Privatizing NEC would be unconstitutional

[Tracktwentynine]

As reported in the The Hill, the Congressional Research Service has opined that Representative Mica's proposal to split the NEC off from Amtrak is unconstitutional. They posit that the transaction violates the takings clause of the Constitution.

From the article:

The Congressional Research Service said this week that the House Republican plan to privatizing rail service currently provided by Amtrak would violate the Takings Clause of the U.S. Constitution.
Looking into the proposal at the behest of Democrats on the House Transportation and Infrastructure Committee, the CRS ruled that the proposal to transfer assets in the Northeast Rail Corridor currently owned by Amtrak to the Department of Transportation runs afoul of the constitutional provision that requires compensation for transactions of value.

"The terms of the clause make plain that if the proposed bill were enacted, Amtrak would be able to invoke the clause's protections if (1) Amtrak may be regarded as an entity outside the federal government for Takings Clause purposes … (2) the Amtrak assets to be transferred to the Secretary are 'property' under the Clause and (3) the transfer is a 'taking' under the clause," the CRS report obtained by The Hill said.

"There is little doubt that all three of these prerequisites for invoking the Takings Clause are satisfied," the report continued.

...

 

[Devil's Advocate]

Oh well, at least Mica put to rest any notion that he's pro-Amtrak.

 

[PaulM]

Privatizing the NEC might be dumb as dirt; but this is grasping at straws. The government could simply negotiate a fair price for the NEC and then deduct that from the general subsidy. There's is no constitutional requirement to subsidize Amtrak, only a choice made by the people through their representatives.

 

[GG-1]

Oh well, at least Mica put to rest any notion that he's pro-Amtrak.

Aloha

Doesn't matter if he is "pro Amtrak", what maters is he or anyone in govt.is pro an alternate transportation system for this country. Then if they are pro, then Amtrak represents a major national transportation system.

 

[afigg]

Now that is interesting. So if Chairman Mica wants to take the NEC back from Amtrak (or those sections Amtrak owns), the federal government would have to compensate Amtrak for the value of the property. That could be a pretty hefty sum. Probably more than enough to get the NEC up to a state of good repair and up to the long sought after speeds, which would be ironic.

I have not followed the whole Mica and House Republican proposal all that closely because I figured it was dead on arrival. What are they proposing to do about the sections of the NEC owned by MTA/NY state, CDOT, and MBTA? Or did they even address that in their bill?

 

[Tracktwentynine]

Privatizing the NEC might be dumb as dirt; but this is grasping at straws. The government could simply negotiate a fair price for the NEC and then deduct that from the general subsidy. There's is no constitutional requirement to subsidize Amtrak, only a choice made by the people through their representatives.

Okay, so you realize that the people "grasping at straws" are the Congressional Research Service, the people who are paid to know (or find out) about these things, right?

Secondly, Mica's proposal does not compensate Amtrak for anything. It doesn't matter what it would be like if the proposal did X, if it's not going to do X. Or to put it more simply, if I go into a store and grab a flatscreen TV and walk out without paying, my lawyer is not going to get me off by saying, "but it wasn't robbery because he could have paid." All that matters to the court is that I didn't pay.

Mica's proposal: Take the NEC from Amtrak and don't give Amtrak any money for it.

US Constitution: "nor shall private property be taken for public use, without just compensation."

Congressional Research Service: Amtrak is a separate entity from the US Government, therefore, it's property cannot be taken without just compensation.

Therefore: Mica's proposal = unconstitutional.

 

[bretton88]

Now that is interesting. So if Chairman Mica wants to take the NEC back from Amtrak (or those sections Amtrak owns), the federal government would have to compensate Amtrak for the value of the property. That could be a pretty hefty sum. Probably more than enough to get the NEC up to a state of good repair and up to the long sought after speeds, which would be ironic.

I have not followed the whole Mica and House Republican proposal all that closely because I figured it was dead on arrival. What are they proposing to do about the sections of the NEC owned by MTA/NY state, CDOT, and MBTA? Or did they even address that in their bill?

Those where addressed. The only section of the corridor that is being dealt with is the WAS-NYC section. The rest of it will be left to the ownership of the states. And by the way, this is not a sell off. it would be simply a splitting of Amtrak into ownership and operation. USDOT will still control the tracks. They will then "auction off" operating rights, which Amtrak operations can bid for. There is not taking, just a "transfer" from one sub-department to another. The big question is whether Amtrak is a private corporation or a government agency. That will be left up to the courts. If its a private company, then USDOT will have to pay big to get control. If it's a government agency, then its a simple transfer. The irony is that USDOT has already paid for the corridor once (they provided the purchase money for amtrak to buy the corridor).

 

[transit54]

Privatizing the NEC might be dumb as dirt; but this is grasping at straws. The government could simply negotiate a fair price for the NEC and then deduct that from the general subsidy. There's is no constitutional requirement to subsidize Amtrak, only a choice made by the people through their representatives.

Paul, I'm not sure I'm following your argument, but I maybe just don't understand what you are saying. The way I understand it, in order to transfer the Northeast Corridor from Amtrak, Amtrak would need cash compensation (assuming it was found to be an independent entity). The value of NEC has to be unbelievably immense - I think we'd be talking about tens of billions of dollars, if not more. The NEC runs through some of the most expensive and densely developed land in the entire country, and compensation would be required not only for the land, but the rails, catenary, substations, dispatching facilities and potentially any stations that Amtrak owns outright. It would greatly exceed Amtrak's current subsidies by a large margin.

In a sense, Amtrak could theoretically be paid and have it's subsidy eliminated for 15 years or whatever the equivalent amount would be, but that money would need to be paid to them upfront to be in compliance with court decisions on the takings clause.

Is that what you meant, or am I totally off base here?

 

[PaulM]

In a sense, Amtrak could theoretically be paid and have it's subsidy eliminated for 15 years or whatever the equivalent amount would be, but that money would need to be paid to them upfront to be in compliance with court decisions on the takings clause.

Is that what you meant, or am I totally off base here?

That's basically what I had in mind. But if others are correct that negotiations are not part of the proposed bill, then it doesn't apply.