors. This official also noted that the rail carrier does not
                     even maintain information on how many rights-of-way it has banked or
                     where they are located. Officials with CSX Transportation told us that the
                     rail carrier’s banked corridors are probably not located in areas that would
                     need freight service. An official with Norfolk Southern told us that the
                     rights-of-way it agreed to bank were banked under the assumption that the
                     conversion to trails would be permanent. This official noted that if the

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carrier did try to resume rail service on a right-of-way that had been
converted to a trail, there would likely be a “big fight” and negative
publicity that the rail carrier would prefer to avoid. Only one rail carrier
we contacted, Burlington Northern Santa Fe, has plans to restore service
to a banked right-of-way; an official with this carrier told us it would like
to restore rail service to 5 miles of one banked right-of-way.

Managers of trails that have been opened on rail-banked rights-of-way also
told us that the property is not likely to be returned to rail service. For
example, at one trail in Kansas, the Director of State Parks told us there
are other active rail lines near the trail, leaving virtually no chance that any
rail carrier would ever restore service on the banked right-of-way.
According to a trail developer in Missouri, there has been no discussion of
using the banked right-of-way for rail service because it was not a main
rail line and other small rail lines in the area are still being abandoned. The
manager of a trail in Massachusetts told us it is unlikely that the
right-of-way will be returned to rail service because there are no
companies along it that would need freight service.

Future opportunities for rail banking may be limited because the recent
growth in rail traffic and the subsequent need for more rail capacity on
some routes has led to fewer abandonments of rights-of-way, according to
rail carrier officials. Moreover, two rail carriers—Norfolk Southern and
CSX Transportation—have made the strategic decision not to abandon or
bank additional rights-of-way where they see a potential for future rail
service. Instead, the carriers are preserving them under a discontinuance
authority, which relieves a rail carrier of its current obligation to provide
service but allows it to retain the right-of-way. These rail carriers are
choosing to keep these rights-of-way rather than face the potential
problems associated with returning service to rights-of-way that have been
rail banked. Rail officials noted that such problems could include public
challenges to resuming rail service if the misperception develops among
trail users that the trail is a public asset, like a beach or public park.
According to rail officials, if this idea were supported by elected officials,
the restoration of rail service could be blocked despite the intention of the
Trails Act Amendments. In addition, delays in restoring rail service could
arise if a trail has been constructed over the right-of-way. Finally, one
official noted that the threat of litigation from landowners with underlying
rights to the rail-banked property is avoided under a discontinuance

Page 12                         GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails

                         Finally, a Board official stated that a rail carrier other than the original
                         carrier can restore rail service to all or part of rail-banked rights-of-way.
                         Because of constraints on the infrastructure of the current rail system and
                         the recent and potential growth in rail traffic, the Board official cautioned
                         that it is possible that additional rail-banked rights-of-way will be returned
                         to rail service.

                         According to Board officials, the resumption of rail service over a banked
The Return of Inactive   right-of-way is a rather straightforward process for the rail carrier that
Rights-Of-Way to Rail    originally agreed to rail banking. If the rail carrier that banked a
Service Is Easier        right-of-way wants to return it to rail service, the carrier has to notify the
                         Board; the abandonment proceeding is then reopened, and the trail use
Under Rail Banking       authority is revoked. However, if a different rail carrier wants to use the
Than After an            right-of-way, it must file an application for the construction and operation
                         of a line of railroad.12 Depending on the situation, this may trigger an
Abandonment              environmental review by the Board under its requirements for initiating
                         rail service. Of the three cases in which rail service was restored to
                         portions of banked rights-of-way, the first involved a power company that
                         in 1990 wanted to return service to a small portion of a line in Iowa that
                         had been rail banked in 1989. ICC approved the resumption of rail service,
                         noting, however, that the rail carrier that had banked the right-of-way
                         needed to concur with this decision, which it did. In the second case, a rail
                         carrier that was not the original carrier requested in 1993 that a
                         right-of-way banked in 1990 in Ohio be returned to rail service. According
                         to the attorney representing the requesting carrier, ICC did not require any
                         environmental studies prior to approving the resumption of rail service. In
                         addition, there was no public opposition to the reinstitution of rail service.
                         ICC approved the unbanking of the right-of-way a few months after it was
                         requested. In the third case, in Missouri, the rail carrier that had banked a
                         right-of-way in 1992 requested in 1997 that a portion of it be returned to
                         rail service; the Board approved the request within 2 weeks.

                         In addition to being a simpler process than that for reinstituting rail
                         service on an abandoned right-of-way, rail banking offers some cost
                         advantages to rail carriers. According to rail carrier officials, assembling a
                         rail corridor is a massive and expensive undertaking. These officials told
                         us that rail banking a right-of-way could eliminate the cost of reacquiring
                         any land that, if abandoned, could have reverted to property owners or
                         been developed in a manner that would make restoration of the

                          The requirements to construct and operate a rail line are codified at 49 U.S.C. 10901. A rail carrier
                         may also seek to be exempted from these requirements under 49 U.S.C. 10502.

                         Page 13                                   GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails

                  right-of-way difficult. By rail banking a right-of-way rather than
                  abandoning it, the rail carrier can also avoid the cost of trying to market
                  the land or the cost of identifying and locating anyone with underlying
                  rights to the property. In addition, because a trail sponsor is not permitted
                  to create any impediments to resuming rail service, a rail carrier official
                  told us a carrier would need to do less in terms of reconstruction along a

                  We provided a draft of this report to the Department of Transportation and
Agency Comments   to the Department of the Interior for their review and comment.
                  Subsequently, we discussed the draft report with Department of
                  Transportation officials, including the Surface Transportation Board’s
                  Deputy Director of Proceedings and a senior attorney. The officials
                  commented that the draft report was straightforward and that the facts
                  presented accurately represent the rail-banking process. The officials also
                  provided technical clarifications, which we incorporated, as appropriate.

                  In commenting on the draft report, the National Park Service of the
                  Department of the Interior emphasized that the Service considers the
                  rail-banking program to be very effective and many communities find it to
                  be beneficial. The Service noted that rail banking’s relatively brief 15-year
                  existence has not provided enough time to determine the number of
                  banked rights-of-way that may ultimately be returned to rail service. The
                  Service also added that the lack of information on the number of banked
                  rights-of-way shows that there is a need for tracking this information at the
                  federal level. We have incorporated information in the report to recognize
                  the Service’s views concerning the public’s participation in the
                  rail-banking process and the benefits that communities receive from rail
                  banking. The National Park Service also provided technical clarifications,
                  which we incorporated, as appropriate.

                  To gather information on the rail-banking approval process, including how
Scope and         it protects the various interests involved, how many rail-banked
Methodology       rights-of-way have returned to rail service, and whether rail banking
                  facilitates the return of rail service, we interviewed officials of the Surface
                  Transportation Board, the Federal Highway Administration, the National
                  Park Service, and state transportation and parks and recreation offices in
                  Kansas, Illinois, Idaho, and Alabama. We also discussed these issues with
                  trail managers; rail carrier officials with Burlington Northern and Santa Fe
                  Railway Company, CSX Transportation, Norfolk Southern Corporation,

                  Page 14                        GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails

           and Union Pacific Railroad Company; officials with the Association of
           American Railroads and the Short Line and Regional Railroad Association;
           and attorneys involved with rail-banking litigation. In addition, we
           discussed the effectiveness of rail banking with representatives from both
           the Rails-to-Trails Conservancy and the National Association of
           Reversionary Property Owners.

           We performed this work from April 1999 through October 1999 in
           accordance with generally accepted government auditing standards.

           We are sending copies of this report to the Honorable John McCain and
           the Honorable Ernest F. Hollings, Chairman and Ranking Minority
           Member, Senate Commerce, Science, and Transportation Committee; the
           Honorable Bud Shuster and the Honorable James L. Oberstar, Chairman
           and Ranking Democratic Member, House Committee on Transportation
           and Infrastructure; the Honorable Rodney Slater, Secretary of
           Transportation; the Honorable Bruce Babbitt, Secretary of the Interior; Ms.
           Linda Morgan, Chairman, Surface Transportation Board; and Mr. Kenneth
           Wykle, Administrator, Federal Highway Administration. We will also make
           copies available to others on request.

           If you or your staff have any questions about this report, please contact me
           at (202) 512-2834. Key contributors to this report were Helen Desaulniers,
           Leonard Ellis, Ralph Lamoreaux, Susan Poling, and Deena Richart.

           Sincerely yours,

           Phyllis F. Scheinberg
           Associate Director, Transportation Issues

(348173)   Page 15                       GAO/RCED-00-4 Preserving Inactive Rail Lines as Trails
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