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41492
SERVICE DATE – OCTOBER 4, 2011
DO
SURFACE TRANSPORTATION BOARD
DECISION AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT
Docket No. AB 914X
McCLOUD RAILWAY COMPANY–ABANDONMENT AND DISCONTINUANCE OF
SERVICE EXEMPTION–IN SISKIYOU, SHASTA, AND MODOC COUNTIES, CAL.
Decided: October 3,
2011
By decision served on October 14, 2005, the Board, under
49 U.S.C. § 10502, exempted from the prior approval requirements
of 49 U.S.C. § 10903 the abandonment by McCloud Railway Company
(MCR) of approximately 80 miles of rail line in Siskiyou and
Shasta Counties, Cal., and the discontinuance of service
provided under a grant of trackage rights over a 31.4-mile line
owned by BNSF Railway Company in Siskiyou and Modoc Counties,
Cal.
The Board granted the exemption subject to standard
employee protective conditions and several environmental
conditions.
The abandonment exemption became effective on November
20, 2006.
By decision and notice of interim trail use or
abandonment (NITU) served on December 29, 2009, the proceeding
was reopened and was modified to implement interim trail
use/rail banking, under the National Trails System Act (Trails
Act), 16 U.S.C § 1247(d), and 49 C.F.R. § 1152.29.
The NITU authorized a 180-day period, until June 28,
2010, for SAVE BURNEY FALLS (SBF) to negotiate with MCR for
interim trail use on the above-described rail line.
MRC and SBF state that, on June 17, 2010, they entered
into a written Letter of Intent for SBF to acquire the
right-of-way for rail banking and interim trail use.
On June 28, 2010, SBF filed a request for an extension of
the NITU negotiating period until December 26, 2010.
SBF asserted that it needed additional time to complete
negotiations with MCR.
By letter filed July 6, 2010, MCR notified the Board that
it would not agree to the requested extension, on the ground
that an extension was not necessary or appropriate because a
trail use agreement between MCR and SBF had already been reached
during the initial interim trail use negotiating period.
Because interim trail use is voluntary with the carrier,
and MCR had advised that it was not agreeable to an extension,
the Board denied the extension request in a decision served on
August 5, 2010.
On March 7, 2011, MCR and SBF jointly filed a request
asking that the Board impose a new NITU on the 80 miles of rail
line. The parties
state that, since the Board’s last decision in this case, they
have fully agreed on the terms and conditions of their
transaction and implemented the Letter of Intent.
SBF, however, is only prepared to invest in acquiring the
corridor for interim trail use and obligate itself to keep the
corridor available for rail banking if it is ensured that the
property is covered by an applicable NITU.
The prior NITU expired by its own terms on June 28, 2010.
MCR and SBF contend, however, that the abandonment
authority has not lapsed because the June 17, 2010 Letter of
Intent to purchase the rail line for a trail serves as a legal
barrier to consummation under 49 C.F.R. § 1152.29(e)(2).
Trail use requests may be accepted as long as the Board
retains jurisdiction over the right-of-way and the carrier is
willing to enter into negotiations.
Given the parties’ June 17, 2010 Letter of Intent to use
the right-of-way for interim trail use, MCR’s prior assertion
that the parties had completed interim trial use negotiations
shortly thereafter, and their recent confirmation of completion
of the terms and condition of the transaction to implement
interim trail use, no public purpose would be served by
requiring MCR to file again for abandonment authority.
Moreover, the record here shows that MCR has not taken
any action to consummate the abandonment and remove the property
from the Board’s jurisdiction.
To the contrary, MCR entered into the Letter of Intent
with SBF, objected to the prior, timely NITU extension request
as unnecessary in view of the parties’ Letter of Intent and
negotiations, and evidently has agreed to terms and conditions
with SBF.
Under the facts and circumstances of this case an
extension of the consummation deadline to the service date of
this decision is warranted, and the Board will issue a NITU.
SBF has submitted a statement of willingness to assume
full responsibility for management of,
for any legal liability arising out of the transfer or
use of (unless the user is immune from liability, in which case
it need only indemnify the railroad against any potential
liability), and for the payment of any and all taxes that may be
levied or assessed against, the right of way, as required by 49
C.F.R. § 1152.29, and has acknowledged that the use of the
right-of-way for trail purposes is subject to the future
reactivation for rail service.
MCR states that it agrees to imposition of a new trail
use condition for 180 days, and that it has not consummated the
abandonment.
Because MCR
agrees to SBF’s request for a new NITU, and SBF’s request
complies with the requirements of 49 C.F.R. § 1152.29, a new
NITU will be issued.
To the extent that additional time for the parties to
enter into a final agreement is necessary, the parties may
continue to negotiate a final agreement during the 180-day
period prescribed below.
If the parties reach a mutually acceptable final
agreement, no further Board action is necessary.
If no agreement is reached within 180 days, MCR may fully
abandon the line because there are no other conditions that are
a barrier to consummation.
See 49 C.F.R. § 1152.29(d)(1).
Use of the right-of-way for trail purposes is subject to
future use of the property for restoration of railroad
operations.
This action will not significantly affect either the
quality of the human environment or the conservation of energy
resources.
It is ordered:
1. This
proceeding is reopened.
2. The
deadline for the filing of a notice of consummation of the
abandonment authorization in this proceeding is extended to the
service date of this decision
to allow
acceptance of the trail use request and issuance of a NITU in
the present decision.
3. The
parties’ request for a new interim trail use/rail banking
condition is accepted and granted.
4. Upon
reconsideration, the decision served October 14, 2005, exempting
the abandonment of the line described above, is modified to the
extent necessary to implement interim trail use/rail banking as
set forth below to permit SBF to negotiate with MCR for trail
use for a period of 180 days commencing from the service date of
this decision and notice April 1, 2012.
5. If an
interim trail use/rail banking agreement is reached, it must
require the trail user to assume, for the term of the agreement,
full responsibility for management of, for any legal liability
arising out of the transfer or use of (unless the user is immune
from liability, in which case it need only to indemnify the
railroad against any potential liability), and for the payment
of any and all taxes that may be levied or assessed against, the
right-of-way.
6. Interim
trail use/rail banking is subject to any future use of the
property for restoration of railroad operations and to the
user’s continuing to meet the financial obligations for the
right-of-way.
7. If
interim trail use is implemented, and subsequently the user
intends to terminate trail use, it must send the Board a copy of
this decision and notice and request that it be vacated on a
specified date.
8. If an
agreement for interim trail use/rail banking is reached by
April 1, 2012, interim trail use may be implemented.
If no agreement is reached by that time, MCR may fully
abandon the line, provided the conditions imposed in this
proceeding are met.
9. This
decision is effective on its service date.
By the Board, Rachel D. Campbell, Director, Office of
Proceedings.
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