STB REPORT #12 - JUNE 16 - 30, 1998 ****************************************************************************** A compilation of decisions and notices published by the Surface Transportation Board. Includes information on track abandonments, ownership changes and trackage rights agreements. Condensed for readability. The full text is available at www.stb.dot.gov/ ****************************************************************************** SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 31700 (Sub-No. 13) CANADIAN PACIFIC LIMITED, ET AL.--PURCHASE AND TRACKAGE RIGHTS--DELAWARE & HUDSON RAILWAY COMPANY (ARBITRATION REVIEW) In an arbitral award and order entered October 13, 1997, an arbitrator approved the transfer by Canadian Pacific Railway Company (CPR) of five Delaware & Hudson Railway Company, Inc., (D&H) train dispatch positions from Milwaukee, WI, to Montreal, Quebec, Canada. By petition filed October 23, 1997, The American Train Dispatchers Department of the International Brotherhood of Locomotive Engineers (Train Dispatchers) sought Board review of the award and stay of its effectiveness pending a ruling on the request for review. On June 4, 1998, the Train Dispatchers filed a supplement to their petition and an emergency request for expedited consideration of their motion for stay. In support of their request, the Train Dispatchers indicate that the arbitrator, on May 20, 1998, issued a second award and order imposing an implementing agreement in connection with the proposed transfer of dispatch positions. The Train Dispatchers assert that the transfer of dispatching functions is now imminent, that important jurisdictional and safety matters are at issue, and that union employees and the public will be irreparably harmed if the carriers proceed before the Board acts. As such, the Train Dispatchers ask that the Board stay the effectiveness of the arbitral awards and orders. CPR and D&H replied in opposition to the stay. The railroads state that employees will not be affected by the implementing agreement imposed by the arbitrator until August 1, 1998, at the earliest. In addition, the railroads argue that the stay petition is without merit and should be denied. The effectiveness of the challenged arbitral awards will be stayed while the Board considers the appeals of the arbitrator's awards. Because CPR and D&H do not plan to commence coordinated operations until August 1, 1998, they will not be affected by the stay until then. Until the Board considers the Train Dispatchers requests for reconsideration of the arbitral awards, the awards will be stayed. It is ordered: 1. The Train Dispatchers stay request is granted, and the effectiveness of the arbitral awards and orders of October 13, 1997, and May 20, 1998, is stayed pending further Board action. Decided: June 15, 1998 Service Date - June 16, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33599] Consolidated Rail Corporation Trackage Rights Exemption Delaware and Hudson Railway Company, Inc. Delaware and Hudson Railway Company, Inc. (DHC) has agreed to grant overhead trackage rights to Consolidated Rail Corporation (Conrail) over certain railroad trackage, being a portion of the Taylor Secondary, Keyser Valley Industrial Track, and Wye Track, in Lackawanna County, PA, as follows: (1) the railroad tracks and appurtenant devices and facilities on the Taylor Secondary in Taylor Yard between Railroad Valuation Station Nos. 7762 + 04.5 and 7807 + 97, and on the Keyser Valley Industrial Track between Railroad Valuation Station Nos. 7767 + 46.2, 7786 + 32.2 and 7789 + 48, identified as a portion of Track No. 248 and Track Nos. 249, 696, 697, 698, and 699; and (2) the trackage rights also include any additional operating rights needed to make a continuous railroad route to connect the Taylor Secondary at Minooka Jct., which runs from Minooka Jct. to Pittston, with the Keyser Valley Industrial Track and existing trackage rights over DHC running between Taylor Yard and Bridge 60 in Scranton. On June 8, 1998, DHC filed a petition for exemption in STB Finance Docket No. 33595 to acquire from Conrail the trackage over which DHC would then grant back to Conrail the trackage rights that are the subject of this notice. That petition will be addressed by the Board in a separate decision. While the exemption in STB Finance Docket No. 33599 became effective on June 3, 1998, the trackage rights transaction will not be able to be consummated until DHC receives Board approval for the exemption sought in STB Finance Docket No. 33595 to acquire the lines over which DHC would grant trackage rights in this proceeding. Conrail previously conveyed to the Reading, Blue Mountain & Northern Railroad (RBMN) all of its property and operating rights in the vicinity of Taylor Yard, including the Taylor Secondary, Keyser Valley Industrial Track, and the trackage rights to Bridge 60 in Scranton, and has leased to RBMN all of its rights to the tracks in Taylor Yard which DHC is acquiring in STB Finance Docket No. 33595. The parties intend that, once DHC receives Board approval of its exemption in STB Finance Docket No. 33595 and the trackage rights in this proceeding become effective, the lease of Conrail's rights in Taylor Yard will terminate, and these trackage rights will be assigned to RBMN. The purpose of the trackage rights is to allow Conrail, or its successor, to continue to access its customers on the Keyser Valley Industrial Track, and its customers and connections reached via Bridge 60 in Scranton. Decided: June 10, 1998. Service Date - June 16, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33602] Bethlehem Steel Corporation--Control Exemption--Brandywine Valley Railroad Corporation and Upper Merion and Plymouth Railroad Company Bethlehem Steel Corporation (BSC), a noncarrier, has filed a notice of exemption to indirectly control two Class III railroads, Brandywine Valley Railroad Corporation (BVRY) and L I Acquisition Corp. (doing business as Upper Merion and Plymouth Railroad Company) (UMP), operating in Pennsylvania, that are currently indirectly controlled by Lukens, Inc. (Lukens), upon the acquisition by BSC of the stock of Lukens. BSC currently owns all of the outstanding stock of six Class III railroads: Philadelphia, Bethlehem and New England Railroad Company; Steelton & Highspire Railroad Company; Cambria & Indiana Railroad Company; and Conemaugh & Black Lick Railroad Company, operating in Pennsylvania; South Buffalo Railway Company, operating in New York; and, Patapsco & Back Rivers Railroad Company, operating in Maryland. BSC will control BVRY and UMP in common with its other subsidiary railroads through its acquisition of control of BVRY's and UMP's corporate parent Lukens. BSC intended to acquire control of Lukens on or about May 29, 1998. Decided: June 9, 1998. Service Date - June 16, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB- 33 (SUB-NO. 117X) UNION PACIFIC RAILROAD COMPANY ABANDONMENT EXEMPTION IN LEADVILLE, LAKE COUNTY, CO (LEADVILLE BRANCH) In this proceeding, the Union Pacific Railroad Company has filed a notice in connection with the abandonment of its railroad line known as the Leadville Branch located between Milepost 274.3 near McWethy Drive to the end of the line at Milepost 276.1 at the rail year near U.S. Highway 24 in Leadville, a distance of approximately 1.8 miles in Lake County, Colorado. The proposed abandonment of this line is related to Finance Docket No. 32760, Union Pacific Corporation, et al--Control and Merger--Southern Pacific Rail Corporation et al. UP has premised its Environmental and Historic Reports in this proceeding on the Environmental Report and subsequent Environmental Assessment prepared in Finance Docket No. 32760. The line is located in the California Gulch Superfund Site. According to UP, the U.S. Environmental Protection Agency, Region 8, is involved in negotiations concerning a Memorandum of Understanding, which contains an agreement for abandonment of the line and its use in a trail project. The National Geodetic Survey has identified two geodetic station markers that may be affected by the proposed abandonment. If UP plans any activities that may disturb or destroy these markers, it must provide NGS with not less than 90 days notification in advance of such activities. We therefore recommend imposition of the following condition: Prior to engaging in any salvage activities that may disturb or destroy the two geodetic station markers identified by the National Geodetic Survey (NGS), the Union Pacific Railroad must provide NGS with not less than 90 days notification in advance of such activities. Based on the information provided from all sources to date and subject to the recommended condition, we conclude that, as currently proposed, abandonment of the line will not significantly affect the quality of the human environment. Service Date - June 17, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-303 (Sub-No. 17X) WISCONSIN CENTRAL LTD.--ABANDONMENT EXEMPTION-- IN MARQUETTE AND ALGER COUNTIES, MI On December 19, 1997, a decision and notice of interim trail use or abandonment (NITU) was served, authorizing a 180-day period for the Michigan Department of Natural Resources (MDNR) to negotiate an interim trail use/rail banking agreement with Wisconsin Central Ltd. (WCL) for an approximately 37.3-mile line of railroad on the Marquette-Munising Line, between milepost 154, at a point east of Marquette, and milepost 116.7 in Munising Junction, in Marquette and Alger Counties, MI. The 180-day period under the NITU is scheduled to expire on June 19, 1998. By letter dated June 3, 1998, MDNR filed a request to extend the negotiation period for an additional 180 days. MDNR states that it is continuing to negotiate with WCL for an interim trail use/rail banking agreement. By letter filed June 9, 1998, WCL states that it supports the extension request. Because WCL is willing to continue trail use negotiations with MDNR and an extension of the negotiation period will promote the establishment of trail use and rail banking consistent with the National Trails System Act, the requested extension of the negotiation period under the NITU will be granted. It is ordered: 1. The negotiating period under the NITU is extended to December 16, 1998. Decided: June 11, 1998 Service Date - June 17, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-541X Portland & Western Railroad, Inc. -- Abandonment Exemption -- In Washington County, Oregon In this proceeding, the Portland & Western Railroad, Inc. (P&W) has filed a petition in connection with the abandonment of its railroad line located between milepost 20.05 and milepost 21.09, a distance of 1.04 miles in Orenco, Washington County, Oregon. P&W has not provided any service on the line proposed for abandonment since purchasing it from the Burlington Northern Santa Fe Railroad Company in November, 1997. P&W believes that the last service provided by BNSF on this line was in December of 1994. If abandonment authority is granted, P&W plans to remove a bridge to facilitate a road widening project by the Oregon Department of Transportation. P&W then plans to reuse a portion of the bridge to reconstruct a portion of its Cornelius Pass line. We recommend that no environmental conditions be placed on any decision granting abandonment authority. Based on the information provided from all sources to date, we conclude that, as currently proposed, abandonment of the line will not significantly affect the quality of the human environment. Following abandonment and salvage of the rail line, the right-of-way may be suitable for other public use. P&W owns the facilities on the line proposed for abandonment, however, the real property underlying the line is owned by BNSF, which according to P&W has declared an intention to donate the property to the Oregon Department of Transportation. Service Date - June 17, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33420 RICHARD D. ROBEY, JUNIATA VALLEY RAILROAD COMPANY, ET AL.-- PETITION FOR DECLARATORY ORDER--ALLEN J. LEVIN AND LEWISTOWN CENTRAL RAILROAD COMPANY By petition filed June 18, 1997, Richard D. Robey, Juniata Valley Railroad Company, Lycoming Valley Railroad Company, Nittany & Bald Eagle Railroad Company, and North Shore Railroad Company (collectively, petitioners) seek a declaratory order finding that the claims and remedies asserted by Allen J. Levin and his company, Lewistown Central Railroad Company (collectively, Levin), regarding the acquisition and operation of two former Consolidated Rail Corporation (Conrail) clusters of lines are within the Board's exclusive jurisdiction. Levin accuses Robey and SEDA-COG Joint Rail Authority (SEDA-COG) of having conspired to acquire and operate the two clusters of lines without opportunity for competitive bidding. As discussed below, we conclude that these claims are beyond our regulatory purview. However, any remedy which infringes upon our exclusive jurisdiction to regulate rail transportation is preempted by 49 U.S.C. 10501(b). SEDA-COG is a tax exempt rail authority formed under Pennsylvania state law. It exists to preserve essential rail service to central Pennsylvania industries. SEDA-COG acquires, rehabilitates, and maintains rail lines and manages the rail property. SEDA-COG contracts with private companies to conduct the rail freight operations. SEDA-COG's two contract operators are Juniata and Lycoming, both of which are owned by Robey (who also owns other railroads). In STB Finance Docket No. 33008 (STB served Aug. 30, 1996), we authorized (1) noncarrier SEDA-COG to acquire from Conrail 12.3 miles of rail line in Mifflin County, PA, known as the Lewistown Cluster, and (2) noncarrier Juniata to operate those lines. Upon consummation of the transaction, Juniata became a Class III carrier. Concurrently, we granted Robey, a noncarrier individual, authority to continue in control of Juniata and other nonconnecting Class III rail carriers owned by Robey upon Juniata's becoming a Class III carrier In STB Finance Docket No. 33010 (STB served Aug. 30, 1996), we authorized (1) SEDA-COG to acquire from Conrail 38.0 miles of track in the counties of Clinton and Lycoming, PA, known as the Williamsport Cluster, and (2) noncarrier Lycoming to operate the lines. Upon consummation of the transaction, Lycoming became a Class III carrier. Also concurrently, we granted Robey authority to continue in control of Lycoming and other nonconnecting Class III rail carriers owned by Robey upon Lycoming's becoming a Class III carrie On May 29, 1997, Levin filed a civil action in Pennsylvania state court, seeking damages and other relief, based upon a claim that petitioners and SEDA-COG committed fraud and violated the Pennsylvania Municipal Authorities Act and the federal Racketeer Influenced and Corrupt Organizations Act (RICO). On June 30, 1997, petitioners removed the state court action to federal court. Petitioners also filed this declaratory order request with us, on June 18, 1997. On December 10 and 11, 1997, the federal court granted petitioners and SEDA-COG's motions to dismiss the complaint, finding that the court lacked subject matter jurisdiction over the claims presented because the rail transportation involved is within the exclusive jurisdiction of the Board. Levin appealed that ruling to the United States Court of Appeals for the Third Circuit. On April 27, 1998, in response to appellee's Joint Motion for Summary Affirmance and Brief in Support, which the court noted was unopposed, the motion was granted. As stated, Levin accuses SEDA-COG and Robey of conspiring to violate state laws limiting the powers of municipal authorities. Levin further argues that their actions constituted fraud and violated the federal RICO statute. Specifically, Levin contends that the subject lines were acquired illegally from Conrail because there was no competitive bidding for them, thus denying Levin his pursuit of legitimate business interests and causing him to suffer financial damages. He seeks both legal and equitable relief, including divestiture of all Robey-owned or - operated rail properties so that Levin may assume ownership of, and operate over, the lines. Petitioners ask us to declare that all of the claims and issues raised by Levin fall within our exclusive jurisdiction. Petitioners rely on the following statement that appeared in the two notices authorizing (by exemption) the acquisition by SEDA-COG, and operation by the Robey-affiliate, of the lines involved: Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. Petitioners contend that the only proper means for Levin to pursue his claims is by a petition to us seeking revocation of the exemptions through which we authorized the present ownership and operation of these lines. We do not agree. The alleged violations of municipal statutes and the federal RICO statute that were brought before the lower court do not come within our jurisdiction. Allegations that the exemption requests that we granted contained incorrect or misleading information, so as to have worked a fraud upon the Board that would void the exemptions, clearly would be subject to our jurisdiction. However, Levin makes no such suggestion of fraud in the exemption requests. Accordingly, we conclude that we lack subject matter jurisdiction over the claims asserted by Levin and that those claims are properly addressed to the appropriate court. However, any remedy which infringes upon our exclusive jurisdiction to regulate rail transportation is preempted by section 10501(b). Thus, the remedial tools available to a court considering Levin's claims are limited. The divestiture remedy sought by Levin, for example, may not be accomplished without our approval. Moreover, any finding that a court might make with respect to fraud would not be conclusive as to the type of fraud necessary to void the authority we have issued with respect to these lines. For these reasons, the declaratory relief sought by petitioners is denied. It is ordered: 1. The petition for a declaratory order is denied. Decided: June 11, 1998 Service Date - June 17, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-494X AKRON BARBERTON CLUSTER RAILWAY COMPANY-- ABANDONMENT EXEMPTION--IN SUMMIT COUNTY, OH Akron Barberton Cluster Railway Company (ABCR) filed a notice of exemption to abandon 4.14 miles of its line of railroad from Valuation Station 440 + 00 at Main Street to Valuation Station 658 + 63 at Seiberling Avenue, in Summit County, OH. Notice of the exemption was published in the Federal Register on May 21, 1998. The exemption is scheduled to become effective on June 20, 1998. The Board's Section of Environmental Analysis (SEA) served an environmental assessment (EA) in this proceeding on May 26, 1998. In the EA, SEA states that the National Geodetic Survey (NGS) has identified two geodetic markers that may be affected by the abandonment. NGS requests that it be notified 90 days in advance of any activities that may disturb or destroy the five geodetic markers. Therefore, SEA recommends that a condition be imposed requiring ABCR to consult with the NGS and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers. SEA also states that the State of Ohio Environmental Protection Agency, Division of Surface Water (Ohio EPA), states that the line runs parallel to and crosses the Little Cuyahoga River. Ohio EPA has expressed concern regarding disposal of debris during salvage operations. Ohio EPA states that, during salvage operations, none of the debris may be discarded along the right-of-way or placed or left in streams or wetland, or the banks of such waterways. Ohio EPA also states that appropriate measures should be taken to prevent or control spills from fuels, lubricants, or any other pollutants from entering any watercourses. Therefore, SEA recommends that a condition be imposed requiring ABCR to consult with the Ohio EPA prior to conducting salvage operations. The recommended conditions will be imposed. As conditioned, this decision will not significantly affect either the quality of the human environment or the conservation of energy resources. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the exemption of the abandonment of the rail line described above is subject to the conditions that ABCR shall: (l) consult with the NGS and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers; and (2) consult with the Ohio EPA prior to conducting salvage operations, and take appropriate measures to prevent or control spills from fuels, lubricants, or any other pollutants from entering any watercourses. Decided: June 15, 1998 Service Date - June 18, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-540X FOREST TRANSIT COMMISSION--ABANDONMENT EXEMPTION--IN FOREST AND FLORENCE COUNTIES, WI On May 21, 1998, the Forest Transit Commission (FTC) filed a notice of exemption to abandon a 37.83-mile line of railroad between milepost 77.75 near Wabeno, WI, and milepost 115.2 near Tipler, WI, in Forest and Florence counties, WI. FTC states that it expects to consummate the abandonment on July 10, 1998. FTC is a governmental entity formed by the towns of Tipler and Long Lake, WI, and Forest County to acquire and operate part of an 89.4-mile branch line formerly owned by the Chicago and North Western Transportation Company (C&NW) that was abandoned in 1979. Wisconsin law empowered counties and municipalities to acquire and operate transportation systems. The Wisconsin Department of Transportation (WISDOT), acting on behalf of FTC, acquired the line from C&NW on July 27, 1979. Under an agreement dated December 15, 1979, WISDOT transferred the line to FTC. On August 14, 1980, the Interstate Commerce Commission granted FTC authority to acquire and operate the Wabeno-Tipler line. On May 3, 1989, FTC entered into an operating agreement and designated the Nicolet Badger Northern, Inc. (NBNI), a wholly owned subsidiary of Great Lakes Central, Ltd., to provide freight service over the line. On December 1, 1994, NBNI notified its customers that, due to financial reasons and a lack of freight business, NBNI would terminate service on the line between Wabeno and Tipler on December 30, 1994. According to FTC, because of NBNI's default, the rail assets of NBNI were surrendered to FTC on December 31, 1995, and no rail service has occurred on the line since that time. The provisions of 49 CFR 1152 are inapplicable to property that is not subject to the Board's continuing jurisdiction. According to the record, the line of railroad that is the subject of the notice was acquired by WISDOT, on behalf of FTC, after it had been abandoned by C&NW and the ICC's jurisdiction over the line had terminated. Neither WISDOT nor FTC assumed a common carrier obligation to provide service upon the acquisition of the abandoned line. Because FTC did not operate the line after NBNI's default under the operating agreement, FTC did not subsequently become a common carrier subject to the Board's jurisdiction. Therefore, the notice of exemption will be rejected for lack of jurisdiction over the property. Shortly after WISDOT acquired the line at issue here, the ICC exempted states from the need to obtain ICC approval for a state's acquisition of lines approved for abandonment by the ICC or a bankruptcy court when the abandonment had not yet been consummated. The ICC also concluded that, in these circumstances, a state would become a common carrier only if it operated the line it was acquiring. It is ordered: 1. The notice of exemption is rejected. Decided: June 15, 1998 Service Date - June 18, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION Finance Docket No. 32662 CONSOLIDATED RAIL CORPORATION--TRACKAGE RIGHTS EXEMPTION--MISSOURI PACIFIC RAILROAD COMPANY The Brotherhood of Locomotive Engineers (BLE) and the United Transportation Union (UTU) filed petitions to revoke the notice of exemption in this proceeding on April 13, 1995, and May 24, 1995, respectively. On May 23, 1995, Consolidated Rail Corporation (Conrail) and Missouri Pacific Railroad Company (MP) jointly replied. The petitions will be denied. (At the time the notice of exemption was published, MP was a subsidiary of the Union Pacific Corporation, parent of the Union Pacific Railroad Company (UP). MP merged into UP on January 1, 1997. Therefore, UP is the successor-in-interest to MP.) On February 3, 1995, Conrail filed a notice under the class exemption procedures to acquire overhead trackage rights over 33.28 miles of MP's St. Louis Division, Chicago Subdivision main line from milepost 220.82, at St. Elmo, IL, to milepost 254.10, at Salem, IL. MP's milepost 220.82 is located at the connection between MP and Conrail at approximately milepost 154.10 of Conrail's east-west main line between Avon and East St. Louis, IL. The Eastern Region of UP includes the lines MP acquired from the former Chicago and Eastern Illinois Railroad (C&EI). The UP line between St. Elmo and Salem was part of the former C&EI trackage. Conrail's notice also included certain tracks within a common yard to be established by MP at its Salem Yard for the purpose of receiving and delivering bridge traffic between Conrail and MP. Conrail's caption summary of the notice of exemption states that the tracks are located within the Common Yard owned by MP at Salem, as designated from time to time by the appropriate operating officer of MP. Paragraph 6 of the notice of exemption makes clear that the common yard is not in existence, but rather will be established at MP's Salem Yard. Like the line between St. Elmo and Salem, the Salem Yard was formerly owned by C&EI. Notice of the exemption was served on February 23, 1995, and published in the Federal Register on February 24, 1995. The trackage rights became effective on February 10, 1995. We may revoke an exemption if we find that regulation is necessary to carry out the rail transportation policy (RTP) of 49 U.S.C. 10101a. Labor interests may raise issues concerning the appropriate level of labor protection in a petition for revocation. To the extent that a party wishes to challenge a transaction, we retain the right to review the transaction to protect the integrity of our processes. The party seeking to revoke an exemption must meet its burden of proof by articulating reasonable, specific concerns to satisfy the revocation criteria. The unions seek revocation of the exemption on the grounds that the notice of exemption contains false and misleading information, alleging that the trackage rights are not bridge trackage rights and that the Salem Yard is not a common yard. They also contend that revocation is necessary to carry out the RTP, alleging that the sole purpose of the transaction is to avoid the carriers obligations to labor. The unions state that the trackage rights MP granted Conrail are not intended to permit Conrail to go from a point on one of its lines to a point on another of its lines. Therefore, according to the unions, the traffic hauled under these rights is not bridge traffic and Conrail will not be using MP's track as a bridge between its lines. Rather, the unions argue, Conrail will be doing work now performed by UP crews (formerly MP/C&EI crews). In reply, the railroads state that bridge trackage rights are transactions which will maintain the competitive balance among carriers, preserve shippers existing transportation choices, give shippers access to alternative routes with shorter, faster, or otherwise improved routing and increase the operational efficiency of the participating carriers, citing Railroad Consolidation Procedures, (1985) (Procedures). The railroads argue that the subject trackage rights operation is within the class of transactions exempted in Procedures and is a bona fide transaction undertaken to provide improved service to shippers and to achieve operational efficiencies and economies which otherwise could not be accomplished in the absence of the operation. The railroads also argue that, in the context of a trackage rights notice of exemption, the distinction among bridge, overhead, and local trackage rights is of no legal significance, as the exemption includes all such trackage rights so long as they are based on a written agreement of the parties and are not sought as a condition to a consolidation proposal. According to the railroads, unlike the Salem Yard, there are no crew facilities at St. Elmo. Prior to the trackage rights, Conrail trains had to stop at St. Elmo to wait for MP local crews to travel the 27 miles by van from Salem in order to move the Conrail trains received in interchange. In addition to the significant delays, averaging two hours prior to departure for traffic received from or delivered to Conrail, the railroads state that the crew changes were dangerous because MP crews had to walk across Conrail's busy main line to reach the trains on the siding. The railroads submit that these problems have been eliminated by the trackage rights now that Conrail is permitted to move trains directly over MP's line to Salem where they are interchanged to MP and then handled by MP's road haul crew to another interchange or to final destination. We agree with the railroads that what is important is that the trackage rights qualify for the class exemption, not whether they are bridge trackage rights. In any event, there is no false and misleading information in the notice because these are bridge trackage rights. Contrary to the unions assertion, there is no requirement that bridge trackage rights extend from one point to another point on a tenant railroad's line and the definition of bridge traffic includes no such requirement. The involved trackage rights do not permit Conrail to serve local shippers. Rather, they are intended only to improve the efficiency of the carriers operations by allowing Conrail to complete the interchange with MP at the Salem Yard instead of at St. Elmo. The unions assert that the notice creates the impression that Conrail has access to and operates in a common yard at Salem, but the unions claim that the Salem Yard is and always has been within the exclusive jurisdiction of MP/UP or, formerly, C&EI. In addition, the unions contend that a Bulletin issued by UP to its engine and train service crews stating that all tracks in the Salem Yard are designated for interchange, conflicts with the text of the notice, which provides that certain tracks in MP's Salem Yard, but not the entire yard and tracks therein, would be designated by MP for exercise of Conrail's trackage rights. Finally, the unions argue that the carriers are engaged in a subterfuge and that Conrail and MP will make a de facto interchange in the yard without lawful authority. Accordingly, the unions allege that the sole purpose of the transaction is to circumvent their labor contract. In response, the railroads point out that the notice of exemption does not indicate that the Salem Yard is a common yard, but states that a common yard will be established at Salem with implementation of the trackage rights operation. The railroads state that the unions mistakenly interpret the words de facto interchange in the Bulletin to mean that there is an interchange without lawful authority, when all that is meant by the term de facto is that the interchange between the railroads actually will take place at Salem instead of at St. Elmo. Both the notice and the underlying trackage rights agreement make it clear that the establishment of a common yard at Salem is prospective. Conrail's notice specifically states that the common yard will be established at MP's Salem Yard, and establishing a common yard at owner's Salem Yard is given as a reason for the agreement in the preamble to the trackage rights agreement. Also, the trackage rights give Conrail the right to operate over certain tracks within the Salem Yard as designated from time to time by . . . MP. According to the railroads, MP designated all of the tracks in the Salem terminal as a common yard in order to give both Conrail and MP the flexibility to use any yard track to expedite through movement of the involved trains. Because MP has the right to designate which tracks within the Salem Yard Conrail may operate over, its designation in the Bulletin of all tracks in the Yard does not conflict with the notice of exemption. Finally, there is no unlawful interchange between the carriers at Salem. The trackage rights give Conrail only the right to handle traffic for interchange with MP at the Salem Yard, and restrict it from handling any local traffic on the line or using the trackage rights for interchange with any other railroad. The traffic interchanged at the Salem Yard is the same traffic which was being interchanged between MP and Conrail at St. Elmo. While MP's Salem Yard is designated a common yard, it remains under control of MP, and Conrail's operations within the yard are limited to functions necessary to complete the interchange. The unions contend that this transaction does not have as its basic purpose the furtherance of rail transportation policy, because there has been no showing of any public need for Conrail to operate over MP's tracks or to run its trains and equipment into and around MP's Salem Yard. Rather, the unions contend that the only purpose of the trackage rights arrangement is to enable the railroads to bypass the collective bargaining procedures set forth in the Railway Labor Act and to use our powers to obtain what they could not achieve through negotiations with the unions. Specifically, BLE reports that UP had actively sought to negotiate to implement changes to the collective bargaining agreements (CBAs) that would have permitted Conrail crews to operate Conrail trains over MP's tracks and within the Salem Yard. The unions submit that we were not commissioned as a labor regulator or labor relations agency and that the primary relief the carriers seek concerns a labor dispute under the jurisdiction of the Federal courts and the National Mediation Board. In response, the railroads argue that the sole purpose for the trackage rights operation is to improve service to shippers and to achieve operating efficiencies and economies, not to bypass or to change CBAs. The railroads state that there has been no change in any CBA for the involved trackage rights operation and that UP/MP has no intention of removing any MP crews from coverage of their CBAs. There is no merit to the union's arguments regarding our jurisdiction. We do not somehow lose jurisdiction over a trackage rights transaction when implementing such rights may give rise to a labor dispute. The unions have not shown that this is a sham transaction to avoid collective bargaining. The railroads, on the other hand, have demonstrated that there is a legitimate transportation purpose to the trackage rights arrangement and, most importantly, that no CBA has been or will be modified as a result of its implementation. We conclude that the unions have not made the requisite showing for revocation of the exemption and have not otherwise shown that the notice of exemption contains false or misleading information or fails to comply with applicable requirements that would make the exemption void. Accordingly, we find no basis for revoking the trackage rights exemption in this proceeding, and, therefore, we will deny the petitions to revoke. It is ordered: 1. The petitions to revoke are denied. Decided: June 11, 1998 Service Date - June 18, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33604] Lone Star Railroad, Inc.--Acquisition Exemption--Union Pacific Railroad Company Lone Star Railroad, Inc. (LSRI), a Class III rail carrier, has filed a notice of exemption to acquire through lease a Union Pacific Railroad Company rail line as follows: all Abilene, TX yard tracks south of the Abilene wye track and south of the east-west main line, including the A&S Industrial Lead from milepost 0.0 to milepost 4.30, a distance of approximately 8.24 miles, at Abilene, Taylor County, TX. The transaction was scheduled to be consummated on or shortly after May 26, 1998. This proceeding is related to STB Finance Docket No. 33604 (Sub-No. 1), wherein Southern Switching Company (SSC), also a Class III rail carrier, has concurrently filed a notice of exemption to operate the Abilene line pursuant to an operating agreement with LSRI. LSRI and SSC are commonly controlled by Gregory B. Cundiff. Decided: June 12, 1998. Service Date - June 18, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33604 (Sub-No. 1)] Southern Switching Company--Operation Exemption--Lone Star Railroad, Inc. Southern Switching Company (SSC), a Class III rail carrier, has filed a notice of exemption to operate over approximately 8.24 miles of railroad leased by Lone Star Railroad, Inc. (LSRI). The involved trackage is as follows: all Abilene, TX yard tracks south of the Abilene wye track and south of the east-west main line, including the A&S Industrial Lead from milepost 0.0 to milepost 4.30, at Abilene, Taylor County, TX. The transaction was scheduled to be consummated on or shortly after May 26, 1998. This proceeding is related to STB Finance Docket No. 33604, wherein LSRI has concurrently filed a notice of exemption to acquire through lease the Abilene line from Union Pacific Railroad Company. LSRI and SSC are commonly controlled by Gregory B. Cundiff. Decided: June 12, 1998. Service Date - June 18, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33605] J.K. Lines, Inc.--Acquisition and Operation Exemption--Line of The Burlington Northern and Santa Fe Railway Company. J.K. Lines, Inc. (JK), a Class III rail carrier, has filed a notice of exemption to acquire and operate approximately 2 miles of rail line, the track right-of-way, and certain adjacent real estate owned by The Burlington Northern and Santa Fe Railway Company (BNSF). The line covers seven parcels extending from the end of BNSF's track in Joliette, ND, at milepost 179.55, south to the North Dakota Highway No. 5 right-of-way line, near milepost 177.44. J.K. Line will provide common carrier rail service on the involved line through a subcontractor. The transaction was scheduled to be consummated on or shortly after May 31, 1998. Decided: June 10, 1998. Service Date - June 18, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-354 (Sub-No. 2X)] Rochester & Southern Railroad, Inc.--Abandonment Exemption-- in Cattaraugus County, NY On June 1, 1998, Rochester & Southern Railroad, Inc. (R&S) filed with the Surface Transportation Board a petition for exemption to abandon a 10.41-mile line of railroad, extending from milepost 83.39, at or near Machias, to milepost 93.8, at or near Ashford Junction, in Cattaraugus County, NY. The line traverses U.S. Postal Service Zip Codes 14101 and 14731, and includes the non-agency rail stations of Ashford Junction, located at milepost 93.6, and Machias, located at milepost 83.4. By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by September 18, 1998. Decided: June 10, 1998. Service Date - June 19, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-369 (Sub-No. 3X)] Buffalo & Pittsburgh Railroad, Inc.--Abandonment Exemption--in Erie and Cattaraugus Counties, NY On June 1, 1998, Buffalo & Pittsburgh Railroad, Inc. (B&P) filed a petition for exemption to abandon two contiguous segments of rail line: (1) from milepost 2.0, at or near Buffalo, NY, to milepost 45.0, at or near Ashford Junction, NY, a distance of 43.0 miles; and (2) from milepost 93.8, at or near Ashford Junction, to milepost 103.0, at or near Salamanca, NY, a distance of 9.2 miles, in Erie and Cattaraugus Counties, NY. The line segments traverse U.S. Postal Service Zip Codes 14224, 14218, 14127, 14098, 14170, 14033, 14055, 14141, 14171, 14731, and 14741. The line segments include the stations of Lackawanna-South Park (milepost 3), Kellogg (milepost 5), East Hamburg (milepost 8), Orchard Park (milepost 9), Colden (milepost 19), East Concord (milepost 26), Springville (milepost 30), West Valley (milepost 39), Ashford Junction (milepost 45), and Ellicottville (milepost 98.1). By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by September 18, 1998. Decided: June 12, 1998. Service Date - June 19, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33606] Minnesota Commercial Railway Company--Acquisition and Operation Exemption-- Certain Lines of The Burlington Northern and Santa Fe Railway Company Minnesota Commercial Railway Company (MC), a Class III rail carrier, has filed a notice of exemption to acquire and operate approximately 5 miles of rail line owned by The Burlington Northern and Santa Fe Railway Company (BNSF), plus incidental trackage rights to reach certain industries and MC's own trackage. The line is located in Minneapolis, MN, known as the Southeast Minneapolis Switching District (SEMSD). BNSF classified the SEMSD as industrial trackage, and, consequently, there are no mileposts on the subject trackage. The transaction was scheduled to be consummated on or shortly after May 28, 1998. Decided: June 11, 1998. Service Date - June 19, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33388 Decision No. 88 CSX CORPORATION AND CSX TRANSPORTATION, INC., NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN RAILWAY COMPANY --CONTROL AND OPERATING LEASES/AGREEMENTS-- CONRAIL INC. AND CONSOLIDATED RAIL CORPORATION By correspondence filed June 15, 1998, Wheeling & Lake Erie Railway Company (W&LE) requests clarification of the summary description of conditions adopted at our June 8, 1998 voting conference. W&LE contends that our summary description of conditions relative to its interests and participation in this proceeding, if not clarified at this time, could result in unintended disputes and revenue losses during implementation of the relief intended for W&LE. W&LE asks us specifically to include underlying trackage rights in its haulage rights with respect to Toledo and Lima, OH, impose a 15-year conditional sale in the extension of its Huron Dock lease with NS, and confirm that its access to Ohio aggregate markets will be over both applicants rail lines. W&LE's request will be denied. We will not entertain responsive pleadings, including petitions for clarification and similar relief, until our written decision is served on July 23, 1998. Pleadings such as W&LE's clarification request may be filed after our written decision is served, not before. We will not address any comparable pleadings filed in this proceeding prior to service of our written decision. We believe that our public vote on June 8, 1998, was sufficiently clear to permit parties, should they choose to do so, to initiate appropriate negotiations in advance of the issuance of the written decision. It is ordered: 1. W&LE's request for clarification is denied. Decided: June 18, 1998 Service Date - Late Release June 19, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT STB Docket NO. AB-414(SUB-NO. 2X) Iowa Interstate Railroad, Ltd.--Abandonment Exemption-- in Marion County, IA In this proceeding, Iowa Interstate Railroad, Ltd. (IAIS) has filed a petition to abandon and discontinue operations of a 8.70-mile line of railroad between the end of the line at or near milepost 114.80 in Pella and milepost 123.5 near Otley, in Marion County, IA. In its petition, IAIA states that there are four shippers on the line: Pella Corporation, Pella Field Service, The City of Pella and Farm Service Co-op. The line was formerly owned by the Trustee of the Chicago, Rock Island and Pacific Railroad Company and its successor Chicago Pacific Corporation (CPAC). The line was acquired on October 10, 1984 and commenced operations on or about October 20, 1984. The line was taken out of service and embargoed on October 6, 1996 due to deteriorated track conditions. In 1996, 330 cars were handled inbound or outbound, 308 cars in 1995 and no cars in 1997. Alternative transportation service is available through other rail carriers and truck companies. The National Geodetic Survey (NGS), has identified five geodetic station markers that may be affected by the proposed abandonment. Therefore, IAIS shall notify NGS at least 90 days prior to salvage activities in order to plan their relocation. The U.S. Army Corps of Engineers states that IAIS should contact the Rock Island Field Office of the U.S. Fish and Wildlife Service (FWS), to determine if any federally listed endangered species are being impacted, and if so, how to avoid or minimize impacts. Also the Iowa Department of Natural Resources (IDNR) states that if listed species or rare communities are found during the planning or construction phases, additional studies and/or mitigation may be required. Therefore, IAIS prior to salvage activities shall consult with FWS and the IDNR to determine if permits are required. We will recommend consultation conditions with these agencies. The State Historical Society of Iowa (IA SHPO) states that if the abandonment uncovers an item or items which may have archeological, historical or architectural interest, or if important data come to light in the project area, IAIS should make reasonable efforts to avoid or minimize harm to the property until the significance of the discovery can be determined. Therefore, during salvage operations, if archaeological or historical materials are discovered, IAIS shall discontinue the operations and notify the IA SHPO. We will recommend consultation with the IA SHPO. Based on the information provided from all sources to date, and subject to the recommended conditions, we conclude that, as currently proposed, abandonment of the line will not significantly affect the quality of the human environment. Service Date - June 22, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33612] The Burlington Northern and Santa Fe Railway Company Trackage Rights Exemption Union Pacific Railroad Company Union Pacific Railroad Company (UP) has agreed to grant overhead trackage rights to The Burlington Northern and Santa Fe Railway Company (BNSF) between Dallas, TX, in the vicinity of UP's milepost 214.6 (Dallas Subdivision) and Tower 55, Fort Worth, TX, in the vicinity of UP's milepost 245.5 (Dallas Subdivision), a distance of approximately 30.9 miles. The transaction was scheduled to be consummated on June 15, 1998. On June 4, 1998, BNSF and UP filed a petition for exemption in STB Finance Docket No. 33612 (Sub-No. 1), wherein BNSF and UP request that the Board permit the overhead trackage rights arrangement described in the present proceeding to expire on July 31, 1998. That petition will be addressed by the Board in a separate decision. The purpose of the trackage rights is to allow BNSF to operate over an alternative line while BNSF's line is undergoing maintenance and repair. Decided: June 15, 1998. Service Date - June 22, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-33 (Sub-No. 118X) UNION PACIFIC RAILROAD COMPANY--ABANDONMENT EXEMPTION--IN EL PASO COUNTY, CO By decision served on June 8, 1998, the Board exempted Union Pacific Railroad Company from the prior approval requirements to abandon a 3.07-mile line of railroad known as the Templeton Gap Spur, extending from the end of the line at milepost 602.70 to milepost 605.77, in Colorado Springs, El Paso County, CO, subject to environmental and labor protective conditions. The exemption was scheduled to become effective on July 8, 1998, unless stayed by the Board or unless a formal offer of financial assistance (OFA) was filed by June 18, 1998. On June 15, 1998, a petition to toll the 10-day period for submitting an OFA for an additional 60 days was filed by the Colorado Springs & Eastern Railroad Company (CS&E). CS&E's president indicates that, although she submitted a request to UP's counsel for the required information on May 29, 1998, that information has not been received and is not expected to be received prior to the deadline for filing the subject petition. UP replied on June 17, 1998, seeking either denial of the petition or an extension of the OFA period to no later than June 25, 1998. UP claims that it responded to the request in a June 12, 1998 letter, that CS&E should have received the information on June 15, and that CS&E could have filed an OFA by the June 18, 1998 due date. As UP points out, CS&E could have requested the information well before May 29, 1998. The expanded notice procedure at the outset of abandonment proceedings allows adequate time for parties to consider filing an OFA. CS&E gives no reason for not submitting its request for information until May 29, 1998. Under the circumstances, CS&E's request to toll the OFA period for 60 days will be denied, and, instead, the OFA period will be tolled until June 29, 1998. The Board will entertain petitions to toll the 10-day period for filing OFAs when an applicant has failed to provide a potential offeror with the information necessary to the development of its OFA. Where, as here, it appears that UP has already provided the necessary information, an extension of 11 days, not 60 days, would be more reasonable. Accordingly, the period within which an OFA must be filed in this proceeding will be tolled until June 29, 1998, and the effective date of the exemption will be postponed until July 19, 1998. It is ordered: 1. The time period for CS&E to file an OFA is extended until June 29, 1998. 2. The effective date of the exemption is postponed until July 19, 1998. Decided: June 22, 1998 Service Date - June 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-33 (Sub-No. 118X) UNION PACIFIC RAILROAD COMPANY--ABANDONMENT EXEMPTION--IN EL PASO COUNTY, CO On February 18, 1998, Union Pacific Railroad Company filed a petition seeking an exemption to abandon a 3.07-mile line of railroad known as the Templeton Gap Spur, extending from the end of the line at milepost 602.70 to milepost 605.77, in Colorado Springs, El Paso County, CO. By decision served June 8, 1998, the Board granted the petition, subject to environmental and labor protective conditions. The exemption was scheduled to become effective on July 8, 1998, unless stayed by the Board or unless a formal offer of financial assistance (OFA) was filed by June 18, 1998. On June 15, 1998, a petition to toll the 10-day period for submitting an OFA was timely filed by the Colorado Springs & Eastern Railroad Company. A subsequent decision will be issued on this matter. On June 11, 1998, the City of Colorado Springs (the City) filed a motion to intervene in this proceeding. Although the City previously filed a letter dated February 12, 1998, in support of the abandonment, the City is not presently a party of record. Because the City is the owner of the underlying right-of-way involved in this proceeding, the City asserts that it clearly has an interest in the outcome of this proceeding. The City represents that UP does not oppose its motion seeking intervention. A motion to intervene in a proceeding may be granted if it (1) will not unduly disrupt the schedule for filing verified statements, except for good cause shown; and (2) would not unduly broaden the issues raised in the proceeding. The City's intervention will not unduly disrupt the schedule and will not unduly broaden the issues. Accordingly, the motion to intervene will be granted. It is ordered: 1. The City is granted leave to intervene in this proceeding. Decided: June 17, 1998 Service Date - June 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT STB Docket No. AB-33 (Sub-No. 119X) UNION PACIFIC RAILROAD COMPANY--ABANDONMENT EXEMPTION-- IN ROCK, GREEN AND DANE COUNTIES, WI On March 4, 1998, Union Pacific Railroad Company filed a petition to abandon a line of railroad known as the Harvard Subdivision, extending from railroad milepost 119.0 near Evansville to railroad milepost 134.0 near MX , a crossing of Wisconsin & Southern Railroad Company (WSOR), near Madison, a distance of 15.0 miles in Rock, Green and Dane Counties, WI. The Line traverses U.S. Postal Service Zip Codes 53536, 53575 and Area 537 (near Madison), and includes the non-agency rail station of Oregon at milepost 128.1. The Board published a notice in the Federal Register on March 24, 1998, instituting an exemption proceeding. The United Transportation Union (UTU) requests imposition of labor protective conditions. The Wisconsin Department of Transportation (WisDOT), on behalf of the Wisconsin Department of Natural Resources (WisDNR), requests issuance of a notice of interim trails use (NITU). The City of Fitchburg and the Village of Oregon (Fitchburg/Oregon Partnership), requests a public use condition. In addition, the City of Evansville and Dane County lend their support to the request by Fitchburg/Oregon Partnership for the public use condition. We will grant the exemption, subject to trail use, public use, environmental conditions, and standard employee protective conditions. UP has rail operations in 24 states including, as relevant here, Wisconsin. UP owns and operates the Line. All UP rail traffic to or from Madison is interchanged with WSOR at Janesville, WI, or Chicago, IL, and handled over WSOR's lines. There is no overhead traffic on the Line and the Line would not be needed for overhead traffic. UP's local rail traffic terminates near Evansville. (UP has trackage rights over the WSOR line between Janesville and MX. ). UP seeks to abandon the Line because: (1) freight revenues from local traffic on the Line are insufficient to justify operations and the expenses involved in maintaining the Line; and (2) there is no reasonable prospect that traffic and revenue will ever increase sufficiently in the foreseeable future to justify operation and retention of the Line. According to UP there has been no local traffic from or to the only shipper on the Line since May 1996. The shipper is Oregon Farm Center. The shipper received one inbound carload of fertilizer in 1995, and two in 1996. No traffic moved over the Line in 1997. The Line has a maximum operating speed of 30 m.p.h. Rehabilitation is not required to meet Federal Railroad Administration Class 1 safety standards. The Line contains 15.00 miles of mainline track and 2.10 miles of miscellaneous sidings. The net liquidation value of the track material on the Line is $803,515. If UP retained and operated the Line, there would be annual costs for normalized maintenance to a Class 1 level of $103,165, due to 14 road crossings on the Line, eight of which are signalized. UP indicates that the right-of-way of the Line consists of both reversionary and non-reversionary acreage and that, based on information in its possession, the Line does not contain federally-granted rights of way. Regulation of the proposed transaction is not necessary to protect shippers from the abuse of market power because there has been no local traffic from or to the sole shipper on the Line, Oregon Farm Center, since May 1996. No one has protested the proposed abandonment. Nevertheless, to ensure that the shipper is aware of our action, we will require UP to serve a copy of this decision on Oregon Farm Center within 5 days of the service date of this decision and to certify to us that it has done so. SEA indicated that the National Geodetic Survey (NGS) has identified 18 geodetic station markers along the rail line and requests 90 days notice to plan relocation of any markers that may be disturbed or destroyed. Therefore, SEA recommends, and we agree, that a condition be imposed requiring UP to consult with the NGS and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers. By letter filed April 13, 1998, WisDOT requests that interim trail use/rail banking be imposed under the National Trails System Act. WisDOT and WisDNR have agreed to work cooperatively to acquire and use the right of way. WisDNR has submitted a statement of willingness to assume financial responsibility for the right-of-way, and acknowledged that use of the right-of-way is subject to possible future reconstruction and reactivation of the right-of-way for rail service as required. By a faxed letter dated June 8, 1998, UP states that it is agreeable to negotiating with WisDNR for interim trail use. WisDNR's request complies with the requirements and UP is willing to enter into negotiations. Therefore, we will issue a NITU for the described line. The parties may negotiate an agreement during the 180-day period prescribed below. If an agreement is executed, no further Board action is necessary. If no agreement is reached within 180 days, UP may fully abandon the Line, subject to the conditions imposed below. Use of the right-of-way for trail purposes is subject to restoration for railroad purposes. In a letter dated April 13, 1998, the Fitchburg/Oregon Partnership (the Partnership) requests that a 180-day public use condition be imposed. The Partnership proposes to jointly develop a 230 acre business park adjacent to the tracks, which are here the subject of abandonment. The Partnership authorized a study to determine the feasibility of the joint Business Park in April 1995. With renewed interest by business prospects in 1997, the Partnership has initiated efforts to implement the project. The Partnership indicates that the 180- day period is needed in order for them to: (1) continue negotiations between the respective municipalities for a shared service agreement for the business park; (2) conduct negotiations with UP; (3) determine the rail car usage for the prospective businesses in the Fitchburg/Oregon business park; and (4) determine alternate operators such as WSOR. The Partnership requests that UP be precluded from disposing of the rail corridor, i.e., the removal or destruction of structures such as bridges, trestles, culverts, tunnels and rails, because these structures may have considerable value for the intended public use. In a letter dated April 16, 1998, UP states that it does not object to the imposition of a public use condition on the right-of-way and bridges but does oppose any such condition on the track structure of the Line. UP states, however, that it recognizes the need for the track structure for continued rail service to the proposed business park. UP indicates that, if requested by the Partnership, it will provide information regarding the net liquidation value for the track structure and the value of the right-of-way, in the event that the Partnership desires to make an offer of financial assistance. In a reply letter dated May 5, 1998, the Partnership states an interest in negotiating with UP to determine the feasibility of delaying the removal and salvage of the track structure. The Partnership further indicates that, if the parties cannot reach agreement, it will then seek the STB's involvement. Until then, the Partnership believes it is unnecessary for the STB to decide the issue of imposing conditions on the track structure. According to the Partnership, it is working in conjunction with WisDOT to acquire the 15.0 mile UP rail line. We have determined that persons who file under the Trails Act may also file for public use. When the need for both conditions is established, it is our policy to impose them concurrently, subject to the execution of a trail use agreement. The public use criteria has been met by the Partnership. Accordingly, a 180-day public use condition also will be imposed, commencing with the effective date of this decision and notice. If a trail use agreement is reached on a portion of the right-of-way, UP must keep the remaining right-of-way intact for the remainder of the 180-day period to permit public use negotiations. When imposing a public use condition, the Board normally does not prohibit a carrier from removing track and track materials. But here, the Partnership's public use request is based solely on the need for a rail line to serve a proposed industrial business park. Without the rail structure remaining intact there can be no rail service on this line to the business park. We will exercise our discretion and impose a public use condition that prohibits the removal of the track structure. The 180 day period will provide the parties time to negotiate and agree on the ultimate public usage of the rail line. It is ordered: 1. Under 49 U.S.C. 10502, we exempt from the prior approval requirements of 49 U.S.C. 10903 the abandonment by UP of the above-described line, subject to the employee protective conditions set forth in Oregon Short Line R. Co.--Abandonment--Goshen, 360 I.C.C. 91 (1979), and the conditions that: (1) UP shall leave intact all of the right-of-way, including bridges, trestles, culverts, tunnels and track and track materials for a period of 180 days from the effective date of this decision and notice, to enable any state or local government agency or any other interested person to negotiate the acquisition of the Line for public use; (2) UP shall comply with the interim trail use/rail banking procedures set forth below; and (3) UP shall notify the NGS at least 90 days prior to engaging in any activities that would disturb or destroy the geodetic markers identified on the Line. 2. UP is directed to serve a copy of this decision on the shipper on the Line within 5 days after the service date of this decision and to certify to the Board that it has done so. 3. If an interim trail use/rail banking agreement is reached, it must require the trail user to assume, for the term of the agreement, full responsibility for management of, any legal liability arising out of the transfer or use of (unless the user is immune from liability, in which case it need only indemnify the railroad against any potential liability), and for the payment of any and all taxes that may be levied or assessed against, the right-of-way. 4. Interim trail use/rail banking is subject to the future restoration of rail service and to the user's continuing to meet the financial obligations for the right-of-way. 5. If interim trail use is implemented and subsequently the user intends to terminate trail use, it must send the Board a copy of this decision and notice and request that it be vacated on a specified date. 6. If an agreement for interim trail use/rail banking is reached by the 180th day after service of this decision and notice, interim trail use may be implemented. If no agreement is reached by that time, UP may fully abandon the Line, provided the conditions imposed above are met. 7. Provided no OFA has been received, this exemption will be effective on July 23, 1998. 8. UP shall file notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the Line. If consummation has not been effected by UP's filing of a notice of consummation by June 22, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: June 22, 1998 Service Date - June 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-55 (Sub-No. 559X) CSX TRANSPORTATION, INC.--ABANDONMENT EXEMPTION--IN ATLANTA, FULTON COUNTY, GA By petition filed March 2, 1998, CSX Transportation, Inc. (CSXT), seeks an exemption to abandon a 0.35-mile portion of its Atlanta Service Lane, Atlanta Terminal Subdivision, extending from milepost 4.87 at Memorial Drive to milepost 5.22 at Wylie Street, in Atlanta, Fulton County, GA. A notice was published in the Federal Register on March 20, 1998, instituting an exemption proceeding. A request for imposition of a public use condition and issuance of a notice of interim trail use (NITU) was filed by the City of Atlanta. The United Transportation Union requests imposition of labor protective conditions. We will grant the exemption, subject to public use and standard employee protective conditions. Before July 1991, the line segment proposed for abandonment was served by CSXT from the south. In 1991, CSXT abandoned its southern connection to the line, between milepost 4.39 at Glenwood Avenue and milepost 4.87 at Memorial Drive, to facilitate a Georgia Department of Transportation project to widen Interstate 20. At that time, there was one customer, Recycall, located at a facility on Memorial Drive, on the line segment CSXT now seeks to abandon, that used the line to ship scrap paper. Following abandonment of the southern connection, CSXT began serving Recycall from the north out of Hulsey Yard until Recycall vacated the facility. In September 1996, the facility was leased to another shipper of scrap paper, Weyerhaeuser Corporation. Weyerhaeuser shipped 37 carloads in 1996 and 19 carloads in 1997. Its last shipment was in May 1997 when it too vacated the Memorial Drive facility, which has remained vacant. According to CSXT, no shipments have moved over the line since May 1997, and CSXT does not anticipate any traffic in the future. There is a rail patron, Stein Steel, that is located between Wylie Street and Memorial Drive, but, according to CSXT, Stein Steel will not be affected by the abandonment because it is served by another rail line out of Hulsey Yard. In a letter dated June 2, 1998, the Georgia Department of Natural Resources, Historic Preservation Division, has determined that the entire line and the Fulton Terrace bridge at milepost 5.06 are both eligible for listing in the National Register of Historic Places and that the effects of the proposed abandonment must be determined. Therefore, SEA recommends that we impose a condition requiring CSXT to retain its interest in and take no steps to alter the historic integrity of all sites and structures on the line that are 50 years old or older until completion of the section 106 process of the National Historic Preservation Act. We will impose the condition recommended by SEA. The City requests a NITU in a letter filed April 9, 1998. It has submitted a statement of willingness to assume financial responsibility for the right-of-way and acknowledged that use of the right-of-way is subject to possible future reconstruction and reactivation for rail service as required. By letter filed May 5, 1998, CSXT states that it is not willing to negotiate with the City for interim trail use. Because 16 U.S.C. 1247(d) permits only voluntary interim trail use, we cannot issue a NITU in this proceeding. SEA has indicated in its EA that the right-of-way may be suitable for other public use after abandonment. As noted above, the City also requests imposition of a 180-day public use condition precluding CSXT from disposing of the rail corridor and removing or destroying potential trail-related structures, such as bridges, trestles, culverts and tunnels. The City states that the rail corridor is included in the Atlanta Parks Open Space and Greenway Plan adopted by the City Council in December 1993 and is suitable for a greenway trail. It states that the development of a greenway trail will provide an alternative mode of transportation, improve the City's air quality, and help to revitalize the City's Reynoldstown neighborhood. As an alternative to interim trail use under the Trails Act, the right-of-way may be acquired for public use. The City has met the public use criteria by specifying: (1) the condition sought; (2) the public importance of the condition; (3) the period of time for which the condition would be effective; and (4) justification for the period of time requested. Accordingly, a 180-day public use condition will be imposed, commencing with the effective date of this decision. It is ordered: 1. Under 49 U.S.C. 10502, we exempt from the prior approval requirements of 49 U.S.C. 10903, the abandonment by CSXT of the above-described line, subject to: (a) the employee protective conditions in Oregon Short Line R. Co.--Abandonment--Goshen, 360 I.C.C. 91 (1979); (b) the condition that CSXT shall leave intact all of the right-of-way, including bridges, trestles, culverts and tunnels (but not track and track materials) for a period of 180 days from the effective date of this decision to enable any state or local government agency or any other interested person to negotiate the acquisition of the line for public use; and (c) the condition that CSXT shall retain its interest in and take no steps to alter the historic integrity of all sites and structures on the line that are 50 years old or older until completion of the section 106 process of the National Historic Preservation Act. 2. CSXT is directed to serve a copy of this decision on Weyerhaeuser within 5 days after the service date of this decision and certify to the Board that it has done so. 3. Provided no OFA has been received, this exemption will be effective July 23, 1998. 4. CSXT shall file notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by CSXT's filing of a notice of consummation by June 23, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: June 18, 1998 Service Date - June 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 30186 (Sub-No. 3) TONGUE RIVER RAILROAD COMPANY--CONSTRUCTION AND OPERATION--IN ROSEBUD AND BIG HORN COUNTIES, MT ACTION: Notice of Construction and Operation Application and Adoption of Initial Procedural Schedule. SUMMARY: The Board is publishing notice of an application filed by the Tongue River Railroad Company (TRRC) seeking authority to construct and operate 17.3 miles of track, called the Western Alignment, to be built between Decker, MT, and a point 17.3 miles north of Decker, to connect with the rail line previously approved for construction in Tongue River Railroad Company--Rail Construction and Operation--Ashland to Decker, Montana, Finance Docket No. 30186 (Sub-No. 2) (STB served Nov. 8, 1996) (Tongue River II). The Western Alignment is proposed as an alternative to a routing called the Four Mile Creek Alternative (herein, the Four Mile Creek Route) approved in Tongue River II. The routing of the Western Alignment separates from TRRC's approved Four Mile Creek routing approximately 20.8 miles south of the point at which the line connects with TRRC's approved line routing between Ashland and Miles City, MT, and extends southwest to the Spring Creek/Decker area of southeastern Montana, terminating near Decker where it will connect with The Burlington Northern and Santa Fe Railway Company's Kennecott Spur. The Board is issuing a procedural schedule establishing filing dates for comments and replies on whether this application meets the criteria of 49 U.S.C. 10901. The Board may subsequently issue another notice setting forth a procedural schedule for the filing of any additional pleadings after completion of the necessary environmental analysis, if appropriate. SUPPLEMENTARY INFORMATION: Along with its application, TRRC has submitted a renewed petition to establish a procedural schedule for this proceeding. (TRRC's initial request for establishment of a procedural schedule was denied by decision served March 24, 1998.) Northern Cheyenne Tribe and Native Action, Inc., filed a reply to TRRC's request for a procedural schedule. Great Northern Properties Limited Partnership and Northern Plains Resource Council, Inc., also filed a reply to TRRC's petition. These replies are primarily directed to the environmental issues raised here and the schedule contemplated for their resolution. Since we are adopting a procedural schedule only for dealing with non-environmental issues, these petitions need not be addressed here. The United Transportation Union-General Committee of Adjustment and United Transportation Union-Montana State Legislative Board also replied jointly to TRRC's petition, raising concerns about technical compliance with our notification rules and the fairness or openness of our actions in this case. As discussed below, the procedural schedule we are adopting here provides adequate notice as well as ample opportunity for a full and thorough evaluation of all of the issues involved here. The schedule proposed by TRRC would establish due dates for submissions and Board action, both in considering the transportation merits of the application and in carrying out the environmental review process. The Board is adopting only that portion of TRRC's procedural schedule that sets due dates for filing comments on issues involving whether or not the application meets the statutory criteria of 49 U.S.C. 10901, and for filing replies to those comments. The Board will not, however, set a date for issuance of a final decision on the merits of the application. Nor will we establish a procedural schedule for our environmental review of the new application. Rather, as discussed below, we will initiate the environmental review process now, and establish a procedural schedule for submission of any additional pleadings and issuance of a final decision upon completion of that process. We are not adopting TRRC's proposal that we set an environmental procedural schedule because the Board's environmental analysis depends on input from many sources, including Federal and state agencies, and at this point it is impossible to predict how long the environmental review process will take. Our experience has shown that the preparation of a NEPA document in a proceeding such as this, where a number of environmental issues may exist generally, does not lend itself to a structured time limit. Because we would be unable to assure compliance with TRRC's proposed schedule even if we adopted it, we see no point in seeking public comment on it. Rather, we will adopt a schedule for receiving comments and replies on whether the application meets the statutory criteria in 49 U.S.C. 10901. The schedule we are adopting will allow for adequate public participation and the development of a sufficient record to allow the Board to determine whether the proposed construction meets the criteria of section 10901. Turning to the environmental review, the Board's Section of Environmental Analysis (SEA) shortly will issue a notice of intent to prepare a supplement to the Final Environmental Impact Statement issued in Tongue River II (herein, the Supplement) and in that document will seek comments regarding the environmental scope of, and potential environmental concerns and issues to be addressed in, this case. It appears that a Supplement is the appropriate means of reviewing TRRC's application for the Western Alignment. It is premature to determine the scope of the Supplement at this time. Before doing so, SEA will review any comments on the notice of intent, verify the information in TRRC's environmental report, and consult with the appropriate Federal and state agencies to identify the key environmental issues to be addressed in the Supplement. Decided: June 15, 1998. Service Date - June 23, 1998 PROCEDURAL SCHEDULE June 23, 1998 Publication of notice adopting procedural schedule. June 30, 1998 Due date for publication by TRRC of newspaper notices announcing this procedural schedule. July 13, 1998 Due date for notices of intent to participate as a party of record. September 16, 1998 Due date for comments in support of or opposition to the application. November 2, 1998 Due date for replies to comments. ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33381 APPLICATION OF THE NATIONAL RAILROAD PASSENGER CORP. UNDER 49 U.S.C. 24308(a)--SPRINGFIELD TERMINAL RAILWAY COMPANY, BOSTON AND MAINE CORPORATION, AND PORTLAND TERMINAL COMPANY By petition filed on June 17, 1998, the National Railroad Passenger Corporation (Amtrak) and the Northern New England Passenger Authority (NNEPRA) request a 20-day extension of time to file petitions for reconsideration of our prior decision served on May 29, 1998. Amtrak and NNEPRA state that an extension will preserve the rights of all parties in the event that their current negotiations with Springfield Terminal Railway Company, Boston and Maine Corporation, and Portland Terminal Company are not successful. The requested extension will be granted. It is ordered: 1. The deadline for filing petitions for reconsideration is extended until July 8, 1998. Decided: June 22, 1998 Service Date - June 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33556 Decision No. 4 CANADIAN NATIONAL RAILWAY COMPANY, GRAND TRUNK CORPORATION, AND GRAND TRUNK WESTERN RAILROAD INCORPORATED CONTROL ILLINOIS CENTRAL CORPORATION, ILLINOIS CENTRAL RAILROAD COMPANY, CHICAGO, CENTRAL AND PACIFIC RAILROAD COMPANY, AND CEDAR RIVER RAILROAD COMPANY On February 12, 1998, Canadian National Railway Company (CNR), Grand Trunk Corporation (GTC), and Grand Trunk Western Railroad Incorporated (GTW) [referred to collectively as CN], and Illinois Central Corporation (IC Corp.), Illinois Central Railroad Company (ICR), Chicago, Central and Pacific Railroad Company (CCP), and Cedar River Railroad Company (CRRC) [referred to collectively as IC. CN and IC are referred to collectively as applicants], filed a notice of intent to file a joint application seeking Surface Transportation Board authority for the acquisition of control, by CNR, through its indirect wholly owned subsidiary Blackhawk Merger Sub, Inc. (Merger Sub), of IC Corp., and through it of ICR and its railroad affiliates, and for the resulting common control by CNR of GTW and its railroad affiliates and ICR and its railroad affiliates. Applicants expected that they would file the Primary Application on or before June 12, 1998. In view of the need to take account of subsequent developments, applicants state that they now expect to file in early July. In Decision No. 1 (served February 26, 1998), in order to facilitate the prompt and efficient resolution of this proceeding, the parties to this proceeding were directed to comply with the protective order attached to that decision as an Appendix. In Decision No. 2 (served March 13, 1998), we found that the transaction contemplated by applicants is a major transaction and we assigned the proceeding to Administrative Law Judge David Harfeld for handling of all discovery matters and the initial resolution of discovery disputes. We address in this decision the petition filed May 20, 1998, by applicants, wherein applicants seek waiver or clarification of certain requirements of the Board's Railroad Consolidation Procedures and of certain other regulations governing filings related to the Primary Application. On May 20, 1998, applicants filed a proposed procedural schedule, which will be addressed in a separate decision. Applicants request that the Board waive or clarify its regulations to allow the application to exclude effects of the transaction that would take place entirely outside the United States. Applicants state that, although CN is primarily a Canadian rail carrier, its proposed acquisition of control of IC is subject to the jurisdiction of the Board because both CN and IC operate in the United States and are rail carriers providing transportation subject to the jurisdiction of the Board. Applicants further note that, under the public interest standard by which the Board must evaluate the proposed CN/IC transaction, the Board may consider certain matters that affect both sides of the international border (for example, the financial strength of the combined system and improved service on traffic movements between the United States and Canada). Applicants state that the regulatory focus of that inquiry will be on how those effects bear on shippers and communities in the United States and on the United States rail transportation system. Applicants further state that the statute constitutes neither a mandate nor authority for the Board to inquire generally into CN's operations outside the United States, and that requiring them in this case to include detailed information about the effects of the transaction outside the United States could impose significant burdens on them in preparing the application, without materially assisting the Board in applying the public interest standard. Applicants therefore request that the Board waive or clarify its regulations to allow the application to exclude effects of the transaction that would take place entirely outside the United States. We find applicants request reasonable and will therefore grant the request to allow the application to exclude effects of the transaction that would take place entirely outside the United States. The Railroad Consolidation Procedures define applicant as one of [t]he parties initiating a transaction. Applicants seek waiver or clarification that, with respect to the Primary Application, the term applicant includes only CNR, GTC, GTW, IC Corp., ICR, CCP, and CRRC, and does not include Holdings or Merger Sub. Applicants state that Holdings is a wholly owned subsidiary of IC Corp., and that it owns 100% of the stock of CCP and CRRC but does not conduct any operations in its own name. Applicants further state that Merger Sub is an indirect, wholly owned subsidiary of CNR whose sole function is to effectuate the proposed acquisition of IC Corp. stock, and that Merger Sub's separate corporate existence will end when it merges with and into IC Corp. We agree that there is no need for Holdings or Merger Sub to be a formal applicant. These entities currently have no rail activities or rail operations, nor will any of such entities have any such activities or operations prior to such time, if ever, as we approve the primary application; rather, these entities have been, or will be, created simply to effectuate the control transaction. We will therefore grant the waiver or clarification sought by applicants. The Railroad Consolidation Procedures define applicant carriers as [a]pplicant, all carriers related to the applicant, and all other carriers involved in the transaction. Applicants seek waiver or clarification with respect to the Primary Application, to limit the definition of applicant carriers to GTW, ICR, CCP, CRRC, and any other Board-regulated rail carriers in which either CN or IC now hold an interest greater than 50%. The requested waiver or clarification would exclude from the definition of applicant carriers any rail carrier subsidiaries not subject to the Board's jurisdiction, and any in which CN or IC have interests of 50% or less. Applicants state that CN and IC have less-than-majority interests in a number of rail carriers, all of which operate independently of CN and IC and maintain their own records (e.g., terminal, switching, or short-line railroads owned jointly with other railroads). Applicants state that, because these companies are under separate management from CN and IC, applicants do not anticipate any change in the management or operation of these companies as a result of the proposed transaction. Applicants further state that requiring the Primary Application to include information on these entities as applicant carriers would impose significant burdens on them without enhancing the Board's ability to evaluate the control transaction proposed in the Primary Application. We will grant the waiver or clarification sought by applicants, by confirming that, with respect to the Primary Application, the term applicant carriers refers to GTW, ICR, CCP, CRRC, and any other Board-regulated rail carriers in which either CN or IC now holds, directly or indirectly, a majority interest. We agree with applicants that the burdens of including financial and other data with respect to carriers other than those described in the preceding sentence would be unjustified because these data would not contribute to our evaluation of the Primary Application. We have no need for these data with respect to rail carrier subsidiaries not subject to our jurisdiction. We similarly have no need for these data with respect to rail carrier subsidiaries in which neither CN nor IC has (directly or indirectly) a majority interest. Furthermore, we have no need for these data with respect to carrier subsidiaries other than rail carriers because, under the ICC Termination Act of 1995, regulatory approval is no longer required for common control of rail carriers together with motor and water carriers. We expect, however, that all such excluded carriers will be identified either in the corporate chart or in the statement of direct or indirect intercorporate or financial relationships required. We also expect that applicants will fully describe, in the Primary Application, the effects, if any, of the Primary Application on the operations of the excluded carriers. We further expect that applicants will file, along with the primary application, either an application for approval or a petition for exemption with respect to control by CN or IC of any Board-regulated rail carrier in which CN or IC, respectively, does not now hold, directly or indirectly, a majority interest but will hold such an interest if the Primary Application is approved and the merger is consummated. Applicants request clarification that information and data pertaining to applicant carriers that are required by the Board's Railroad Consolidation Procedures may be submitted on a consolidated basis (i.e, consolidated information regarding CNR and IC Corp., as appropriate, with their respective majority-owned subsidiaries). Applicants further state: that information and data pertaining to CNR and IC Corp., and their respective majority-owned subsidiaries, would be submitted on a consolidated basis, and separate information is not necessary for the Board's consideration and disposition of the Primary Application; that it will be necessary to submit evidence on a consolidated basis in order for the Board to be able to evaluate the benefit of the transaction and the financial position of the combined rail system that will result from the transaction; and that, because they do not maintain required information on a subsidiary-by- subsidiary basis or in a form that aggregates information on applicant carriers separate from information on noncarrier affiliates, requiring them to create such information would impose a significant burden without providing significant assistance to the Board. We agree that separate information regarding majority-owned subsidiaries is not necessary for our consideration and disposition of the Primary Application, and that use of consolidated information and data will avoid the unnecessary burden and redundancy of preparing and providing the information and data on a carrier-by-carrier basis. We will therefore permit the filing of information and data pertaining to each of the applicant carriers (including their majority-owned subsidiaries) on a consolidated basis. Our regulations require a discussion of the effect of the proposed transaction upon applicant carriers employees (by class or craft), the geographic points where the impact will occur, the time frame of the impact (for at least 3 years after consolidation), and whether any employee protection agreements have been reached. Because the regulations do not specify the class or craft to be used, applicants seek, with respect to the Primary Application, confirmation that they may use the system of classification shown in attached Appendix A. Applicants proposal is adequate to provide the information we need, and we will therefore approve it. Applicants request waiver of the requirement that the Primary Application include each applicant carrier's two most recent annual reports to stockholders. Applicants note that none of the applicant carriers other than CNR has any public shareholders and none other than CNR prepares an annual report to stockholders. Applicants request that they be allowed to submit the two most recent CNR and IC Corp. annual reports to stockholders, as well as the subsequent annual and quarterly reports to CNR and IC Corp. stockholders. This request is reasonable, and we will therefore grant it. Applicants state that they may have certain modest control-related construction projects, probably involving the construction of connections, for which they will seek approval or exemption in applications submitted together with the Primary Application. According to applicants, they will be identifying these projects as they progress in their preparation of the application. Section 1150.1(b) requires consultation with the Board's Section of Environmental Analysis (SEA) at least 6 months before the filing of a construction application, and section 1105.10(a) requires submission of a written notice to SEA at least 6 months before the filing of a construction application if the proposed construction might require preparation of an environmental impact statement (EIS). Applicants note that the Board's predecessor agency recognized that such requirements need not be applied to control-related construction projects. Applicants anticipate that any control-related construction projects for which they will seek approval or exemption in this proceeding will have minor, if any, adverse environmental impacts, and that preparation of an EIS will not be required. Applicants state that they have begun the process of consulting with SEA with regard to the Primary Application and all related applications, and that they will advise SEA as soon as they identify specific control-related construction projects and will provide SEA with any required information regarding those projects. Applicants assert that they will identify all such projects by no later than 30 days before the filing of the Primary Application, which will provide at least 1 month in advance of that filing for SEA to begin its environmental analysis of these projects. Applicants originally intended to file an environmental report 30 days after the Primary Application, but after recent consultations with SEA, it was determined that applicants will file an environmental overview with the Primary Application and operating plan. Applicants therefore request that we waive or clarify the prefiling notice requirements, and find that notice to SEA of control-related construction projects will be satisfactory if provided no later than 30 days prior to the filing of the Primary Application. In view of applicants previous consultations with SEA and on the condition that the consultations with SEA continue, waiver of the 6-month time periods will be granted. However, we emphasize that any speculation regarding the appropriate level of environmental review of any merger-related construction projects is premature at this time. When SEA has obtained and analyzed the relevant information on the individual construction projects, and when it has consulted with other Federal, state, and local agencies, it will determine the type of environmental document that should be prepared. We request that applicants submit, with the Primary Application, 10 copies of each of their operating timetables for CNR, ICR, GTW, CCP, and CRRC. This information will facilitate our analysis of a number of aspects relating to this proceeding. It is ordered: 1. The CN/IC-4 petition for waiver or clarification, and related relief, is granted to the extent set forth in this decision. Decided: June 22, 1998 Service Date - Late Release June 23, 1998 APPENDIX A CLASSIFICATION OF JOBS SHOWN IN LABOR IMPACT DATA Blacksmiths/Boilermakers Carmen Clerks/Communication Workers Electricians Engineers Laborers/Firemen and Oilers Machinists Maintenance of Way (including Track Employees, Bridge and Building Employees, and Work Equipment Employees) Nonagreement Police Railway Supervisors Sheet Metal Workers Signalmen Train Dispatchers Trainmen Yardmasters ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33556 Decision No. 5 CANADIAN NATIONAL RAILWAY COMPANY, GRAND TRUNK CORPORATION, AND GRAND TRUNK WESTERN RAILROAD INCORPORATED CONTROL ILLINOIS CENTRAL CORPORATION, ILLINOIS CENTRAL RAILROAD COMPANY, CHICAGO, CENTRAL AND PACIFIC RAILROAD COMPANY, AND CEDAR RIVER RAILROAD COMPANY ACTION: Request for Comments on Procedural Schedule. SUMMARY: The Surface Transportation Board (Board) is inviting comments from interested persons on a proposed procedural schedule for this proceeding. On February 12, 1998, Canadian National Railway Company (CNR), Grand Trunk Corporation (GTC), and Grand Trunk Western Railroad Incorporated (GTW), and Illinois Central Corporation (IC Corp.), Illinois Central Railroad Company (ICR), Chicago, Central and Pacific Railroad Company (CCP), and Cedar River Railroad Company (CRRC), filed a notice of intent to file a joint application seeking Surface Transportation Board authority for the acquisition of control, by CNR, through its indirect wholly owned subsidiary Blackhawk Merger Sub, Inc., of control of IC Corp. and through it of ICR and its railroad affiliates, and for the resulting common control by CNR of GTW and its railroad affiliates and ICR and its railroad affiliates. SUPPLEMENTARY INFORMATION: On May 20, 1998, Applicants filed a petition (CN/IC-5) to establish a proposed procedural schedule as follows: APPLICANTS PROPOSED PROCEDURAL SCHEDULE F Primary application and any related applications filed. F + 30 Board notice of acceptance of primary application (and any related applications) published in the Federal Register. F + 30 Environmental Report and Safety Integration Plan due. F + 45 Notification of intent to participate in proceeding due. Description of anticipated inconsistent and responsive applications due; petitions for waiver or clarification due with respect to such applications. F + 60 Inconsistent and responsive applications due. All comments, protests, requests for conditions, and any other evidence and argument in opposition to the Primary Application due. Comments by U.S. Department of Justice ("DOJ") and U.S. Department of Transportation ("DOT") due. F + 75 Notice of acceptance (if required) of inconsistent and responsive applications published in the Federal Register. F + 90 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 + 105 Rebuttal in support of inconsistent and responsive applications due. F + 125 Briefs due, all parties (not to exceed 50 pages). F + 145 Oral argument. F + 150 Voting conference (at Board's discretion). F + 180 Date of service of final decision. The proposed schedule contains substantially shorter time periods than those provided for in the statute. For instance, written comments about an application may be filed with the Board within 45 days after Board notice of acceptance of the primary application (and any related applications) is published in the Federal Register. Applicants propose that comments be filed within 30 days of publication in the Federal Register. The proposed schedule also suggests that inconsistent and responsive applications be filed 30 days following acceptance of the primary application rather than the 90 days noted in the statute. Comments in opposition to the Applicants proposed procedural schedule were filed by the Brotherhood of Maintenance of Way Employees (BMWE), on June 2, 1998, and the United Transportation Union (UTU), on June 8, 1998. Both BMWE and UTU state that the proposed schedule is too short and urge the Board to adopt the statutory procedural schedule. Alternatively, UTU urges the Board to adopt a 350-day schedule modeled upon the procedural schedule issued by the Board in CSX and Norfolk Southern Railway Company--Control and Operating Leases/Agreements--Conrail Inc., STB Finance Docket No. 33388, Decision No. 6 (STB served May 30, 1997). We do not at this time see any compelling reason to adopt a 6-month procedural schedule for this proceeding. The statute allows 16 months for the processing of major consolidation proceedings. The Board must conclude the evidentiary stage of the proceeding within 13 months of the application's filing date, and must issue the final decision by the 90th day after the conclusion of the evidentiary stage. We believe that a 10-month procedural schedule would be sufficiently expeditious so as not to delay unnecessarily any benefits that would flow from the proposed integration of the CN and IC systems, while at the same time allowing sufficient time to develop the record upon which the Board's decision would be based. We propose to modify Applicants proposed procedural schedule so as to conclude the evidentiary stage of this proceeding approximately 8 months after the application is filed, and to issue the final decision approximately 2 months thereafter. Given the importance of the safe implementation of major rail consolidations, we propose to require Applicants to file Safety Integration Plans on Day (F + 30) as they have proposed. Also, we propose to require inconsistent and responsive applicants to file their Responsive Environmental Reports and Environmental Verified Statements on Day (F + 100), which is 20 days in advance of when inconsistent and responsive applications would be due. Specifically, as for the remainder of the procedural schedule, we propose to modify Applicants' proposed schedule to allow 30 more days for parties intending to file comments, protests, requests for conditions, and any other opposition evidence and argument, so that these filings would not be due until 90 days after the application is filed [Day (F + 90)]. Comments from the U.S. Department of Justice (DOJ) and the U.S. Department of Transportation (DOT) would be due 120 days after the application is filed. Responses to comments, protests, requested conditions, and other opposition (except DOJ and DOT), and also rebuttal in support of the primary application and related applications would be due on Day (F + 120). We propose to keep inconsistent and responsive applications due 120 days after the application is filed [Day (F + 120)] as provided for under 49 U.S.C. 11325(b)(2). Response to comments of DOJ and DOT would be due on Day (F + 150 ). Descriptions of anticipated inconsistent and responsive applications and petitions for waiver or clarification due with respect to such applications would be due on Day (F + 60) (rather than Day (F + 45)). In addition, we propose adding 5 days for responses to inconsistent and responsive applications (which would be due Day (F + 155)), and adding 15 days for rebuttals for inconsistent and responsive applications (which would be due Day (F + 185)). Briefs would be due on Day (F + 205), and we are proposing page limitations for briefs for all parties to promote useful, focused filings, with Applicants permitted to file somewhat longer briefs, as they would have more points to address at that time than would other parties. We propose, however, adding 10 days to Applicants' proposed period of time for parties to prepare for oral argument, so that oral argument would occur on Day (F + 235). The oral argument would close the record. We propose (as did the Applicants) a 5-day interval between the oral argument and the voting conference, so that a voting conference would occur on Day (F + 240). We also propose allowing 60 days after the voting conference for the service of the Board's final decision on Day (F + 300). PROPOSED PROCEDURAL SCHEDULE AS MODIFIED BY THE BOARD F Primary application and any related applications filed. F + 30 Board notice of acceptance of primary application (and any related applications) published in the Federal Register. F + 30 Safety Integration Plan due. 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 + 90 All comments, protests, requests for conditions, and any other evidence and argument in opposition to the Primary Application due (except filings by U.S. Department of Justice (DOJ) and U.S. Department of Transportation (DOT)). F + 100 Responsive Environmental Report and Environmental Verified Statements for inconsistent and responsive applicants due. F + 120 Inconsistent and responsive applications due. Comments by DOJ and DOT due. Response to comments, protests, requested conditions, and other opposition (except DOJ and DOT) due. Rebuttal in support of primary application and related applications due. F + 140 Notice of acceptance (if required) of inconsistent and responsive applications published in the Federal Register. F + 150 Response to comments of DOJ and DOT due. F + 155 Response to inconsistent and responsive applications due. F + 185 Rebuttal in support of inconsistent and responsive applications due. F + 205 Briefs due, all parties (not to exceed 50 pages for Applicants and not to exceed 25 pages for all other parties). F + 235 Oral argument (close of record). F + 240 Voting conference (at Board's discretion). F + 300 Date of service of final decision. Based on consultations with Applicants, the Board's Section of Environmental Analysis (SEA) has determined that preparation of an Environmental Assessment (EA) is appropriate in this proceeding. This approach is consistent with the Board's environmental rules, which call for an EA in a merger or acquisition such as this proceeding. Also, in making its determination to prepare an EA, SEA considered the nature of the transaction, including the projected changes in train traffic, the anticipated changes at rail yards and intermodal facilities, and the number, type, and location of proposed construction projects. However, if SEA determines that this proceeding has the potential for significant environmental impacts, then SEA may prepare an Environmental Impact Statement, as required by the National Environmental Policy Act (NEPA). Applicants originally proposed to file an environmental report 30 days after they filed their application. In a letter dated June 18, 1998, however, Applicants requested that SEA conduct a modified environmental review process in this proceeding. SEA concurs with this approach. Under this approach, Applicants will provide, with their application and operating plan, an environmental overview rather than an environmental report. This is consistent with the Board's environmental rules, which waive the requirement for an environmental report for applicants that retain an independent third-party contractor to work under SEA's direction to prepare the necessary environmental documentation. For this proceeding, Applicants have retained the requisite independent third-party contractor. With direction and guidance from SEA, Applicants will prepare and submit to SEA a Preliminary Draft Environmental Assessment (PDEA). Preparation of a PDEA is consistent with the Council on Environmental Quality regulations that permit preparation of an environmental assessment by an applicant. Upon receipt of Applicants PDEA, SEA will review and verify the environmental information provided by Applicants in this document. SEA will then prepare a Draft Environmental Assessment (Draft EA) for public review and comment. The Draft EA will include SEA's independent preliminary recommendations for mitigation to address potentially adverse environmental impacts. As part of the environmental review process, Applicants also propose to submit a safety integration plan, which will fully describe the extensive plans they have for maximizing the safe operation of the combined system. After reviewing all of the public comments on the Draft EA and conducting additional analyses, SEA will prepare a Final Environmental Assessment (Final EA). The Final EA will include SEA's final recommendations for environmental mitigation. The Board will consider all public comments, the Draft EA and Final EA, and SEA's environmental recommendations in making its final decision in this proceeding. Applicants suggest that the Board include in its procedural schedule language which reminds parties that, in discovery and in submissions to the Board, they focus strictly on relevant issues. Applicants request that the Board direct that parties wishing to engage in discovery consult with the ALJ designated to handle all discovery matters and to resolve initially all discovery disputes, and that the Board give the ALJ authority to adopt discovery guidelines and rule on discovery matters but not to modify the procedural schedule. Applicants also suggest that the Board require appeals of ALJ decisions to be filed within 3 working days of the date of a bench ruling, or in its absence the date of a written ruling, with replies to appeals or to any motion filed with the Board to be filed within 3 working days. We invite all interested persons to submit written comments on the procedural schedule we are proposing here. Decided: June 22, 1998 Service Date - Late Release June 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33285 RAILAMERICA, INC., AND THE DELAWARE VALLEY RAILWAY COMPANY, INC., PETITION TO SET SUBSIDY TERMS UNDER 45 U.S.C. 744(c) AND 49 CFR PART 1155 By petition filed October 29, 1996, RailAmerica, Inc. (RA), and its wholly owned subsidiary Delaware Valley Railway Company, Inc. (DV), request that we set terms for DV's use of a line of railroad owned by Wilmington and Northern Railroad Company (W&N), a subsidiary of the Reading Company (collectively Reading), successor to the former Reading Railroad Company. (On October 28, 1997, RA gave notice of its withdrawal from the proceeding. DV remains a party, and, accordingly, we will process the petition). On November 19, 1996, Reading filed a response. On December 6, 1996, petitioners filed a rebuttal statement. On December 23, 1996, Reading submitted an informal rejoinder to petitioners rebuttal. On September 11, 1997, petitioners filed a supplemental statement and a request for expedited action. Reading replied on September 23, 1997. On May 6, 1998, and May 12, 1998, respectively, DV and W&N informed the Board about court litigation. DV indicates that the lawsuit filed in Delaware state court by W&N had been settled and dismissed with prejudice. According to DV, the suit concerns payment by DV of liquidated damages allegedly owed W&N for the early termination of the lease for the rail line at issue. W&N submits that the issue of DV's continued occupancy of the line following the termination of the lease is pending in the United States District Court for the District of Delaware. DV's original petition sought to have the subsidy set under former 49 CFR 1155 (regional subsidy standards). After its petition was filed, the Board issued a notice of proposed rulemaking proposing to remove the regional subsidy standards of part 1155 and we sought comments as to whether parts of the regional subsidy standards should be transferred to the offer of financial assistance regulations. DV, in its September 11, 1997 supplement, noted the existence of the then-pending STB Ex Parte No. 566, and stated that if the national OFA standards were amended to apply to situations presently covered by the regional standards, then DV sought recovery under the national standards. The Board issued a decision in STB Ex Parte No. 566 on May 22, 1998, that eliminated the part 1155 regulations and amended the OFA regulations by adding a new provision at 49 CFR 1152.27(n) to provide rules for the purchase or subsidization of rail lines that have been continuously subsidized since the inception of the Final System Plan. DV's petition to set terms will be denied. However, if the line has been continuously subsidized and it is abandoned or rail service is discontinued, our new section 1152.27(n) procedures are available to govern the subsidization or purchase of the line. This dispute involves a lease between DV and W&N for DV's use of and operations over a line of railroad approximately 9.8 miles long between milepost 12.7 at the Delaware- Pennsylvania state line and milepost 2.9 at Elsmere Junction near Wilmington, DE. The Line is used exclusively for its operating efficiencies; there are no shippers. DV moves traffic originating from other points on its system over the Line to interchange with Consolidated Rail Corporation (Conrail) through the intermediate switching facilities of CSX Transportation, Inc. The Line was originally owned by the Reading Railroad, which sought reorganization in 1970 under former section 77 of the Bankruptcy Act. In response to the bankruptcy of the Reading Railroad and several other midwestern and eastern railroad companies, the Congress enacted the Regional Rail Reorganization Act of 1973. Under the 3R Act, a Final System Plan (FSP) was developed by the United States Railway Association. This plan designated which lines would be retained in active service and consequently would be transferred to Conrail, a government-created successor railroad to the various railroads in reorganization, and which lines would be allowed to be abandoned. Under the FSP, the Line was not designated for transfer to Conrail. Accordingly, the line could have been abandoned and service discontinued pursuant to the 3R Act, unless an offer to purchase the line was made or a rail service continuation payment was offered. Subsequently, Conrail operated the Line under a subsidy agreement pursuant. Conrail operated the Line for a short time, and it was later operated by the Octoraro Railway, Inc. (Octoraro). On July 1, 1994, DV assumed operations from Octoraro. According to DV, [w]ith the exception of a brief period of time around 1977-78, between Conrail and Octoraro's operations, [t]he Line has seen continuous rail service. (Conrail received its certificate of designated operator (D-OP) on April 21, 1976. Reading states that, in 1977, Conrail petitioned to abandon service, and Octoraro obtained subsidy agreements and began rail operations. Our records also indicate that Octoraro received its D-OP certificate on February 22, 1977. It is thus unclear why any break in service occurred between 1977-78.) DV entered into its lease with Reading on July 6, 1994. Under the 10-year lease, DV agreed to pay $10,150 per month for use of the line with an option to purchase the line for $1.5 million. DV claimed that the lease terminated under its own provisions, effective June 30, 1996, when its original operating agreement with the State of Pennsylvania to operate connecting lines in that state expired. Reading insisted that the lease did not terminate under its own provisions, but rather that DV attempted to terminate the lease by its unilateral actions. Under the terms of the lease, this dispute was submitted to arbitration. On August 11, 1997, the arbitrator found that petitioners had terminated the lease pursuant to an escape clause and ordered petitioners to pay W&N a termination fee equal to one year's rent or $121,800. Accordingly, DV argues that it has no lease with Reading, that Reading is unwilling to negotiate a new subsidy arrangement, that the Board has jurisdiction over this matter, and that we should resolve the dispute and establish the level of the subsidy payment, retroactive to July 1, 1996, for its use of the line. Petitioner originally asked that we set subsidy terms for its use of the line under section 304(c) of the 3R Act, and the implementing regional subsidy standards at 49 CFR part 1155. In its supplemental petition, it requested that we use the national OFA rules to set the subsidy if those rules are applicable. DV submitted an appraisal of the line prepared by Main Line Management Services, Inc., as well as two inventories and valuations of track material prepared by the Tie Yard of Omaha and the L.B. Foster Company, two railroad salvage companies. Petitioner argues that because DV is both the subsidy offeror and the operating carrier, the only payment required is compensation for a return on value to Reading for DV's use of the line. Alternatively, DV contends that the Board has jurisdiction to establish terms and conditions for use of the line. Petitioner estimates that, according to the subsidy standards, the monthly subsidy for the line should be $1,663.37. Reading objects to the determination of the Board of any lease issues. It claims that the parties have established the terms of the lease through arm s-length negotiations. It also argues that relief is not available under the 3R Act because the 3R Act was intended to resolve cases involving railroads in reorganization. Reading contends that the former railroad companies that had emerged from reorganization were not railroads in reorganization and the 3R Act cannot be applied to non-bankrupt entities. Reading also submits that the regional subsidy standards are applicable only where the property owner is threatening abandonment or the carrier is threatening discontinuance. If DV is considering discontinuance, Reading argues that the issue becomes whether some party offers DV a subsidy to continue operations. According to Reading, it is not seeking to abandon and DV is not seeking to discontinue service. Reading also argues that the national OFA standards at 49 U.S.C. 10904 are not applicable because Reading is not a rail carrier as defined by 49 U.S.C. 10102(5). Reading states that the arbitrator held that the lease was terminated by DV's refusal to pay the agreed rent and that the issue of damages for post-breach detention of the premises was not arbitrable, but is properly heard by a law court. We are denying DV's request for relief. First, the Board does not have authority to set terms for designated operator leases. Second, the national OFA standards, as modified, are not applicable to this situation, because there has been no notice of intention to abandon or discontinue operations. The ICC and the Board have each asserted jurisdiction to set terms and conditions of transactions that have been approved and authorized under 49 U.S.C. 11323. Leases of designated operators do not fall within the ambit of 49 U.S.C. 11323. As noted, the designated operator is the rail carrier conducting operations when a subsidizer guarantees payment. Although they are common carriers, designated operators did not need ICC authority to commence operations or abandon operations. Accordingly, we do not have the jurisdiction to set terms and conditions for designated operator leases as we have to set compensation for trackage rights and leases between rail carriers under 49 U.S.C. 11323. In the alternative, DV asks that we set compensation under the applicable subsidy standards. In STB Ex Parte No. 566, the part 1155 subsidy rules were eliminated, but we modified the OFA regulations at 49 CFR 1152.27 to encompass the lines that are still being subsidized under the regional subsidy standards. These rules, however, pertain to the summary abandonment or discontinuance of rail lines that have been continuously subsidized since the inception of the FSP. (Because the lines have already been approved for abandonment or discontinuance, Board authority to abandon or discontinue is not needed.) We are not aware that DV has given the notice of discontinuance to shippers required of it, nor has the line owner given notice to the Board of any discontinuance or its intention to abandon. If appropriate notice is given, and the line otherwise qualifies, interested persons will have the opportunity to purchase or subsidize the line under our amended national OFA rules. It is ordered: 1. The DV's request to set terms is denied. 2. This decision is effective on July 24, 1998. Decided: June 22, 1998 Service Date - June 24, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33616] Union Pacific Railroad Company Trackage Rights Exemption Central California Traction Company Central California Traction Company (CCT) has agreed to grant local trackage rights to Union Pacific Railroad Company (UP) over 2.9 miles of CCT's rail line between milepost 41.9 near Eldercreek Road and milepost 44.8, near Polk Junction, in the Sacramento Industrial Park and Fruitridge, in and near the City of Sacramento, Sacramento County, California. CCT is jointly owned by UP and The Burlington Northern and Santa Fe Railway Company (BNSF), and, after the trackage rights are effective, UP will handle rail cars as the operating agent for BNSF. The transaction was scheduled to be consummated on or after June 12, 1998. The purpose of the local trackage rights is to permit UP to serve customers on the line, which UP expects to result in an efficient and economical route for the shippers in the City of Sacramento. Decided: June 17, 1998. Service Date - June 25, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-55 (Sub-No. 563X)] CSX Transportation, Inc.--Abandonment Exemption--In Harrison County, WV On June 8, 1998, CSX Transportation, Inc. (CSXT) filed with the Surface Transportation Board a petition for exemption to abandon a 0.87-mile portion of its line of railroad known as the WVA&P Subdivision, extending between milepost 1.23 and milepost 2.1, in Clarksburg, Harrison County, WV. The line traverses U.S. Postal Service Zip Code 2630l and includes no stations. By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by September 25, 1998. Decided: June 18, 1998. Service Date - June 26, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-57 (Sub-No. 40X) SOO LINE RAILROAD COMPANY, D/B/A CANADIAN PACIFIC RAILWAY-- ABANDONMENT EXEMPTION--IN HENNEPIN COUNTY, MN By petition filed March 10, 1998, Soo Line Railroad Company, doing business as Canadian Pacific Railway (CPR), seeks an exemption to abandon a 1-mile line of railroad known as the Hiawatha/Cedar Avenue Wye, extending from milepost 423.59+/-, near the eastern edge of Cedar Avenue to the end of a wye at mileposts 423.26+/- and 423.21+/-, respectively, near the eastern edge of Hiawatha Avenue (State Highway 55), in Hennepin County, MN. The United Transportation Union seeks imposition of labor protective conditions. In addition, on April 17, 1998, Twin Cities & Western Railroad (TCW) filed comments requesting that any exemption granted contain certain conditions with respect to its trackage rights over the line. On June 18, 1998, Rahr Malting Co., the owner of the Cepro Elevator (Cepro) facility located adjacent to the line proposed for abandonment in this proceeding, filed a statement in opposition to the proposed abandonment. We will grant the exemption, subject to environmental and standard employee protective conditions and the condition that CPR may discontinue service but cannot consummate the abandonment of the line until after TCW obtains our approval or an exemption to discontinue its trackage rights. CPR currently operates over a continuous route extending from the western boundary of Minneapolis, to St. Paul, MN, over a line known as the 29th Street Corridor. Pursuant to a Purchase Agreement dated December 23, 1992, the Hennepin County Regional Railroad Authority (HCRRA) owns the 29th Street Corridor and CPR and TCW operate over it by virtue of a grant-back easement for continued rail operations. Included in the agreement is the condition that CPR will ultimately relocate those operations currently moving through the wye trackage to enable the Minnesota Department of Transportation to rehabilitate and upgrade Highway 55 and avoid restoration of two railroad crossings over a main highway artery to and from downtown Minneapolis. HCRRA also owns the former Chicago and North Western Transportation Company (CNW) line between Hopkins, MN, and Cedar Lake/Minneapolis, MN, which is known as the Kenilworth Route. CPR and TCW have existing trackage rights over the Kenilworth Route and HCRRA is in the process of rehabilitating the track to permit CPR and TCW to relocate their overhead operations. Upon completion of the rehabilitation, but not later than July 1, 1998, CPR and TCW plan to relocate their respective overhead operations using the Kenilworth Route and their existing trackage rights over a line of The Burlington Northern and Santa Fe Railroad Company (BNSF), between Minneapolis and St. Paul. According to CPR, no local shippers will be affected by the proposed abandonment or the relocation of operations, because Cepro, the only customer adjacent to the line, has been assured that service will continue after that portion of the line serving its facility is removed from service. Cepro, through its owner's June 18, 1998 filing, expresses dissatisfaction with the plan to reroute its traffic 5 miles west and 6 miles northeast instead of going directly to the east. Cepro is concerned about the circuity, the potential increased costs to it, and the fact that several yard moves would evidently be necessary as part of the rerouting. As part of the purchase of its lines from CPR in 1991, TCW was granted incidental trackage rights over the Merriam Park Line, extending from the eastern terminus of TCW's line at Tower E-14 near Hopkins (milepost 435.06) to milepost 416.43, and operating rights beyond to the St. Paul Yard, where it interchanges with CPR pursuant to an interchange agreement. The portion of the Hiawatha/Cedar Avenue Wye from milepost 423.59 to milepost 421.21 forms a part of the Merriam Park Line. (The Merriam Park Line appears to be the same as the 29th Street Corridor.) While TCW acknowledges that its trackage rights agreement with CPR, dated July 26, 1991, contemplated that CPR would sell to HCRRA a substantial portion of the Merriam Park Line, there is a stipulation in the agreement that if operations over the Merriam Park Line are interrupted, CPR will provide an alternate route through the Twin Cities Terminal over the Kenilworth Route. From Cedar Lake Junction, TCW could access its trackage rights over BNSF's line to the St. Paul Yard. CNW discontinued operations over the Kenilworth Route in 1994, and it is now out-of- service and in disrepair. Among other things, the trestle bridge over the canal between Cedar Lake Junction and Lake of the Isles needs approximately $500,000 of rehabilitation, according to TCW. TCW has reservations concerning the timing of the rehabilitation of the Kenilworth Route. It argues that a delay in the rehabilitation of the Kenilworth Route will have little effect on CPR because it has extremely limited operations over the Merriam Park Line and has an alternate route for its traffic. In contrast, TCW states that it handles approximately 15,000 carloads per year (85 percent of its traffic) over the Merriam Park Line, and currently has no other route to or from the St. Paul Yard. Thus, TCW asserts that abandonment of the Hiawatha/Cedar Avenue Wye sho