Interim Joint Committee on Transportation

Minutes of the<MeetNo1> Fifth Meeting

of the 2003 Interim

<MeetMDY1> October 7, 2003

The<MeetNo2> fifth meeting of the Interim Joint Committee on Transportation was held on<Day> Tuesday,<MeetMDY2> October 7, 2003, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Senator Virgil Moore and Representative Hubert Collins, jointly chaired the meeting.  Senator Moore called the meeting to order, and the secretary called the roll.

Present were:

Members:<Members>  Senator Virgil Moore, Co-Chair; Representative Hubert Collins, Co-Chair; Senators Charlie Borders, Paul Herron Jr, Ray Jones II, Daniel Kelly, Albert Robinson, Ernesto Scorsone, Gary Tapp, and Johnny Ray Turner; Representatives Eddie Ballard, Carolyn Belcher, Denver Butler, Howard Cornett, Jodie Haydon, Paul Marcotte, Charles Miller, Russ Mobley, Lonnie Napier, Rick Nelson, Don Pasley, Marie Rader, Rick Rand, Ancel Smith, Jim Stewart, Jim Thompson, Tommy Turner, and John Vincent.  Senator Bob Leeper attended the meeting via teleconference from the Crisp Center in Paducah, Kentucky.

Guests Appearing Before the Committee:  Steve Blackistone, National Transportation Safety Board, Washington, D. C.; Mack Bushart, Commissioner, Department of Vehicle Regulation, and Eddie Deskins, Director, Division of Motor Vehicle Licensing, Kentucky Transportation Cabinet; Jim Adams, Resident Vice President for State Relations, CSX Railroad; and Jim Oaks, Member of the Board of Directors, R. J. Corman Railroad Group.

LRC Staff:  Kathy Jones, John Snyder, Geri Grigsby, Bryan Sunderland, and Linda Hughes.

The first item on the Committee’s agenda was a discussion of safety Issues by Mr. Steve Blackistone, National Transportation Safety Board (NTSB), Washington, D. C.

Mr. Blackistone said that NTSB is an independent Federal agency charged by Congress to investigate transportation accidents, determine their probable cause, and make recommendations to prevent their recurrence.  He said NTSB has neither regulatory authority or grant funds, but in its 36-year history, organizations and government bodies have adopted more than 80 percent of its recommendations.

Mr. Blackistone said that NTSB recognized for many years that traffic crashes are one of this nation’s most serious transportation safety problems.  More than 90 percent of all transportation related deaths, each year, result from highway crashes.  And, with nearly 1,000 persons killed on Kentucky highways in 2002, Kentucky faces a significant problem.  Mr. Blackistone said that he wanted to focus on just three of the important highway safety issues NTSB sees Kentucky facing: the alcohol-highway safety problem, the teen driving problem; and the safety of 15-passenger vans.

Mr. Blackistone said that impaired driving is one of the most often committed crimes.  It kills someone in America every 30 minutes and almost 41 percent of the country’s highway deaths are alcohol-related.  He said that alcohol-related fatalities, nationwide, has increased in each of the past three years, costing society over $17 billion per year.  Mr. Blackistone noted that while the affected individual covers some of these costs, those not directly involved in crashes pay for nearly three-quarters of all crash costs, primarily through insurance premiums, taxes, and travel delay.

Mr. Blackistone reminded the members that the worst alcohol-related highway collision, nationwide, occurred in Carrollton, Kentucky in 1988.  He said 27 Kentuckians were killed and another 34 were injured in that bus crash.  He also stated that ninety minutes after the crash, the blood alcohol content (BAC) of the pick-up driver who hit the bus was 0.26 percent.  He said that NTSB considers the pick-up driver a hard core drinking driver.  Anyone driving with a BAC of 0.15 percent or greater is considered by NTSB to be a hard core drinking driver.  Mr. Blackistone said that from 1983 through 1998, more than 137,000 people died in crashes involving hard core drinking drivers, and analysis of current fatality numbers reveals that more than 48 percent of the alcohol-related deaths involved these type drivers.

Mr. Blackistone said that most experts agree that impaired drivers persist in their behavior because they believe that they will not be caught or convicted. He said the problem of hard core drinking drivers is complex and that they require different approaches.  Mr. Blackistone stated in 2000, NTSB asked states to implement a comprehensive program which would include stronger sanctions for first offenders with a high BAC, administrative license revocation, vehicle sanctions, and accurate record keeping.  Mr. Blackistone said that the nation needs a comprehensive system of prevention, apprehension, sanction, and treatment to reduce the crashes, injuries, and fatalities caused by hard core drinking drivers.

Mr. Blackistone stated that high BAC offenders are likely to be repeat offenders, and are substantially more likely to be involved in fatal crashes.  He said the Insurance Institute for Highway Safety has estimated that the relative fatality risk for drivers in single-vehicle crashes with a high BAC is 385 times that of a zero-BAC driver and for male drivers the risk is 607 times that of a sober driver.  Mr. Blackistone said that Kentucky’s law provides enhanced penalties for drivers having a BAC of 0.18 percent or greater and that NTSB would like to see Kentucky lower that level to 0.15 percent.

Mr. Blackistone stated that while Kentucky prohibits prosecutors from accepting pleas to lesser, non-alcohol-related charges, it still allows diversion for first offenders.  He said diversion systems are flawed and research indicates that offenders who receive diversion recidivate faster than offenders receiving conviction and traditional sanctions.  Mr. Blackistone commented that diversion programs interferr with a state’s ability to retain accurate records and a subsequent DUI conviction may not cause an individual to be identified as a repeat offender.

Mr. Blackistone said that NTSB promotes the Administrative License Revocation (ALR) which gives law enforcement officers the authority, on behalf of the state licensing agency, to confiscate the license of any driver who either fails or refuses to take a chemical breath test.  Once a driver’s license has been confiscated, the driver is issued a temporary license that is valid for a short, specified period of time.  During that time he or she may seek an administrative hearing to determine if the driver failed or refused to take a breath test.   The driver may still face criminal proceedings, but the important thing is that that driver is off the road sooner.  Mr. Blackistone stated that opponents of ALR argue that it is unconstitutional – that it denies the impaired driver due process.  However, ALR has not been declared unconstitutional in any state, to the contrary, the U. S. Supreme Court ruled that revocation of a license, prior to an administrative hearing is not a violation of due process as long as there are provisions for a swift post-suspension hearing.

Mr. Blackistone said that the U.S. Department of Justice conducted a study that demonstrated that states with ALR have reduced recidivism rates among drinking/driving offenders.  The most startling effect was found in North Dakota where the recidivism declined by nearly 40 percent, suggesting the potential for long-term behavior modification.  He said that this study is consistent with others that indicate, even though some drivers will continue to drive after revocation, they tend to drive less frequently and more cautiously.  The concern that the lost driving privileges, especially in rural areas, would result in the loss of a job, prompted studies in New Mexico, Mississippi, and Delaware.  He noted that in all three states, the problem was minimal.   Delaware, a rural state with little public transit, revealed only 1.2 percent of those whose licenses were revoked lost their jobs.  The study also revealed that loss of employment resulting from the loss of a driver’s license was unusual.  Mr. Blackistone urged the Committee to take another look at administrative license revocation during the 2004 Session.

With regards to vehicle sanctions, Mr. Blackistone provided the following statistics: 

· License plate impoundment reduces recidivism by 50 percent;

· Vehicle immobilization reduces recidivism by 36 percent;

· Vehicle impoundment reduces subsequent convictions by 18 to 34 percent and subsequent crashes by 25 to 34 percent;

· Vehicle forfeiture reduces crashes by 14 percent and alcohol-related fatalities by 32 percent; and

· Ignition interlocks are especially effective while they are on the vehicle and reduces recidivism by 62 to 75 percent.

Mr. Blackistone said another major highway safety issue is teen driving.  He said crash rates for teen drivers are significantly higher than crash rates for other drivers.  Teen drivers represent about 6.6 percent of the driving population, but comprise about 14 percent of the fatal crashes.  And, 22 percent of all highway fatalities occur in crashes involving teen drivers.  In 2001, Kentucky teens made up a little more than 5 percent of the state’s driving population, while almost 23 percent of the deaths occurred in crashes involving teen drivers. 

Mr. Blackistone noted that almost 50 percent of teen’s fatalities occurred at night.   Traffic crashes account for 40 percent of all deaths among 15-20 year olds, making traffic crashes the leading cause of death for this age group.  He said that NTSB believes that once young people learn the mechanics of driving, they should receive additional “on-the-job” training, without unnecessary distractions, and with the assistance of a more mature and experienced driver.  As the teens’ skills and maturity develop, teen drivers can proceed to full licensure.

Mr. Blackistone said NTSB recommends a three-stage teen driving system, a learner’s permit, intermediate or provisional license, and a full license.  The graduated driver license (GDL) program should also include driver education, parent participation, restricted night driving, and rapid corrective action following at fault crashes and violations.  He said the basic elements for a GDL program should include:

· Minimum 6 month holding period for the learner’s permit, during which the permit holder is supervised by a license driver, who is at least 21 years old.

· At least 50 hours of supervised driving practice with a licensed driver, who is at least 21 years old.

· Minimum 6 months without at-fault crashes or traffic violations before proceeding to the intermediate or provisional license.

· An intermediate phase that include a nighttime driving restriction, a limitation on the number of passengers, and a prohibition on cell phone use by the young novice driver.

· Minimum 6 month holding period for the intermediate or provisional license.

· The nighttime driving restriction should prohibit the intermediate or provisional license holder from driving unsupervised at night, particularly between the hours of midnight and 6:00 a.m.

· The passenger restriction should allow not more than one passenger in the vehicle, unless the driver is accompanied by a supervising adult.

· Mandatory seatbelt use and zero tolerance of alcohol use at each stage.

· Accelerated penalties for at-fault crashes or traffic violations at each stage.

Mr. Blackistone informed the members that a 1977 study of North Carolina’s crash data, since it implemented a 9:00 p.m. to 5:00 a.m. nighttime driving restriction for teens, found at least a 25 percent reduction in injuries and deaths involving 16-year old drivers.  He said Iowa realized a 20 percent reduction in teen traffic crashes a year after it restricted teen nighttime driving, and 16- year old drivers received 38 percent fewer traffic citations in that year.  Mr. Blackistone stated that 43 percent of teen motor vehicle deaths in 2001 occurred between 9:00 p.m. and 6:00 a.m.  He also noted that a 1984 study of nighttime driving restrictions in four states found among 16 year old drivers that crashes were reduced by 69 percent in Pennsylvania, 62 percent in New York, 40 percent in Maryland, and 25 percent in Louisiana.

With regard to passenger restrictions for teen drivers, Mr. Blackistone said that teen drivers generally have more passengers than older drivers, and these passengers are usually the drivers’ peers, which results in a deadly combination of inexperience and immaturity.  He said that the risk of death among 16 and 17 year old drivers who have at least one passenger in the car is significantly greater compared to driving alone, and that that risk increases with an increase in passengers.

Mr. Blackistone said that statistics show that two-thirds of teenage vehicle deaths occur in vehicles driven by teenagers.  More teenagers die in vehicles driven by 16 year olds than in vehicles driven by 17, 18, or 19 year olds.  The NTSB found that teen drivers were involved in 6.796 single vehicle fatal crashes from 1997 through 2001.  Sixty-seven percent of the passengers killed in crashes involving teen drivers were teenagers themselves between the ages of 15 and 19, and 17 percent were younger than 14 years of age.

Mr. Blackistone said that there has been a remarkable movement to enact passenger restrictions since they were first implemented in the mid-1990s.  Today, Mr. Blackistone said 21 states and the District of Columbia have added passenger restrictions to their graduated licensing systems.  These include all but 2 of the 7 states that border Kentucky.

The jurisdictions adopting passenger restrictions have generally followed a model law developed by the National Committee on Uniform Traffic Laws and Ordinances.  Provisions of the model law, according to Mr. Blackistone, include:

· No more than one passenger is allowed;

· The passenger restriction is in effect throughout the provisional license period;

· Passengers under age 20 may not ride with provisional license holders without a supervising adult driver present; and,

· Passenger exemptions are granted for family members to ride with an unsupervised provisional licensed driver.

Mr. Blackistone said the NTSB believes Kentucky should restrict young drivers from carrying more than one passenger under the age of 20 until they receive an unrestricted license, or for at least 6 months, whichever is longer.

A new teen restriction recommended by the NTSB is that states should consider restricting the use of cell phones.  Mr. Blackistone said that this recommendation was prompted by a crash near Largo, Maryland where a Ford Explorer driven on Interstate 495 by a 20 year old novice driver, talking on her cell phone, veered off the left side of the roadway, crossed over the median, climbed a guardrail, flipped over and landed on top of a southbound Ford minivan, which was carrying 4 passengers.  He said all five individuals died as a result of this crash.

Mr. Blackistone stated the NTSB realizes more data is needed to determine the full scope of driver distraction, but noted that according to Cellular Telecommunications & Internet Association, there are approximately 145 million subscribers as of May 2003.  He noted the potential for distraction is growing and urged Kentucky to prohibit teen drivers from using cell phones while driving.

The last safety issue Mr. Blackistone discussed with the Committee was the use of 15-passenger vans.  He said that in the last three years NTSB has investigated 11 crashes involving 15-passenger vans.  The accidents involved a daycare center transporting children, church vans, a college sports team, farm workers, and a family.  A total of 60 people were killed and 77 injured in these 11 accidents.

Mr. Blackistone said that NTSB identified several factors that contribute to the dangers posed by 15-passenger vans.  He noted that passenger vans are not required to meet the same Federal motor vehicle safety standards as passenger vehicles, even though vans are used in a similar manner.  Vans also have a higher center of gravity and different handling characteristics than traditional passenger vehicles, making passenger vans more prone to rollovers.  And drivers of these vehicles do not have special licensing or training requirements.

Mr. Blackistone commented that more efforts need to be made to impress upon drivers the inherent danger of operating 15-passenger vans, particularly when fully loaded, and educating drivers about proper handling and control, particularly during emergency situations.  He noted that drivers operating vehicles carrying more than 15 passengers are required to have Commercial Drivers Licenses that come with specialized training, and the same should hold true for drivers of 15-passenger vans.  Mr. Blackistone said that Kentucky should pursue statutory changes to require a special endorsement for operating 15-passenger vans.

Mr. Blackistone said that NTSB continues to advocate its recommendation on licensing proper transportation vehicles for school age children.  He said that in 1999, NTSB asked states to require that all vehicles carrying more than 10 passengers and transporting children to and from school or school-related activities meets the school bus structural standards.  School buses are built with extra safety features that 15-passenger vans do not have, such as compartmentalization, roof rollover protection, and specialty devices, such as flashing lights, swing-out arms, emergency egress areas, fire extinguishers, the bright yellow color, etc. 

In conclusion, Mr. Blackistone said that in 2002, 915 people lost their lives in traffic crashes on Kentucky roads, and this fact alone should cause the state to make improving highway safety a top priority in the next legislative session. 

Senator Borders commented that Mr. Blackistone’s testimony portrayed SUVs and mini vans as unsafe, and asked if NTSB considered them so.  Mr. Blackistone said no, however the larger vehicles usually have more problems with gravity.

Representative Mobley asked if Mr. Blackistone had any accident data on 18-wheelers.  Mr. Blackistone said not with him, but that they usually find that the smaller vehicles are usually responsible for the accident and there is usually a fatality within the smaller vehicle.  Mr. Blackistone commented that there is currently controversy at the Federal level on how many hours individuals operating large commercial vehicles should be able to drive without a break.

Chairman Moore asked if trucks towing three-units were a problem.  Mr. Blackistone said there is a matter of controversy over their safeness when considering weight and maneuverability, and the issue of weight shifting.

Representative Miller asked Mr. Blackistone if NTSB had any thoughts on whether it believed the independent driving schools were better than school related driver education programs.  Mr. Blackistone said that NTSB was looking at various driver education courses but still considered this training to be the tip of the iceberg. 

Chairman Collins questioned whether the unfamiliarity of driving a new vehicle played as much of a part, if not more, than the use of a cell phone during the accident of the 20 year-old in Maryland cited by Mr. Blackistone.  Chairman Collins noted there are many distractions when driving a vehicle and that cell phones are only one of those distractions.  Mr. Blackistone commented that that could be true, however, cell phone usage rate increases 10 to 15 percent each year, which the NTSB sees as a problem. 

Chairman Collins asked Mr. Blackistone if he had any data on the Kentucky fatalities and seatbelt usage.  Mr. Blackistone replied that of Kentucky’s 2002 fatalities, approximately 70 percent of those individuals were not wearing seatbelts.

Chairman Collins asked what was the average increase in seatbelt usage when a state changed from secondary enforcement to primary enforcement.  Mr. Blackistone said usually seatbelt usage would increase by approximately 15 percent.  He noted that Kentucky’s current rate of seatbelt usage was 65 percent, 15 percent below the national average.

Chairman Collins asked if NTSB had data on accidents involving all-terrain vehicles on highways.  Mr. Blackistone said no, not to his knowledge. 

Chairman Moore asked Mr. Blackistone where he obtained his figure that 65 percent of Kentuckians used seatbelts.  Mr. Blackistone noted the University of Kentucky Transportation Center and other national surveys.  He said that NTSB found that these studies were carefully monitored and that they tended to use compatible data.

Senator Robinson asked if Mr. Blackistone’s crash statistices involving older drivers revolved around property damage only accidents.  Mr. Blackistone said no, his comments were limited to fatal accidents.  He said that NTSB was still investigating the crash where an elderly gentleman ran down several people in California by mistakenly stepping on the automobile’s excelerator instead of the brakes.  He noted that the NTSB knows senior citizen groups are very sensitive to developing driving restrictions based upon age of the driver.

Representative Haydon commented that he was dismayed to find that NTSB did not consider the use of seatbelts a major highway safety issue and questioned Mr. Blackistone as to why his testimony did not include this issue.  Mr. Blackistone said that NTSB considers the use of seatbelts as one of the most important issues in saving lives in vehicle crashes.  He said the issues discussed today were at the direction of Chairman Moore who had asked him to make a presentation on ways to reduce or prevent highway traffic accidents.  He said seatbelts cannot reduce or prevent accidents, they only help protect occupants involved in an accident, and therefore he had not focused his comments on the use of seatbelts. However, he noted that NTSB feels very strongly about the use of seatbelts and primary enforcement as major safety issues.

Representative Haydon said that he believed that seatbelts saved lives and in some cases not using a seatbelt could actually cause an accident.  He urged Mr. Blackistone to return to Kentucky to discuss the use of seatbelts.  Mr. Blackistone said that NTSB would be more than happy for a return visit to discuss the use of seatbelts.

Representative Ballard asked how many states require driver testing of their older population.  Mr. Blackistone said many states offer vision testing as the most common means of testing older people.  Representative Ballard asked at what age did the states begin offering vision testing.  Mr. Blackistone said it varied from 40 years to 70 years of age.  Chairman Moore stated that LRC staff had that information and would see that Representative Ballard received a copy.

Chairman Moore stated that he had personally conducted visual surveys as to the use of seatbelts on a number of Kentucky highways and found that 90 percent of drivers used their seatbelts on the interstates and 85 percent used their seatbelts on the secondary roads.

Chairman Moore entertained a motion on the approval of the minutes. Co-chairman Collins moved to approve the minutes of the Committee’s September 2, 2003, meeting, as submitted.  Representative Haydon seconded the motion, which passed by voice vote.

At this time Chairman Moore turned the Committee over to Chairman Collins.

The next item on the Committee’s agenda was a follow-up discussion of the motor vehicle titling process by Mack Bushart, Commissioner, Department of Vehicle Regulation, and Eddie Deskins, Director, Division of Motor Vehicle Licensing.

Mr. Bushart said the Cabinet had been asked to make a recommendation regarding how Kentucky should address titles from other states that have been branded “unrebuildable.”  He said Kentucky law does not provide for an unrebuildable designation.  That when presented with one of these titles from another state,  KRS 186.530 simply requires a picture of the front and one of the back of the automobile, a list of the parts used to rebuild the car, and two estimates showing the vehicle was rebuilt for less than 75 percent of the N. A. D. A. value and an unrebuildable title will be converted to a rebuilt Kentucky title.  He said there were 1,500 unrebuildable titles converted in 2001 and 2,200 in 2002 and noted that this could become a problem.

Mr. Bushart said the potential for problems come with Kentucky “cleaning” the title of a vehicle permanently branded in another state as unrebuildable.  The vehicle can be licensed here in Kentucky but not relicensed in several other states such as Florida, Tennessee, Indiana, and Missouri.  He asked what happens to the person who buys a car that has a rebuilt Kentucky title then decides to move to Florida, only to find out that his car can not be licensed there because it was previously declared to be unrebuildable in that state.  Mr. Bushart referred to a local car auction that had such a problem.  They announced the vehicle had a salvage title, but the person who bought the car had added several thousands more dollars in repairs and tried to license the auto in Florida, only to find out that it could not be licensed there.  When they found they could not license the car in Florida they contacted the auction house seeking a refund, plus reimbursement for parts and labor.

Chairman Collins asked who inspects a vehicle in Kentucky.  Mr. Bushart said the local sheriff checks the Vehicle Identification Number, and checks to see if the running lights, horn, and windshield wipers, work.  He said that in some cases there can be major damage done to a vehicle’s frame or body that a sheriff, who is charged with inspecting the vehicle, is not trained to find.  Mr. Bushart said he felt that this has the potential of causing serious problems for the state.  He stated that the cabinet is concerned Kentucky is becoming a dumping ground for unsafe vehicles. 

Representative Cornett asked if the Cabinet was saying that rebuilt vehicles were not safe.  Mr. Bushart said no, most rebuilt vehicles are fine, but he did question the integrity of vehicles branded as unrebuildable by other jurisdictions.  Mr. Bushart gave a true example of a vehicle declared by Florida to be unrebuildable because the repair estimate was $14,000 and over 80 percent of the N. A. D. A. value of the vehicle.  A person bought the car, brought it to Kentucky, and said the repairs would only cost $6,000 or less.  Mr. Bushart expressed concern over these types of discrepancies.  He also noted that in Kentucky a sheriff is paid $5.00 for his cursory inspection, while surrounding states charge approximately $58.00 for a more comprehensive inspection.

Senator Tapp asked if there was any data on the vehicles considered unrebuildable.  Mr. Bushart said he did not have any information on those vehicles.

Mr. Deskins urged the members to review the issue of unrebuildable vehicles and the inspection process when they return in January.

The last item on the Committee’s agenda was a report of CSX Railroad’s sale of the railroad line from Winchester to Anchorage, Kentucky to R. J. Corman.  Mr. Jim Adams, Resident Vice-President for State Relations, CSX Railroad, and Mr. Jim Oaks, Board Member, R. J. Corman Railroad Group presented this report.

Mr. Adams said that CSX operates over 1800 miles of railroad and employs approximately 3,200 people, making Kentucky the third largest employment center on the CSX system.  On September 30, 2003, CSX completed the transaction to sell the railroad infrastructure and lease the property corridor constituting the Old Road (Winchester to Anchorage) to R. J. Corman.  The Old Road, which derives its name from the fact that it is the oldest railroad west of the Allegheny Mountains, was established in 1830 and comprises 94 miles of track. Mr. Adams said that under the terms of the operating agreement with R. J. Corman, CSX would continue to move the two daily coal trains on the line and may use the line for freight trains as traffic volumes demand.  He said CSX would no longer serve industries located on the line. 

He said the sale/lease of the Old Road (Winchester to Anchorage) is indicative of CSX Transportation’s approach to delivering value to their shareholders and quality service to their customers by working with short line companies to optimize previously underutilized segments of CSX’s network.  He said 20 percent of CSX’s annual revenue is derived from freight that originates or terminates on a short line.  Mr. Adams said that short lines are able to realize lower operating costs and provide small shippers with added flexibility.  He noted that every customer affected by the transaction received advanced notice of the pending changes to operations on the Old Road.

Mr. Adams said that in just a few weeks, the combined strengths of CSX and R. J. Corman will work together to allow a Kentucky aluminum producer to shift its fright shipments from truck to rail and remove over 12,000 thousand tractor-trailers from the state’s congested highways each year.

Mr. Jim Oaks, Board Member, R. J. Corman Railroad Group, who also worked with CSX for forty-five years, stated that short line railroads have much more flexibility in their operations typically resulting in lower cost to its customers.  He said that presently R. J. Corman Railroad Group, whose headquarters is in Nicholasville, Kentucky,  owns and operates twelve short lines, which includes five in Kentucky.  These twelve lines range from five miles in length to almost three hundred miles.  Mr. Oaks said that currently, the Corman companies own and operate in excess of 1000 miles of railroads.

In addition to the short lines, R. J. Corman owns a material sale company that inventories rail parts for Class I railroads, they have 15 yards east of the Mississippi,  16 derailment service units located strategically between the East Coast and Wyoming, one of which is located in Nicholasville, which provides emergency services to other railroads and industries; distribution services providing warehousing and delivery services in Ohio, Kentucky, and Tennessee; My Old Kentucky Dinner train in Bardstown, a railroad construction company providing a full line of services to the railroad industry; and a storm team to assist in cases of hurricanes, floods, ice and snowstorms.

Mr. Oaks said that since R. J. Corman already owns the line between Lexington and Versailles, a connection exists between the Lexington yard and this line to allow one of the customers currently trucking their goods from near Frankfort to Versailles to use rail, which would eliminate double handling and be more cost effective.  They are also plan to meet with Kentucky Utilities to discuss the possibility of resuming movements of coal by rail into their Tyrone plant, which is currently trucked into the plant.

Mr. Oaks said CSX and R. J. Corman have established interchange points at Louisville and Winchester, which will enhance transit time for traffic moving to and from customers on the Old Road.  Currently Alcan, in Berea, produces 35 ingots every day, 365 days per year, and they move one ingot per truck from Berea to Russellville in Logan County.  These ingots weigh approximately 56,000 pounds each, which means every truck, 12,000 per year, is overloaded and traveling on Kentucky’s highways.  The good news is the establishment of R. J. Corman and CSX shuttle trains, effective around October 15, will move the ingots from Berea to Logan Aluminum near Russellville.

In closing Mr. Oaks said that while the railing of ingots from Berea to Russellville may be the first major event since the acquisition of the Old Road, R. J. Corman believes it is only the beginning of the benefits it plans to offer to existing and new customers served by the Old Road (now the R. J. Corman Central Kentucky Line) and for the Commonwealth.

Representative Cornett asked Mr. Adams if this sale of the Old Road was to become a trend with CSX.  Mr. Adams replied no, that this would not become a trend but that CSX will continue to review all of its assets to deliver value to its shareholders and quality service to its customers.  Representative Cornett noted that freight rates were higher in eastern Kentucky and stated he was concerned that CSX may liquefy its assets there next.

Representative Cornett asked how many CSX employees lost their jobs as a result of this transaction.  Mr. Adams said there were only two employees that may not be transferable.

Representative Cornett asked Mr. Oaks if the R. J. Corman Group was unionized.  Mr. Oaks said no, but that some of their employees in the Chicago area had a chance to become unionized.  He said the Mr. Corman told those employees that if they elected to become a union he would see that they followed union scale in salaries as well as vacation/sick leave and insurance benefits.  Mr. Oaks said that after that meeting the employees voted unanimously not to go with the union because Mr. Corman’s salaries and benefits were better.

Representative Napier asked how many employees R. J. Corman employed.  Mr. Oaks said approximately 600 employees from Florida to New York, and that around half of the 600 employees are Kentucky natives.  Representative Napier said that he is familiar with the R. J. Corman Group and to the best of his knowledge the company is very fair with its employees and that those employees thought the world of Mr. Corman.

Representative Pasley inquired as to where CSX ends and the R. J. Corman Central Kentucky Line begins in Winchester.  Mr. Oaks said R. J. Corman begins where the main line to Cincinnati goes over a bridge at Maple Expressway.  Mr. Oaks said that Patio Yard will be their changing yard but will still be owned by CSX.

Representative Pasley asked how long CSX has leased the right-of-way.  Mr. Adams said 20 years with a re-opening clause if both parties are agreeable.

Senator Borders noted that he has been involved in meetings with CSX since 1993, and to his knowledge CSX has been nothing but above board and honest, and expressed his appreciation to CSX.  Senator Borders also commented that in his opinion R. J. Corman had some big shoes to fill. 

Representative Miller asked whom he should call if he has a problem in Louisville.  Mr. Adams told Representative Miller that if he should have any problems he was to contact him and he would try and take care of his concerns.

Representative Cornett said that previously CSX sold  90 percent of the rails and land in Letcher County.  He commented that that was devastating to the county and asked CSX and R. J. Corman that if either of the systems planned on selling off railroad lines in the future, they would contact the local authorities prior to selling.

Mr. Oaks said that R. J. Corman owns around 38 miles of rails in Paintsville that is not in operation or currently making a penny, but that Mr. Corman refused to sell the lines last year in the hopes that coal will once again becomes a commodity in demand.  Mr. Oaks said that he is not making any promises that that 38 miles of line won’t one day be sold off, but as of today, no discussions are taking place to do so.

With no other business before the Committee, the meeting adjourned 3:10 p.m.