DOT REPORT #24 - November, 1996 ================================================================= A compilation of rail notices published by the US Department of Transportation between November 16 - 30, 1996. Includes abandonment, operation and control notices, FRA orders and related petitions. Condensed from original. ================================================================= CONTENTS: Delaware Valley Railway Company, Inc.--Acquisition and Operation Exemption--Gettysburg Railroad Company Genesee & Wyoming Inc.--Control Exemption--Rail Link, Inc. Norfolk and Western Railway Company--Abandonment Exemption--in Polk County, IA Norfolk Southern Corporation and Norfolk Southern Railway Company--Control--Conrail Inc. and Consolidated Rail Corporation Wisconsin Central Ltd.--Trackage Rights Exemption--Commuter Rail Division of the Regional Transportation Authority Wisconsin Central Ltd.--Acquisition Exemption--Lines of Union Pacific Railroad Company ==================================================================== DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33287] Delaware Valley Railway Company, Inc.--Acquisition and Operation Exemption--Gettysburg Railroad Company Delaware Valley Railway Company, Inc., a Class III shortline carrier, has filed a notice of exemption under 49 CFR 1150.41 to acquire and operate approximately 23.4 route miles from Gettysburg Railroad Company between approximately milepost 31.2, at Gettysburg, PA, and milepost 7.8, at Mount Holly Springs, PA. The transaction is expected to be consummated on or about November 15, 1996. Decided: November 7, 1996. ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33291] Genesee & Wyoming Inc.--Control Exemption--Rail Link, Inc. Genesee & Wyoming Inc. (GWI), a noncarrier holding company, has filed a notice of exemption to acquire control through stock ownership of Rail Link, Inc. (Rail Link), a noncarrier holding company. Rail Link controls three separate Class III railroads as follows: Carolina Coastal Railway, Inc. (CLNA); Commonwealth Railway, Inc. (CWRY); and Talleyrand Terminal Railroad (TRR). GWI is acquiring all of the outstanding capital stock of Rail Link and will indirectly control CLNA, CWRY, and TRR. The transaction will be consummated on or after November 8, 1996. GWI controls 11 existing Class III carrier subsidiaries: Genesee & Wyoming Railroad Company, Inc., operating in western New York; Dansville and Mount Morris Railroad Company, operating in New York; Rochester & Southern Railroad, Inc., operating in New York; Louisiana & Delta Railroad, Inc., operating in Louisiana; Buffalo & Pittsburgh Railroad, Inc., operating in New York and Pennsylvania; Bradford Industrial Rail, Inc., operating in Pennsylvania and New York; Allegheny & Eastern Railroad, Inc., operating in Pennsylvania; Willamette & Pacific Railroad, Inc., operating in Oregon; GWI Switching Services, operating in Texas; Illinois & Midland Railroad, Inc., operating in Illinois; and Pittsburg & Shawmut Railroad, Inc., operating in Pennsylvania. GWI states that (i) CLNA, CWRY, and TRR will not connect with any railroad in the GWI corporate family; (ii) the acquisition of control is not part of a series of anticipated transactions that would connect the Rail Link subsidiaries with any railroad in the GWI corporate family; and (iii) the transaction does not involve a Class I carrier. Therefore, the transaction is exempt from the prior approval requirements of 49 U.S.C. 11323. See 49 CFR 1180.2(d)(2). Decided: November 7, 1996. ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-290 (Sub-No. 186X)] Norfolk and Western Railway Company--Abandonment Exemption--in Polk County, IA Norfolk and Western Railway Company (NW) has filed a notice of exemption under 49 CFR 1152 Subpart F--Exempt Abandonments to abandon its 1.21-mile line of railroad between Station 422+69.9 and Station 486+64 in Clive, Polk County, IA. NW has certified that: (1) No local traffic has moved over the line for at least 2 years; (2) there is no overhead traffic on the line; (3) no formal complaint filed by a user of rail service on the line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the line either is pending with the Surface Transportation Board (Board) or with any U.S. District Court or has been decided in favor of complainant within the 2-year period; and (4) the requirements at 49 CFR 1105.7 (environmental reports), 49 CFR 1105.8 (historic reports), 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on December 25, 1996, unless stayed pending reconsideration. Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision. Decided: November 18, 1996. ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33286] Norfolk Southern Corporation and Norfolk Southern Railway Company--Control--Conrail Inc. and Consolidated Rail Corporation ACTION: Decision No. 1; Notice of prefiling notification and request for comments. SUMMARY: Pursuant to 49 CFR 1180.4(b), Norfolk Southern Corporation (NSC) and Norfolk Southern Railway Company (NSR) (applicants) have notified the Surface Transportation Board (Board) of their intent to file an application seeking authority under 49 U.S.C. 11323-25 for: (1) The acquisition of control of Conrail Inc. (CRI) and Consolidated Rail Corporation (CRC) (Conrail) by NSC; and (2) the resulting common control by NSC of Conrail and its subsidiaries, on the one hand, and NSR and its subsidiaries, on the other. The Board finds this to be a major transaction as defined in 49 CFR part 1180. The Board invites comments from interested persons on a proposed procedural schedule. SUPPLEMENTARY INFORMATION: In the notice of intent filed November 6, 1996, applicants state that on October 23, 1996, NSC announced its intention to commence a public tender offer for equity securities of CRI. On October 24, 1996, NSC and its wholly owned subsidiary, Atlantic Acquisition Corporation (Acquisition), commenced the tender offer pursuant to an Offer to Purchase dated October 24, 1996. NSC and Acquisition have offered to purchase shares of common stock of CRI, subject to the conditions specified in the Offer to Purchase. Upon purchase of CRI shares by NSC, Acquisition, or their affiliates, such purchased shares will be deposited in an independent voting trust pending approval by the Board of the acquisition of control by NSC of Conrail. NSC is seeking to negotiate with CRI a definitive merger agreement pursuant to which CRI would, as soon as practicable following consummation of the Offer, consummate a merger or similar business combination with Acquisition or another direct or indirect subsidiary of NSC (the Merger). To avoid the acquisition of control by NSC of Conrail prior to approval by the Board, NSC intends to deposit all issued and outstanding common stock of Acquisition (which may become stock of the surviving corporation on consummation of the Merger) owned by NSC into the voting trust at or immediately prior to the Merger. Upon Board approval of the acquisition by NSC of control of Conrail, NSC will acquire control of Conrail through stock ownership of the voting trust. Applicants state that they will use the year 1995 for purposes of their impact analysis to be filed in the application, and that they anticipate filing their application on or before May 1, 1997. The Board finds that this is a major transaction, as defined at 49 CFR 1180.2(a), as it is a control transaction involving two or more Class I railroads. By petition filed November 8, 1996 (NSC-3), applicants requested a protective order to protect confidential, highly confidential, and proprietary information, including contract terms, shipper-specific traffic data, and other traffic data to be submitted in connection with the control application. Applicants' request for protective order will be addressed in a separate decision. Also on November 8, 1996, applicants filed a petition to establish a proposed procedural schedule (NSC-2). Applicants' proposed procedural schedule is as follows: Applicants' Proposed Procedural Schedule F--Primary application and related applications filed. F + 30--Board notice of acceptance of primary application and related applications published in the Federal Register. F + 45--Notification of intent to participate in proceeding due. F + 60--Description of anticipated inconsistent and responsive applications due; petitions for waiver or clarification due with respect to such applications. F + 120--Inconsistent and responsive applications due. All comments, protests, requests for conditions, and any other opposition evidence and argument due. Comments by U.S. Department of Justice (DOJ) and U.S. Department of Transportation (DOT) due. F + 135--Notice of acceptance (if required) of inconsistent and responsive applications published in the Federal Register. F + 150--Response to inconsistent and responsive applications due. Response to comments, protests, requested conditions, and other opposition due. Rebuttal in support of primary application and related applications due. F + 165--Rebuttal in support of inconsistent and responsive applications due. F + 185--Briefs due, all parties (not to exceed 50 pages). F + 215--Oral argument (at Board's discretion). F + 217--Voting conference. F + 255--Date of service of final decision. The proposed schedule is identical to the one requested by the applicants in STB Finance Docket No. 33220, CSX Corporation and CSX Transportation, Inc.--Control and Merger--Conrail Inc. and Consolidated Rail Corporation (CSX/CR), filed October 18, 1996 (CSX/CR-3), and is substantially similar to that adopted in Union Pacific Corporation, Union Pacific Railroad Company and Missouri Pacific Railroad Company-- Control and Merger--Southern Pacific Rail Corporation, Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, SPCSL Corp. and The Denver and Rio Grande Western Railway Company (UP/SP), Finance Docket No. 32760. Applicants' proposal is one of the first major consolidation transactions presented to the Board under the ICC Termination Act of 1995, effective January 1, 1996. The Board is seeking comments from the public on applicants' proposed procedural schedule, as modified by us below to adhere more closely to the provisions of ICCTA. Specifically, we propose to modify applicants' proposed schedule to require parties intending to file comments, protests, requests for conditions, and any other opposition evidence and argument to file their submissions 75 days from the date the application is filed [F + 75] as provided for under 49 U.S.C. 11325(b)(1), with comments from the U.S. Department of Justice (DOJ) and the U.S. Department of Transportation (DOT) due 90 days from the date the application is filed [F + 90 days] as provided for under 49 U.S.C. 11325(b)(1). If these due dates were to be established for comments in this proceeding, responses to comments, protests, requested conditions, and other opposition, and also rebuttal in support of the primary application and related applications would be due 30 days after the due date (i.e., on day F + 105 for responses to commenters and parties other than DOJ and DOT; and on day F + 120 for responses to DOJ and DOT). We propose to keep inconsistent and responsive applications due 120 days from the date the application is filed [F + 120 days] as provided for under 49 U.S.C. 11325(b)(2). Because there has not been a major merger in the East since the early 1980s, given our merger experience, we believe it would be prudent for us to factor in some additional time to accommodate possible unique issues that may arise. We propose extending applicants' proposed procedural schedule by 45 days allocated as follows: (1) adding 5 days to applicants' proposed period of time for parties to prepare their briefs, so that briefs would be due on F + 190 days; (2) adding 15 days to applicants' proposed period of time for parties to prepare for oral argument, so that oral argument would occur on F + 235 days; (3) adding 3 days to applicants' proposed 2-day interval between the oral argument and the voting conference, so that a voting conference would occur on F + 240 days; and (4) adding 22 days to applicants' proposed period of time after the voting conference for the service of the Board's final decision on F + 300 days. In addition, we propose requiring applicants to file an environmental report, including all supporting documents, no later than 30 days prior to the filing of the primary application. Proposed Procedural Schedule as Modified by the Board F---30--Environmental report, including all supporting documents due. F--Primary application and related applications filed. F + 30--Board notice of acceptance of primary application and related applications published in the Federal Register. F + 45--Notification of intent to participate in proceeding due. F + 60--Description of anticipated inconsistent and responsive applications due; petitions for waiver or clarification due with respect to such applications. F + 75--All comments, protests, requests for conditions, and any other opposition evidence and argument due. F + 90--Comments by U.S. Department of Justice (DOJ) and U.S. Department of Transportation (DOT) due. F + 105--Responses to comments, protests, requested conditions, and other opposition due. Rebuttal in support of primary application and related applications due in response to filings on day F + 75. F + 120--Inconsistent and responsive applications due. Rebuttal in support of primary application and related applications due in response to filings of DOJ and DOT on day F + 90. F + 135--Notice of acceptance (if required) of inconsistent and responsive applications published in the Federal Register. F + 150--Response to inconsistent and responsive applications due. F + 165--Rebuttal in support of inconsistent and responsive applications due. F + 190--Briefs due, all parties (not to exceed 50 pages). F + 235--Oral argument (close of record). F + 240--Voting conference. F + 300--Date of service of final decision. Applicants are proposing that any applications for authority for, or for exemption of, merger-related abandonments, and any supporting verified statements, be filed with the primary application, and be treated as related applications, with any opposition evidence, comments, rebuttal and briefing on those applications to be submitted in accordance with the same schedule as the primary application. We agree that we should process any merger-related abandonment applications in accordance with the overall merger procedural schedule, rather than applying the procedures found at 49 U.S.C. 10903, which is similar to our process we used in the UP/SP proceeding. Therefore, we will grant applicants' request for waiver under 49 CFR 1152.24(e)(5) to permit modifications of the procedures andtimetables prescribed in 49 CFR 1152.25(d) (6) and (7) to be consistent with the procedural schedule subsequently adopted in this proposed merger proceeding. Applicants indicate that they intend to file shortly a petition for waiver or clarification of Railroad Consolidation Procedures, and related relief. As in UP/SP, applicants should also seek an exemption under 49 U.S.C. 10502 from any statutory procedural requirements at 49 U.S.C. 10903 necessary to allow the Board to process the merger-related abandonment applications under the procedural schedule ultimately adopted. We invite all interested persons to submit written comments on the procedural schedule we are proposing here. Decided: November 21, 1996. ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33295] Wisconsin Central Ltd.--Trackage Rights Exemption--Commuter Rail Division of the Regional Transportation Authority Commuter Rail Division of the Regional Transportation Authority (METRA) has agreed to grant non-exclusive trackage rights to Wisconsin Central Ltd. (WCL), a class II railroad, over 6.0 miles of railroad between milepost 12.6 at Franklin Park to milepost 6.6 at Cragin, in Cook County, IL. The transaction was scheduled to be consummated on November 11, 1996. The trackage rights is solely for the purpose of moving loaded and empty cars in through freight service. The parties have agreed that except for emergencies or until further review, WCL is restricted in the number and length of trains it can operate over the line each day. Decided: November 19, 1996. ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33116] Wisconsin Central Ltd.--Acquisition Exemption--Lines of Union Pacific Railroad Company ACTION: Notice of filing of a petition for exemption and a request for public comments, including comments on labor protective arrangements to be provided by a Class II railroad under 49 U.S.C. 10902. SUMMARY: Wisconsin Central Ltd. (WCL), a Class II rail carrier, seeks an exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 10902 for its acquisition of two lines of railroad from Union Pacific Railroad Company (UP) in central Wisconsin. Section 10902 is a new provision added by the ICCTA governing purchases of active rail lines by Class II (medium sized) and Class III (small) carriers. Under subsection 10902(d), a Class II railroad that acquires a rail line subject to the Board's jurisdiction must provide a fair and equitable arrangement for the protection of employees who may be affected by the transaction. The arrangement shall consist exclusively of 1 year of severance pay equal to the employee's earnings during the 12 months preceding the application filing date. WCL has proposed an employee protective arrangement to comply with subsection 10902(d). The labor protective arrangement that results from this proceeding may be used as a model for conditions we impose governing the minimum labor protective arrangements we require with respect to acquisitions by Class II railroads. Such arrangements have in the past consisted of two elements: (1) Procedural (i.e., when must employees be notified of their options and by whom); and (2) substantive (i.e., how many years of protection should be provided and what should that level of protection be). Plainly the new provision explicitly limits substantive aspects of any arrangement we may require. We seek comments on whether WCL's proposed arrangement meets the statutory requirements, and on whether and to what extent we should establish and/or oversee the procedural aspects of labor protective arrangements under this statute. SUPPLEMENTARY INFORMATION: WCL, a wholly owned subsidiary of Wisconsin Central Transportation Corporation, proposes to acquire from UP two rail lines, the ``Hayward Line'' between Hayward and Hayward Junction, WI, and the ``Wausau Pocket'' between Kelly and Wausau-Schofield, WI, totaling 17.8 miles in central Wisconsin. There are two shippers on the Hayward Line and eight shippers on the Wausau Pocket that jointly generate approximately 12,300 carloads a year. WCL submitted supporting statements from each shipper on the two lines. The Board seeks comments on the proposed transaction. Petitioner expects that the transaction, while eliminating nine UP positions, will create eight new positions on WCL. WCL indicates that it will offer these new positions to displaced UP employees on a priority basis, subject to application and employee qualification. WCL will provide affected UP employees with written notice of the positions, including wage and benefit levels, job responsibilities, and other relevant data, at least 1 month before consummation of the transaction. WCL proposes to inform displaced UP employees of any option they may have to decline a WCL job and elect a severance payment. Under petitioner's protective arrangement, for any severed UP employee not hired by WCL, WCL will provide a single payment equal to the employee's railroad earnings for the 12-month period ending October 18, 1996. For severed UP employees hired by WCL, severance payments will be paid for 1 year on a prorated, monthly basis, reduced each month by the employee's WCL earnings for the corresponding month. WCL estimates that its pay scales are 90% of those of Class I carriers. In view of the requirement of subsection 10902(d) that a Class II railroad provide a fair and equitable arrangement for the protection of employees adversely affected by the carrier's acquisition, the Board invites comments on whether WCL's proposed employee protective arrangement meets the requirements of 49 U.S.C. 10902. Decided: November 15, 1996. ===================================================================== Comments or questions about this compilation should be directed to Paul Moore at 71367.1057@Compuserve.com. =======================================================================