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ATLP Association Highlights: PASSENGER RAIL UPDATE

Introduction

Recent news in the passenger rail transportation regulatory field includes the following:

♦   FRA Awards $47.5M to CRISI Grant to NCDOT
♦   FRA Plans Releases Final Rule of Particular Applicability and Record of Decision for Texas Central Railroad
♦   Massachusetts’ Lawmakers Push for State Acquisition of Pan Am Railways
♦   Colorado Receives Funding for Passenger Rail Study
♦   Montana Hosts Virtual Rail Passenger Summit

Read on for details.









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STB Determines that Texas Central Passenger Railroad Is Subject to its Jurisdiction

A proposed high-speed passenger railroad between Dallas and Houston has successfully convinced the federal Surface Transportation Board (STB) that it has jurisdiction over the proposed Texas rail line. While STB jurisdiction will greatly aid the rail line by generally preempting state and local regulation, the STB's order has added federal requirements that will have to be addressed. FD 36025 (STB Served July 16, 2020)

Texas Central Railroad and Infrastructure Inc. and its subsidiary, Texas Central Railroad LLC (Texas Central), had lost an initial effort to secure federal jurisdiction over its planned line of railroad in 2016. That's when the STB found that Texas Central's operation, as then presented, would be purely in intrastate commerce. With this most recent decision, the STB rules that Texas Central's new plans will make it part of the "interstate rail network" and place it squarely in the realm of interstate commerce and the STB's exclusive jurisdiction.

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Ninth Circuit Rules that Oregon Tax Discriminated Against BNSF in Violation of 4-R Act

On July 8, the United States Court of Appeals for the Ninth Circuit issued a decision affirming a district court ruling in favor of BNSF Railway Company (BNSF) regarding the railroad’s challenge to Oregon’s tax on intangible personal property as a discriminatory tax on railroads in violation of the Railroad Revitalization and Regulatory Reform Act (4-R Act).  BNSF Ry. Co. v. Or. Dep’t of Revenue, 965 F.3d 681 (9th Cir. 2020).

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The Board Issues a Final Rule in the Market Dominance Streamlined Approach Proceeding

The Board adopted a final rule establishing a streamlined approach for pleading market dominance in rate reasonableness proceedings.  Market Dominance Streamlined Approach, Ex Parte 756 (STB served Aug. 3, 2020).  This decision finalized a notice of proposed rulemaking (NPRM) served in this proceeding on September 12, 2019.  The Board received comments from over 20 entities on the NPRM.  As explained below, the Board in the final rule adopted the NPRM proposals with minor modifications.

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The Board Withdraws Proposal to Revise its Methodology for Determining the Railroad Industry’s Cost of Capital

On June 23, the Board withdrew its proposal to revise its methodology for calculating the cost-of-equity component of the railroad industry’s cost of capital by incorporating a third model, based on comments and replies the Board received in response to the notice of proposed rulemaking (NPRM).  Revisions to the Board’s Methodology for Determining the R.R. Indus.’s Cost of Capital, Ex Parte 664 (Sub-No. 4) (STB served June 23, 2020). 

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Passenger Rail Update

Introduction
 
            The passenger rail sphere has seen a number of developments in the spring of 2020 on the regulatory and funding fronts, including:

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Talking Transportation with Jay Fox - SEPTA Deputy General Counsel

This week’s ATLP Highlights Blog features an interview that I recently conducted with Jay Fox, Deputy General Counsel for the Southeastern Pennsylvania Transportation Authority (“SEPTA”).

SEPTA serves the Philadelphia metropolitan area operating: bus, rapid transit, commuter rail, light rail, and electric trolleybus service.  The transit agency employs over 9,000 people and logs nearly 1.5 trillion passenger miles per year across all modes.

Jay began his career in private practice as a litigator and then as general counsel to an export management firm before joining the Federal Aviation Administration (“FAA”) only a month after the September 11 terrorist attacks.  He then went on to the Federal Transit Administration and Amtrak prior to joining SEPTA. Jay is a graduate of Rutgers Law School.

Jay and I spoke via zoom as both Philadelphia, where Jay lives, and metro Washington D.C., my home, are currently under “stay-at-home” orders in response to the Covid-19 Pandemic.





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