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September 28, 1955


Appeals, Nos. 15 and 27, March T., 1955, from orders of Public Utility Commission, Docket Nos. 80456 and 80351, in case of Commonwealth of Pennsylvania, Department of Highways, v. Pennsylvania Public Utility Commission, and Pennsylvania Railroad Company. Orders affirmed.


Joseph J. Laws, Senior Highway Counsel, with him John R. Rezzolla Jr., Advanced Highway Counsel, Phil H. Lewis, Deputy Attorney General, and Herbert B. Cohen, Attorney General, for Department of Highways, appellant.

Harris J. Latta, Jr., Assistant Counsel, with him Albert E. Luttrell and John R. Gavin, Assistant Counsel, and Thomas M. Kerrigan, Acting Counsel, for Public Utility Commission, appellee.

Windsor F. Cousins, with him Lawrence K. Connell, for railroad, intervening appellee.

Before Rhodes, P.j., Hirt, Ross, Gunther, Wright, Woodside, and Ervin, JJ.

Author: Rhodes

[ 179 Pa. Super. Page 378]


These appeals are by the Department of Highways of the Commonwealth of Pennsylvania from two orders of the Pennsylvania Public Utility Commission of May 24, 1954 (appeal taken June 25, 1954) and July 12, 1954 (appeal taken August 20, 1954) approving the applications of the department for reconstruction, inter alia, of two railway-highway grade separation facilities, one located in Camp Hill, Cumberland County

[ 179 Pa. Super. Page 379]

(Pa. P.U.C. A-80456), and the other in Falls Township, Bucks County (Pa. P.U.C. A-80351), and allocating the costs thereof. The applications comprehend large highway improvement programs. These appeals relate only to the allocation of costs of the separation facilities.

The applications proposed replacement of existing bridges carrying automobile traffic over the tracks of the Pennsylvania Railroad Company with new and larger structures. Application 80456 involved relocation and reconstruction of a bridge over tracks of the railroad in Camp Hill and adjacent townships in Cumberland County. The existing bridge would be replaced by another structure located to the west of the existing structure. Since the approach to this bridge would be a limited access highway, it was also proposed to construct a supplemental bridge for local service purposes east of the existing structure. The estimated cost of both bridges in this project was $392, 924.65.

Application 80351 involved the replacement of an existing bridge with a 4-span deck girder structure with two roadways, each 28 feet in width, carrying state highway route 150 over the existing five tracks of the railroad and over four proposed tracks in Falls Township, Bucks County, a short distance from the site of the new Fairless plant of the United States Steel Company. The estimated cost of the bridge in this project was $690,868.

The department, in the reconstruction of the bridges in both projects, agreed to assume the entirety of certain costs, but requested that the railroad be required to participate in the balance of the cost in each case, consisting of construction costs and the cost of temporary relocation of railroad signal facilities and electrification facilities.

[ 179 Pa. Super. Page 380]

The commission approved both applications by the respective orders from which these appeals have been taken. But it denied the department's requests, and the department was directed to pay the costs of both projects, less the sum of $100,000 agreed to be paid by the railroad and certain substantial fractional costs imposed on the railroad in both projects.

The commission in allocating costs considered the fact that the department proposed to utilize federal funds in connected with the construction of both projects. The commission also took into consideration what it believed to be certain limitations as to cost allocations against railroads as set up in section 5 (b) of the Federal-Aid Highway Act of 1944, December 20, 1944, 78th Congress, 2d Sessions, C. 626, § 5, 58 Stat. 838, and General Administrative Memorandum No. 325 of the Public Roads Administration, Federal Works Agency, issued thereunder.

The Federal-Aid Highway Act of 1944 authorizes appropriations of federal funds to States to use in the elimination and reconstruction of grade crossing hazards.*fn1 This purpose is implemented by section 5 of the act.*fn2 Section 5 (b) apparently limits the liability

[ 179 Pa. Super. Page 381]

    of a railroad, at least to the United States, where federal funds are used in whole or in part by providing

[ 179 Pa. Super. Page 382]

    that "in no case shall the total benefits to any railway or railways be deemed to have a reasonable value in excess of 10 per centum of the cost of any such project."

The effect of General Administrative Memorandum No. 325, submitted of record before the commission, is that, in reconstruction projects like those here involved, no benefit shall be considered as resulting to the railroad and no contribution shall be required. The pertinent section of the Memorandum reads as follows: "2. Reconstruction of Existing Railway Highway Grade Separation Structures. This group shall include all projects for the reconstruction, including replacement, widening, or strengthening of existing structures that separate railways and highways at grade, whether on the same or different locations, and shall be considered as not resulting in ascertainable benefits to the railroad and consequently no contribution to the cost of such a project by the railroad shall be required."*fn3

[ 179 Pa. Super. Page 383]

The commission also had before it Regulation 1.14, Code of Federal Regulations, Title 23-Highways, § 1.14, which provides as follows:

"Railway-highway crossing projects.

"(a) Before a project for the elimination of hazards at a railway-highway crossing shall be approved for construction an agreement shall be entered into between the State highway department and the railroad concerned for the construction and maintenance of such project. Each such project to be financed in whole or in part from funds provided under the Federal-Aid Highway Act of 1944 and subsequent acts shall be classified and the benefits to be derived from and contributions to be made to such project by the railroad shall be determined in accordance with the classification and procedure established for that purpose, and the estimate of benefits and contributions so determined shall be included in the agreement between the State highway department and the railroad.

"(b) State laws pursuant to which contributions are imposed upon railroads for the elimination of hazards at railway-highway crossings shall be held not to apply to Federal-aid projects."

On these appeals the department contends that the commission in allocating costs erred as follows: (1) In considering the source of funds to be used by the department; (2) in arbitrarily making the source of funds the sole basis of its cost allocations; (3) in allocating the costs as to the railroad to conform with the General Administrative Memorandum No. 325.

[ 179 Pa. Super. Page 384]

The commission has broad power to allocate and assess costs in rail-highway crossing improvement or elimination projects. Section 409 of the Public Utility Law, Act of May 28, 1937, P.L. 1053, Art. IV, as amended, 66 PS § 1179, provides that no rail-highway crossing heretofore or hereafter constructed shall be altered, relocated, or abolished without order of the commission. Section 411 of the Public Utility Law, 66 PS § 1181, further provides: "(a) ... the expense of such construction, relocation, alteration, protection, or abolition of any crossing, shall be borne and paid, as hereinafter provided, by the public utilities or municipal corporations concerned, or by the Commonwealth, in such proper proportions as the commission may, after due notice and hearing, determine, unless such proportions are mutually agreed upon and paid by the interested parties." See Pennsylvania Railroad Company v. Pennsylvania Public Utility Commission, 136 Pa. Superior Ct. 1, 7 A.2d 86; Department of Highways v. Pennsylvania Public Utility Commission, 141 Pa. Superior Ct. 376, 380, 14 A.2d 611. In apportioning costs the commission is not limited to any fixed rule, but all factors entering into a division of the costs should be taken into consideration and carefully examined. Pittsburgh, Bessemer & Lake Erie Railroad Co. v. Public Service Commission, 71 Pa. Superior Ct. 15, 19; Tarentum Borough v. Pennsylvania Public Utility Commission, 171 Pa. Superior Ct. 156, 161, 90 A.2d 853. Such order of the commission as to costs, made in the exercise of its administrative discretion, will not be reversed if reasonable and in conformity with law. Tarentum Borough v. Pennsylvania Public Utility Commission, supra, 171 Pa. Superior Ct. 156, 161, 90 A.2d 853. The present orders, in so far as they relate to allocation of costs, are well within the commission's statutory power. Under the circumstances, in making

[ 179 Pa. Super. Page 385]

    allocations, it was proper for the commission to recognize the fact that federal funds were to be used in each of the projects,*fn4 and to consider the conditions which might be applicable to the use of such funds.

The commission could also consider, in the light of present day conditions, the general purpose and circumstances underlying the grant of federal funds for such projects, including the financial position of the railroads and the relative benefit to the railroads as compared to that accruing to users of motor highways. The two grade separation facilities here involved were relatively small portions of comprehensive improvements involving more than $2,000,000 in each project. Construction of new highways to meet modern traffic conditions is a proper objective, but the railroads are not necessarily real beneficiaries in the construction of such competitive facilities. It appears that the real purpose of the present projects is to replace existing two-lane highways, without regard to their present condition, with a new type of highway construction at new locations. The railroad has little, if anything, to do with the proposed changes. In the Camp Hill project there was testimony that the existing bridge would accommodate an additional railroad track for which provision was likewise made in the new structure. In the Falls Township project the railroad requested that an additional span be included in the bridge structure to provide for future construction of additional tracks, and it was agreeable to pay the cost of the construction of the additional span.

[ 179 Pa. Super. Page 386]

It may be that the proposed use of federal funds was the decisive factor in the cost allocations made by the commission. In any event, the allocations were within the commission's general powers, and we cannot say as a matter of law that the commission did not consider all factors, or that it gave undue weight to any one factor in apportioning the costs.

These appeals do not raise the question whether the commission was bound to consider the use of federal funds, nor do they raise the question whether the commission is bound by any alleged restriction where federal funds are used. These are not cases where the commission has refused to consider the use of federal funds or where it allocates costs in violation of alleged restrictions in the use of such funds.

On March 21, 1955, it was stipulated by counsel that these appeals be heard and argued upon an agreed statement of facts including the fact that under dates of August 20, 1954, and November 9, 1954, project agreements were entered into between the Federal Bureau of Public Roads and the Pennsylvania Department of Highways covering the grade separation facilities involved in these appeals, and that in each of the said projects the order of the Pennsylvania Public Utility Commission was accepted as substantially complying with the requirements of the Federal Bureau of Public Roads relative to matters concerning railway-highway separation structures so that no separate State-Railroad agreement was required, and that in both of these instances the projects, so far as the above matters are concerned, were approved as submitted by the State.*fn5

[ 179 Pa. Super. Page 387]

These steps were taken by the department in order to secure the use of federal funds, and the "agreements" were entered into after the department had taken the appeals to this Court from the orders of the commission. It would seem that, in view of such acceptance of the commission's orders, the department cannot with good grace question them now. It follows that the questions which the department has attempted to raise on these appeals may have become moot.


The orders of the commission as they relate to the allocation of costs are affirmed.

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