Voting Conference, May 3, 2005

Number range CHAPTERStatement of Brian O'Boyle

Staff Attorney, STB Office of Proceedings

Norfolk & Western Railway Company

-- Abandonment Exemption --

Between Kokomo and Rochester in Howard, Miami, and Fulton Counties, IN

STB Docket No. AB-290 (Sub-No. 168X)

Good morning Chairman Nober, Vice Chairman Buttrey, and Commissioner
Mulvey.

The draft decision before you involves a complicated series of facts
regarding the rail banking of a formerly active rail line in Indiana.

The facts are as follows: In May 1996, the Board issued a decision
authorizing the Norfolk & Western Railway Company, now Norfolk Southern
Railway, or NSR, to abandon a line between Kokomo, IN, and Rochester,
IN. As part of the decision, the Board also issued a notice of interim
trail use, or NITU, for the southern segment of the line to the Indiana
Trails Fund, or ITF. ITF had also requested a NITU for the northern
segment of the line, but NSR still had a trackage rights agreement with
another carrier---one that was in a bankruptcy court proceeding---over
the northern segment. The Board found that a NITU for the northern
segment could not be issued until the trackage rights agreement was
dissolved by the bankruptcy court.

In December 1997, the trackage rights agreement was dissolved by the
bankruptcy court. However, ITF neglected to return to the Board for a
NITU for the northern segment. In August 1998, NSR and ITF entered into
a trail use agreement for both the southern segment (for which a NITU
had been issued) and the northern segment (for which no NITU had been
issued).

In February 2004, ITF, realizing it had never obtained a NITU for the
northern segment, filed a request with the Board. The Board, finding
that NSR had never consummated abandonment of the northern segment and
that ITF was a qualified trail sponsor, issued the NITU in March 2004.

Soon after, petitions for reconsideration were filed by landowners who
reside adjacent to the former rail line. In these petitions, the
landowners challenge whether the northern and southern segments of the
former rail line were properly rail banked. Specifically, the
petitioners assert that the Board should not have granted the March 2004
NITU for the northern segment because NSR consummated abandonment of
this segment, and because the segment was severed from the interstate
rail network. The petitioners also assert that the southern segment
should no longer be rail banked because it too is now severed from the
interstate rail network. Finally, the petitioners assert that the NITUs
for both the northern and southern segments should be revoked because
ITF is an unfit trail sponsor because it has not properly maintained the
trails.

The draft decision denies the landowners' petitions.

Addressing the northern segment first, the draft decision finds that the
record shows that NSR did not consummate abandonment of this segment.
Rather, the evidence shows that NSR intended from the outset of this
proceeding to rail bank the northern segment and that its intent never
changed. The draft decision also finds that the northern segment has not
been severed from the interstate rail network, as it is still connected
to an active rail line at one end. Therefore, the northern segment was
still within the Board's jurisdiction when it issued the March 2004
NITU.

Regarding the petitioners' claims pertaining to the southern segment,
the draft decision finds that it too is still within the Board's
jurisdiction because it is also still connected to the interstate rail
network. Although we agree with the petitioners that one small portion
of the southern segment has been abandoned at one end, there is clearly
a connection at the other end.

Finally, the draft decision finds that the petitioners' claims that ITF
is an unfit trail sponsor should be addressed by the Indiana state
courts. Should an Indiana state court determine that ITF has in fact
failed to properly manage the trail, then the Board would be available
to consider whether the NITUs should be revoked.

We would be happy to answer any questions you may have.