Surface Transportation: Issues Related to Preserving Inactive Rail Lines
as Trails (Letter Report, 10/18/1999, GAO/RCED-00-4).

Pursuant to a congressional request, GAO provided information on rail
banking, which refers to the preservation of inactive rail lines as
trails, focusing on: (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-ways 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.

GAO noted that: (1) rail banking is a voluntary agreement between a rail
carrier proposing to abandon a right-of-way and a party interested in
converting it to a trail (trail sponsor); (2) during the abandonment
process, a trail sponsor submits a request to the Surface Transportation
Board to use the right-of-way as a trail; (3) in this request, the trail
sponsor must agree that: (a) the use of the right-of-way is subject to
the restoration of rail service; and (b) it will assume all managerial,
financial, and legal responsibility for the right-of-way, including any
liability arising out of its use as a trail; (4) 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; (5) if a
rail-banking agreement is reached between the parties, it may be
implemented without any analysis or approval by the Board; (6) 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; (7) because rail-banked properties are not considered
abandoned under the law, the rights-of-way remain intact and adjoining
property owners do not have use of the rights-of-way; (8) 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; (9) of the rights-of-way
that have been rail banked, three have been returned to rail service;
(10) officials with four of the largest rail carriers and trail sponsors
told GAO that the likelihood of additional rail-banked rights-of-way
returning to rail service in the near future is low; (11) officials with
two of these rail carriers told GAO they are only rail banking those
rights-of-way for which they see little to no future potential for the
reactivation of rail service; (12) rail banking offers carriers some
advantages over abandoning unused rights-of-way; (13) while returning
rail-banked rights-of-way to rail service may require some environmental
studies, rail carrier officials stated that the carriers can avoid the
cost of repurchasing or condemning land to reassemble or reconstruct a
rail line; and (14) these officials noted that the rail line
reconstruction costs 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.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-4
     TITLE:  Surface Transportation: Issues Related to Preserving
	     Inactive Rail Lines as Trails
      DATE:  10/18/1999
   SUBJECT:  Public lands
	     Railroad land grants
	     Outdoor recreation
	     Land management
	     Railroad transportation operations
	     Railroad industry
	     Land use agreements
IDENTIFIER:  FHwA Federal-Aid Highway Program
	     STB Rail Banking Program

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Cover
================================================================ COVER

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

October 1999

SURFACE TRANSPORTATION - ISSUES
RELATED TO PRESERVING INACTIVE
RAIL LINES AS TRAILS

GAO/RCED-00-4

Preserving Inactive Rail Lines as Trails

(348173)

Abbreviations
=============================================================== ABBREV

  FHWA - Federal Highway Administration
  ICC - Interstate Commerce Commission

Letter
=============================================================== LETTER

B-282801

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 ï¿½rail banking,ï¿½ 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. 

--------------------
\1 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. 

\2 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. 

   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Rail banking is a voluntary agreement between a rail carrier
proposing to 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 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. 

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
serviceï¿½which may not be the case if the property was abandoned and
thereby made available for other types of development. 

   BACKGROUND
------------------------------------------------------------ Letter :2

To establish a nationwide system of nature trails, the Congress
enacted the 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 actï¿½namely, 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 trail. 

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

--------------------
\3 The Board refers to landowners along a rail right-of-way as
adjoining property owners.  Property laws differ from state to state. 

\4 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. 

   THE STATUTORY REQUIREMENTS OF
   THE RAIL-BANKING PROCESS ARE
   LIMITED AND DO NOT ADDRESS ALL
   CONCERNS OF VARIOUS PARTIES
------------------------------------------------------------ Letter :3

In administering the rail-banking program, the Board has established
specific procedures for allowing interim trail use.  Rail banking is
a voluntary agreement between a rail carrier proposing to abandon a
right-of-way and a potential trail sponsor.  During the abandonment
process, a trail sponsor submits a request to the Board to use a
right-of-way as a trail.  In this request, the trail sponsor must
agree to meet 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 sponsor assumes all liability for the
property's management, taxes, and 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 property. 

      THE BOARD'S ROLE AND
      RESPONSIBILITIES UNDER THE
      RAIL-BANKING PROCESS ARE
      LIMITED
---------------------------------------------------------- Letter :3.1

Before rail banking can begin, a rail carrier must initiate
abandonment procedures by seeking authority for abandonment from the
Board and notifying various individuals, significant users of the
rail line, and state and federal agencies.  It must also publish
notices in local newspapers.\5 To 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 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

                                Table 1
                
                Abandonments and Trail Use Requests Made
                 and Granted, Fiscal Years 1987 Through
                                  1998

                             Abandonments         Trail use requests
                        ----------------------  ----------------------
                         Cases  Grante           Cases  Grante
Fiscal year              filed       d   Miles   filed       d   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 filed. 

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. 

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. 

--------------------
\5 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. 

\6 The Board will often grant an extension of that period at the
request of both the rail carrier and the trail sponsor. 

\7 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. 

\8 Trail use requests also cannot be authorized if the Board
determines that it no longer has jurisdiction over the property in
question. 

\9 Statistics maintained by the Board include some of this
information but only for the initial trail use filings submitted
during the abandonment proceedings. 

      WHILE THE RAIL-BANKING
      PROCESS DOES NOT PROTECT
      SOME INTERESTS OF LANDOWNERS
      AND OTHERS, THEIR CONCERNS
      MAY BE ADDRESSED UNDER
      FEDERAL, STATE, OR LOCAL
      LAWS
---------------------------------------------------------- Letter :3.2

Although the Board has a limited role in administering the
rail-banking program, the Board has made it clear that when it is
presented with serious questions from landowners, communities, or
others about whether the two statutory conditions of rail banking are
being met, it will look into the matter.  For example, landowners or
other members of the public may petition the Board if they believe
that a trail sponsor has no intent of using a right-of-way as a trail
or that the trail sponsor is not meeting its financial 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 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 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 banking. 

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. 

--------------------
\10 Preseault v.  ICC, 494 U.S.  1 (1990). 

\11 See the Tucker Act (28 U.S.C.  1491(a)) and the Little Tucker Act
(28 U.S.C.  1346(a)(2)). 

   FEW RAIL-BANKED RIGHTS-OF-WAY
   HAVE RETURNED TO RAIL SERVICE,
   AND IT IS UNLIKELY THAT MANY
   MORE WILL DO SO
------------------------------------------------------------ Letter :4

While the Board has no information on the number of rights-of-way
that have been rail banked out of the 288 requests for trail use it
has granted, the Board is aware of three rights-of-way returning to
rail service after 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 the previous year.  The second
case, filed in 1993, involved 9.1 miles of a 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
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 1992. 

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-wayï¿½such 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 carrier did try to resume rail service on
a right-of-way that had been converted to a trail, there would likely
be a ï¿½big fightï¿½ 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 authority. 

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. 

   THE RETURN OF INACTIVE
   RIGHTS-OF-WAY TO RAIL SERVICE
   IS EASIER UNDER RAIL BANKING
   THAN AFTER AN ABANDONMENT
------------------------------------------------------------ Letter :5

According to Board officials, the resumption of rail service over a
banked right-of-way is a rather straightforward process for the rail
carrier that originally agreed to rail banking.  If the rail carrier
that banked a 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 authority is revoked.  However, if a
different rail carrier wants to use the 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
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 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 right-of-way. 

--------------------
\12 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. 

   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

We provided a draft of this report to the Department of
Transportation and 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. 

   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

To gather information on the rail-banking approval process, including
how it protects the various interests involved, how many rail-banked
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, 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. 

---------------------------------------------------------- Letter :7.1

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

*** End of document. ***