Surface Transportation Board (STB) has agreed to examine "paper barrier" provisions

10/31/07

The Surface Transportation Board (STB) has agreed to examine "paper barrier" provisions on a case-by-case basis. Paper Barriers are a common provision in rail line lease or sale agreements. These restrict a tenant or purchasing railroad from interchanging traffic with carriers other than the railroad leasing the line or selling railroad. The STB is proposing new disclosure rules to ensure advance regulatory scrutiny of any such provisions involving a new sale or lease. The STB also plans to issue expedited discovery rules to ensure parties challenging an existing interchange commitment can obtain quick access to the carriers' agreement. Under the proposed regulations, the STB would require parties to identify any interchange commitment and the affected interchange points when seeking board authorization for the sale or lease of a rail line. The board is accepting comments on the proposed regulations until Jan. 2. Replies will be due Jan. 22.