Railbanking

In the United States, railbanking is a legal mechanism that preserves out-of-service railroad corridors for potential future rail use by converting them into interim multi-use rail trails. Established in 1983 as an amendment to the National Trails System Act—often referred to as the Rails-to-Trails Act—the policy allows a railroad company to reach a voluntary agreement with a public or private trail sponsor, such as a municipality, state agency, or land trust. During this interim use, the trail sponsor assumes full responsibility for the corridor, relieving the railroad of maintenance, liability, and taxation.

Crucially, railbanking prevents a rail line from being legally abandoned. By keeping the corridor under the continuous jurisdiction of the federal Surface Transportation Board (STB), railbanking preempts state laws that would otherwise dissolve the railroad easements and revert the land to adjacent property owners. While the continuous property lines and structural infrastructure like bridges and culverts are preserved, the physical steel rails and wooden ties are typically removed and sold as salvage to make way for an improved trail surface. Because the corridor remains legally intact in the "bank," the railroad retains the right to re-establish active rail service should future economic conditions warrant it.