On December 29, 1999, adjoining landowners and the Citizens Association of Marion and McPherson Counties (hereafter petitioners) filed a petition to reopen the 1999 Decision. Petitioners allege that the 1999 Decision "fails to meet the mandate and directives of" Jost on the land sale issues. ⁽²⁾ In addition, petitioners contend that the trail condition permitting interim trail use/rail banking on this right-of-way should be involuntarily revoked because the trail sponsor, Central Kansas Conservancy Inc. (Conservancy), is not meeting its statutory responsibilities for taxes, legal liability and trail management. ⁽³⁾

The Conservancy has responded to the request for revocation of the trail condition, in a pleading filed February 7, 2000 (the February 2000 Pleading). The Conservancy states that it "recognizes its legal obligation to pay property taxes" pursuant to Kansas law on this property, that it is in the process of applying for a tax exemption, and that, should its request for a tax exemption be denied, "it will proceed to assist in the determination of the proper amount of taxes owed on the property actually owned."

On March 3, 2000, petitioners supplemented their petition for reconsideration with letters from the Marion County and McPherson County tax appraisers dated February 11, 2000, stating that, as of that date, the Conservancy had not filed an application for a tax exemption with either county. Based on these letters, petitioners contend that the Conservancy's February 2000 Pleading contains false and misleading information and should be stricken.

DISCUSSION

If it is shown that a trail sponsor has failed or likely will fail to pay taxes, meet past or potential liability claims, or adequately manage the trail, we will revoke the trail condition. See, e.g., T & P Ry. -- Abandonment -- In Shawnee, Jefferson, & Atchison Counties, Kan, STB Docket No. AB-381 (Sub-No. 1X) (STB served Feb. 20, 1997), at 9; Idaho N. & Pac. R.R. -- Abandonment & Discontinuance Exemption -- In Washington & Adams Counties, ID, STB Docket No. AB-433 (Sub-No. 2X) (STB served Apr. 1, 1998), at 8 (Idaho Northern). Therefore, we will not address the parties' further arguments regarding the land sale issues until we have addressed the new evidence regarding the financial responsibility of the trail sponsor here. Financial responsibility is a threshold issue because, under the Trails Act, a trail sponsor must assume managerial, tax and legal responsibility for a right-of-way for as long as the property is used as a trail. 16 U.S.C. 1247(d); Idaho Northern. In short, if the Conservancy is failing to meet its financial obligations, the trail condition must be revoked, thereby mooting the land sale issue.

Here, the evidence that the Conservancy is delinquent in its tax obligations raises sufficient questions to warrant investigating the financial responsibility matter further. However, given the Conservancy's stated intention to seek a tax exemption and its suggestion that, if that request is denied, it will pay the taxes that are owed, the fact that no request for a tax exemption had been filed by February 11, 2000 is not enough to show that the Conservancy will not meet its financial responsibilities as a trail sponsor under Kansas law.

Accordingly, we will require the Conservancy and/or CKR to show cause that the trail sponsor is meeting its responsibilities under Kansas Law for taxes, legal liability, and trail management and that this trail condition should not be involuntarily revoked. The Conservancy and/or CKR have 30 days from the date of service of this decision to respond to this show cause order and to serve a copy of the response(s) on petitioners. Petitioners may respond to the Conservancy/CKR filing(s) within 20 days of receipt of the Conservancy/CKR filing(s).

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

It is ordered:

1.. The motions to strike or reject are denied.

2. Within 30 days of the effective date of this decision, Conservancy and/or CKR are directed to show cause that the trail sponsor is meeting its responsibilities under Kansas law for taxes, legal liability, and trail management and that the trail condition should not be revoked. Conservancy and/or CKR must serve a copy of the response(s) to the Board on petitioners. Petitioners may respond within 20 days of receipt of the response(s).

3. This decision is effective on its service date.

KANSAS SOUTHWESTERN RAILWAY, L.L.C.--ABANDONMENT--IN SUMNER,

HARPER, BARBER, RENO AND KINGMAN COUNTIES, KS

Decided: June 12, 2000

A decision and certificate of interim trail use (CITU) served June 10, 1999, authorized the Kansas Southwestern Railway, L.L.C. (KSW) to abandon (1) its 57.85-mile Hardtner Branch, extending from milepost 514.00 at Conway Springs to milepost 571.85 at Kiowa; KS and (2) a 50.97-mile portion of its Stafford Branch, extending from milepost 559.028 at Conway Springs to milepost 610.00 at Olcott, KS. The June 10, 1999 decision stated that, if consummation had not been effected by KSW's filing of a notice of consummation by June 10, 2000, and there were no legal or regulatory barriers to consummation, the authority to abandon would automatically expire. Under 49 CFR 1152.29(e)(2), a railroad may, for good cause, request an extension of time to file a notice of consummation in abandonment proceedings.

In a letter dated March 24, 2000, KSW notified the Board that it had consummated abandonment of: (1) its Hardtner Branch between milepost 514.25 and milepost 571.85.; and (2) the portion of its Stafford Branch between milepost 593.31, at Kingman, KS, and milepost 610.00, at Olcott. KSW also indicated that it would subsequently notify the Board about the status of the remaining portion of the Stafford Branch between milepost 559.028 and milepost 593.31.

The CITU established a 180-day period for the City of Kingman, KS, to negotiate an interim trail use/rail banking agreement with KSW for the 3.4-mile portion of KSW's Stafford Branch between milepost 591.8 and milepost 595.2. The trail use negotiation period under the CITU expired in December 1999, but in a decision served March 24, 2000, the CITU was modified to cover only the 1.51-mile portion of the line between milepost 591.8 and milepost 593.31, with the trail use negotiating period extending until July 5, 2000. ⁽¹⁾

On May 25, 2000, KSW filed a request to extend, until December 11, 2000, the time to consummate the abandonment and to file its notice of consummation for the portion of the Stafford Branch between milepost 559.028 and milepost 591.8. KSW states that it recently agreed with the state of Kansas to relocate a portion of its rail line near Kingman and to rehabilitate and continue operating most of its line between milepost 559.028 and milepost 591.8. According to KSW, a short segment of the line near Kingman will become unnecessary for future operations after the relocation and rehabilitation project is completed. KSW states that, at this time, it is unclear which portion of the line would no longer be needed. KSW indicates that it does not want to risk mistakenly abandoning a segment of track that will be needed for the relocation project and future operations. Nor does it want to lose abandonment authority for the small segment that would not be needed for future operations. It requests the 6-month extension to determine which portion of the line can be abandoned without jeopardizing its agreement with the State.

KSW has shown good cause to extend the time to consummate the abandonment and for filing a notice of consummation in this proceeding. Accordingly, the request will be granted.

It is ordered:

1. KSW's request for an extension of time to consummate the abandonment is granted.

2. The authority to abandon must be exercised on or before December 11, 2000.

3. This decision is effective on its service date.

By the Board, David M. Konschnik, Director, Office of Proceedings.

Vernon A. Williams

Secretary

1. KSW was therefore free to fully abandon the 1.89-mile segment of the line between milepost 593.31 and milepost 595.2, as long as all conditions previously imposed as to that segment had been met.

By joint letter filed July 24, 2000, ITC has requested an extension of the negotiating period for an additional 180 days in which to negotiate a trail use agreement and CKR has indicated that it is agreeable to the extension request. The parties state that they did not complete negotiations by the June 15 date, but note that CKR has not consummated abandonment of the line.

An extension of the trail use negotiating period may be granted as long as the Board retains jurisdiction over the involved railroad right-of-way ⁽²⁾ and the carrier is willing to continue negotiations. Inasmuch as CKR has not consummated the abandonment and has indicated a willingness to continue to negotiate, the extension request can be granted.

The requested extension of the negotiating period will promote the establishment of trail use and rail banking consistent with the National Trails System Act, 16 U.S.C. 1247(d). Accordingly, the extension will be granted.

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.