LegiStorm

Summary:

Pressure is building for greater passenger use of freight railroad rights of way. Freight railroad rights of way are owned by private, for-profit corporations, and the routes potentially most useful for passenger service are typically the busiest with freight traffic. In many cases, states or commuter rail authorities have reached agreement with freight railroads to share either their track or right of way. However, unlike Amtrak, which has eminent domain power over freight facilities and can appeal to a federal agency to determine the terms of its access to freight track, other would-be passenger rail operators do not have any statutory leverage when negotiating with freight railroads. This likely increases the price public authorities pay for access and leaves them with no apparent recourse when freight railroads reject their offers. During House committee mark-up of the Passenger Rail Investment and Improvement Act of 2008 (P.L. 110-432), a provision to require binding arbitration when commuter rail authorities and freight railroads fail to reach agreement over access proved controversial. The committee chose instead to require non-binding arbitration. Some Members of Congress have urged greater reliance on private companies to provide intercity rail services similar to those offered by Amtrak, but such private services may be difficult to develop so long as potential operators lack Amtrak's statutory right to compel freight railroads to carry passenger trains. Freight railroads can be expected to object to such initiatives as unfair "takings" of their private property. In the 112th Congress, the version of surface transportation legislation passed by the Senate (S. 1813) calls for a federal study to evaluate passenger service in shared-use rail corridors and to survey processes for resolving disputes over passenger access. Passenger access to freight railroad track raises old but recurring questions about the fundamental nature of railroad rights of way. Railroads are not like other businesses that are free to decide how and where they allocate resources solely on the principle of maximizing shareholder returns. While railroad rights of way are private property, more than a century of case law has upheld a public duty on them. The public nature of railroads is evident from the fact that they were designated as "common carriers," granted eminent domain power, and regulated by government. However, the private interest of railroads is protected by the limitation that the government's right to regulate does not mean the right to confiscate. Railroad rights of way, unlike highways, were not considered part of the "public domain." When competition from other modes eroded passenger rail travel, it was confirmed that the public duty attached to railroads could obligate them to operate some trains at a loss, provided the railroad's overall operations were profitable. The issue for Congress is whether freight railroads and prospective passenger rail authorities should negotiate over the terms of use of railroad property just as any private parties would or if a governmental third party, such as the federal Surface Transportation Board (STB), should have some role in determining the terms. Given that a public service obligation is still attached to railroads, albeit largely lifted with respect to passenger service, do freight railroads have the right to set the price for passenger access unilaterally, or should the public's convenience and necessity be given some consideration? Granting track access rights to potential private operators of passenger service could be a particularly thorny issue. Given the increasing demands on urban rail corridors, Congress might examine alternative methods for managing them. A public "rail port authority" might have some advantages over private railroads in optimizing an urban rail network.