The following is excerpted from the Rails-to-Trails Conservancy:

Railbanking, established in 1983 as an amendment to Section 8(d) of the National Trails System Act, is a voluntary agreement between a railroad company and a trail agency to use an out-of-service rail corridor as a trail until a railroad might need the corridor again for rail service. This interim trail use of railbanked corridors has preserved thousands of miles of rail corridors that would otherwise have been abandoned.

Railbanking takes place during the rail corridor abandonment process, and official negotiations with the railroad can begin only after the railroad submits an initial notification to abandon the line to the Surface Transportation Board (STB). Any qualified private organization or public agency that has agreed to maintain the corridor for future rail use is eligible to negotiate for railbanking. During negotiations, the railroad is permitted to remove all its equipment and materials, except for bridges, tunnels and culverts, from a corridor.

If railbanking negotiations fail, the railroad will usually proceed with line abandonment. If negotiations succeed, a railbanking agreement will be established, and the railroad will turn the corridor over to the qualified private organization or public agency. This property transfer precludes abandonment. In other words, because a railbanked corridor is not considered abandoned, it can be sold, leased or donated to a trail manager without reverting to adjacent landowners.

The abandoning railroad has the right to re-establish rail service on a railbanked corridor. Should that occur, the trail-managing agency ordinarily is entitled to fair market compensation from the railroad seeking to re-establish rail service. However, to avoid disputes, this issue should be specifically addressed as a contingency in the initial contract with the abandoning railroad.

In the early 1980s, Congress became concerned about the dramatic decline in the nation’s railroad infrastructure. With so many railroads abandoning corridors, it became apparent to Congress that something needed to be done to preserve the nation’s rail system for future transportation uses. In 1983, Congress amended Section 8(d) of the National Trails System Act to create a program to preserve rail corridors (called “railbanking”), through which corridors that would otherwise be abandoned can be preserved for future rail use by converting them to interim trails. The old, inactive railroad route survives but is re-purposed for other—potentially temporary—trail uses.

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