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Rail Preservation Preliminary Investigation 5-31-11

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Rail Preservation Preliminary Investigation 5-31-11 Preliminary Investigation Caltrans Division of Research and Innovation Produced by CTC & Associates LLC Rail Preservation Programs: A Survey of National Guidance and State Practice Requested by Todd LaCasse, Office of Goods Movement, Caltrans Division of Transportation Planning Revised June 21, 2011 The Caltrans Division of Research and Innovation (DRI) receives and evaluates numerous research problem statements for funding every year. DRI conducts Preliminary Investigations on these problem statements to better scope and prioritize the proposed research in light of existing credible work on the topics nationally and internationally. Online and print sources for Preliminary Investigations include the National Cooperative Highway Research Program (NCHRP) and other Transportation Research Board (TRB) programs, the American Association of State Highway and Transportation Officials (AASHTO), the research and practices of other transportation agencies, and related academic and industry research. The views and conclusions in cited works, while generally peer reviewed or published by authoritative sources, may not be accepted without qualification by all experts in the field. Executive Summary Background Caltrans has limited ownership of the rail lines located in the state, and private owners are increasingly filing for abandonment with the federal government. If Caltrans does not act to acquire or otherwise preserve these lines, the land may be purchased by someone who will remove the lines. Once rail lines are removed from the ground, these rail rights of way are no longer exempt from the public hearing and environmental processes and are effectively lost forever. This may result in more freight being transported on highways and preclude any possible future use of the abandoned line for either freight or passengers. Even if a line is not currently used, it is often desirable to preserve it for potential future use, as establishing a new line (or re-establishing removed tracks) is much more difficult than bringing an old line back into use. Caltrans wishes to understand how other states are dealing with the issue of rail preservation, with a focus on preserving intact rail right of way for future freight use. This Preliminary Investigation seeks to capture national guidance for preserving freight rail corridors and service, trends in the abandonment of freight rail lines and the critical elements of progressive state department of transportation (DOT) rail preservation programs. Summary of Findings This Preliminary Investigation includes an examination of National Guidance and Progressive State Rail Preservation Programs. The two sections of this Preliminary Investigation are summarized below. National Guidance Best practices or recurring themes culled from the survey responses that provided the foundation of a 2007 NCHRP synthesis on rail preservation include: • Developing a clear policy foundation that allows an agency to act before abandonment is proposed. • Tracking and communicating the benefits of public rail line investment. • Providing a mixture of loans and grants to fund rail rehabilitation efforts. States with well-funded programs have high rates of success in retaining rail corridors. • Directly engaging with all types of rail service providers to develop relationships and encourage information sharing about lines that have the potential for abandonment. • Restoring rail service is far less common than restoring a rail corridor. Having the long-term funding commitment necessary to respond to restoration opportunities as they arise is critical. We also highlight models and tools that assess and compare the relative costs of the transportation modes used to move freight, including a guidebook that is part of a 2007 NCHRP report and a Federal Railroad Administration Excel-based model that analyzes the diversion of highway freight traffic to rail. Progressive State Rail Preservation Programs We reviewed published research, state rail plans and state DOT web sites to gather information about the rail preservation programs administered by the following state DOTs: • Indiana. • Oregon. • Virginia. • Kansas. • Pennsylvania. • Washington. • North Carolina. • South Carolina. • Wisconsin. • Ohio. • Texas. Best Practices The most commonly used strategy in the rail preservation programs we examined is the availability of funding for rail acquisition or rehabilitation. Most of these programs are geared toward short line railroads—the smaller Class II or Class III railroads—rather than large Class I1 freight railroad companies. States with well-developed preservation programs have also found some success with state acquisition of rail lines, though research indicates that this preservation tool requires adequate time and funding to fully realize the benefits of state ownership. Benefit-cost analyses are a relatively recent addition to the rail preservation toolbox. The table below highlights strategies that are recommended or in use to advance an effective state rail corridor preservation program. Several of these strategies are similar to recommendations in the 2007 NCHRP synthesis on rail preservation. 1 Class I railroads, which are regulated by the Surface Transportation Board, have operating revenues at or above a threshold indexed to a base of $250 million that is adjusted annually in conjunction with changes in the Railroad Freight Rate Index published by the Bureau of Labor Statistics. Declassification from Class I status occurs when a railroad falls below the applicable threshold for three consecutive years. 2 State Rail Corridor Preservation Strategies Strategy State(s) Indiana, Kansas, North Carolina, Ohio, Establishing funding programs that offer grants or loans Oregon, Pennsylvania, Texas, Virginia, for capital improvements Washington, Wisconsin North Carolina, Ohio, Oregon, South Granting authority for the state to acquire rail lines Carolina, Texas, Washington, Wisconsin Conducting benefit-cost analyses to evaluate public Ohio, Pennsylvania, Virginia, Washington benefits of public investments in rail projects Establishing a relationship with railroad representatives Indiana, Oregon, South Carolina, Texas Monitoring the rail system for rail corridors ripe for Indiana, South Carolina, Texas preservation Supporting public purchase of rail cars or other Indiana, Kansas, Oregon equipment Providing rail-related funding as an incentive to North Carolina, Virginia businesses to locate or expand in the state Consolidating or developing storage and loading Indiana, Oregon facilities to improve accessibility to rail service Conducting public information campaigns Indiana Developing performance measures for rail funding Kansas programs Monitoring existing and proposed industrial South Carolina development Obtaining the backing of a political champion Texas Creating public-private partnerships with Class I South Carolina railroads Forming Rural Rail Transportation Districts (in response to concerns about the loss of rail service in rural parts of Texas Texas) Financial Support Of the states that have strategies, all but two—South Carolina and Texas—currently offer financial assistance to encourage preservation of rail lines for rail use. South Carolina DOT provides funding to preserve abandoned railway corridors for pedestrian and bicycle use; preserving a corridor for future use of an active rail line is not an allowable use under the program. In Texas, the Rail Relocation and Improvement Fund was created by the state Legislature and approved by Texas voters at a constitutional amendment election in 2005 but is not yet funded. 3 The table below summarizes the ongoing state-funded programs that provide support for rail preservation. Most programs limit availability to short line railroads. Funding Programs to Encourage Rail Preservation State Program(s) Description Industrial Rail Service Fund Grants and low-interest loans to Class II and Class Indiana (1997) III railroads. State Rail Service Low-interest, 10-year revolving loans to short line Kansas Improvement Fund (1999) railroads; loans cover 70 percent of project costs. Funds of up to 50 percent of project costs may be Rail Industrial Access Program used to construct or rehabilitate tracks; provides North Carolina (1994) an incentive to businesses to locate or expand facilities in North Carolina. Assistance for the acquisition of rail lines to Ohio Rail Line Acquisition Program prevent cessation of service or enhance the line’s viability. A lottery-bond-based initiative that began in 2005 Oregon ConnectOregon (2005) to provide financing for rail and other types of transportation projects. 1. Rail Freight Assistance Program (1984). All programs provide financial assistance for investment in rail infrastructure. 1. Funding for up to 70 percent of the total 2. Rail Transportation Pennsylvania project up to $700,000. Assistance Program. 2. Applicants are required to have a line item authorized in the current Capital Budget Act. 3. Pennsylvania Infrastructure 3. Low-interest loans with terms up to 10 years. Bank (1998). 1. Fund established in 2005 as the first dedicated 1. Rail Enhancement Fund source of rail funding in state history; (2005). applicants must provide a minimum of 30 percent cash or in-kind contribution. 2. Grants to support and preserve short line 2. Rail Preservation Grants Virginia railways, with an annual allocation of (1991). $3 million. 3. Grants to support projects that provide rail 3. Rail Industrial Access access to businesses in Virginia; funding Grants
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