---
kind: "range"
citation: "49 U.S.C. §§ 10901–10906"
title: "49"
from: "10901"
to: "10906"
count: 6
release: "119-102"
url: "https://uscodex.org/usc/49/10901..10906"
---

# §10901. Authorizing construction and operation of railroad lines

- (a) A person may—
  - (1) construct an extension to any of its [railroad](/usc/49/10102.md?p=6) lines;
  - (2) construct an additional [railroad](/usc/49/10102.md?p=6) line;
  - (3) provide [transportation](/usc/49/10102.md?p=9) over, or by means of, an extended or additional [railroad](/usc/49/10102.md?p=6) line; or
  - (4) in the case of a person other than a [rail carrier](/usc/49/10102.md?p=5), acquire a [railroad](/usc/49/10102.md?p=6) line or acquire or operate an extended or additional [railroad](/usc/49/10102.md?p=6) line,

  only if the [Board](/usc/49/10102.md?p=1) issues a certificate authorizing such activity under [subsection (c)](#c).

- (b) A proceeding to grant authority under [subsection (a)](#a) of this section begins when an application is filed. On receiving the application, the [Board](/usc/49/10102.md?p=1) shall give reasonable public notice, including notice to the Governor of any affected [State](/usc/49/10102.md?p=8), of the beginning of such proceeding.
- (c) The [Board](/usc/49/10102.md?p=1) shall issue a certificate authorizing activities for which such authority is requested in an application filed under [subsection (b)](#b) unless the [Board](/usc/49/10102.md?p=1) finds that such activities are inconsistent with the public convenience and necessity. Such certificate may approve the application as filed, or with modifications, and may require compliance with conditions (other than labor protection conditions) the [Board](/usc/49/10102.md?p=1) finds necessary in the public interest.
- (d)
  - (1) When a certificate has been issued by the [Board](/usc/49/10102.md?p=1) under this section authorizing the construction or extension of a [railroad](/usc/49/10102.md?p=6) line, no other [rail carrier](/usc/49/10102.md?p=5) may block any construction or extension authorized by such certificate by refusing to permit the carrier to cross its property if—
    - (A) the construction does not unreasonably interfere with the operation of the crossed line;
    - (B) the operation does not materially interfere with the operation of the crossed line; and
    - (C) the owner of the crossing line compensates the owner of the crossed line.
  - (2) If the parties are unable to agree on the terms of operation or the amount of payment for purposes of paragraph (1) of this subsection, either party may submit the matters in dispute to the [Board](/usc/49/10102.md?p=1) for determination. The [Board](/usc/49/10102.md?p=1) shall make a determination under this paragraph within 120 days after the dispute is submitted for determination.

# §10902. Short line purchases by Class II and Class III rail carriers

- (a) A Class II or Class III [rail carrier](/usc/49/10102.md?p=5) providing [transportation](/usc/49/10102.md?p=9) subject to the jurisdiction of the [Board](/usc/49/10102.md?p=1) under this part may acquire or operate an extended or additional rail line under this section only if the [Board](/usc/49/10102.md?p=1) issues a certificate authorizing such activity under [subsection (c)](#c).
- (b) A proceeding to grant authority under [subsection (a)](#a) of this section begins when an application is filed. On receiving the application, the [Board](/usc/49/10102.md?p=1) shall give reasonable public notice of the beginning of such proceeding.
- (c) The [Board](/usc/49/10102.md?p=1) shall issue a certificate authorizing activities for which such authority is requested in an application filed under [subsection (b)](#b) unless the [Board](/usc/49/10102.md?p=1) finds that such activities are inconsistent with the public convenience and necessity. Such certificate may approve the application as filed, or with modifications, and may require compliance with conditions (other than labor protection conditions) the [Board](/usc/49/10102.md?p=1) finds necessary in the public interest.
- (d) The [Board](/usc/49/10102.md?p=1) shall require any Class II [rail carrier](/usc/49/10102.md?p=5) which receives a certificate under [subsection (c)](#c) of this section to provide a fair and equitable arrangement for the protection of the interests of employees who may be affected thereby. The arrangement shall consist exclusively of one year of severance pay, which shall not exceed the amount of earnings from [railroad](/usc/49/10102.md?p=6) employment of the employee during the 12-month period immediately preceding the date on which the application for such certificate is filed with the [Board](/usc/49/10102.md?p=1). The amount of such severance pay shall be reduced by the amount of earnings from [railroad](/usc/49/10102.md?p=6) employment of the employee with the acquiring carrier during the 12-month period immediately following the effective date of the transaction to which the certificate applies. The parties may agree to terms other than as provided in this subsection. The [Board](/usc/49/10102.md?p=1) shall not require such an arrangement from a Class III [rail carrier](/usc/49/10102.md?p=5) which receives a certificate under [subsection (c)](#c) of this section.

# §10903. Filing and procedure for application to abandon or discontinue

- (a)
  - (1) A [rail carrier](/usc/49/10102.md?p=5) providing [transportation](/usc/49/10102.md?p=9) subject to the jurisdiction of the [Board](/usc/49/10102.md?p=1) under this part who intends to—
    - (A) abandon any part of its [railroad](/usc/49/10102.md?p=6) lines; or
    - (B) discontinue the operation of all rail [transportation](/usc/49/10102.md?p=9) over any part of its [railroad](/usc/49/10102.md?p=6) lines,

    must file an application relating thereto with the [Board](/usc/49/10102.md?p=1). An abandonment or discontinuance may be carried out only as authorized under this chapter.

  - (2) When a [rail carrier](/usc/49/10102.md?p=5) providing [transportation](/usc/49/10102.md?p=9) subject to the jurisdiction of the [Board](/usc/49/10102.md?p=1) under this part files an application, the application shall include—
    - (A) an accurate and understandable summary of the [rail carrier](/usc/49/10102.md?p=5)’s reasons for the proposed abandonment or discontinuance;
    - (B) a statement indicating that each interested person is entitled to make recommendations to the [Board](/usc/49/10102.md?p=1) on the future of the rail line; and
    - (C)
      - (i) a statement that the line is available for subsidy or sale in accordance with [section 10904 of this title](/usc/49/10904.md), (ii) a statement that the [rail carrier](/usc/49/10102.md?p=5) will promptly provide to each interested party an estimate of the annual subsidy and minimum purchase price, calculated in accordance with [section 10904 of this title](/usc/49/10904.md), and (iii) the name and business address of the person who is authorized to discuss the subsidy or sale terms for the [rail carrier](/usc/49/10102.md?p=5).
  - (3) The [rail carrier](/usc/49/10102.md?p=5) shall—
    - (A) send by certified mail notice of the application to the chief executive officer of each [State](/usc/49/10102.md?p=8) that would be directly affected by the proposed abandonment or discontinuance;
    - (B) post a copy of the notice in each terminal and station on each portion of a [railroad](/usc/49/10102.md?p=6) line proposed to be abandoned or over which all [transportation](/usc/49/10102.md?p=9) is to be discontinued;
    - (C) publish a copy of the notice for 3 consecutive weeks in a newspaper of general circulation in each county in which each such portion is located;
    - (D) mail a copy of the notice, to the extent practicable, to all shippers that have made significant use (as designated by the [Board](/usc/49/10102.md?p=1)) of the [railroad](/usc/49/10102.md?p=6) line during the 12 months preceding the filing of the application; and
    - (E) attach to the application filed with the [Board](/usc/49/10102.md?p=1) an affidavit certifying the manner in which [subparagraphs (A) through (D)](#a-A..a-D) of this paragraph have been satisfied, and certifying that [subparagraphs (A) through (D)](#a-3-A..a-3-D) have been satisfied within the most recent 30 days prior to the date the application is filed.
- (b)
  - (1) Except as provided in [subsection (d)](#d), abandonment and discontinuance may occur as provided in [section 10904](/usc/49/10904.md).
  - (2) The [Board](/usc/49/10102.md?p=1) shall require as a condition of any abandonment or discontinuance under this section provisions to protect the interests of employees. The provisions shall be at least as beneficial to those interests as the provisions established under sections [11326(a)](/usc/49/11326.md?p=a) and [24706(c)](/usc/49/24706.md?p=c)[^1] of this title before May 31, 1998.
- (c)
  - (1) In this subsection, the term “potentially subject to abandonment” has the meaning given the term in regulations of the [Board](/usc/49/10102.md?p=1). The regulations may include standards that vary by region of the [United States](/usc/49/10102.md?p=10) and by [railroad](/usc/49/10102.md?p=6) or group of [railroads](/usc/49/10102.md?p=6).
  - (2) Each [rail carrier](/usc/49/10102.md?p=5) shall maintain a complete diagram of the [transportation](/usc/49/10102.md?p=9) system operated, directly or indirectly, by the [rail carrier](/usc/49/10102.md?p=5). The [rail carrier](/usc/49/10102.md?p=5) shall submit to the [Board](/usc/49/10102.md?p=1) and publish amendments to its diagram that are necessary to maintain the accuracy of the diagram. The diagram shall—
    - (A) include a detailed description of each of its [railroad](/usc/49/10102.md?p=6) lines [potentially subject to abandonment](#c-1); and
    - (B) identify each [railroad](/usc/49/10102.md?p=6) line for which the [rail carrier](/usc/49/10102.md?p=5) plans to file an application to abandon or discontinue under [subsection (a)](#a) of this section.
- (d) A [rail carrier](/usc/49/10102.md?p=5) providing [transportation](/usc/49/10102.md?p=9) subject to the jurisdiction of the [Board](/usc/49/10102.md?p=1) under this part may—
  - (1) abandon any part of its [railroad](/usc/49/10102.md?p=6) lines; or
  - (2) discontinue the operation of all rail [transportation](/usc/49/10102.md?p=9) over any part of its [railroad](/usc/49/10102.md?p=6) lines;

  only if the [Board](/usc/49/10102.md?p=1) finds that the present or future public convenience and necessity require or permit the abandonment or discontinuance. In making the finding, the [Board](/usc/49/10102.md?p=1) shall consider whether the abandonment or discontinuance will have a serious, adverse impact on rural and community development.

- (e) Subject to this section and sections [10904](/usc/49/10904.md) and [10905](/usc/49/10905.md) of this title, if the [Board](/usc/49/10102.md?p=1)—
  - (1) finds public convenience and necessity, it shall—
    - (A) approve the application as filed; or
    - (B) approve the application with modifications and require compliance with conditions that the [Board](/usc/49/10102.md?p=1) finds are required by public convenience and necessity; or
  - (2) fails to find public convenience and necessity, it shall deny the application.

# §10904. Offers of financial assistance to avoid abandonment and discontinuance

- (a) In this section—
  - (1) the term “avoidable cost” means all expenses that would be incurred by a [rail carrier](/usc/49/10102.md?p=5) in providing [transportation](/usc/49/10102.md?p=9) that would not be incurred if the [railroad](/usc/49/10102.md?p=6) line over which the [transportation](/usc/49/10102.md?p=9) was provided were abandoned or if the [transportation](/usc/49/10102.md?p=9) were discontinued. Expenses include cash inflows foregone and cash outflows incurred by the [rail carrier](/usc/49/10102.md?p=5) as a result of not abandoning or discontinuing the [transportation](/usc/49/10102.md?p=9). Cash inflows foregone and cash outflows incurred include—
    - (A) working capital and required capital expenditure;
    - (B) expenditures to eliminate deferred maintenance;
    - (C) the current cost of freight cars, locomotives, and other equipment; and
    - (D) the foregone tax benefits from not retiring properties from rail service and other effects of applicable Federal and [State](/usc/49/10102.md?p=8) income taxes; and
  - (2) the term “reasonable return” means—
    - (A) if a [rail carrier](/usc/49/10102.md?p=5) is not in reorganization, the cost of capital to the [rail carrier](/usc/49/10102.md?p=5), as determined by the [Board](/usc/49/10102.md?p=1); and
    - (B) if a [rail carrier](/usc/49/10102.md?p=5) is in reorganization, the mean cost of capital of [rail carriers](/usc/49/10102.md?p=5) not in reorganization, as determined by the [Board](/usc/49/10102.md?p=1).
- (b) Any [rail carrier](/usc/49/10102.md?p=5) which has filed an application for abandonment or discontinuance shall provide promptly to a party considering an offer of financial assistance and shall provide concurrently to the [Board](/usc/49/10102.md?p=1)—
  - (1) an estimate of the annual subsidy and minimum purchase price required to keep the line or a portion of the line in operation;
  - (2) its most recent reports on the physical condition of that part of the [railroad](/usc/49/10102.md?p=6) line involved in the proposed abandonment or discontinuance;
  - (3) traffic, revenue, and other data necessary to determine the amount of annual financial assistance which would be required to continue rail [transportation](/usc/49/10102.md?p=9) over that part of the [railroad](/usc/49/10102.md?p=6) line; and
  - (4) any other information that the [Board](/usc/49/10102.md?p=1) considers necessary to allow a potential offeror to calculate an adequate subsidy or purchase offer.
- (c) Within 4 months after an application is filed under [section 10903](/usc/49/10903.md), any person may offer to subsidize or purchase the [railroad](/usc/49/10102.md?p=6) line that is the subject of such application. Such offer shall be filed concurrently with the [Board](/usc/49/10102.md?p=1). If the offer to subsidize or purchase is less than the carrier’s estimate stated pursuant to [subsection (b)(1)](#b-1), the offer shall explain the basis of the disparity, and the manner in which the offer is calculated.
- (d)
  - (1) Unless the [Board](/usc/49/10102.md?p=1), within 15 days after the expiration of the 4-month period described in [subsection (c)](#c), finds that one or more financially responsible persons (including a governmental authority) have offered financial assistance regarding that part of the [railroad](/usc/49/10102.md?p=6) line to be abandoned or over which all rail [transportation](/usc/49/10102.md?p=9) is to be discontinued, abandonment or discontinuance may be carried out in accordance with [section 10903](/usc/49/10903.md).
  - (2) If the [Board](/usc/49/10102.md?p=1) finds that such an offer or offers of financial assistance has been made within such period, abandonment or discontinuance shall be postponed until—
    - (A) the carrier and a financially responsible person have reached agreement on a transaction for subsidy or sale of the line; or
    - (B) the conditions and amount of compensation are established under [subsection (f)](#f).
- (e) Except as provided in [subsection (f)(3)](#f-3), if the [rail carrier](/usc/49/10102.md?p=5) and a financially responsible person (including a governmental authority) fail to agree on the amount or terms of the subsidy or purchase, either party may, within 30 days after the offer is made, request that the [Board](/usc/49/10102.md?p=1) establish the conditions and amount of compensation.
- (f)
  - (1) Whenever the [Board](/usc/49/10102.md?p=1) is requested to establish the conditions and amount of compensation under this section—
    - (A) the [Board](/usc/49/10102.md?p=1) shall render its decision within 30 days;
    - (B) for proposed sales, the [Board](/usc/49/10102.md?p=1) shall determine the price and other terms of sale, except that in no case shall the [Board](/usc/49/10102.md?p=1) set a price which is below the fair market value of the line (including, unless otherwise mutually agreed, all facilities on the line or portion necessary to provide effective [transportation](/usc/49/10102.md?p=9) services); and
    - (C) for proposed subsidies, the [Board](/usc/49/10102.md?p=1) shall establish the compensation as the difference between the revenues attributable to that part of the [railroad](/usc/49/10102.md?p=6) line and the [avoidable cost](#a-1) of providing rail freight [transportation](/usc/49/10102.md?p=9) on the line, plus a [reasonable return](#a-2) on the value of the line.
  - (2) The decision of the [Board](/usc/49/10102.md?p=1) shall be binding on both parties, except that the person who has offered to subsidize or purchase the line may withdraw his offer within 10 days of the [Board](/usc/49/10102.md?p=1)’s decision. In such a case, the abandonment or discontinuance may be carried out immediately, unless other offers are being considered pursuant to paragraph (3) of this subsection.
  - (3) If a [rail carrier](/usc/49/10102.md?p=5) receives more than one offer to subsidize or purchase, it shall select the offeror with whom it wishes to transact business, and complete the subsidy or sale agreement, or request that the [Board](/usc/49/10102.md?p=1) establish the conditions and amount of compensation before the 40th day after the expiration of the 4-month period described in [subsection (c)](#c). If no agreement on subsidy or sale is reached within such 40-day period and the [Board](/usc/49/10102.md?p=1) has not been requested to establish the conditions and amount of compensation, any other offeror whose offer was made within the 4-month period described in [subsection (c)](#c) may request that the [Board](/usc/49/10102.md?p=1) establish the conditions and amount of compensation. If the [Board](/usc/49/10102.md?p=1) has established the conditions and amount of compensation, and the original offer has been withdrawn, any other offeror whose offer was made within the 4-month period described in [subsection (c)](#c) may accept the [Board](/usc/49/10102.md?p=1)’s decision within 20 days after such decision, and the [Board](/usc/49/10102.md?p=1) shall require the carrier to enter into a subsidy or sale agreement with such offeror, if such subsidy or sale agreement incorporates the [Board](/usc/49/10102.md?p=1)’s decision.
  - (4)
    - (A) No purchaser of a line or portion of line sold under this section may transfer or discontinue service on such line prior to the end of the second year after consummation of the sale, nor may such purchaser transfer such line, except to the [rail carrier](/usc/49/10102.md?p=5) from whom it was purchased, prior to the end of the fifth year after consummation of the sale.
    - (B) No subsidy arrangement approved under this section shall remain in effect for more than one year, unless otherwise mutually agreed by the parties.
- (g) Upon abandonment of a [railroad](/usc/49/10102.md?p=6) line under this chapter, the obligation of the [rail carrier](/usc/49/10102.md?p=5) abandoning the line to provide [transportation](/usc/49/10102.md?p=9) on that line, as required by [section 11101(a)](/usc/49/11101.md?p=a), is extinguished.

# §10905. Offering abandoned rail properties for sale for public purposes


When the [Board](/usc/49/10102.md?p=1) approves an application to abandon or discontinue under [section 10903](/usc/49/10903.md), the [Board](/usc/49/10102.md?p=1) shall find whether the rail properties that are involved in the proposed abandonment or discontinuance are appropriate for use for public purposes, including highways, other forms of mass [transportation](/usc/49/10102.md?p=9), conservation, energy production or transmission, or recreation. If the [Board](/usc/49/10102.md?p=1) finds that the rail properties proposed to be abandoned are appropriate for public purposes and not required for continued rail operations, the properties may be sold, leased, exchanged, or otherwise disposed of only under conditions provided in the order of the [Board](/usc/49/10102.md?p=1). The conditions may include a prohibition on any such disposal for a period of not more than 180 days after the effective date of the order, unless the properties have first been offered, on reasonable terms, for sale for public purposes.


# §10906. Exception


Notwithstanding [section 10901](/usc/49/10901.md) and subchapter II of [chapter 113](/usc/49/chstIV-ptA-ch113.md) of this title, and without the approval of the [Board](/usc/49/10102.md?p=1), a [rail carrier](/usc/49/10102.md?p=5) providing [transportation](/usc/49/10102.md?p=9) subject to the jurisdiction of the [Board](/usc/49/10102.md?p=1) under this part may enter into arrangements for the joint ownership or joint use of spur, industrial, team, switching, or side tracks. The [Board](/usc/49/10102.md?p=1) does not have authority under this chapter over construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks.