TransportationHigh Speed Rail Project May Proceed With Application to Federal Agency, No Exemption Granted

Reversing a previous decision, the Surface Transportation Board said it will be the controlling agency over Texas Central's high-speed rail project and will require the railroad to submit a full application.
July 28, 2020
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Reversing a previous decision, the Surface Transportation Board (STB) has declared its jurisdiction over Texas Central Railroad, but the railroad will be subject to full regulatory and financial scrutiny through the application process. 

Texas Central may now apply to the STB in order to construct and operate a high-speed rail from Dallas to Houston; however, it will not be granted the application exemption it sought. 

An application “is appropriate given the magnitude of the project, the questions about increased costs and funding sources, the substantial public interest, and the potential impact on numerous local landowners,” the board’s decision stated.

Federal law (49 U.S.C. §10901) requires that a railroad apply for and receive permission to construct a railroad line from the STB. The application requires public notice and may include conditions for construction.

As part of its petitions in 2016 and 2018, Texas Central sought an exemption from application requirements as allowed by 49 U.S.C. § 10502. 

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An independent federal agency, the STB is charged with the economic regulation of various modes of surface transportation, including railroads. Its jurisdiction includes “railroad rate, practice, and service issues” and line construction.

The STB found in its original decision in 2016 that it lacked jurisdiction over Texas Central because it was not “part of the interstate rail network.” 

Not only did the plan lack a direct physical connection with Amtrak, but the “proposed Line would have no direct connection with Amtrak, such as a shared station or a clearly defined arrangement to connect passengers” as through ticketing.

In May 2018, Texas Central filed a petition to reopen the proceeding because it claimed “substantially changed circumstances.”  

At least 13 U.S. congressional representatives from Texas, both Democrats and Republicans, submitted comments in support of Texas Central. Representatives Ron Wright (R-TX-6), Louie Gohmert (R-TX-01), and Kevin Brady (R-TX-8) submitted comments in opposition to the project.

Reversing its previous decision, the Surface Transportation Board decided in favor of Texas Central, finding that it would now be part of an interstate rail network because it has reached an agreement with Amtrak for single ticketing and transfer services. 

Opponents, such as Texans Against High Speed Rail (TAHSR), argued that this ticketing provision is insufficient to establish an interstate rail network, constituting the “barest, de minimis tangential relationship to the interstate rail network.”

However, the STB declared that the “clearly defined through-ticketing arrangement with Amtrak and a transfer service that would facilitate a practical and continuous movement of passengers in interstate commerce,” the board granted that it now has jurisdiction over the project as part of the interstate railway network.

In response to the decision, a spokesperson for Texas Central said, “Texas Central is very pleased that the [Surface Transportation Board] has rendered their unanimous decision to advance the high-speed rail project between Dallas and Houston. This decision is an important milestone for Texas Central, Texas and the United States. We look forward to working with the STB, DOT and FRA to move this historic project forward.”

Texas Central however did not receive the exemption it sought.  A full application will be required “in light of questions surrounding the financial feasibility of the proposed project.”  

Opponents submitted to the STB that the project, originally projected to cost over $10 billion, is now projected to cost at least $16.5 billion and possibly as much as $30 billion, as stated in an April letter by Texas Central chairman Drayton McLane.

In its original filing with STB in 2016, Texas Central estimated the cost to be $10 billion and asserted that it would be privately financed. More recently, Texas Central has indicated it will explore federal funding. 

Opponents also pointed to questions about the sufficiency and availability of funds for the project, arguing that the STB should substantiate funding claims by Texas Central through the application process.  

Regarding eminent domain, the board clarified that its decision does not confer any federal power to take private property. Those issues rest in state law.  

In May of this year, the 13th Texas Court of Appeals ruled that the project can exercise the power of eminent domain because it qualifies as a railroad under Texas law.

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Kim Roberts

Kim Roberts

Kim Roberts is a reporter for the Texan in the DFW metroplex area where she has lived for over twenty years. She has a Juris Doctor from Baylor University Law School and a Bachelor's in government from Angelo State University. In her free time, Kim home schools her daughter and coaches high school extemporaneous speaking and apologetics. She has been happily married to her husband for 23 years, has three wonderful children, and two dogs.