Railbanking, as defined by the National Trails System Act, 16 USC 1247 (d), 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. Because a railbanked corridor is not considered abandoned, it can be sold, leased or donated to a trail manager without reverting to adjacent landowners.
Railbanking takes place during the rail corridor abandonment process. Official negotiations with the railroad begin after the railroad submits an initial notification to abandon the line to the Surface Transportation Board (STB). Negotiations end with either railbanking or line abandonment.
The railbanking provisions of the National Trails System Act as adopted by Congress in 1983 have preserved thousands of miles of rail corridors that would otherwise have been abandoned.
In 1916, at the peak of the United States' construction and development of rail lines, more than 275,000 miles of track crisscrossed the country, carrying freight and passengers and fueling the economy and growth of the nation. But by the 1950s and 1960s, railroads faced increasing competition from trucking companies, and costly federal regulations made it even more difficult for the railroads to compete. Nearly a quarter of the nation's railroad lines were operating under bankruptcy, in fact, by the early 1970s.
The Staggers Rail Act, passed in 1980, deregulated the railroads and made it easier for them to abandon lines. Although railroads were then able to streamline their operations and diversify successfully, this deregulation also triggered a mass wave of rail line abandonments. Before deregulation, 38,000 miles of track were abandoned in the 45 years from 1930 to 1975. Yet, in the next 15 years until 1990, railroads abandoned nearly double that amount—65,000 miles—in only a third of the time.
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 repurposed for other—potentially temporary—trail uses.
Opponents of railbanking have unsuccessfully challenged the constitutionality of the railbanking provisions of the National Trails System Act. In 1990, the Supreme Court unanimously ruled, in the case of Preseault v. United States, that preserving a corridor for future rail use through railbanking is a legitimate exercise of governmental power. This decision protects a railroad's legal right to transfer all forms of its ownership, including easements, to a trail group.
Opponents periodically attempt to stop implementation of the railbanking provisions through legislative restrictions on trail development. RTC remains vigilant in monitoring legislative and legal assaults on railbanking and continues to build support in favor of the railbanking statute.