Surface Transportation Board Acts To Protect Integrity Of Its Financial Assistance Process

Paul R. Hitchcock is a Senior Policy Advisor in our Jacksonville office.

The Surface Transportation Board (STB) has adopted new rules to prevent abuse of offers of financial assistance (OFAs) under the ICC Termination Act of 1995. Under the OFA process, a party that wants to preserve rail service on a line about to be shut down can offer to subsidize, or even purchase, the line to continue operations.

A rail carrier needs authority from the STB to abandon or discontinue service on a line of railroad. A shipper or community for which rail service is important has the opportunity to preserve service, providing it is willing to make the financial contribution to justify continuing operations. Alternatively, a third party that believes it can be successful operating the line may seek to take on the role, if it is willing to purchase the assets.