STB REPORT #10 - MAY 16 - 31, 1998 ****************************************************************************** A compilation of decisions and notices published by the Surface Transportation Board. Includes information on track abandonments, ownership changes and trackage rights agreements. Condensed for readability. The full text is available at www.stb.dot.gov/ ****************************************************************************** SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-32 (Sub-No. 83) BOSTON AND MAINE CORPORATION--ABANDONMENT--IN HARTFORD AND NEW HAVEN COUNTIES, CT STB Docket No. AB-355 (Sub-No. 23) SPRINGFIELD TERMINAL RAILWAY COMPANY--DISCONTINUANCE OF SERVICE-- IN HARTFORD AND NEW HAVEN COUNTIES, CT By decision served on April 22, 1998, the Board found that the public convenience and necessity permit Boston and Maine Corporation (B&M) and Springfield Terminal Railway Company (ST) to abandon and discontinue service, respectively, over a line of railroad known as the Canal Branch extending from milepost 14.50 in Cheshire, CT, to milepost 24.00 in Southington, CT, a distance of 9.50 miles, in Hartford and New Haven Counties, CT. The decision was scheduled to become effective on May 22, 1998, unless an offer of financial assistance (OFA) was filed on or before May 1, 1998. On May 1, 1998, Dalton Enterprises, Inc., timely filed an OFA. By decision served on May 5, 1998, Dalton was found to be financially responsible and the effective date of the April 22 decision was postponed to permit the financial assistance process to proceed. On May 4, 1998, Dalton filed a petition for stay of the effective date of the April 22 decision pending its appeal of the decision to the United States Court of Appeals for the Second Circuit. The stay request will be denied. As noted, because of the pendency of Dalton's OFA, the effective date of the abandonment decision has been postponed until the completion of the OFA process. Thus, a stay is not warranted at this time. It should be noted that, if Dalton were to prevail on the merits of its court appeal, and if B&M and ST had already acted on the authority to abandon and discontinue, B&M and ST could be required to restore the line to service. Thus, there is no irreparable harm. It is ordered: 1. The petition for stay is denied. Decided: May 15, 1998 Service Date - May 18, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT STB Docket NO. AB-55 (SUB-NO. 560X) CSX Transportation, Inc.--Abandonment Exemption--in Logan County, WV In this proceeding, CSX Transportation, Inc. (CSXT) has filed a petition in connection with the abandonment of an approximately 0.73 miles of railroad between milepost CMB-0.33 at Bandmill Junction and milepost CMB-1.05 at Melville, in Logan County, WV. In its petition, CSXT states that in recent years, Austin Powder Company (Austin Powder) has shipped or received freight by rail. Austin Powder operates an explosives manufacturing plant in Melville. In 1996, Austin Powder received 78 carloads of ammonium nitrate via rail at its Melville facility; 51 carloads in 1997, via rail at Melville and 12 carloads through March 9, 1998. CSXT states that Austin Powder plans to move its operation at Melville to CSXT's Peach Creek Yard Transflo Services Facility (Peach Creek). Following the relocation by Austin Powder, there will no further originating or terminating traffic on the line. CSXT will not abandon the line until Austin Powder has completely relocated its operations from Melville to the Peach Creek facility. The right-of-way is 30 feet wide and meanders through an unpopulated and mountainous hollow adjacent to a stream. We recommend that no environmental conditions be placed on any decision granting abandonment authority. Service Date - May 18, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-303 (Sub-No. 14X) WISCONSIN CENTRAL LTD.--ABANDONMENT EXEMPTION--IN WOOD COUNTY, WI In the above-entitled proceeding, no environmental or historic preservation issues have been raised by any party or identified by the Section of Environmental Analysis. It is ordered: 1. Abandonment of the involved rail line will have no significant effect on the quality of the human environment and conservation of energy resources or on historic resources. Decided: May 8, 1998 Service Date - May 18, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-531 (Sub-No. 1X) PIONEER VALLEY RAILROAD COMPANY, INC.--ABANDONMENT EXEMPTION--IN HAMPSHIRE COUNTY, MA In the above-entitled proceeding, no environmental or historic preservation issues have been raised by any party or identified by the Section of Environmental Analysis. It is ordered: 1. Abandonment of the involved rail line will have no significant effect on the quality of the human environment and conservation of energy resources or on historic resources. Decided: May 8, 1998 Service Date - May 18, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33004 READING BLUE MOUNTAIN & NORTHERN RAILROAD COMPANY --ACQUISITION AND OPERATION EXEMPTION-- CONSOLIDATED RAIL CORPORATION By motion filed on May 7, 1998, the Delaware and Hudson Railway Company, Inc. (DHRC), requests that its petition be dismissed with prejudice and that this proceeding be discontinued, representing that the issues therein have been settled. DHRC's motion will be granted. It is ordered: 1. DHRC's petition is dismissed with prejudice and this proceeding is discontinued. Decided: May 14, 1998 Service Date - May 19, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 32760 (Sub-No. 26) [HOUSTON/GULF COAST OVERSIGHT] UNION PACIFIC CORPORATION, UNION PACIFIC RAILROAD COMPANY, AND MISSOURI PACIFIC RAILROAD COMPANY--CONTROL AND MERGER--SOUTHERN PACIFIC RAIL CORPORATION, SOUTHERN PACIFIC TRANSPORTATION COMPANY, ST. LOUIS SOUTHWESTERN RAILWAY COMPANY, SPCSL CORP., AND THE DENVER AND RIO GRANDE WESTERN RAILROAD COMPANY ACTION: Corrected Decision; Decision No. 1; Notice of Houston/Gulf Coast Oversight Proceeding. Requests for Additional Conditions to the UP/SP Merger for the Houston, Texas/Gulf Coast Area. SUMMARY: Pursuant to a petition filed February 12, 1998, by the Texas Mexican Railway Company and the Kansas City Southern Railway Company (Tex Mex/KCS) and a request filed March 6, 1998, by the Greater Houston Partnership (GHP), the Board is instituting a proceeding as part of the 5-year oversight condition that it imposed in Finance Docket No. 32760 (UP/SP Merger), to examine their requests, and others that may be made, for additional remedial conditions to the UP/SP merger as they pertain to rail service in the Houston, Texas/Gulf Coast region. The Board is establishing a procedural schedule for the submission of evidence, replies, and rebuttal. DATES: The proceeding will commence on June 8, 1998. On that date, all interested parties must file requests for new remedial conditions to the UP/SP merger regarding the Houston/Gulf Coast area, along with all supporting evidence. The Board will publish a notice of acceptance of requests for new conditions in the Federal Register by July 8, 1998. Notices of intent to participate in the oversight proceeding are due July 22, 1998. All comments, evidence, and argument opposing the requested new conditions are due August 10, 1998. Rebuttal in support of the requested conditions is due September 8, 1998. SUPPLEMENTARY INFORMATION: In UP/SP Merger, Decision No. 44, served August 12, 1996, the Board approved the common control and merger of the rail carriers controlled by Union Pacific Corporation (Union Pacific Railroad Company and Missouri Pacific Railroad Company) and the rail carriers controlled by Southern Pacific Rail Corporation (Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, SPCSL Corp., and the Denver and Rio Grande Western Railroad Company) (collectively UP/SP), subject to various conditions. Common control was consummated on September 11, 1996. The Board imposed a 5-year oversight condition to examine whether the conditions imposed on the merger effectively addressed the competitive concerns they were intended to remedy, and retained jurisdiction to impose, as necessary, additional remedial conditions if the Board determined that the conditions already imposed were shown to be insufficient. In its initial oversight proceeding, the Board concluded that, while it was still too early to tell, there was no evidence at the time that the merger, with the conditions that the agency had imposed, had caused any adverse competitive consequences. Nevertheless, the Board indicated that its oversight would be ongoing, and that it would continue vigilant monitoring. UP/SP has experienced serious service difficulties since the merger, and the Board has issued a series of orders, effective through August 2, 1998, to mitigate a rail service crisis in the western United States caused, in large measure, by severely congested UP/SP lines in the Houston/Gulf Coast region. In acting to relieve some of the congestion, the Board made substantial temporary changes to the way in which service is provided in and around Houston. (The Board directed UP/SP to release shippers switched by the Houston Belt & Terminal Railway Company (HB&T) or the Port Terminal Railroad Association (PTRA) from their contracts so that they could immediately route traffic over the Burlington Northern and Santa Fe Railway Company (BNSF) or Tex Mex, in addition to UP/SP. The agency also directed UP/SP to permit BNSF and Tex Mex to modify their operations over UP/SP lines to minimize congestion over UP/SP's Sunset Line, to move traffic around Houston rather than going through it, and to have full access to UP/SP's Spring, TX dispatching facility as neutral observers. More generally, the Board required UP/SP to cooperate with other railroads and to accept assistance from other railroads able to handle UP/SP traffic. UP/SP and BNSF recently have agreed to make other changes designed to improve service. In particular, the carriers have agreed to joint ownership of the Sunset Line between Avondale (New Orleans), LA and Houston; joint dispatching in the Houston area; and overhead trackage rights for UP/SP over the BNSF line between Beaumont and Navasota, TX.) The Board found that, although merger implementation issues were involved, a key factor in bringing about the service emergency was the inadequate rail facilities and infrastructure in the region, and, as such, also ordered UP/SP, BNSF, and other involved railroads to submit to the Board their plans to remedy these inadequacies. Recognizing the limitations on its authority under the emergency service provisions of the law, the Board rejected proposals offered by certain shipper, carrier, and governmental interests to force UP/SP to transfer some of its lines to other rail carriers and effect a permanent alteration of the competitive situation in the Houston region; it adopted instead only those measures designed to facilitate short-term solutions to the crisis that did not further aggravate congestion in the area or create additional service disruptions. The Board declared, however, that interested persons could present proposals for longer-term solutions to the service situation including those seeking structural industry changes based on perceived competitive inadequacies in formal proceedings outside of section 11123, particularly in the UP/SP merger oversight process. Tex Mex/KCS has now requested that we invoke our oversight jurisdiction over the merger for the purpose of considering such proposals, including the transfer to it of various UP/SP lines and yards in Texas. The Railroad Commission of Texas (RCT) has previously announced its intent to seek similar relief. GHP has also requested the Board's intervention to provide for Houston's long-term rail service needs, including the establishment of a neutral switching operation. That the service emergency in the Houston/Gulf Coast region remains ongoing is well known. In its progress report of March 9, 1998, UP/SP announced that it would take drastic action in 30 days including the refusal of new business and the transfer of existing business to its competitors if the steps it has taken to deal with the emergency are not successful. On March 24, 1998, the carrier announced an embargo of a significant portion of its southbound traffic destined for the Laredo, TX gateway to clear a backlog of 5,500 cars waiting to cross into Mexico. Given these circumstances, the Board will invoke its oversight jurisdiction over the UP/SP merger to consider new conditions to the merger of the kind proposed here, and others that may be made. We note that no party as yet has seriously suggested that SP's inadequate infrastructure would not have produced severe service problems in the Houston/Gulf Coast area even if there had been no merger. Nonetheless, the Board believes that, given the gravity of the service situation, it should thoroughly explore anew the legitimacy and viability of longer-term proposals for new conditions to the merger as they pertain to service and competition in that region. UP/SP and BNSF argue that Tex Mex/KCS request for conditions that have been previously rejected, without any new evidentiary justification, is insufficient grounds for the Board to begin a new oversight proceeding. We disagree. Our 5-year oversight of the UP/SP merger is not a static process, but a continuing one, so that the Board's prior rejection of Tex Mex/KCS or any other party's requested conditions whether in the Board's approval of the merger or in a subsequent oversight proceeding does not preclude their fresh consideration now. Through our oversight condition, we have retained jurisdiction to monitor the competitive consequences of this merger; to re-examine whether our imposed conditions have effectively addressed the consequences they were intended to remedy; and to impose additional remedial conditions if those previously afforded prove insufficient, including, if necessary, divestiture of certain of the merged carriers property. The virtual shutdown of rail service in the Houston/Gulf Coast area that occurred after the UP/SP merger and which, after many months, has yet to be normalized is unprecedented. In our judgment, those circumstances alone are sufficient for the Board to commence this proceeding now. Clearly, our 5-year oversight jurisdiction permits us to examine and, if necessary, re-examine at any time during this period whether there is any relationship between the market power gained by UP/SP through the merger and the failure of service that has occurred here, and, if so, whether the situation should be addressed through additional remedial conditions. We caution, however, that we will not impose conditions requiring UP/SP to divest property that would substantially change the configuration and operations of its existing network in the region in the absence of the type of presentation and evidence required for inconsistent applications in a merger proceeding; i.e, parties must present probative evidence that discloses the full effects of their proposals. Divestiture is only available when no other less intrusive remedy would suffice, and we will impose it only upon sufficient evidentiary justification. The Board will confine this proceeding under its continuing oversight jurisdiction to examining requests for new conditions to the merger relating to rail service in the Houston/Gulf Coast area. As we have noted, the service crisis in this region, and its significant impact on the regional economy, clearly warrant our discrete treatment of these matters now. As a result, the procedures set forth here will be separate from those in the more general oversight proceeding that will begin July 1, 1998. Decided: March 30, 1998. Service Date - May 19, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 32760 (Sub-No. 26) [HOUSTON/GULF COAST OVERSIGHT] Decision No. 2 UNION PACIFIC CORPORATION, UNION PACIFIC RAILROAD COMPANY AND MISSOURI PACIFIC RAILROAD COMPANY CONTROL AND MERGER SOUTHERN PACIFIC RAIL CORPORATION, SOUTHERN PACIFIC TRANSPORTATION COMPANY, ST. LOUIS SOUTHWESTERN RAILWAY COMPANY, SPCSL CORP., AND THE DENVER AND RIO GRANDE WESTERN RAILWAY COMPANY Pursuant to oversight authority that it retained upon its approval of the UP/SP merger, the Board instituted a proceeding on March 31, 1998, to consider requests for additional conditions to the merger for the Houston, Texas/Gulf Coast area, including those that seek divestiture of certain of the merged carriers property. All interested persons were directed to file their requests, along with all supporting evidence, by June 8, 1998. The Board commenced this proceeding pursuant to a joint petition filed February 12, 1998, by the Texas Mexican Railway and the Kansas City Southern Railway Company (Tex Mex/KCS). On April 22, 1998, Tex Mex/KCS asked the Board to (1) adopt discovery guidelines and appoint an Administrative Law Judge to handle all discovery matters and to initially rule on all discovery disputes which the parties cannot mutually resolve; and (2) enter a protective order similar to those in other control proceedings that would facilitate any necessary discovery and protect the confidentiality of materials reflecting the terms of contracts, shipper-specific traffic data, and other confidential and/or proprietary information in the event that parties seek to produce such materials. Petitioner would include in the protective order a provision governing the production of certain highly confidential competitive information that would restrict that information to use by outside counsel or outside consultants for the parties. On reply, UP objects to formal discovery procedures, arguing that Tex Mex/KCS apparent request for full-blown discovery of the kind involved in a primary merger proceeding would be out of place and overly burdensome in the allegedly more narrow oversight context that is involved here, particularly when UP has already publicly provided a great amount of comprehensive data on the most relevant issues in this matter its service in the Houston/Gulf Coast region. UP also objects to the adoption of a new protective order, arguing that the one in the merger proceeding is already in place. In the Decision No. 1, the Board stated that it would: not impose conditions requiring UP/SP to divest property that would substantially change the configuration and operations of its existing network in the region in the absence of the type of evidence required for inconsistent applications in a merger proceeding; i.e., parties must present probative evidence that discloses the full effect of their proposals. Divestiture is only available when no other less intrusive remedy would suffice, and we will impose it only upon sufficient evidentiary justification. While the Board's inquiry here will clearly be more confined than its prior consideration of the merger as a whole, to address this evidentiary burden parties will likely require discovery of relevant matters. As a result, the Board assigns and authorizes Administrative Law Judge Stephen Grossman to handle all discovery matters and to entertain and rule upon all disputes concerning discovery in this proceeding. Good cause also exists for the Board to enter a protective order, and to avoid any possible confusion, the Board will issue a new one governing this oversight proceeding. Unrestricted disclosure of confidential, proprietary or commercially sensitive information and data could cause serious competitive injury to the parties. Issuance of a protective order ensures that such information and data produced by any party in response to a discovery request or otherwise will be used solely for purposes of this proceeding and not for any other business or commercial use. The protective order will facilitate the prompt and efficient resolution of this proceeding. It is ordered: 1. The petition for a protective order is granted and the parties to this proceeding must comply with the protective order. 2. This proceeding is assigned to Administrative Law Judge Stephen Grossman for handling of all discovery matters and the initial resolution of all discovery disputes. Decided: May 18, 1998 Service Date - May 19, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-290 (SUB-NO.193X) NORFOLK AND WESTERN RAILWAY COMPANY --ABANDONMENT AND DISCONTINUANCE OF TRACKAGE RIGHTS--AT WAYNESBORO, VIRGINIA In this proceeding, the Norfolk and Western Railway Company ( NW ) has filed a notice in connection with the abandonment of its railroad line located between Stations 60+00 and 67+56, a distance of 0.14 miles, and for discontinuance of trackage rights over CSXT between Stations 0+64 and 60+00, a distance of 1.12 miles, at Waynesboro, Virginia. CSXT received abandonment authority for the 1.12 mile segment in a decision served May 6, 1987, in ICC Docket No. AB-18 (Sub-No. 86X). According to NW, the land use along the right-of-way is primarily 75 percent industrial and 25 percent commercial businesses. No traffic has moved over the line for two years and none is anticipated. The Virginia Department of Environmental Quality expressed concern about air quality, waste issues, and erosion and sediment control during salvage operations. During salvage, NW is required to control fugitive air emissions and any land clearing debris must be disposed of in an approved manner. NW must comply with Virginia open burning and fugitive air emission regulations. NW should employ appropriate erosion and sediment control measures for track removal. To ensure compliance with the Virginia regulations protecting water quality and air quality during salvage operations, we will recommend that a condition be imposed on any decision granting abandonment authority requiring NW to consult with the Virginia Department of Environmental Quality prior to beginning salvage operations. Service Date - May 20, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT STB Docket No. AB-312 (Sub-No. 2X) SOUTH CAROLINA CENTRAL RAILROAD COMPANY, INC., D/B/A CAROLINA PIEDMONT DIVISION--ABANDONMENT EXEMPTION--IN GREENVILLE COUNTY, SC By decision served April 1, 1998, the Board granted South Carolina Central Railroad Company, Inc., d/b/a Carolina Piedmont Division (CPDR), an exemption to abandon two segments of its line of railroad extending from: (1) milepost AJK 585.34, in East Greenville, SC, to milepost AJK 588.63 in Greenville, SC; and (2) milepost 0.0 to milepost 2.0 in Greenville, a total distance of 5.29 miles, in Greenville County, SC. The exemption was scheduled to become effective on May 1, 1998. On April 21, 1998, the Rails to Trails Conservancy (RTC) filed a request for issuance of a notice of interim trail use under the National Trails System Act. RTC submitted a statement of willingness to assume financial responsibility for interim trail use and rail banking and acknowledged that use of the right-of-way for trail purposes is subject to future reactivation for rail service. By letter filed April 29, 1998, CPDR indicated its willingness to negotiate with RTC for interim trail use for a 90-day period. Because CPDR is willing to enter into negotiations, a NITU will be issued. The parties may negotiate an agreement during the 90-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 90 days, CPDR may fully abandon the line. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the decision served on April 1, 1998, 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 for a period of 90 days after the May 1, 1998 effective date (until July 30, 1998). 3. 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 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. 4. Interim trail use/rail banking is subject to the future restoration of rail service and to the user's continuing to meet the financial obligations for the right-of-way. 5. 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 specific date. 6. If an agreement for interim trail use/rail banking is reached by July 30, 1998, interim trail use may be implemented. If no agreement is reached by that time, CPDR may fully abandon the line. Decided: May 13, 1998 Service Date - May 20, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33388 Decision No. 82 CSX CORPORATION AND CSX TRANSPORTATION, INC., NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN RAILWAY COMPANY --CONTROL AND OPERATING LEASES/AGREEMENTS-- CONRAIL INC. AND CONSOLIDATED RAIL CORPORATION In Decision No. 76, served April 17, 1998, we denied the motion by Richard and Judith Bell and George Rigamer for leave to intervene and participate individually and as representatives of a class of approximately 8,000 plaintiffs in the court proceeding In Re: New Orleans Train Car Leakage Fire Litigation, No. 87-16374, Civil District Court for the Parish of Orleans, LA. By motion filed May 12, 1998, movants seek reconsideration of our Decision No. 76. CSX replied in opposition to the request. The motion for reconsideration will be denied. Appeals from a decision by the entire Board will be granted only upon a showing that the prior decision is materially in error or materially affected by new evidence or changed circumstances. Movants fail to show any of these required elements. Movants state that they did not seek to enter this proceeding prior to the due date for comments, protests, and requests for conditions because of the uncertainty of the status of the case [before the Louisiana courts]. Movants concede, however, that their jury verdict was rendered on September 9, 1997, as noted in Decision No. 76. By necessary implication, any evidence presented to the trial court could have been submitted in this proceeding on or before the October 21, 1997 deadline. Movants maintain that they had no notice of our deadlines. However, public notice of this proceeding, and the public's right to participate in it, was provided on a number of occasions. In addition, the proposed acquisition of Conrail by CSX and NS received widespread publicity, as did the fact that approval of the transaction was subject to our review. In these circumstances, we must affirm our conclusion that movants request to intervene, filed more than 5 months after the October 21, 1997 deadline, is too late. It is ordered: 1. The motion for reconsideration, filed by Richard and Judith Bell and George Rigamer, is denied. Decided: May 18, 1998 Service Date - May 20, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33570] Oregon Pacific Railroad Company--Acquisition and Operation Exemption--East Portland Traction Co. and Molalla Western Railway Oregon Pacific Railroad Company (OPR), a noncarrier, has filed a verified notice of exemption to acquire and operate certain rail lines of East Portland Traction Co. (EPTC) and Molalla Western Railway (MWRL) in Clackamas and Multnomah Counties, OR. The line to be acquired from EPTC extends from EPTC milepost 0.26 (at its connection with Union Pacific Railroad Company's (UP) Portland-Eugene mainline at UP MP 769) at or near East Portland, OR, to milepost 4.54 at Milwaukie, a distance of 4.28 miles, and includes 2.11 miles secondary and yard trackage, for a total trackage of 6.39 miles to be operated in Clackamas County, OR. The line to be acquired from MWRL extends from a connection with the UP main track at UP milepost 747.568 in the city of Canby, OR, to MP 757.50 at Molalla, a distance of 9.93 miles, and includes 1.45 miles of secondary and yard trackage, for a total trackage of 11.38 miles to be operated in Clakamas County, OR. The projected revenues of OPR will not exceed those of a Class III railroad. An agreement was reached among the parties on December 31, 1996, to transfer all assets from both EPTC and MWRL to OPR effective January 1, 1997. Due to oversight, OPR has been operating the rail lines since January 1, 1997, without appropriate authority from the Board. Because OPR did not file its verified notice, as amended, until May 4, 1998, the effective date of the exemption was May 11, 1998. Decided: May 12, 1998. Service Date - May 20, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-494X] Akron Barberton Cluster Railway Company--Abandonment Exemption--in Summit County, OH Akron Barberton Cluster Railway Company (ABCR) has filed a notice to abandon 4.14 miles of its line of railroad from Valuation Station 440 + 00 at Main Street to Valuation Station 658 + 63 at Seiberling Avenue, in Summit County, OH. The line traverses United States Postal Service Zip Codes 44301, 44305, 44300 and 44311. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on June 20, 1998, unless stayed pending reconsideration. ABCR shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by ABCR's filing of a notice of consummation by May 21, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: May 8, 1998. Service Date - May 21, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33567] Albany & Eastern Railroad Company--Acquisition and Operation Exemption--The Burlington Northern and Santa Fe Railway Company Albany & Eastern Railroad Company (AERC), a noncarrier, has filed a verified notice of exemption to acquire from The Burlington Northern and Santa Fe Railway Company (BNSF), and to operate 17.40 miles of rail line between MP-14.50, at or near Lebanon, and MP-31.90, at or near Foster, in Linn County, OR. AERC also is acquiring incidental trackage rights over Union Pacific Railroad Company's (UP) rail line between MP- 688.96, at or near Lebanon, and MP-691.52, at or near Albany, and over BNSF's line between MP-0.0, at Albany, and MP-0.89, east of Albany, in Linn County, OR, a total of 13.62 miles. The incidental trackage rights will permit AERC to interchange traffic with BNSF at its Albany yard. AERC will acquire the track, ties, and other improvements, and a permanent, irrevocable easement to operate on this line, but not the real estate. The transaction was expected to be consummated on or shortly after May 8, 1998. Decided: May 14, 1998. Service Date - May 21, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-32 (SUB-NO. 86X) BOSTON AND MAINE CORPORATION -- ABANDONMENT EXEMPTION -- IN MIDDLESEX COUNTY, MA NO. AB-355 (SUB-NO. 24X) SPRINGFIELD TERMINAL RAILWAY COMPANY -- DISCONTINUANCE OF SERVICE -- IN MIDDLESEX COUNTY, MA The Boston and Maine Corporation (B&M) has filed a notice in connection with the abandonment of its railroad line located between Engineering Stations 87 + 90 and 184 + 25, a distance of 1.82 miles in Watertown, Middlesex County, Massachusetts. The Springfield Terminal Railway Company (STR) seeks authority to discontinue service over the same B&M line described above. No rail traffic has moved over the line for over two years. We recommend that no environmental conditions be placed on any decision granting abandonment and/or discontinuance authority. Service Date - May 22, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT DOCKET NO. AB-103 (Sub. No. 13X) The Kansas City Southern Railway Company - Notice of Exemption for Abandonment Near Springhill, Webster Parish, Louisiana The Kansas City Southern Railway Company (KCS) has filed a notice in connection with the abandonment of its line of railroad between Milepost 46.78 at the Arkansas-Louisiana State Line and Milepost 48.48 approximately 200 feet south of Vine Street in Springhill, a distance of 1.70 miles in Webster Parish, LA. The right-of-way passes through the town of Springhill and through a small adjacent rural area. Springhill may be interested in acquiring the right-of-way for recreational trails use. The National Geodetic Survey has informed us that 6 geodetic station markers may be affected by the proposed abandonment. NGS requests that it receive not less than 90 days notification in advance of any salvage activities that may affect the markers in order to plan for their relocation. NGS also sent a copy of the list and location of the markers to KCS. We will recommend NGS's request as a condition to any abandonment authority. Service Date - May 22, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-167 (Sub-No. 1183X)] Consolidated Rail Corporation--Abandonment Exemption--in Philadelphia County, PA Consolidated Rail Corporation (Conrail) has filed a notice of exemption to abandon a 0.42-mile portion of the Berks Street Industrial Track between milepost 2.98+/- and milepost 3.40+/-, in the City of Philadelphia, Philadelphia County, PA. The line traverses United States Postal Service Zip Code 19140. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on June 21, 1998, unless stayed pending reconsideration. Conrail shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by Conrail's filing of a notice of consummation by May 22, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: May 15, 1998. Service Date - May 22, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-468 (Sub-No. 3X)] Paducah & Louisville Railway, Inc.--Abandonment Exemption--in Muhlenberg County, KY On May 5, 1998, Paducah & Louisville Railway, Inc. (P&L) filed with the Surface Transportation Board a petition to abandon: (1) 6.70 miles of rail line between milepost J-126.6 at Central City, KY (JK Jct.), and milepost J-133.3 at Greenville, KY; and (2) 6.14 miles of branch line trackage known as the Beech Creek Lead, between Greenville and Pond Creek, KY, in Muhlenberg County, KY. The lines traverse U.S. Postal Service Zip Codes 42330, 42337, 42345 and 42367. The lines include the stations of JK Jct. at milepost J-126.7 and Pond Creek at milepost J-133.1. By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by August 21, 1998. Decided: May 14, 1998. Service Date - May 22, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Ex Parte No. 566 RAIL SERVICE CONTINUATION SUBSIDY STANDARDS ACTION: Final Rule. SUMMARY: The Surface Transportation Board is removing from the Code of Federal Regulations rules concerning standards for determining subsidies for the continuation of rail service on rail properties not transferred to Consolidated Rail Corporation (Conrail) under the Final System Plan pursuant to the Regional Rail Reorganization Act of 1973. It is also amending the regulations concerning offers of financial assistance to provide rules for the purchase or subsidization of rail lines that have been continuously subsidized since the inception of the Final System Plan. EFFECTIVE DATE: June 21, 1998. SUPPLEMENTARY INFORMATION: In a notice of proposed rulemaking (NPR) published in the Federal Register on August 8, 1997, the Board proposed to remove the regulations that concern subsidy standards for certain rail lines of railroads in reorganization not included in the Final System Plan. The NPR noted that these regulations are based, at least partially, on statutes that are still in effect. Under the ICC Termination Act of 1995, however, the Rail Services Planning Office (RSPO), the statutory body that developed the regulations, has been abolished. Moreover, the Board has in place analogous offer of financial assistance (OFA) regulations providing national subsidy standards. Finally, the NPR stated that the regional subsidy regime, which applies to rail service on rail properties of a railroad in reorganization, may be outdated and may apply only to a limited number of situations. Accordingly, we instituted this proceeding to determine whether these regulations may be eliminated in light of the national OFA standards, whether portions of the regulations could be transferred to the national standards, or whether they have a continuing vitality and should be retained. After considering the record, we will eliminate the part 1155 rules and modify the national OFA rules at 1152.27. Because the part 1155 rules have only limited applicability, it is unnecessary to maintain these detailed regulations. However, to provide an opportunity for rail service continuation and to deal with abandonments of lines that are still being subsidized, we are modifying our national OFA regulations at 49 CFR 1152.27 to require that the line owner give notice of the abandonment or discontinuance to enable interested persons to purchase or subsidize the line. Our NPR gave a detailed background for the part 1155 regulations and will be repeated only as necessary. The part 1155 rules were based on the Regional Rail Reorganization Act of 1973, (3R Act), as amended by the Railroad Revitalization and Regulatory Reform Act of 1976 (4R Act).. In response to the bankruptcy of the Penn Central Transportation Company and seven other major railroads in the Northeast and Midwest (The Lehigh Valley Railroad Company, the Central Railroad of New Jersey, the Ann Arbor Railroad Company, the Lehigh and Hudson Valley Railroad Company, the Boston and Maine Corporation, the Erie Lackawanna Railway Company, and the Reading Railroad), the 3R Act provided for the development and ultimate approval by Congress of a Final System Plan (Plan) for the redesign of rail services in the region. Lines that could not be operated profitably and were not considered essential to the rail transportation system would not be included in the Plan. The 3R Act's Plan created Conrail as a for-profit corporation to reorganize the bankrupt rail services in the region. Section 304 of the 3R Act permitted the summary discontinuance of service over those lines not included in the Plan without Interstate Commerce Commission approval if 60 days notice was given and certain parties were notified. Beginning 120 days after such discontinuance, the summary abandonment of a line was allowed if 30 days notice was given and the parties were notified. The 3R Act, in effect, authorized the discontinuance and abandonment of the lines not included in the Plan; ICC approval was not needed. However, the 3R Act stated that an abandonment or discontinuance could not be carried out if a shipper, or public authority, or any responsible person offered a rail service continuation subsidy. The 4R Act amended the 3R Act by adding a new section which specified that a designated operator would be the rail carrier conducting operations when a subsidizer guaranteed payment. Although not needing ICC authority to operate or abandon, the designated operators were common carriers. The use of the subsidy is limited to rail service and rail properties of a railroad in reorganization in the region that are not included in the Plan. Moreover, the subsidy must be made within 2 years of the effective date of the Plan or within 2 years after the date on which the final rail service continuation payment is received, whichever is later . . . . The 3R Act, as amended by the 4R Act, also created RSPO which was authorized to issue standards for defining the subsidy-related terms. Subsequently, the ICC issued regulations that are now codified at 49 CFR 1155. The regulations define the terms noted above (revenue attributable, avoidable costs, return on value, reasonable management fee) for determining the subsidy payment for the continuation of train service over lines not included in the Plan. The regulations are largely self-executing with little role provided for the ICC. The 4R Act also instituted the national OFA procedures. It allowed an abandonment to be postponed for up to 6 months if a financially responsible person offered to purchase or subsidize the line. In essence, the regional subsidy provision was expanded to apply to all carriers. In our NPR, we stated that we were reexamining part 1155 because of the changes made by the ICCTA, the availability of our national subsidy standards, and the likelihood that few situations fall within the regional subsidy framework. Comments were filed by the Association of American Railroads (AAR) and the Delaware Valley Railway Company, Inc. (DV). The AAR, in its brief comment, supports the removal of part 1155, arguing that rules are of marginal, if any, utility . . . . DV is a Class III short line railroad. It has operated over a rail line owned by a subsidiary of the Reading Company, the corporate successor of the bankrupt Reading Railroad Company. DV expresses its belief that the regional standards substantially duplicate the National OFA standards, and supports removal of the part 1155 regional regulations because of the availability of the national OFA standards. It claims that, to keep separate regulations applicable to only a few lines and another standard for all other lines, would cause unnecessary, wasteful, potentially inconsistent, and duplicative regulation. It seeks to amend the national OFA standards to handle the few situations that would still fall under the regional standards. In response to the question of whether there are any railroads in reorganization, DV claims that the Reading Company, while concededly not a railroad in reorganization under that [3R Act] statute, is a successor to a railroad in reorganization and should be subject to the provisions of part 1155 on that basis. DV claims it involves one of the few instances, if not the last instance, of rail service provided over railroad property owned by the successor to a bankrupt railroad not transferred to Conrail or another rail carrier under the [Plan]. It argues that Congress did not intend that carriers could avoid regulatory oversight by reorganizing themselves, and that the Board should focus on the rail property and rail service at issue and not the status of the owning entity. Because of the changes in the ICCTA and the fact that there appear to be few lines being operated under the regional subsidy regime, we will remove the more than 30 pages of regulations at part 1155. While technically there may no longer be any 3R Act railroads in reorganization, there appear to be a few lines that have been continuously subsidized under 49 U.S.C. 744, and these lines require special procedures. Therefore, we are issuing regulations that would provide for summary abandonment and discontinuance on notice by the carrier owning the line, and that would allow for the opportunity to subsidize and purchase lines under the national OFA rules. As noted, these lines were effectively approved for abandonment and discontinuance under section 744, and, for those lines that have been continually subsidized, we do not believe that the approval to abandon or discontinue has been removed. Accordingly, Board authorization is not needed for cessation of service. Lines of railroad in the Northeast that were not included in the Plan and are no longer being subsidized under section 744 but continue to be operated are common carrier lines subject to the regular abandonment and national OFA regime of the Interstate Commerce Act. The commenters generally support the removal of part 1155 (with DV also seeking a concomitant modification of the national OFA rules). Moreover, the record indicates that the regulations appear to be unnecessary. They were determined and issued by an office (RSPO) that has been abolished by the ICCTA. Even if the ICCTA does not mandate the removal of the regulations, there appears to be little need for the subsidy rules, because of the availability of the national standards and because the circumstances and conditions that the regional standards were to address have largely expired. There may not be any railroads in reorganization as defined by the statute. In Consolidated Rail Corp. v. Reading Co., (Reading) a case arose that involved whether personal injury claims could be brought against Conrail and National Railroad Passenger Corporation. That section provided for assumption by Conrail of personal injury claims against a railroad in reorganization. The court looked at the definition of railroad in reorganization, and stated that certain predecessor railroads of Conrail were not railroads in reorganization because they were no longer subject to a bankruptcy proceeding. These carriers had undergone reorganization, final consummation orders had been entered, and the carriers had been discharged in bankruptcy. The court noted the following consummation dates: Erie Lackawanna, Inc. (November 30, 1982); Reading Co. (December 31, 1980); Penn Central Transportation Co. (October 24, 1978); Lehigh Valley Railroad Co. (September 1, 1982); and the Central of New Jersey (September 14, 1979). As a consequence of Reading, there will, at a minimum, be no new lines that can be added to the regional subsidy regime. This does not, however, end our inquiry. There appears to be at least one line that has been subsidized since the enactment of the regional subsidy program. Such lines have already been approved for abandonment and discontinuance. Under these circumstances, we believe that the best approach will be to eliminate part 1155, but modify the OFA regulations for situations involving lines that are still being subsidized under the regional standards. The notice periods will follow the basic regime of section 744. Summary discontinuance of service without Board approval may be effected if 60 days notice is given by the owner of the line and certain parties are notified. Beginning 120 days thereafter, the summary abandonment of a line is allowed if 30 days notice is given and the parties are notified. We are requiring the owner of the line, and not the designated operator, to provide the notice that triggers the OFA process. We are retaining the provision by which a designated operator may terminate service in accordance with the terms of its agreement and is only required to give notice of termination of service to the shippers on the line. No time period is specified for the notice. We hope that the designated operator and line owner will coordinate the giving of notice so that there will be no break in service. We recognize, however, that under our present designated operator rules, it is possible that the operator could terminate service before the notice period has expired. This eventuality is a natural outcome of such subsidy regimes where service is tied specifically to an agreement. Nevertheless, given the specified time periods and the ability of the Board to set terms and conditions under the national standards, we expect that any breaks in service would be of short duration. We are modifying 49 CFR 1152.27 by adding a new paragraph (n). Abandonment or discontinuance notice must be given, affording interested persons an opportunity to purchase or subsidize the line under our national OFA standards. The applicable time limits will run from the date of the notice as the Board does not approve the cessation of service for these lines. We will generally apply the national OFA standards applicable to class exemptions to these summary abandonments and discontinuances. For example, a party may discontinue or abandon service on a line of railroad formerly in reorganization that was not included in the Plan on 60 days notice and, beginning 120 days after discontinuance, on 30 days notice, respectively. Notice of summary abandonment or discontinuance will be published by the Board in the Federal Register within 20 days of filing. Expressions of intent to file an offer must be filed no later than 10 days after the Federal Register publication. An offer must be filed within 30 days of the Federal Register publication. The Board will review offers to determine if a financially responsible person has offered assistance. If this criterion is met, the Board will postpone the effective date of the summary abandonment (but not the discontinuance) within 35 days of the Federal Register publication. If the carrier and financially responsible person fail to agree on the amount or terms of subsidy or purchase, either party may request the Board to establish the conditions and amount of the compensation. This request must be filed within 30 days after the offer of purchase or subsidy is made, and the Board will issue a decision within 30 days after the request is due. Lines of the former railroads in reorganization under the 3R Act are under Board jurisdiction insofar as the institution of new rail service is involved. Thus, in those instances, any future abandonment or discontinuance would be subject to the abandonment and OFA procedures. Decided: May 13, 1998. Service Date - May 22, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL REVIEW - EXECUTIVE SUMMARY STB Finance Docket No. 33388 CSX CORPORATION AND CSX TRANSPORTATION, INC., NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN RAILWAY COMPANY --CONTROL AND OPERATING LEASES/AGREEMENTS-- CONRAIL INC. AND CONSOLIDATED RAIL CORPORATION The Surface Transportation Board, Section of Environmental Analysis, prepared this Final Environmental Impact Statement to identify and evaluate the potential environmental impacts of the CSX and NS proposal to acquire Conrail. SEA has recommended a number of mitigation measures to address these environmental impacts. The Board will fully consider the EIS, all public comments, and other relevant environmental information in deciding whether to approve as proposed, approve with conditions (including environmental conditions), or disapprove the proposed Conrail Acquisition. CSX, NS, and Conrail filed a joint application (hereafter, this Primary Application) with the Board on June 23, 1997. In their Application, they jointly seek authority for CSX and NS to acquire Conrail, and for the subsequent division of most of Conrail's assets and the joint operation of other Conrail assets. The proposed action would consolidate the three railroads into two railroads. The proposed action, which would affect most of the eastern United States, including 24 states and the District of Columbia, is one of the most complex transactions the Board has ever considered. The Board will decide whether it will approve, disapprove, or approve with appropriate conditions, including environmental conditions, the proposed Conrail Acquisition at a voting conference on June 8, 1998. The Board intends to issue its final written decision on the proposed Conrail Acquisition on July 23, 1998. In that decision, the Board will address environmental, economic, and competitive transportation issues and impose any conditions it deems appropriate, including environmental conditions. On a system-wide basis, SEA identified several environmental benefits resulting from overall improvements and operating efficiencies, but no potential significant adverse environmental impacts that would result from the proposed Conrail Acquisition. On a regional basis and a local or site-specific basis, SEA identified both benefits and potential significant adverse environmental impacts. Of the 1,022 rail line segments SEA evaluated, 201 would experience reduced train traffic and 532 rail line segments would experience no change in train traffic. For most potential significant environmental impacts, in particular regions or rail corridors, SEA identified reasonable environmental mitigation measures that the Board could require the Applicants to perform as conditions of approval. However, SEA acknowledges that even if the 65 mitigation conditions that apply to rail line segments in 19 states and the District of Columbia are successfully implemented, potential significant adverse environmental impacts would still exist in certain communities. In their Application, CSX and NS state that the proposed Conrail Acquisition is intended to provide for a more efficient rail transportation system in the eastern United States and to increase rail competition in the Northeast and Midwest. This proposed action covers a large portion of the eastern United States and involves more than 44,000 miles of rail lines and related facilities in 24 states and the District of Columbia. The proposed Conrail Acquisition would replace the existing Conrail system with expanded CSX and NS systems in major sections of the Northeast and upper Midwest. Under the Application, most of Conrail's assets would be divided between CSX and NS, which would operate their respective enlarged systems independently and in competition with each other. In Michigan, New Jersey, and Pennsylvania, they would jointly operate former Conrail facilities as Shared Assets Areas. Based on the Applicants Operating Plans, the proposed Conrail Acquisition would result in numerous rerouting and consolidation activities. These activities include increased or decreased rail traffic on some rail line segments and in some rail yards, diversion of long-haul highway truck shipments to rail shipments, diversion of some rail shipments to trucks, abandonment and rail line construction projects, and construction or expansion of certain rail yards and intermodal facilities. In imposing environmental mitigation conditions, the Board has consistently focused on the potential environmental impacts that would result directly from changes in activity levels on existing rail lines and at rail facilities. The Board does not require mitigation for existing environmental conditions, such as impacts associated with current railroad operations. SEA is issuing this Final EIS to the public prior to the Board's June 4, 1998, oral argument where environmental as well as economic and competitive transportation issues can be addressed and prior to the Board's voting conference on June 8, 1998. At the voting conference, the Board will decide whether it will approve or disapprove the proposed Conrail Acquisition or approve it with appropriate conditions, including environmental conditions. The Board's final written decision on the proposed Conrail Acquisition will be served on July 23, 1998. In its decision, the Board will address environmental, economic, and transportation issues; and it will impose any conditions it deems appropriate, including environmental conditions. One month before this Final EIS was completed, NS submitted changes in train traffic operations for the Greater Cleveland Area to address potential significant adverse impacts. The Board has decided that persons affected by the potential traffic changes, which would reduce train traffic in some areas of Cleveland and increase it in other areas of Ohio and Pennsylvania, may file comments limited to the new NS routing information, Persons who wish to submit comments on this new information should do so no later than June 28, 1998, to allow the Board to fully consider these comments prior to the issuance of the Board's final written decision on July 23, 1998. The Applicants proposed increases in rail activity have the potential to affect safety in many ways, including train operations, hazardous materials transport, and motor vehicles at highway/rail at-grade crossings. Therefore, safety is a major concern of the Board. Approximately half of SEA's recommended environmental conditions address safety concerns related to day-to-day railroad operations. In the past, however, the Board has not focused on, nor has it been asked to, address an applicant's process for combining and safely integrating the infrastructure, equipment, personnel, and operating practices of two or more entities following a merger or acquisition. For the first time in an environmental review, the Board has considered this process, called safety integration, and has required specific actions by the proposed Conrail Acquisition Applicants. Prior to issuance of the Draft EIS, the Department of Transportation's Federal Railroad Administration (FRA) expressed concern that combining the three railroad systems into two could cause safety problems, and it recommended that the Board require the Applicants to develop plans detailing the procedures that each would follow to integrate the railroads systems in a manner that would maintain safety. In response, the Board issued Decision No. 52 requiring the Applicants to file detailed Safety Integration Plans. SEA included the Safety Integration Plans in the Draft EIS, and it encouraged FRA and the public to review and comment on these plans. SEA also independently reviewed the plans for comprehensiveness and reasonableness. This Final EIS includes SEA's responses to public comments on the Safety Integration Plans. Prior to issuing this Final EIS, the Board and FRA, with concurrence of DOT, agreed to a Memorandum of Understanding (MOU) to clarify the actions each would take to ensure the successful implementation of the Safety Integration Plans. Under the terms of that MOU, FRA would monitor, evaluate, and review the Applicants efforts with respect to implementation of the Safety Integration Plans. FRA would report the Applicants progress and provide, where appropriate, recommendations for how the Board could correct a deficiency until FRA affirms to the Board in writing that the proposed integration has been satisfactorily completed. (See Chapter 6, Summary of Safety Integration Plan Comments, Responses, and Analysis for more information.) In its environmental analysis, SEA identified both beneficial and potential significant adverse environmental effects of the proposed Conrail Acquisition. Under the Applicants Operating Plans, the locations of rail activity would shift as shippers take advantage of the reconfigured rail system. For many regions and communities, this shift would reduce rail traffic and activities and result in environmental benefits. However, for others, the shift would increase rail activity, which could cause potential significant adverse effects. In its environmental review, SEA carefully assessed the extent and potential significance of adverse effects related to proposed increases in rail traffic. Based on its analysis, SEA developed a set of mitigation measures that address potential significant adverse effects at multiple levels (general, regional, and local). In developing its recommended environmental mitigation measures, SEA considered a host of challenging issues that included: The broad geographic scope of the proposed Conrail Acquisition; The number of concerned communities; The variety of environmental issues; The importance of safety; The importance of safety integration planning; The accommodation of freight rail and passenger rail service on the same rail line; The concerns about environmental justice; The scope of the Board's jurisdiction to impose mitigation. SEA's overall mitigation strategy would provide safeguards to ensure that the Applicants maintain safe operations and protect the environment following consolidation of the three rail systems into two systems. However, SEA acknowledges that for a limited number of locations with identified significant adverse environmental impacts, mitigation alternatives were not reasonable or feasible. Therefore, even with all the recommended mitigation, some potential significant adverse environmental impacts still exist in certain communities. CSX and NS have consulted with certain affected communities and have developed Negotiated Agreements with local and state governments and organizations to address specific environmental issues. As of publication of this Final EIS, CSX and NS have submitted 18 executed agreements to the Board. SEA reviewed these agreements and recommends that the Board impose conditions that require CSX and NS to comply with the negotiated terms. SEA continues to encourage CSX and NS and the communities to negotiate mutually acceptable environmental solutions. If any Negotiated Agreements are executed after SEA issues the Final EIS, SEA recommends, subject to review of these agreements, that the Board include compliance with terms of those additional agreements as conditions of approval. Based on its environmental analysis, SEA identified the following impacts and recommended mitigation measures. On a general or system-wide basis, SEA's analysis indicated no potential significant adverse environmental impacts. Environmental benefits would occur on a system-wide basis, primarily from the more efficient routes that the proposed Conrail Acquisition would create. These potential benefits include reductions in fuel consumption, air pollutant emissions, and highway congestion. Nevertheless, SEA recommends several general mitigation measures to reduce the potential for accidents at highway/rail at-grade crossings and during hazardous materials transport. SEA also recommends general measures to ensure compliance with relevant laws and regulations as well as SEA's Best Management Practices. On a regional basis, SEA identified potential significant adverse environmental impacts on passenger rail safety and hazardous materials transport and developed appropriate mitigation to reduce the potential adverse effects. SEA's recommended mitigation measures would enhance safety and service for areas where passenger rail trains share track with freight trains and for hazardous materials transport. On a local or site-specific basis, SEA identified potential significant adverse environmental impacts in a number of issue areas, including highway/rail at-grade crossing safety, traffic delay at highway/rail at-grade crossings, freight rail operations, noise, cultural resources, natural resources, and environmental justice. SEA recommends mitigation measures to address potential significant adverse environmental impacts that would increase safety at highway/rail at-grade crossings, reduce traffic delay, enhance safety for hazardous materials transport, reduce noise, protect cultural and natural resources, and address environmental justice issues. SEA has recommended mitigation measures for the District of Columbia and the following 19 states that might experience significant adverse environmental impacts: Alabama, Delaware, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia. Safety: Highway/rail At-grade Crossings The predicted accident frequency would increase to exceed SEA's criteria of significance at 89 highway/rail at-grade crossings. Therefore, SEA's recommended mitigation includes upgrading warning devices, installing advisory signs at crossings, and providing community education about highway/rail at-grade-crossing safety. Safety: Hazardous Materials Transport Hazardous materials transport would increase to more than 10,000 carloads per year on 44 rail line segments, and the volume of hazardous materials traffic would at least double and exceed 20,000 carloads per year on 20 rail line segments. Accordingly, SEA's recommended mitigation includes requiring the Applicants to comply with industry safety standards and develop additional measures to aid in emergency response at the community level. SEA believes these approaches are appropriate and would effectively reduce risk. SEA also determined that the increase in rail activity would increase the risk of a hazardous materials release due to an accident by 56 percent at certain rail yards and 75 percent at certain intermodal facilities. To mitigate this potential increase in risk, SEA recommends that the Board require CSX and NS to establish programs for reducing the risk of spills associated with hazardous materials transport and storage at these facilities. Safety: Passenger Rail Operations SEA determined that the predicted risk of a freight/passenger accident warranting mitigation would increase on five rail line segments that carry passenger trains. To mitigate this potential increase in risk, SEA recommends that the Board require CSX and NS to work with FRA and the affected passenger service providers to develop operational strategies and technology improvements that would ensure passenger train safety on the five rail line segments. Safety: Freight Rail Operations SEA determined that the predicted risk of a freight accident would increase enough to exceed SEA's criteria of significance on eight rail line segments. As a mitigation measure, SEA recommends that the Board require CSX and NS to conduct safety inspections of their rail using FRA's proposed rule on the frequency of internal rail inspections as a guideline. Safety: Integration Planning SEA recommends that the Board require the Applicants to comply with their Safety Implementation Plans, which may be modified and updated. SEA further recommends the Board require the Applicants to cooperate with the ongoing monitoring and review process established in the Memorandum of Understanding to which the Board and FRA, with the concurrence of DOT, have agreed. Transportation: Passenger Rail Service All rail line segments where passenger and freight trains share track could accommodate the proposed Acquisition-related increase in freight traffic without disrupting passenger rail service schedules. SEA determined that mitigation measures would not be required. Transportation: Highway/rail At-grade Crossing Delay Traffic delay would exceed SEA's criteria of significance at 13 highway/rail at-grade crossings. Where reasonable and feasible to mitigate these increases in traffic delay, SEA recommends that the Applicants be required to construct a grade-separated crossing, reroute train traffic, modify train operations, and implement operating efficiencies. SEA examined the effect of the proposed Conrail Acquisition on emergency vehicle response times and identified five local areas that would warrant mitigation. To mitigate these effects, SEA recommends that the Board require the Applicants to provide, install, and maintain computer equipment that allows local emergency responders to monitor train locations and route emergency vehicles appropriately. Transportation: Roadway Systems At proposed abandonments and intermodal facilities, SEA determined that the local roadways could accommodate the increased truck traffic and mitigation would not be warranted. Transportation: Navigation SEA did not identify any adverse system-wide or site-specific impacts to navigation on waterways that rail lines cross. Energy The proposed Conrail Acquisition would result in a potential 80-million-gallon annual decrease in diesel fuel consumption. SEA did not identify any potential significant adverse environmental impacts associated with energy. Air Quality SEA determined that no potential significant adverse air quality impacts would result from the proposed Conrail Acquisition. Air pollution emissions would decrease system- wide for all air pollutants except sulfur dioxide, which would increase by a negligible amount. Noise SEA found that noise would increase along selected rail line segments. SEA recommends that the Board require CSX and NS to mitigate wayside noise with either noise barriers or sound insulation at the sensitive receptor locations. Cultural Resources SEA determined that the proposed Conrail Acquisition could affect significant cultural resources at four sites. SEA recommends that the Board require the Applicants to complete appropriate cultural resources documentation and Section 106 of the National Historic Preservation Act consultation process prior to undertaking any activity involving these resources. Hazardous Wastes Sites Because the Applicants must comply with Federal and state statutes regarding the investigation and remediation of hazardous wastes sites, SEA determined that mitigation measures would not be necessary. Natural Resources One endangered species is potentially present near one proposed new rail line connection construction site. SEA recommends that the Applicants be required to consult with the responsible agencies to determine appropriate steps to protect this species and comply with Section 7 of the Endangered Species Act. The proposed transaction would cause no significant effect on any other natural resource, including water resources. However, to ensure protection of natural resources, SEA recommends that the Board require CSX and NS to follow Best Management Practices, which are construction practices designed to protect these resources. Land Use And Socioeconomics The proposed Conrail Acquisition would not affect or conflict with any land use plans, prime farmlands, Native American lands, Coastal Zone Management plans, or socioeconomic factors related to job loss as a result of physical changes to the environment. In evaluating the proposed abandonments, SEA determined that alternative modes of transportation for goods and services exist. SEA determined that mitigation measures are not necessary. Environmental Justice SEA conducted additional outreach and analysis activities since the Draft EIS. Where SEA identified potential disproportionately high and adverse effects to environmental justice populations, it notified those populations. SEA identified areas where there could be disproportionately high and adverse impacts for minority and low-income populations affected by the proposed Conrail Acquisition. To mitigate the effects of the proposed Conrail Acquisition on these environmental justice populations, SEA first considered the effect of the mitigation it generally recommended for all communities experiencing a similar effect. If, because of the characteristics of the environmental justice community, SEA's mitigation would be unsatisfactory to address the effect, SEA developed tailored mitigation to meet the particular needs of the identified minority and low-income populations. In all, SEA's recommended mitigation addressed potential impacts for environmental justice populations in 15 cities. Cumulative Effects On a system-wide basis, air quality would improve, national rail and highway systems would be more efficient, and energy consumption would decrease. On a local level, SEA determined that no cumulative effects would result from the proposed Conrail Acquisition. SEA has determined that the proposed Conrail Acquisition would have several beneficial environmental effects, including system-wide reductions in fuel consumption, air pollutant emissions, and highway congestion with a resultant decrease in the likelihood of highway accidents. In addition, many regions and localities would experience environmental benefits from reductions in train traffic. Numerous other communities would experience no change in train traffic. Regional adverse effects would occur in passenger rail safety and hazardous materials transport. Local or site-specific adverse effects would occur in the following issue areas: highway/rail at-grade crossing safety, traffic delay at highway/rail at-grade crossings, freight rail operations, noise, cultural resources, natural resources, and environmental justice. SEA identified reasonable and appropriate mitigation measures to address these potential environmental impacts. If the Board decides to approve the proposed Conrail Acquisition, SEA recommends that the Board require the Applicants to implement SEA's 65 final recommended environmental conditions of this Final EIS as measures to eliminate or minimize the potential significant adverse environmental impacts. These measures would not eliminate all potential significant impacts in every community; however, they are reasonable and feasible ways to address most potential significant adverse impacts associated with the proposed Conrail Acquisition. SEA's final recommended mitigation measures would minimize the effects of increased train traffic in a manner that is reasonable and would not compromise the benefits of the proposed Conrail Acquisition. The measures also reflect the Board's practice of mitigating only the direct results of the transaction before it (not pre-existing conditions). For these reasons SEA recommends that the Board require the Applicants to comply with SEA's final recommended environmental mitigation as conditions to any final decision approving the proposed Conrail Acquisition. Service Date - May 22, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT STB Docket NO. AB-494X Akron Barberton Cluster Railway Company--Abandonment Exemption--in Summit County, OH In the above entitled proceeding, Akron Barberton Cluster Railway Company (ABCR), has filed a notice in connection with the abandonment of a 4.14-mile line of its railroad from Valuation Station 440+00 at Main Street to Valuation Station 658+63 at Seiberling Avenue, in Summit County, OH. The right-of-way passes through an area that is considered zoned industrial, light manufacturing, and residential. In its application, ABCR states that there has been no traffic on the line during the past two years. The National Geodetic Survey (NGS), U.S. Department of Commerce, has informed us that 2 geodetic station markers may be affected by the proposed abandonment. NGS requests that it receive not less than 90 days notification in advance of any salvage activities in order to plan for their relocation. NGS also sent a copy of the list and location of the markers to ABCR. We recommend NGS's request be imposed as a condition to any abandonment authority. The State of Ohio Environmental Protection Agency, Division of Surface Water (OHIO EPA) stated that the line runs parallel to and crosses the Little Cuyahoga River. Ohio EPA has expressed concern regarding disposal of debris during salvage operations. OHIO EPA states during salvage operations, none of the debris may be discarded along the right-of-way nor placed or left in streams or wetland, or the banks of such waterways. We recommend that ABCR consult with Ohio EPA prior to conducting salvage operations and take appropriate measures to prevent or control spills from fuels, lubricants, or any other pollutants from entering any watercources. Service Date - May 26, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-493 (SUB-NO.7X) TRACK TECH, INC. -- ABANDONMENT AND DISCONTINUANCE BETWEEN CRESTON AND GREENFIELD, IOWA IN ADAIR AND UNION COUNTIES, IOWA In this proceeding, Track Tech, Inc. has filed a petition in connection with the abandonment of its railroad line located between milepost 1.45 near Creston, Iowa and Milepost 21.15 at the end of the line in or near Greenfield, Iowa, all within Adair and Union Counties, Iowa, a distance of 19.70 miles. There are three shippers located on the Line: Green Valley Chemical; Rolling Hills Farm Service, and Farmers Cooperative Company. The line formerly was owned by the Burlington Northern Santa Fe Railroad Company ( BNSF ). The line was sold by BNSF to the Petitioner on or about June 11, 1997. The line was taken out of service and embargoed by BNSF at the end of February, 1997. During the last full year of operation by BNSF in 1996, shipper use of the line was sporadic and minimal. Only 82 cars were moved in 1996 with 27 cars of fertilizer received inbound at Orient and Greenfield and 55 cars of grain and anhydrous ammonia forwarded off the line. The right-of-way is generally less than 100 feet wide. It is located entirely within Adair and Union Counties, Iowa, which have a combined population of approximately 20,837. The National Geodetic Survey (NGS) has identified 9 geodetic station markers along the rail line and requests 90 days notice to plan relocation of any markers which may be disturbed or destroyed. Therefore, we recommend that the following condition be imposed on any decision granting abandonment authority: Track Tech, Inc. shall consult with the National Geodetic Survey and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers. Service Date - May 27, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33571] Wisconsin & Southern Railroad Co.--Lease and Operation Exemption--Soo Line Railroad Company d/b/a Canadian Pacific Railway The Wisconsin & Southern Railroad Co. (WSOR), an existing Class III rail carrier, has filed a notice to lease from the Soo Line Railroad Company d/b/a Canadian Pacific Railway (CPR), and to operate a line of railroad known as the Waterloo Spur, extending from milepost 132.11 at Watertown, WI, to milepost 164.61 at Madison, WI, a total of 32.5 miles. The transaction is expected to be consummated on or after June 1, 1998. Decided: May 22, 1998. Service Date - May 27, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33571 WISCONSIN & SOUTHERN RAILROAD CO.--LEASE AND OPERATION EXEMPTION-- SOO LINE RAILROAD COMPANY D/B/A CANADIAN PACIFIC RAILWAY By petition filed May 13, 1998, Wisconsin & Southern Railroad Co. (WSOR) seeks waiver of a portion of section 1150.42(e). 49 CFR 1150.42(e), states If the projected annual revenue of the rail lines to be acquired or operated, together with the acquiring carrier's projected annual revenue, exceeds $5 million, the applicant must, at least 60 days before the exemption becomes effective, post a notice of applicant's intent to undertake the proposed transaction at the workplace of the employees on the affected line(s) and serve a copy of the notice on the national offices of the labor unions setting forth the types and numbers of jobs expected to be available, the terms of employment and principles of employee selection, and the lines that are to be transferred, and certify to the Board that it has done so. On May 7, 1998, WSOR, a Class III rail carrier, filed a verified notice of exemption to lease and operate a line of railroad known as the Waterloo Spur, extending from milepost 132.11 at Watertown, WI, to milepost 164.61 at Madison, WI, a total of 32.5 miles. WSOR proposed to lease the line from the Soo Line Railroad Company, doing business as the Canadian Pacific Railway (herein, CPR). In the notice, in an effort to comply with 49 CFR 1150.42(e), WSOR certified that its annual revenues exceed $5 million and that it had, as of March 20, 1998, served the national offices of the labor unions representing the employees on the line with a copy of a notice of intent to carry out this transaction. WSOR also certified that it posted this notice at the workplace of the employees on the affected lines on March 23, 1998. WSOR stated in its notice that it expected to consummate the transaction on or after June 1, 1998. In its petition, WSOR says it scheduled the June 1, 1998 date in the belief that WSOR would be able to consummate the lease 60 days after posting notice to the affected employees of the CPR. WSOR states that it now realizes that the regulation provides that it may only consummate 60 days after certifying to the Board that it posted the notice. Although the notice was posted on March 23, 1998, WSOR did not certify that fact to the Board until May 7, 1998. Thus, absent action by the Board, the transaction may not be consummated until July 6, 1998. WSOR seeks waiver of the 60-day Board notice period and seeks to have the exemption made effective June 1, 1998, so that consummation of the transaction can go forward on that date. WSOR points out that the affected employees and their unions will have had more than 60 days notice by June 1, 1998. WSOR says that the restoration of rail service on the Waterloo Spur will be delayed unless the petition is granted. WSOR also says it has already committed resources to its rehabilitation project for the Waterloo Spur. Petitioner says it has purchased crossties and has committed track maintenance equipment and personnel to move forward on June 1, 1998. If WSOR cannot consummate the lease on that date, petitioner will experience substantial economic loss. WSOR's waiver request will be granted. The purpose of 49 CFR 1150.42(e) is to ensure that rail labor unions and employees who would be affected by the transfer of a line are given sufficient notice of the transaction before consummation. WSOR has provided that notice. Therefore, we will accept WSOR's May 7 certification to the Board and will waive the 60-day requirement under 49 CFR 1150.42(e). Thus, the notice of exemption being issued concurrently in this proceeding will be effective June 1, 1998. It is ordered: 1. WSOR's petition is granted to the extent described above. Decided: May 21, 1998 Service Date - May 27, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33596] Capital Metropolitan Transportation Authority Acquisition Exemption City of Austin, TX Capital Metropolitan Transportation Authority (Capital Metro), a noncarrier, has filed a notice of exemption to acquire the City of Austin's Giddings-Llano line, a 162 mile continuous railroad right-of-way (including spurs), extending from SPTC milepost 57.00/AUNW milepost 0, near Giddings, TX, to SPTC milepost 99.04/AUNW milepost 154.07, near Llano, TX, including the Marble Falls Branch from milepost 6.2/AUNW milepost 61.2, near Marble Falls, TX, to SPTC milepost 0.0/AUNW milepost 124.7, near Fairland, TX. Capital Metro states that the line will continue to be operated by the Central of Tennessee Railway & Navigation Company, Inc. d/b/a the Longhorn Railway. Capital Metro is the Austin, TX, regional transit authority, a body corporate and political subdivision of the State of Texas. The transaction is expected to be consummated on May 22, 1998. Decided: May 20, 1998. Service Date - May 27, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33388 Decision No. 83 CSX CORPORATION AND CSX TRANSPORTATION, INC., NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN RAILWAY COMPANY --CONTROL AND OPERATING LEASES/AGREEMENTS-- CONRAIL INC. AND CONSOLIDATED RAIL CORPORATION On May 18, 1998, the Cities of East Chicago, IN, Hammond, IN, Gary, IN, and Whiting, IN (collectively, the Four City Consortium or the Four Cities), filed a Motion to Strike certain materials submitted by CSX to the Board's Section of Environmental Analysis (SEA) during the environmental review process for the proposed Conrail Acquisition. For the reasons discussed below, the motion to strike will be denied. The Four Cities argue that we should strike three documents and portions of two other documents that CSX submitted to SEA between March 5, 1998, and May 12, 1998. The Four Cities complain that they did not have an adequate opportunity to review and appropriately respond to these materials, given the short time available prior to the late May 1998 schedule for the issuance of the Final Environmental Impact Statement (Final EIS) in this case. However, in the Final EIS, which was served May 22, 1998, SEA thoroughly analyzed the environmental issues regarding the acquisition-related changes in rail traffic in the Four Cities. In doing so, SEA performed its own independent analysis and considered both the information submitted by CSX (in its Operating Plan and subsequent submissions) and all public comments, including those filed by the Four Cities as late as May 7, 1998. Moreover, in the Final EIS, SEA recommended mitigation measures for the Four Cities to address the potential adverse environmental impacts of the proposed Conrail Acquisition. As the Final EIS explains, SEA recommended mitigation in the Four Cities because of the unique circumstances of those communities. The recommended mitigation was not based on the acquisition-related increases in the number of trains. The Four Cities suggestion that SEA must provide a formal comment period and opportunity to respond every time an applicant updates or modifies its traffic projections is not correct. Nor is there merit to the Four Cities claim that parties participating in the environmental review process are bound to comply with our procedural schedule for submission of material on the merits and may not submit new evidence or studies to SEA upon closure of the evidentiary phases of a proceeding. The environmental review process is a fluid and open one that encourages the broadest possible participation by the public throughout the process. As the environmental review progresses, it is not unusual for an applicant to propose voluntary mitigation options and other changes to the applicant's original operating plans that can affect projected train traffic levels. SEA normally considers these types of changes as part of its ongoing environmental analysis and recommendations. Where such changes could potentially affect parties rights, SEA provides an opportunity for additional comment. (See the additional comment period announced in the Final EIS for parties affected by NS's proposed train traffic changes in the Greater Cleveland area, which could result in potential train traffic increases in Ohio and Pennsylvania, while reducing traffic in some areas of Cleveland.) Here, however, there is no such problem. As noted, SEA, in the Final EIS, carefully analyzed all of the information provided by the Four Cities, as well as CSX, and has recommended mitigation for those communities. The Four Cities will have an opportunity to raise any concerns about the adequacy of SEA's environmental review and its recommended mitigation for the Four Cities at the oral argument being held in this case on June 3 and 4, 1998, where environmental, as well as economic and competitive transportation, issues can be raised. The Four Cities, like all other parties, then will have the opportunity to bring any remaining concerns to our attention through an administrative appeal of our July 23, 1998 final written decision on the proposed Conrail Acquisition. In that decision, we will address environmental, economic, and competitive transportation issues and impose such conditions as we deem appropriate, including environmental conditions. It is ordered: 1. The Four City Consortium's Motion to Strike is denied. Decided: May 26, 1998 Service Date - Late Release May 27, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33381 APPLICATION OF THE NATIONAL RAILROAD PASSENGER CORP. UNDER 49 U.S.C. 24308(a)--SPRINGFIELD TERMINAL RAILWAY COMPANY, BOSTON AND MAINE CORPORATION, AND PORTLAND TERMINAL COMPANY The Surface Transportation Board sets the terms and compensation for the National Railroad Passenger Corporation's operation over track owned by railroads in the Guilford Rail System. We are prescribing the terms and compensation for the National Railroad Passenger Corporation's access to facilities of railroads within the Guilford Rail System. By application filed March 19, 1997, the National Railroad Passenger Corporation (Amtrak) requests that we set the terms and compensation for its use of certain facilities owned by the Springfield Terminal Railway Company, the Portland Terminal Company, and the Boston and Maine Corporation (B&M), which are part of the Guilford Rail System and will be referred to collectively as Guilford. Amtrak seeks authority to operate passenger rail service over Guilford lines between Plaistow, NH, and Portland, ME in order to reintroduce passenger rail service between Boston, MA and Portland. (Between Boston and Plaistow, Amtrak's trains will operate over track owned by the Massachusetts Bay Transportation Authority). Amtrak will operate the Boston-to-Portland service pursuant to an agreement with the Northern New England Passenger Rail Authority (NNEPRA). Amtrak and Guilford have reached agreement on certain issues regarding Amtrak's use of Guilford facilities. Consequently, in this decision, we discuss only those significant terms and conditions in the Amtrak proposal on which the parties disagree. Guilford is entitled to be compensated for the incremental costs that it will incur as a result of Amtrak's operations. The parties have raised numerous disputes as to what should be considered as incremental costs and how they should be measured. The disputes center around: (1) liability costs; (2) maintenance-of-way expenses; (3) capital expenditures; (4) incentives for on-time performance; (5) administrative costs; and (6) future incremental costs. In addition, Guilford questions our authority to impose certain conditions needed to permit the commencement of passenger service on the Plaistow-Portland line. Each of these issues is discussed below. I. Liability Costs Amtrak has agreed to assume full responsibility for the following types of damages: (a) injuries or death to Amtrak employees or damage to their property; (b) injuries or death to Amtrak passengers and so called meeters and greeters of such passengers, as well as damage to these persons property; (c) damage to Amtrak locomotives, passenger cars, or other Amtrak property or equipment; and (d) injuries or death to any person or damage to property (other than Guilford property and property of its employees) proximately caused as a result of collision of a vehicle or a person with an Amtrak train at a grade crossing. Amtrak proposes a different arrangement for other types of damages that could occur because of Amtrak's presence on Guilford's track, including: (a) injury to trespassers and licensees; (b) general indirect damages, such as environmental damage to houses near the tracks; and (c) injuries or death to Guilford employees or damage to their property or to the property of Guilford. For these "residual damages," Amtrak proposes what it claims is its standard arrangement throughout the national railroad system with host carriers, under which the host carrier (in this case, Guilford) assumes liability for those damages in return for a set payment by Amtrak. Specifically, Amtrak proposes to pay Guilford $0.0734 per passenger train-mile to assume liability for these residual damages, an amount which would result in a total compensation of about $17,000 per year. The $0.0734 per train-mile figure is a privately negotiated figure that has apparently been used for decades. While we do not question its use in other contexts, neither the Board nor its predecessor, the Interstate Commerce Commission (ICC), has adopted any privately negotiated compensation agreement as a standard to apply broadly to all railroads. Rather, compensation issues have been addressed on a case-by-case basis. On the record before us here, there is no evidence to support the adequacy of the $0.0734 per passenger train-mile figure. On its face, $17,000 per year appears to be inadequate. Amtrak witness Marvin Smith, who oversees liability claims for Amtrak, admitted in deposition that, on Amtrak's northeast corridor, the average trespasser claim is settled or litigated at a value of between $15,000 to $17,000, exclusive of legal costs. Thus, the annual payment of $17,000 under the $0.0734 per passenger train-mile formula could be swallowed-up by a single trespasser accident. Amtrak notes that Guilford has incurred no losses associated with either trespasser claims or derailments on the Plaistow-Portland Line in the last 5 years. However, Guilford's fortunate past experience does not insure that such claims will not arise in the future or will not occur in connection with Amtrak operations. Guilford maintains that Amtrak's proposed level of compensation would be woefully inadequate. Guilford obtained a quotation of $514,800 per year from a group of insurers headed by the Lexington Insurance Company based on a $500,000 deductible and a liability limit of $100 million for insurance against the residual damages that it might be required to absorb under Amtrak's proposal. Amtrak argues that the Lexington quotation which would translate to about $2.20 per train-mile, or 10 times more than the $0.216 per train-mile that Amtrak pays to insure its operations nationwide is too high. Moreover, Amtrak points out that the amount that Guilford currently pays for liability insurance for its entire system is only $637,500. None of the insurance coverages cited by the parties establishes what Amtrak should pay to cover residual damages liability here. Guilford's own insurance only covers claims from $5 million to $50 million, and the fact that Guilford chooses to self-insure a portion of its own operations does not mean that it should assume the same liability for Amtrak's operations. Amtrak's existing insurance policy is also limited in coverage it applies only to claims between $10 million and $200 million. Even the Lexington quotation would not cover the first $500,000 of every claim. We conclude that the liability for residual damages arising out of Amtrak operations is an incremental cost for which Guilford is entitled to compensation. However, we do not believe that either side has provided a method by which we could reasonably calculate a precise dollar amount of compensation. Furthermore, we do not believe that it is necessary for us to attempt to prescribe the specific level of compensation necessary to cover the risk of residual damages here. Instead, we direct Amtrak to either: (1) fully indemnify B&M for the residual damage categories, as it has agreed to do for other damage categories; (2) purchase appropriate insurance or other surety to cover Guilford's assumption of liability for all such losses (i.e., without deductibles or low caps), even if that requires the purchase of more than one policy; or (3) a combination of the first two methods (for example, by purchasing insurance with a deductible or low cap, but agreeing to indemnify Guilford for damages that are subject to the deductible or cap). Amtrak must select its approach no later than 6 months before service is scheduled to begin and communicate the details to Guilford. If Guilford can show that the approach selected by Amtrak does not, in fact, provide full indemnification or insurance, it may petition the Board for relief, and the Board will take appropriate actions including, if necessary, an interim order mandating full indemnification for any losses that may occur while Guilford's petition is being heard. We recognize, as pointed out by Amtrak, that these residual damage categories involve areas where host carriers can exercise a large amount of control, through, for example, the barriers that they choose to erect against trespassers, their timing of freight movements that could cause environmental damage in a collision with a passenger train, and their control over the behavior of their own employees. Accordingly, host carriers have the opportunity to affect the incremental risks arising from Amtrak's presence. So that Guilford will have the proper incentive to avoid residual damages, Amtrak may return to the Board and claim an appropriate adjustment in compensation where it can show that Guilford's own conduct is causing its indemnity risk, or its insurance payments to cover residual damages, to rise. Guilford also seeks to be compensated for any punitive damages that may be linked to Amtrak's presence on the line, but are based on Guilford's own gross negligence, recklessness or wanton or willful misconduct. Amtrak argues that: (1) under agency precedent, Amtrak is not required to do more than insure against its own negligence; (2) indemnification of another party's gross negligence or willful and wanton misconduct would contravene public policy; (3) sound policy requires that Guilford have an incentive to avoid conduct that leads to punitive damages; and (4) trackage rights agreements (including those to which Guilford is a party) generally do not require the tenant carrier to provide full indemnity for such damages. With respect to public policy, Guilford argues that: (1) Amtrak has been the beneficiary of liability and punitive damage limits in Massachusetts, the District of Columbia (imposed by Congress), and New Hampshire; and (2) the willful or reckless conduct of railroad employees should not be imputed automatically to their employers because the continuous supervision of operating employees is not possible in the railroad industry. We will not require Amtrak to reimburse Guilford for damages due to Guilford's gross negligence or willful and wanton misconduct. The statute requires that compensation levels reflect safety considerations, and thus Guilford should be encouraged to conduct its operations safely. Moreover, public policy generally disfavors requiring one party to be responsible for another's gross negligence or willful and wanton misconduct. Guilford argues that this policy should not apply where, as here, the uninsurable risk is not voluntarily assumed. However, because this policy is well grounded in our statutory framework and general insurance law precedent, we are not free to depart from it. Guilford is not satisfied with an unsecured indemnification arrangement for liability. Guilford voices concern that, in view of Amtrak's precarious financial condition, Amtrak would not be able to satisfy its indemnity obligations. Accordingly, Guilford asks that we (1) require Amtrak to purchase appropriate insurance or other security and (2) condition access upon Massachusetts, New Hampshire, and Maine enacting limits on liability in excess of insurance coverage. Taking these suggestions in reverse order, we find that making Amtrak's operations dependent upon future state limitations on liability is wholly inappropriate. Under the statute, Amtrak has a right to operate over the lines of other carriers, so long as it does so under reasonable terms, including compensation for the incremental costs incurred by the host carrier. We may not deny Amtrak that right by holding Amtrak hostage to legislative initiatives. Turning to Guilford's first suggestion (requiring that Amtrak secure its indemnity obligations), we find that the request is unsupported. Guilford has not demonstrated a strong likelihood of Amtrak going out of business. It has shown nothing more than that Amtrak's operations remain dependent in large measure on the Congressional appropriations process a process that Amtrak has endured from the date it first commenced operations in 1970. As noted above, Amtrak has existing, nationwide insurance that presumably will cover its operations over this line. Its amount of insurance coverage, incorporating sizable deductibles and caps, is fairly conventional for the railroad industry and has been acceptable for every other railroad with which Amtrak has line usage agreements. We find that requiring Amtrak to absorb the costs of additional insurance or security for Guilford is unnecessary. Guilford has shown no reason why it should be given more preferential treatment than all other carriers hosting Amtrak operations. II. Maintenance-of-Way Expense The parties agree that Amtrak must compensate Guilford for the incremental maintenance- of-way (MOW) costs of running passenger trains over the Plaistow-Portland line. Further, the parties agree that the MOW expenditures must be sufficient to maintain the track at Federal Railroad Administration (FRA) class 3 level, to allow passenger trains to achieve speeds of 60 miles per hour (mph) and provide a comfortable ride for passengers. However, the parties disagree on the method for determining incremental MOW costs. Amtrak proposes to pay Guilford an incremental MOW cost of $0.117 per locomotive- and car-mile (approximately $2,050 per track-mile in 1996 dollars). While acknowledging that this level of compensation is unrelated to the operation of passenger trains over Guilford's track, Amtrak states that the proposed payment will be more than necessary because, following the $39.6 million rehabilitation of the Plaistow-Portland line with funds to be supplied by the State of Maine, there will be little need for track maintenance for the first 6 to 8 years. Furthermore, Amtrak argues that, because of the limited amount of freight traffic that traverses the Plaistow- Portland line (less than 10 million gross tons or MGT), most maintenance costs will be weather- related and not related to Amtrak's use of the line. According to Amtrak, only track inspection costs will be higher due to its use of the line and Amtrak will pay these costs directly. Guilford does not dispute that MOW costs will be significantly reduced in the first few years following rehabilitation; nor does it calculate a specific incremental MOW expense figure. Rather, Guilford proposes that Amtrak pay the difference between Guilford's average MOW cost for the Plaistow-Portland line in the period 1989-1991, and any additional maintenance costs incurred after institution of Amtrak service. Neither party has presented evidence that allows us to accurately estimate the incremental MOW for Amtrak's operations over Guilford's tracks. Amtrak's adoption of incremental MOW cost based on its experience with Conrail is unrelated to the incremental costs that Amtrak's service will impose on Guilford. There are substantial differences between the Conrail facilities over which Amtrak operates and Guilford's facilities. The majority of Conrail's track is maintained for freight operations at a level that is equivalent to or higher than that which Amtrak needs to provide passenger service and, therefore, no special additional maintenance is necessary to allow Amtrak to operate over the Conrail track. Here, however, to conduct its freight operations Guilford does not need to maintain its track at the level needed by Amtrak for passenger service. Therefore, the incremental maintenance needed to allow Amtrak to operate at 60 mph is likely to differ significantly from the figure developed in Amtrak/Conrail. On the other hand, Guilford's proposal that Amtrak pay for all MOW expenditures above those historically made during the 1989-1991 period would result in Amtrak paying for far more than the incremental cost associated with passenger service. Currently, Guilford operates many more trains over the Plaistow-Portland line than it did the 1989-1991 period. In addition, it is anticipated that the proposed acquisition of Conrail by two Eastern railroads, if approved, would further increase Guilford's traffic. Under Guilford's approach, the additional MOW costs resulting from the increase in freight traffic on the Plaistow-Portland line would be borne by Amtrak. In addition, any type of maintenance not incurred in the 1989-1991 period would be payable by Amtrak, whether or not these costs were attributable to Amtrak operations. For example, Guilford's approach assumes that capital expenditures for bridges on the Plaistow- Portland line average only $25,000 a year. But Guilford recently spent $489,000 to rehabilitate the Main Street Bridge in Saco, ME, because salting of the overhead street caused the bridge to deteriorate. Under Guilford's proposal, if Amtrak were operating over that bridge, the entire cost of repairs would be chargeable to Amtrak, even though damage to the bridge was not caused by rail traffic. Also, Guilford's proposal would make Amtrak responsible for damage from natural causes, such as floods or fires, although none of the costs could be attributable to Amtrak's operations, and the majority of repairs would be necessary even if Amtrak were not operating on the line. While on this record it is not possible to estimate the incremental MOW expense that will be attributable to Amtrak service, we recognize that the planning for and restoration of passengerservice on the Plaistow-Portland line needs to move forward. Therefore, to avoid further delays, we are prescribing, on an interim basis, Amtrak's proposed annual MOW payment plus additional charges agreed to by the parties. The parties agree that Amtrak will pay for a weekly track inspection (unless Guilford otherwise has to make the inspection because annual tonnage on the Plaistow-Portland line exceeds 10 MGT), the costs of an annual Sperry Car inspection, and the costs of any non-routine service Guilford performs. This payment is adequate on an interim basis because Guilford will be the immediate beneficiary of $39.6 million of rehabilitation which the parties agree will reduce MOW expense below the historical MOW. Thus, even without Amtrak's MOW payments, Guilford will be required to spend less to maintain the line following rehabilitation than it would if the rehabilitation work were not performed and Amtrak did not institute passenger service. Guilford acknowledges that, in the years immediately following the rehabilitation, the maintenance and capital work needed to maintain the Plaistow- Portland line at Amtrak's desired level of utility would be less than the funds Guilford normally spends to maintain the Plaistow-Portland line. After passenger service has begun, and after the parties have experience operating over the rehabilitated line, data on actual maintenance expenditures will become available and it will be possible to develop a better estimate of the MOW expenses on the line. Thus, although the incremental MOW payment we are prescribing may not be sufficient after the first several years of operations following rehabilitation, after operating on the Plaistow-Portland line for a period of time following the rehabilitation work, the parties will be in a better position to negotiate a MOW payment that better reflects the actual maintenance needs of the Plaistow-Portland line. If, following rehabilitation and the resumption of Amtrak service, either party believes that Amtrak's MOW payments are inappropriate, they may petition the agency to reopen this proceeding at that time. III. Rehabilitation of the Line As noted, Amtrak, Maine Department of Transportation and NNEPRA plan to provide $39.6 million to rehabilitate the Plaistow-Portland line to meet Amtrak passenger service requirements. With the exception of bridge rehabilitation and construction of a track to bypass Guilford's Rigby Yard in Portland, for which Guilford argues that additional funds are needed, the parties agree on the scope of the rehabilitation work. Amtrak submitted evidence that, in order to operate passenger trains at 60 mph over the line, 11 bridges would need $2 million of rehabilitation work. Guilford disagrees and argues that, based on a preliminary January 1993 study prepared for Amtrak that $21 million would be needed to make the bridges on the line safe for passenger operations. The evidence relied on by Guilford is not relevant. The January 1993 study that Guilford refers to was prepared under the assumption that Amtrak trains would operate at 79 mph. Amtrak's $2 million estimate reflects a lower level of bridge rehabilitation to account for the fact that the maximum speeds have been reduced to 60 mph. Amtrak's evidence is reasonable because the slower, 60 mph speeds will produce less stress on bridges and consequently require less structural improvements. Guilford has presented no evidence to rebut this claim. Indeed, Guilford's own evidence shows that in 1991 it proposed to provide passenger service at 80 mph without any bridge rehabilitation. When Guilford was seeking to be the operator of the Boston- to-Portland passenger service, it claimed (to the State of Maine) that rehabilitation of the Plaistow-Portland line to a level that would permit class 4 operating speeds (79 mph) would cost only $25.5 million, and its proposal did not mention the need for any bridge work. Therefore, we find Amtrak's proposal to include $2 million for bridge rehabilitation reasonable and the best evidence of record. The parties agree that a bypass track must be constructed around the Rigby Yard to accommodate the passenger service; they do not agree on the length of the bypass. Amtrak proposes to construct a 2-mile bypass that will intersect Guilford's main line west of Rigby Yard at MP 200.38. Amtrak states this bypass track will allow Amtrak trains to avoid interfering with Guilford's yard operations, which sometimes overflow onto the main line outside the yard. Guilford asserts that placing the bypass switch at MP 200.38 would seriously impede yard operations. Guilford claims that it uses the main line from the yard to MP 201.00 for yard switching operations, brake testing, and holding inbound and outbound trains temporarily when the yard is congested. Consequently, Guilford proposes to either relocate the proposed bypass switch to MP 201.00 or construct a new switching track that parallels the main line for approximately 1 mile west of the yard entrance. To evaluate the need for a longer bypass, Amtrak observed and photographed the yard operations for 3 days (July 21-23, 1997). It found that only one freight train would have been delayed for 10 minutes due to the presence of passenger trains. Guilford claims, however, that Amtrak's observer could not adequately see the yard operations from his vantage point and that the observations were made when yard operations were extremely light. Guilford submits several of its own photographs to show that Amtrak's view of yard operations was blocked by trees. Guilford's photographs do not support its claim. The track is clearly visible in one of Guilford's photographs. Further, the photographs taken by Amtrak, which clearly show Guilford's train operations, demonstrate that Guilford's photographs were not taken from the same spot as Amtrak s. In addition, Guilford's argument that operations during the observation period were unusually light is contradicted by its own witness who, during depositions, stated that operations during the time Amtrak observed the yard were typical. Based on the evidence of record, we will allow Amtrak to proceed based on its proposal to locate the bypass switch at MP 200.38. Guilford has not submitted probative evidence that Amtrak's operations will materially affect operations at the Rigby Yard or that the main line west of Rigby Yard is used extensively for yard operations when Amtrak trains would be present. Indeed, Amtrak observations indicate that there is little yard activity beyond MP 200.38 with which passenger operations would interfere. Although we will not require Amtrak to construct the longer bypass, if Guilford demonstrates to us that a future extension of the bypass is needed solely as a result of Amtrak operations, Guilford will be allowed to recover the cost of construction from Amtrak. IV. Performance Incentive Payments Amtrak's proposal includes incentive payments to Guilford for on-time operation of the Amtrak trains and penalties for untimely performance. The performance proposal is similar to Amtrak's agreement with other freight railroads. Guilford would begin to collect monthly performance incentives when Amtrak trains are on-time 80% of the time and pay penalties when passenger service is on-time less than 70% of the time. Guilford agrees with Amtrak's performance standards, except that Guilford would set lower incentive payments for timely performance and make the tolerance (the allowable difference between scheduled arrival and actual arrival times) subject to change in the event that insufficient funds are provided to perform adequate maintenance work on the track. Amtrak's performance proposal is appropriate. These incentive payment terms and conditions have been included in other proceedings and are more beneficial to Guilford than Guilford's proposal. Further, because service will begin on a newly rehabilitated track, and Guilford will receive compensation from Amtrak for MOW, adequate funds should be available to maintain the line to avoid the types of delays envisioned by Guilford. V. Additional Administrative Costs Based on an agreement between the parties that was never finalized, Guilford proposes that Amtrak pay $0.45 per train-mile as compensation for the administrative work that Guilford will perform. This fee allegedly would cover functions such as dispatching Amtrak trains, accounting, billing, and other administrative-type activities which cannot be quantified with precision. Amtrak objects to the $0.45 per train-mile fee, arguing that it is improper to consider facts presented in failed settlement negotiations. We agree that Amtrak should be responsible for any incremental administrative expenses that it would cause Guilford to incur. However, on this record, Guilford has offered no evidence to quantify the incremental administrative expenses it will incur, other than anecdotal evidence from a failed settlement negotiation. This is an insufficient basis for us to determine the extent, if any, of additional incremental costs that Amtrak operations would cause. Therefore, we cannot prescribe payments for administrative costs. VI. Future Incremental Costs Guilford proposes that we provide for additional future compensation for incremental costs that Guilford can show that it incurs. Guilford suggests two possible candidates for this category: (1) incremental freight service expenses that are caused by the presence of passenger service, such as the additional crew and per diem expenses that Guilford would incur if a passenger train break-down delayed freight service and (2) costs that Guilford would incur to increase the capacity of its facilities when such an increase would not be necessary in the absence of passenger service. Amtrak's proposal includes payments for non-routine services provided by Guilford, including the costs associated with passenger train break-downs. Thus, we find that the proposal already takes into account that certain unanticipated future incremental costs caused by the operation of Amtrak trains may arise. If other incremental costs arise, such as those associated with facility capacity, Guilford may petition for reopening of this proceeding to address those matters. VII. Indexing Although not expressly addressed by the parties, we note that their evidence provides for different methods of indexing the various incremental costs payable by Amtrak. Amtrak proposes that incremental costs be adjusted annually based on the Railroad Cost Recovery Index (RCRI). Guilford proposes to index costs using the Consumer Price Index (CPI) for all urban consumers. We find that Amtrak's indexing proposal is more appropriate. The RCRI is more specifically related to the cost of providing rail service, whereas the CPI is a much broader index of costs that includes many items unrelated to rail operations. We generally prefer the index that is most closely related to the type of costs being indexed, and for that reason, we have used the RCRI to index costs in previous Amtrak proceedings. VIII. Jurisdictional Issues Guilford argues that, while we have authority to set the terms and conditions for Amtrak's access to its line, we do not have the authority to require Guilford to upgrade or maintain its line at the level required by Amtrak, or to determine the number of trains Amtrak initially can operate. Guilford argues that our authority extends only to requiring Guilford to allow Amtrak to use its track and to set the terms and compensation for such use. According to Guilford, 49 U.S.C. 24308(d) and (e) require that any order dealing with the number of passenger trains authorized to operate or the maintenance and rehabilitation of the line must be issued by the Secretary of Transportation. We disagree. The Secretary's authority pertains to those instances where Amtrak is already operating on the line and wishes to modify its service by either operating at higher speeds or by operating additional trains. Here, we are dealing with a situation where Amtrak wants to establish first-time service and seeks a determination of the terms of such access to the facilities. Guilford's statutory construction could frustrate Amtrak's ability to ever institute service. If we could not impose the initial terms for access, including the condition of the line and number of trains that can operate, and if, as the statute indicates, the Secretary can only order increased trains speeds and number of trains on lines where Amtrak is already operating, Guilford could prevent Amtrak from ever beginning service. Clearly, that is not the statute's intention. Because commencement of Amtrak service over the Plaistow-Portland line is dependent upon the rehabilitation of the line, we must have the authority, in setting the terms and conditions for access, to require Guilford to provide the services necessary for rehabilitation to bring the line to a condition that will permit Amtrak to inaugurate service with four trains per day. Indeed, as discussed above, the parties agree on the majority of the rehabilitation work that will be needed. Furthermore, Guilford has previously recognized our authority to require rehabilitation when granting Amtrak access to a line over which it did not currently operate. In a case where Amtrak invoked its condemnation authority to acquire a B&M line in order to upgrade the line for Amtrak service, B&M urged our predecessor, the ICC, to use its authority to require rehabilitation of the line in lieu of condemning the line and conveying it to Amtrak. Thus, we have the authority under the circumstances of this case to require rehabilitation. Moreover, in sanctioning the rehabilitation of the line with public funds, we are requiring that the line be maintained to permit continued passenger service. Indeed, without a maintenance condition, a host carrier could circumvent our prescription of access simply by allowing track to degrade. Amtrak requests that Guilford's right to transfer, assign, lease, or otherwise convey an interest in the Plaistow-Portland line be subjected to prior approval of Amtrak or the Board. Amtrak argues that such a limitation is necessary to protect the public's $39.6 million investment in the line from transfer to an entity that might lack the financial resources to meet its service obligations to Amtrak. We see no need to explicitly impose such a condition. Amtrak's interest in the line can be otherwise fully protected. Under 49 U.S.C. 24311, Amtrak can institute condemnation proceedings to permit it to acquire the line. Moreover, Amtrak's interest in ensuring that a sale of the line will not affect its ability to provide service can also be protected under our jurisdiction over sale or lease of lines of railroad. For these reasons, our prescription in the case need not include a restriction on alienation by Guilford. Guilford objects to a proposed term that would allow Amtrak's successors or assigns to receive the rights granted to Amtrak, unless those parties are themselves statutorily entitled to access to the track. We agree that the access rights that the Act allows us to grant to Amtrak belong only to Amtrak and may not be transferred to a third party "successor or assign" unless the Act or some other provision of law specifically provides otherwise. We see nothing in the access provisions of the Act that allows us to prescribe access terms for a party other than Amtrak, and our decision may not be construed otherwise. If Amtrak seeks to sell or assign its access rights granted under this decision to a third party, its authority to do so may not be supported by this decision. Amtrak, noting that the agreements it has with other freight railroads require that disputes arising from the agreements be submitted to arbitration, proposes that disputes arising from this decision be submitted to binding arbitration. Guilford opposes this condition. While Amtrak argues that we have the authority to require binding arbitration, it also states that it would not object if the requirement was not imposed. Because Amtrak does not insist upon the arbitration requirement, we will not require that disputes be submitted to arbitration. Rather, we will resolve any future disputes in an appropriate manner. Guilford objects to Amtrak's request that we order Guilford to comply with certain requirements that would normally be imposed as a condition to the voluntary receipt of grants from the Federal Transit Administration. While Guilford concedes that it must comply with statutory and regulatory requirements that generally apply to it, the carrier argues that our jurisdiction does not allow us to impose conditions on its use of the funds received as compensation for the property invaded by Amtrak. Specifically, Guilford objects to the following provisions of Amtrak's proposed terms and conditions: (1) a statement that the parties acknowledge certain matters; (2) a requirement that Guilford agree that the federally appropriated funds that it receives will not be used for lobbying; and (3) a requirement that Guilford comply with a wide variety of otherwise inapplicable statutes, DOT regulations, and state obligations concerning civil rights, employment practices, and environmental statutes. We agree with Guilford in this respect. Our authority is limited to prescribing the facilities and services that host carriers must provide to Amtrak and the compensation that Amtrak must provide in return. The statute gives us no authority to prescribe the uses to which host carriers put the specific funds that they receive for compensation. Nor does our authority extend to requiring host carriers to observe statutory provisions and regulations to which they would not otherwise be subject. Thus, we will exclude the Federal Transit Administration "boilerplate" restrictions from our prescription. It is ordered: Guilford will provide services and facilities to Amtrak pursuant to the terms and conditions proposed by Amtrak, as such terms and conditions are modified herein. Decided: May 28, 1998 Service Date - May 29, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33469 APPLICATION OF THE NATIONAL RAILROAD PASSENGER CORPORATION UNDER 49 U.S.C. 24308(a)--UNION PACIFIC RAILROAD COMPANY AND SOUTHERN PACIFIC TRANSPORTATION COMPANY The Board determines the nature of express traffic that Amtrak may transport on its passenger trains. The Board grants Amtrak's application and directs Union Pacific Railroad Company and Southern Pacific Transportation Company to permit Amtrak to transport express traffic over UP/SP lines. By application filed September 16, 1997, the National Railroad Passenger Corporation (Amtrak) requested that the Board direct the Union Pacific Railroad Company and Southern Pacific Transportation Company (collectively, UP/SP) to make available to Amtrak rail facilities and services that it needs to transport express on Amtrak trains. To help sustain its primary passenger operations in light of Congress goal to end its federal subsidies by 2002, Amtrak seeks to expand its transportation of express. UP/SP claims that Amtrak will do so, however, by transporting traffic that is more akin to general freight than express, and in ways that will pose significant operational and logistical problems for the freight carrier. As a result, UP/SP refused to extend its prior agreement with Amtrak, which expired September 30, 1997, that permitted Amtrak to carry express on its passenger trains over UP/SP track. Congress has directed the Board to enforce Amtrak's rights to use the freight railroads facilities to conduct its operations. By its application, Amtrak has, in essence, asked us to determine the scope of its rights to transport express. Because the Act does not define express, and because of the potentially broad impact our interpretation of that term may have on other railroads with which Amtrak has agreements, by order served September 30, 1997, we sought comments on Amtrak's application. While the proceeding was pending, we required UP/SP, within certain limits, to continue to make its facilities available to Amtrak for express