Surface Transportation

The National Trails System Act, as amended, provided carriers with an alternative, referred to as "rail banking," to abandoning unused rights-of-way. 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. Concerns have been raised 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. This report describes the implementation process for rail banking, 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 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.