STB REPORT #18 - SEPTEMBER 16 - 31, 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 AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT STB Docket No. AB-414 (Sub-No. 2X) IOWA INTERSTATE RAILROAD, LTD.--ABANDONMENT EXEMPTION IN MARION COUNTY, IA By decision served August 11, 1998, the Board granted Iowa Interstate Railroad, Ltd. (IAIS) an exemption to abandon its line of railroad extending from milepost 123.5 near Otley to the end of the line at or near milepost 114.80 in Pella, a distance of 8.70 miles, in Marion County, IA. The exemption was scheduled to become effective on September 10, 1998. On August 10, 1998, the Iowa Natural Heritage Foundation (INHF) filed a request for issuance of a notice of interim trail use (NITU) under the National Trails System Act, and imposition of a 180-day public use condition. INHF requests that IAIS be prohibited from disposing of the corridor, including the tracks, ties and signal equipment, except for public use on reasonable terms, and that IAIS be barred from removing or destroying any trail-related structures, such as bridges, ballast, trestles, culverts and tunnels, for a 180-day period from the effective date of the abandonment exemption. INHF states that the 180-day period is needed to complete negotiations with IAIS. INHF also submits a statement of willingness to assume financial responsibility for interim trail use and rail banking and acknowledges that use of the right-of-way for trail purposes is subject to future reactivation for rail service. By facsimile transmitted August 19, 1998, IAIS indicates its willingness to negotiate with INHF for interim trail use only for that portion of the line located between milepost 123.5 near Otley, IA, and a point at or near milepost 117.68 near the eastern edge of the U.S. Highway 163 overpass. IAIS states that the remainder of the line between milepost 117.68 and the end of the line at or near milepost 114.80 is the subject of a sale commitment to a local community organization in Pella, IA. Because the Trails Act permits only voluntary interim trail use, the Board cannot issue a NITU in this proceeding for that portion of the line between milepost 117.68 and milepost 114.80. As an alternative to interim trail use under the Trails Act, the right-of-way may be acquired for public use as a trail. The Board may prohibit the disposal of rail properties that are proposed to be abandoned and are appropriate for public purposes for a period of not more than 180 days after the effective date of the decision approving or exempting the abandonment. INHF's submission meets the requirements for a public use condition 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 imposition of the time period requested. Accordingly, the requested 180-day public use condition will be imposed for the entire line commencing from the effective date of the exemption. While a NITU cannot be issued for the portion of the line between milepost 117.68 and milepost 114.80, imposition of a public use condition does not require the owning railroad's consent. Moreover, IAIS has not demonstrated that the referenced sale commitment as to that portion of the line to a local community organization is for public purposes. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the decision served on August 11, 1998, exempting the abandonment of the line described above, is modified to the extent necessary to implement interim trail use/rail banking as set forth below for that portion of the line located between milepost 123.5 near Otley, IA, and a point at or near milepost 117.68 near the eastern edge of the U.S. Highway 163 overpass, and is subject to the condition that IAIS keep intact the right-of-way underlying the entire track, including tracks, ties, signal equipment, bridges, ballast, trestles, culverts, and tunnels for a period of 180 days after the September 10, 1998 effective date (until March 9, 1999) to enable any State or local government agency, or other interested person to negotiate for acquisition of the line for public use. If an interim trail use/rail banking agreement is executed before the 180-day expiration period specified above, the public use condition will expire to the extent that the trail use/rail banking agreement covers the same line. 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, for 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 specific date. 6. If an agreement for interim trail use/rail banking is reached by March 9, 1999, interim trail use may be implemented. If no agreement is reached by that time, IAIS may fully abandon the line. Decided: September 15, 1998 Service Date - September 16, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33407 DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION CONSTRUCTION INTO THE POWDER RIVER BASIN By decision served May 7, 1998, the Board issued a procedural schedule in this proceeding. Pursuant to that schedule, the reply by applicant Dakota, Minnesota & Eastern Railroad Corporation (DM&E) is due on September 21, 1998. On September 14, 1998, DM&E filed a motion requesting a two-week extension, until October 5, 1998, to file its reply evidence and argument in support of the transportation aspects of the application. DM&E represents that the Mid-States Coalition for Progress (Coalition) does not oppose this motion and that the request is supported by the Western Coal Traffic League (WCTL) and Edison Electric Institute (EEI). DM&E claims that this additional time is necessary to prepare an adequate response to the pleadings of the opposition and that the extension will not prejudice opposing parties. The motion for extension of time will be granted. It is ordered: 1. The motion for extension of time is granted. 2. A reply statement from DM&E is due on October 5, 1998. The Board had set November 3, 1998, as the target date for reaching a preliminary decision on the transportation aspects of this application. In light of the extension granted here to the applicant, the target date for the Board's decision will also be extended by two weeks (until November 17, 1998). Decided: September 16, 1998 Service Date - Late Release September 16, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-55 (Sub-No. 548X) CSX TRANSPORTATION, INC.--ABANDONMENT EXEMPTION-- IN MONROE COUNTY, IN A decision served on September 19, 1997, authorized CSX Transportation, Inc. (CSXT), to abandon a 4.26-mile portion of its railroad line known as the Louisville Service Lane, Monon Subdivision, extending from milepost Q-217.67 at Hunters to milepost Q-213.41 at the end of the track at Ellettsville, in Monroe County, IN. The September 19, 1997 decision stated that, if consummation has not been effected by CSXT's filing of a notice of consummation by September 19, 1998, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. On August 28, 1998, CSXT filed a request to extend, until March 19, 1999, the time to consummate the abandonment and to file its notice of consummation. CSXT states that it has been actively negotiating with the Monon Rail Preservation Corporation (MRPC) since late 1997 to sell the line for continued rail purposes, and maintains that additional time is needed to finalize the transaction. By letter filed September 9, 1998, MRPC supports the extension request. CSXT has shown good cause to extend the time to consummate the abandonment and for filing a notice of consummation in this proceeding. Accordingly, the request will be granted. It is ordered: 1. CSXT's request for an extension of time to exercise the abandonment authority is granted. 2. The authority to abandon must be exercised on or before March 19, 1999. Decided: September 15, 1998 Service Date - September 17, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT STB Docket No. AB-6 (Sub-No. 380X) THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY --ABANDONMENT EXEMPTION--IN KING COUNTY, WA In a decision served May 13, 1998, the Board granted The Burlington Northern and Santa Fe Railway Company (BNSF) an exemption to abandon a 12.45-mile line of railroad between milepost 7.3, near Redmond, and milepost 19.75, at Issaquah, in King County, WA ( the Redmond-Issaquah Line), subject to labor protective and environmental conditions. Thereafter, in a decision served August 5, 1998, the Board rejected an offer of financial assistance filed by Redmond-Issaquah Railroad Preservation Association to continue service on the line. Also in the August 5 decision, the Board deferred action on requests by King County and The Land Conservancy of Seattle and King County (TLC) that the Board impose interim trail use/rail banking. The Board noted that King County and TLC had submitted statements 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. The Board also found that the requests complied with the requirements for interim trail use/rail banking. However, the Board deferred action on the requests pending BNSF's notifying the Board as to whether the railroad was going to exercise its abandonment exemption authority and, if so, whether it was willing to negotiate for trail use. By letter filed August 10, 1998, BNSF has notified the Board that it intends to act on its abandonment exemption authority. BNSF also joins in the requests that a notice of interim trail use (NITU) be issued in this proceeding. Therefore, a NITU will be issued. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the decision served August 5, 1998, exempting BNSF's abandonment of the Redmond-Issaquah Line, is modified to the extent necessary to implement interim trail use/rail banking as set forth below for a period of 180 days from the service date of this decision and notice. 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, for 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 of 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, BNSF may fully abandon the line, provided that the labor protective and environmental conditions imposed in the August 5 decision are met. Decided: September 16, 1998 Service Date - September 18, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-57 (Sub-No. 47X)] Soo Line Railroad Company--Abandonment Exemption--in Hennepin County, MN Soo Line Railroad Company (Soo) has filed a notice of exemption to abandon an approximately .10-mile line of its railroad known as the Minneapolis Terminal Line between milepost 4.09+/-near the western edge of Colfax Avenue North to milepost 4.19+/-near the western edge of Aldrich Avenue North, in Minneapolis, Hennepin County, MN. The line traverses United States Postal Service Zip Code 55405. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on October 18, 1998, unless stayed pending reconsideration. Soo shall file a 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 Soo's filing of a notice of consummation by September 18, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: September 11, 1998. Service Date - September 18, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT STB Docket No. AB-544X SEA LION RAILROAD--ABANDONMENT EXEMPTION--IN KING COUNTY, WA In a decision served August 11, 1998, the Board granted Adventure Trail, Inc., doing business as Sea Lion Railroad (Sea Lion), an exemption to abandon a line of railroad known as the Ballard Line, between milepost 0.09 and the end of the line at milepost 2.70, a distance of almost 3 miles in the Ballard District of Seattle, King County, WA, subject to standard employee protective conditions. In its decision, the Board deferred action on a request by the City of Seattle that the Board impose interim trail use/rail banking. Although the Board noted that Seattle had filed an appropriate statement of willingness to assume financial responsibility for the right-of-way, and that Sea Lion had consented to the issuance of a notice of interim trail use (NITU), the Board determined that it should defer action on Seattle's request pending final action on any offer of financial assistance (OFA) that might be filed. OFAs were due August 21, 1998. No OFA has been filed with the Board. Accordingly, action on the NITU request can now be taken. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the decision served August 11, 1998, exempting Sea Lion's abandonment of the Ballard Line, is modified to the extent necessary to implement interim trail use/rail banking as set forth below for a period of 180 days from the service date of this decision and notice. 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, for 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 of 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, Sea Lion may fully abandon the line, provided that the labor protective conditions imposed in the August 11 decision are met. Decided: September 16, 1998 Service Date - September 18, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT STB Docket No. AB-550X R.J. Corman Railroad Company/Allentown Lines, Inc. -- Abandonment Exemption -- In Lehigh County, Pennsylvania In this proceeding, the R.J. Corman Railroad Company/ Allentown Lines, Inc. (RJC) has filed a notice of exemption in connection with the abandonment of its railroad line located between milepost 93.144 near Union and 3rd Streets in Allentown, PA and milepost 95.089, near Lawrence Street and Lehigh Parkway East in Salisbury Township, a distance of 1.945 miles in Lehigh County, PA. The National Geodetic Survey (NGS) has identified two geodetic station markers that may be adversely affected by this proposed abandonment. Therefore, we recommend that the Board require R.J. Corman Railroad to provide NGS with at least 90 days prior notice before engaging in any activities that may disturb or destroy these station markers. 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. Therefore, the environmental impact statement process is unnecessary. Service Date - September 18, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-354 (Sub-No. 2X) ROCHESTER & SOUTHERN RAILROAD, INC.--ABANDONMENT EXEMPTION--IN CATTARAUGUS COUNTY, NY By petition filed June 1, 1998, Rochester & Southern Railroad, Inc. (R&S) seeks an exemption to abandon a 10.41-mile line of railroad (the Line), extending from milepost 83.39, at or near Machias, to milepost 93.8, at or near Ashford Junction, in Cattaraugus County, NY. Notice of the institution of this exemption proceeding was published in the Federal Register on June 19, 1998. Buffalo Crushed Stone (BCS), a shipper, filed an opposition statement on July 13, 1998. The United Transportation Union requests imposition of labor protective conditions. We will deny the petition. R&S is a common carrier by railroad that owns approximately 55 miles of rail lines in New York. The Line is separated from the rest of the R&S rail system and has been since 1990, when R&S abandoned a portion of its rail line between Silver Spring and Machias. The Line was retained by R&S because of its location between Conrail at Machias and an R&S affiliate, the Buffalo & Pittsburgh Railroad, Inc. (B&P), at Ashford Junction. According to R&S, the Line has not been used for any substantial amounts of overhead traffic between B&P and Conrail. However, R&S states that it, together with its affiliate B&P, developed traffic totaling 569 carloads in 1997 for BCS. BCS is located on the R&S at Machias. Its traffic is interchanged with B&P at Ashford Junction, where the R&S line connects with the B&P. Because B&P has simultaneously filed a petition for exemption to abandon its line from Ashford Junction to Salamanca, the route over which the BCS traffic moves, R&S claims that it will therefore no longer be able to handle BCS traffic. If the BCS traffic terminates, R&S says, it will be left with no local traffic and no prospects for future local traffic. In his verified statement, BCS's witness Laraiso says that his company will lose a growing segment of its business if rail service is discontinued. BCS presently supplies three distribution locations, Dubois, Johnsonburg and Erie, PA, with a skid resistant gravel that is used in roadway development. According to Mr. Laraiso, if rail service is not available to serve its Franklinville mine, BCS will be forced to discontinue distributing processed gravel to these three locations because the use of trucks is cost-prohibitive. BCS projects its 1998 sales to the three distribution points will increase 25% to approximately 700 carloads. Although the prime shipping season for its product is between May and October, BCS states that it already shipped 112 carloads to these locations in the first five months of 1998. Mr. Laraiso notes that R&S does not claim that it is losing money as a result of operating the Line. Instead, he says, R&S claims that, because no local traffic can be handled if B&P abandons its line, the Line would generate no revenue. Mr. Laraiso points out, however, that while B&P has filed for abandonment of its line, which connects with R&S at Ashford Junction, B&P indicates that it may be willing to provide rail service over portions of the line as a sidetrack or spur. This being the case, Mr. Laraiso argues that it is by no means certain that B&P service that connects with R&S at Ashford will disappear. In this case there is insufficient information for us to make an informed decision on the merits of the proposed abandonment exemption. R&S mistakenly assumes that affiliate B&P's simultaneously-filed petition for exemption will be granted, and bases its exemption request on its claim that, because it would be unable to handle BCS's traffic after the B&P abandonment, R&S would receive no revenue. In a separate decision, however, in STB Docket No. AB-369 (Sub-No. 3X) concurrently served with this decision, we have denied B&P's petition for an abandonment exemption of its connecting rail line. Consequently, R&S's argument that an abandonment exemption is warranted because of the impossibility of continued rail service is unfounded. Upon review of the record before us, we conclude that R&S has failed to establish (nor are we able to find) that continued regulation of the proposed abandonment is not necessary to carry out the rail transportation policy and either that it is not necessary to protect shippers from the abuse of market power or that the transaction is limited in scope. Our denial of R&S's petition to abandon service over the above-described line via the exemption process moots labor protection issues and environmental issues. Denial of this petition is without prejudice to R&S's refiling an appropriate abandonment application or petition for exemption that cures the defects found in the current proposal. Any new filing must be made under a new docket number. It is ordered: 1. The petition for exemption is denied. Decided: September 17, 1998 Service Date - Late Release September 18, 1998 ------------------------------------------------------------------------- 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) This proceeding involves appeals by the American Train Dispatchers Department of the International Brotherhood of Locomotive Engineers (Train Dispatchers or petitioners) of an arbitrator's decisions: (1) approving the transfer by Canadian Pacific Railway Company (Canadian Pacific) of five Delaware & Hudson Railway Company (Delaware & Hudson) dispatch positions from Milwaukee, WI, to Montreal, Quebec, Canada; and (2) imposing an implementing agreement to effectuate the transfer. The Train Dispatchers ask that we review and set aside the arbitrator's decisions. Petitioners maintain that the arbitrator lacked jurisdiction over the transfer and failed to give adequate consideration to safety. Applying the standard for review of arbitrators decisions, and in accordance with the Board's policy of promoting negotiation and arbitration in labor matters and of reviewing arbitration decisions only under limited circumstances, we decline to review the decisions. In 1990, in Finance Docket No. 31700, the Interstate Commerce Commission approved an application by Canadian Pacific Limited (CPL) (now Canadian Pacific), and its then newly- created subsidiary D&H Corporation, to acquire substantially all of the rail operating assets of the bankrupt former Delaware & Hudson. In approving the application, the ICC imposed New York Dock labor protective conditions. Two years later, Delaware & Hudson moved its dispatching functions from Schenectady, NY, to Milwaukee, contracting with the Soo Line Railroad Company (Soo), another Canadian Pacific subsidiary, to take over the dispatching function. Delaware & Hudson abolished the dispatcher jobs in Schenectady. The carriers and the Train Dispatchers reached an implementing agreement that provided that the Delaware & Hudson dispatchers could transfer their seniority to Soo's operations. Of the original six Delaware & Hudson dispatchers who relocated to Milwaukee, two continue to perform Delaware & Hudson dispatching services, while the others have left the carrier's employment. In April 1996, Canadian Pacific created a new subsidiary, the St. Lawrence & Hudson Railway Company (St. Lawrence), to operate Canadian Pacific's lines in eastern North America, including both Canada and the United States. Beginning in June 1996, Canadian Pacific notified the Train Dispatchers in a series of letters that the five Delaware & Hudson dispatcher jobs would be moved from Milwaukee to Montreal, Quebec, and indicated that the transfer of the dispatching functions from Milwaukee to Montreal accorded with the labor conditions imposed in CPL/DHRC. Canadian Pacific stated that, for operating purposes, it would be necessary for St. Lawrence to manage its own train dispatching functions, and for the dispatching of Delaware & Hudson trains to be handled by St. Lawrence's facility in Montreal. The Train Dispatchers challenged the carriers right to effectuate the transaction. The parties then attempted to negotiate an implementing agreement under the New York Dock conditions. Their efforts proved unsuccessful and the matter was submitted to arbitration. The Train Dispatchers argued before the arbitrator that he lacked the authority to impose an implementing agreement because the proposed transaction had not been authorized by the ICC. In the Train Dispatchers view, the transfer was not encompassed within the authority the ICC granted in CPL/DHRC. In a decision entered on October 13, 1997, the arbitrator ruled that, pursuant to the authority conferred by the ICC, the carriers are, in fact, authorized to coordinate Delaware & Hudson's train dispatching work with the train dispatching work of Canadian Pacific's other eastern railroad affiliate, St. Lawrence, and to transfer that work to Canada. The arbitrator directed the parties to make and consummate an implementing agreement, which he said must contain certain specified provisions. These provisions were: (1) employees are eligible to follow, on a seniority basis, the transferred work; (2) the carrier is obligated to make reasonable, meaningful, and diligent efforts to overcome Canadian restrictions on immigration and/or collective bargaining considerations; and (3) moving expenses will be provided for pursuant to section 9 of New York Dock. The arbitrator retained jurisdiction in the event the parties could not agree on the precise language of the implementing agreement. The parties were not able to agree on an implementing agreement, and they subsequently submitted statements to the arbitrator. On May 28, 1998, the arbitrator issued a second award in which he revised the carrier's proposed agreement, and adopted the agreement, thus revised, as the implementing agreement. In the meantime, on September 23, 1996, CPL, Canadian Pacific, St. Lawrence, and a Canadian Pacific subsidiary, Napierville Junction Railway Company, Ltd., had jointly filed a verified notice of exemption indicating that Canadian Pacific intended to transfer its interest in certain U.S. rail assets to St. Lawrence. St. Lawrence was to become a carrier upon consummation of the transaction. A notice in STB Finance Docket No. 33136, published on October 9, 1996, set forth the terms of the transaction. The notice stated that the proposed transaction was part of an internal reorganization and was designed to improve services and financial performance by realigning [Canadian Pacific s] railroad operating units and by consolidating duplicate functions, primarily at the managerial and administrative levels. The transfer of dispatching functions from Milwaukee to Montreal was contemplated as part of the transaction. The Train Dispatchers petitioned for revocation of the exemption, arguing that the transfer of dispatching functions from Milwaukee to Montreal contemplated by the transaction constituted a major operational change that rendered the involved corporate simplification transaction ineligible for the class exemption. In a decision served January 13, 1998, we denied the petition to revoke. We declined to address the question of whether the labor issues underlying the petition were the direct result of the notice of exemption or, rather, were the result of the decision in CPL/DHRC, finding that the question was not relevant to the issue raised in the petition to revoke. By pleadings filed on October 23, 1997, April 9, 1998, and June 4, 1998, the Train Dispatchers seek review of the arbitrator's decisions. The carriers have replied to the pleadings. The Train Dispatchers base their appeals on what they argue is the arbitrator's erroneous conclusion that the proposed transfer transaction falls within the scope and authority of the decision in CPL/DHRC. The Train Dispatchers assert that the 1990 approval did not, in fact, encompass the transfer proposal, which has not otherwise been approved by the ICC or by this agency. Therefore, according to petitioners, the arbitrator exceeded his authority in finding otherwise and in proceeding to approve an implementing agreement covering the transaction. In addition, the Train Dispatchers argue that the transfer of the dispatching function raises safety issues. Petitioners assert that the Federal Hours of Service Act and U.S. drug and alcohol testing requirements and other protections against the abuse of drugs and alcohol would not apply to the dispatchers in Montreal. This, the Train Dispatchers say, raises issues concerning the effect on safety of the removal of train dispatching from the authority of U.S. Federal regulatory agencies, including the Federal Railroad Administration (FRA). The Train Dispatchers contend that the FRA has contacted Canadian Pacific and has objected to the proposed transfer of dispatchers. In support, petitioners submit a copy of a letter of March 25, 1998, to Canadian Pacific from FRA Director of the Office of Safety Assurance and Compliance, Edward R. English. In the letter, Director English expresses his concern with the difficulty of enforcing hours of service and alcohol and drug requirements of Rail Traffic Controllers who control the movement of traffic in the U.S. from stations in Canada. The carriers reply that the arbitrator correctly found that the proposed transaction is within the authorization conferred in CPL/DHRC. The involved coordination of operations, the carriers assert, was clearly contemplated by the ICC's decision. The fact that the decision did not expressly anticipate or describe the coordination of dispatching functions per se, the carriers argue, does not mean that the proposed transaction is not authorized. Regarding the Train Dispatchers safety concerns, the carriers indicate that they have been in communication with the FRA, and they submit a copy of extensive documentation prepared for, and filed with, the FRA in response to that agency's inquiries. The carriers state that, in most respects, Canadian and U.S. regulatory requirements are complementary, and that the carriers intend to comply with the highest standards under both regimes. In the case of hours of service regulations, the carriers have agreed to limit dispatchers shifts in accordance with FRA regulations, even though Canadian regulations would permit the dispatchers to work longer shifts. The carriers acknowledge that Canadian human rights standards limit their ability to compel employees to submit to drug and alcohol testing to the same extent permitted by U.S. law. However, the carriers aver that they are committed to enforcing their operating rules in connection with dispatching work to the fullest extent permissible under Canadian law. The carriers add that, on their own initiative, they have proposed a new set of regulations that would require periodic medical assessments of employees, including dispatchers, in sensitive positions. According to the carriers, the new procedures would exceed current FRA requirements for periodic vision and hearing examinations and for the random drug testing program. We do not review issues of causation, the calculation of benefits, or the resolution of other factual questions, and our review is limited to recurring or otherwise significant issues of general importance regarding the interpretation of our labor protective conditions. The Train Dispatchers do not address whether there are issues of general transportation importance here regarding the interpretation of our labor protective conditions. However, in the past, we have considered whether the interpretation is a matter of first impression, the number of affected employees, or the likelihood that the circumstances would recur as part of our analysis. Here, the transaction will affect a small number of employees, and petitioners have not argued or established that the matter is one of first impression or that it is likely to recur. An arbitrator's decision on the issue on which petitioners principally rely, i.e., whether the proposed changes are linked to a prior transaction, is a factual issue. That decision should not be set aside except for egregious error. The Train Dispatchers have not shown that the arbitrator's factual determination regarding the relationship between the proposed changes in dispatching and the transaction approved by the ICC in CPL/DHRC constitutes egregious error. Therefore, there is no basis for us to review this factual issue raised by petitioners, or the issue of whether the arbitrator exceeded his authority which flows from it. We find no merit in petitioners claim that the arbitrator here exceeded his authority. Specifically, the record indicates that the arbitrator examined the transactions approved both in CPL/DHRC and in STB Finance Docket No. 33136. He noted the ICC's observation in the former proceeding that Delaware & Hudson will be fully integrated into CP Rail System, both operationally and financially. The arbitrator also stated that the creation of a new corporate entity, St. Lawrence, did not change or undermine in any meaningful way the fact that the transfer of work is a manifestation of Canadian Pacific's intention, approved by the ICC, to operationally integrate Delaware & Hudson and Canadian Pacific into a single system. Under that analysis, the arbitrator concluded that the transfer of the dispatching function falls within the scope and authority of CPL/DHRC and, thus, he had jurisdiction to consider the carriers proposal for an implementing agreement providing for the transfer of the dispatching function from Milwaukee to Montreal. The Train Dispatchers argument, that an event cannot be deemed reasonably related to an authorization unless it is mentioned in the agency decision, has been resolved adversely to petitioners position. In authorizing transactions, the ICC did not, and the Board does not (and could not), list all the actions expected to flow from the authority conferred. The lack of any statement that dispatcher positions would be transferred to Canada in CPL/DHRC does not mean that the transfer transaction is not directly related to, or does not grow out of, the primary transaction authorized. The Train Dispatchers also have stressed the issue of safety, in particular, the effect of moving the dispatching function for U.S. lines to Canada. But the arbitrator found that the instant proposal is encompassed within the approval granted in CPL/DHRC, and we defer to the arbitrator on that factual finding. The implementing agreement imposed by the arbitrator is consistent with the New York Dock conditions the ICC imposed upon that approval. We would, therefore, in effect be retroactively imposing additional labor conditions on that approval were we to overturn his awards on the basis of safety issues. More importantly, however, the record demonstrates that petitioners concerns in this area have been adequately addressed. The FRA, the agency having primary responsibility over railroad safety enforcement, has been made aware of the proposed transfer of dispatch positions and has been in contact with Canadian Pacific regarding the proposal. Moreover, the railroads have submitted a copy of a substantial filing they made with the FRA on this matter. The filing details Canadian Pacific's safety compliance plans for the Montreal-based dispatch operation. As previously noted, the railroads have undertaken to comply with the highest standards under both Canadian and U.S. safety regulatory regimes. We will hold them to their representations. In these circumstances, the petitioners safety concerns do not furnish a legal basis for reviewing the arbitrator's decisions. In sum, having considered the applicable standard for review of arbitrators decisions, we decline to review the decisions at issue in this proceeding. It is ordered: 1. We decline to review the arbitrators decisions. 2. This decision is effective 30 days after its service date. Decided: September 17, 1998 Service Date - Late Release September 18, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-369 (Sub-No. 3X) BUFFALO & PITTSBURGH RAILROAD, INC.--ABANDONMENT EXEMPTION-- IN ERIE AND CATTARAUGUS COUNTIES, NY By petition filed on June 1, 1998, Buffalo & Pittsburgh Railroad, Inc. (B&P) seeks an 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, 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 Board published a notice in the Federal Register on June 19, 1998, instituting this proceeding. Protests in opposition to the proposed abandonment have been filed by three shippers located on the line to be abandoned. They are Electro Abrasives Corporation (Electro Abrasives); Thruway Builders of Orchard Park, Inc. (Thruway); and Gramco, Inc. (Gramco). Buffalo Crushed Stone, Inc. (BCS), a shipper located on an adjoining line and who ships over the line to be abandoned, also protests the petition. Finally, the United States Department of Energy and the New York State Energy Research and Development Authority, (DOE/NYSERDA or objectors) also protest. The United Transportation Union seeks the imposition of labor protective conditions. Colden Country Rails to Trails has requested a public use condition as well as a request for interim trail use. As explained below, we will deny the petition for exemption. B&P currently owns approximately 83 miles of rail lines in New York. The 51.2-mile line segments at issue here connect with a line owned by the Rochester & Southern Railroad (R&S), an affiliate of B&P, at Ashford Junction, NY. R&S has contemporaneously filed a petition seeking to abandon this connecting line. We are issuing a decision in that proceeding simultaneously with this one, denying that petition. In 1997, B&P consummated a trackage rights agreement with Conrail which enabled B&P to shift its overhead traffic from the line segments at issue here to a parallel Conrail line. B&P states that it has not moved any overhead traffic on these line segments since then. B&P states that it has decided to abandon these contiguous line segments because traffic from them does not justify the cost of operating and maintaining them. B&P contends that the four shippers currently located on the line segments have averaged only about 140 carloads of freight per year over the last five years, producing revenues ranging from approximately $44,000 to $60,000 annually. B&P asserts that each of these shippers also receives service by truck, and that all of the freight handled for these shippers could be accommodated by motor carrier, or a combination of rail service to and from Buffalo or other convenient locations on Conrail's lines in the region together with a local motor carrier move. B&P states that it has chosen to defer major capital expenditures on the line segments, with the exception of those that are essential to keep the segments operating, because of the lack of on-line traffic. Nevertheless, B&P claims it has spent approximately $400,000 annually on maintenance in recent years. B&P also claims that the property taxes allocated to these line segments for 1998 are estimated to be approximately $250,000. B&P states that, although abandonment will not eliminate these taxes, it should significantly reduce them because the State of New York taxes railroad property under a different (presumably higher) formula than other property. B&P notes that it has had discussions with the Department of Environment and Planning of the County of Erie and the Cattaraugus County Industrial Development Agency, which are interested in purchasing portions of the line segments. These two agencies have requested that B&P delay filing this petition to permit further discussions. B&P states, however, that it does not want to be forced to continue to incur the costs of maintaining the line segments. Accordingly, B&P has filed this petition while reporting that it is continuing discussions with interested parties regarding rail service alternatives. DOE/NYSERDA argues that this line is important to the long-term success of the West Valley Demonstration Project (WVDP), a nuclear waste demonstration project managed by DOE and located on a spur line that connects to the Buffalo to Ashford line. DOE/NYSERDA indicates that they are currently considering alternatives for long-term management or closure of the WVDP facilities, but are relying upon the availability of rail transportation to ship radioactive materials off-site in the future. DOE /NYSERDA claims that, if WVDP utilizes rail to ship all of its waste off-site, it could generate between 21,000 and 36,000 rail car shipments over the next twenty-six years. DOE/NYSERDA claims they have spent over $10 million in obtaining special train casks in anticipation of these future shipments. They maintain that B&P has offered no evidence concerning the availability of alternative transportation service for this traffic. DOE/NYSERDA also asserts that B&P has grossly understated the revenues attributable to the line segments because B&P's figures do not include revenue from overhead traffic. Further, they claim that B&P's estimates regarding the costs of operating these line are indefensible, especially because those figures ignore government subsidies that B&P receives to offset its maintenance costs. B&P allegedly received a $4 million grant from the State of New York in 1993 to improve its track, including a segment of its line between Ashford Junction and Salamanca. Objectors also question B&P's claim that it has already spent $75,000 on maintenance in 1998; they note that B&P has rerouted all overhead traffic and has discontinued virtually all local shipments in anticipation of its exemption petition. DOE/NYSERDA suggests, however, that the $75,000 could conceivably have been spent on insurance or on other ongoing expenses that B&P will incur regardless of abandonment. DOE/NYSERDA also claims that an environmental impact statement must be prepared due to the potential adverse impacts from the nuclear waste disposal. They claim that, because the requisite environmental considerations cannot be accomplished within the statutorily mandated 110 days for completion of an abandonment exemption, the petition must be denied. Electro Abrasives claims that the loss of the rail service will force it to use truck transportation for its main raw material at double its current cost, or over $67,000 a year, in a very competitive industry. This shipper also states that its factory is designed solely for railcar delivery of raw materials and that unloading truck deliveries would cost an additional $25,000 per year. Thruway states it has been in the building supply business for over 30 years and has relied heavily upon B&P to deliver its supplies for resale at a cost which permits it to be competitive. Thruway claims that the proposed abandonment will result in financial hardship and will preclude it from competing with the national chains of builder suppliers. Gramco, which operates a feed mill in Springville, NY, employs approximately twenty- six persons, including seven at its Springville plant. Gramco opposes the abandonment, stating that railroad access to its Springville plant is important both for its business and the business of its customers. Gramco states that nearly all of the raw materials it uses are transported by rail and that this has been economical and cost effective in the past. Gramco indicates, however, that this has not been the case over the past several years. This shipper says that service has declined while prices have increased since 1995, when B&P first contemplated abandoning this rail line. Finally, Gramco claims that B&P recently advised it that the cost to transport a rail car from Buffalo to Springville (approximately 28 miles) would be increased from $318 per car to approximately ten times that amount. BCS is a producer of processed gravel products in Franklinville, NY, where it originates traffic on B&P's affiliate R&S. BCS states that, without rail service by B&P over the Ashford Junction/Salamanca line segment proposed for abandonment here, BCS cannot bring a competitively priced product to its markets in Erie, Dubois, and Johnsburg, PA. BCS argues that the use of alternate modes of transportation (namely trucking) is cost-prohibitive, stating that it would cost $4.50 per ton to truck gravel mined at Franklinville to its Pennsylvania centers. BCS states that B&P has failed to provide sufficient information regarding the impacts of the proposed abandonment on BCS, the sole overhead shipper on the Ashford-Salamanca line segment. BCS also maintains that this abandonment proposal must be bifurcated, separating the 43- mile Buffalo to Ashford line from the 9.2-mile Ashford to Salamanca line. BCS claims this latter segment is financially viable, with traffic generated by BCS alone accounting for some $163,000 in revenues over the Ashford to Salamanca segment in 1997. This figure, BCS asserts, is over three times the average annual freight revenues received by B&P from on-line traffic. BCS projects a 25% increase in sales which would result in 131 more carloads of overhead traffic in 1998. Finally, BCS notes that B&P has inextricably intertwined its abandonment proposal with that of its affiliate R&S, and that this whole situation can only be properly resolved through the abandonment application process rather than through an exemption. On rebuttal, B&P argues that the opposing parties arguments are insufficient to warrant the filing of a full abandonment application. These parties, B&P maintains, have failed to demonstrate how the rail transportation policy of 49 U.S.C. 10101 would be served by denying its petition for exemption. It is clear, B&P contends, that its revenues from traffic on or over these line segments is marginal compared to its costs of operating them, and that B&P should not be required to submit detailed financial information to establish this. The increased costs of using alternative transportation modes, B&P concludes, is not a sufficient reason to deny its petition where the opposing parties have failed to show that it will not be burdened by continued operations. Finally, B&P argues that it should not be required to maintain these line segments for speculative future shipments such as those suggested by DOE/NYSERDA. B&P states, in response to DOE/NYSERDA's assertions that B&P has been subsidized by state funds, that B&P has not accepted any of the proceeds of the $4 million New York State grant. In reply, BCS emphasizes that there is no viable alternative to rail service for its traffic to western Pennsylvania and that BCS's overhead traffic would be lost to B&P if abandonment occurs. BCS reiterates that, absent presentation of bifurcated data on the operating results of the Ashford to Salamanca line, there is insufficient information to assess whether waiver of the Board's normal abandonment procedures is consistent with the rail transportation policy. DOE/NYSERDA maintains that it is far from clear that the revenues generated here are minimal compared to the costs of operating the line, and that the exemption petition must therefore be denied. It contends that B&P has not adequately explained why it has failed to utilize the $4 million grant which would clearly reduce the railroad's operating costs significantly. DOE/NYSERDA challenges B&P's assertion that it will save on taxes from abandoning the line. DOE/NYSERDA also argues that B&P's decision to reroute overhead traffic makes it impossible to ascertain the true burden of continued operations here. B&P has elected to forgo presenting any data on the cost of conducting rail operations over the lines to be abandoned. Instead, B&P argues that its costs of maintaining the line and paying taxes on it exceed the revenues it receives and expects to receive from the shippers that use the line. Also, despite BCS's request that B&P bifurcate its cost and revenue data between the 9.2-mile Ashford to Salamanca line, which BCS uses, and the 43-mile Buffalo to Ashford Junction Line, B&P declined to do so, arguing instead that revenue from the BCS traffic should not be considered at all. B&P claims that the BCS traffic should be excluded because B&P is attempting to negotiate an interchange at Machias with Conrail using B&P's trackage rights over that carrier, thereby obviating the need for BCS to ship over the Ashford Junction to East Salamanca line. But B&P has not concluded that agreement. Thus, BCS has no option but to ship over the 9.2- mile segment of B&P's line. For that reason, B&P's revenue for this traffic is properly attributable to that B&P line segment. Moreover, because BCS obviously provides most of the revenues for the lines at issue here, while the cost of earning that revenue is limited to the 9.2- mile line segment, BCS has justified its request that B&P be required to segment its evidentiary submission between the 9.2-mile segment and the 43-mile segment. We cannot authorize the abandonment of the 9.2-mile segment because the petition contains no information on the costs attributable to that line, and BCS has justified treating that segment as a separate part of this petition. Nor do we have any basis upon which to grant the sought exemption as to the 43-mile segment. B&P relies exclusively on its argument that maintenance costs and taxes exceed the revenues from the traffic on that segment. Protestants have challenged both arguments. Protestants note that B&P has been given a $4 million grant from the State of New York. They maintain that B&P is authorized to use those funds to cover maintenance expense. B&P's reply that it elected not to expend the money is not a sufficient response to the question of how this subsidy should be treated, especially where, as here, a state agency is protesting the proposed abandonment. We would like to know why B&P chose not to expend the $4 million granted to it. If B&P had money available to cover all of its maintenance expenses and simply chose not to spend it, we have some doubt that the existence of maintenance expenses, by itself, can be used to justify the abandonment of the line. B&P also cites the taxes it is required to expend annually on the line. In response to protestants arguments that B&P will have to pay taxes on the property whether it is abandoned or not, B&P asserts that New York law taxes rail property more heavily than other real estate. B&P says that it . . . estimates that annual assessment of real property taxes allocated to the Line Segments will be reduced by anywhere from 50 to 70% following abandonment. B&P does not support this assertion with a reference to relevant New York law or with a verified statement from a real estate appraiser or other witness. Because protestants have challenged B&P's tax argument, we cannot grant this petition, in whole or in part, based on an unsupported assertion. In conclusion, the opposition pleadings here raise serious questions about the petition for exemption filed by B&P. Taking those questions into account, we cannot make the findings necessary to support this request for exemption. Accordingly, we will deny the petition for exemption without prejudice to B&P's filing a full abandonment application. Our denial of B&P's exemption request moots labor protection issues and environmental issues, including Colden Country Rails to Trails request for a public use condition as well as interim trail use. As noted, the Rochester & Southern Railroad is seeking an exemption to abandon a 10.41-mile line of railroad that connects with the line segments at issue here at Ashford Junction. By decision issued today in that case, that petition is being denied. The fact that a grant of abandonment authority here would isolate that line from the national rail system affords an additional reason to deny this petition. We strongly suggest that any future requests for the abandonment of these lines and the Rochester & Southern line be coordinated. It is ordered: 1. The petition for exemption is denied. Decided: September 17, 1998 Service Date - Late Release September 18, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-493 (Sub-No. 7X) TRACK TECH, INC.--ABANDONMENT EXEMPTION--IN ADAIR AND UNION COUNTIES, IA By decision served on July 2, 1998, the Board exempted the abandonment by Track Tech, Inc. (Track Tech), of a 19.70-mile line of railroad between milepost 1.45 near Creston, and milepost 21.15 at the end of the line in or near Greenfield, in Adair and Union Counties, IA, subject to public use, trail use, environmental, and standard employee conditions. The exemption was scheduled to become effective on August 1, 1998, unless stayed by the Board or unless a formal offer of financial assistance was filed by July 13, 1998. On July 2, 1998, Green Valley Chemical Company (Green Valley), with the consent of Track Tech, filed a petition to toll the 10-day period for submitting an OFA for the portion of the line between milepost 1.45 and milepost 5.45 for an additional 30 days. By decision served July 10, 1998, the time period for Green Valley to file an OFA was tolled until August 12, 1998, and the effective date of the abandonment exemption with respect to the part of the line between milepost 1.45 and milepost 5.45 was further stayed until September 1, 1998. On August 12, 1998, Green Valley timely filed an OFA to purchase the track between milepost 1.45 and milepost 5.45 for $83,000. By decision served on August 17, 1998, Green Valley was found to be financially responsible and the effective date of the decision authorizing abandonment with respect to the part of the line between milepost 1.45 and milepost 5.45 was further postponed to permit the financial assistance process to proceed. The August 17 decision also noted, that on or before September 11, 1998, either party could request that the Board establish terms and conditions for the sale of the line segment if no agreement was reached during negotiations. By letter filed on September 11, 1998, Green Valley advised the Board that Green Valley and Track Tech have reached a final agreement for the purchase of the track between milepost 1.45 and milepost 5.45. Green Valley, with the consent of Track Tech, requests that the Board approve the purchase and issue an order dismissing the exemption with respect to the part of the line between milepost 1.45 and milepost 5.45. It is ordered: 1. Under 49 U.S.C. 10904 and 49 CFR 1152.27(f)(2), the petition for exemption is dismissed with respect to the part of the line between milepost 1.45 and milepost 5.45 effective on the date the sale is consummated. Decided: September 16, 1998 Service Date - September 21, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-31 (SUB-NO. 32X) Grand Trunk Western Railroad, Inc. -- Abandonment Exemption -- In Oakland County, MI In this proceeding, the Grand Trunk Western Railroad, Inc. (GTW) has filed a petition in connection with the abandonment of its railroad line located between milepost 35.3 and milepost 38.4, a distance of 3.1 miles in Oakland County, MI. As of May 1, 1998, Powers Distributing has relocated to a GTW private siding in Orion Township, MI. From March 1997 to February 1998, Powers received 234 rail carloads of beer. Cadillac Brick Company is located at MP 38.16-38.40. GTW track to Cadillac Brick's site was embargoed on May 16, 1997. The embargo was due to poor track conditions (i.e., soft track) between MP 37.36 and 38.40. In 1996, Cadillac Brick received 386 rail carloads of brick. Cadillac Brick is now receiving brick by truck or via rail/truck, trans-loaded from a nearby point on another railroad. Neither the City of Pontiac nor the City of Sylvan Lake will lose access to the rail network by virtue of the proposed abandonment. The National Geodetic Survey (NGS) identified 30 geodetic station markers along the rail line that may be affected by the proposed abandonment and requests 90 days notice to plan relocation of any markers which may be disturbed or destroyed. Therefore, we recommend that the following condition be imposed on any decision granting abandonment authority: Grand Trunk Western Railroad, Inc. shall consult with the National Geodetic Survey and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers. Service Date - September 22, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33655] Wisconsin Central Ltd. Trackage Rights Exemption Sault Ste. Marie Bridge Company and Fox Valley & Western Ltd. Sault Ste. Marie Bridge Company (SSAM) and Fox Valley & Western Ltd. (FVW) have agreed to grant non-exclusive overhead trackage rights to Wisconsin Central Ltd. (WCL): (1) over SSAM's line of railroad between milepost 92.1, at Powers, MI, and milepost 4, at Duck Creek, WI, including access to FVW's main line at Duck Creek (milepost 4), a distance of approximately 88.1 miles; and (2) over FVW's line of railroad between milepost 4, at Duck Creek, and milepost 1.4, at North Green Bay, WI, including access to WCL's pre-existing rights at North Green Bay, a distance of approximately 2.6 miles. The purpose of the trackage rights is to provide more efficient service by WCL between its lines in the Upper Peninsula of Michigan and the Fox Valley Area of Wisconsin. The transaction was scheduled to be consummated on or after September 11, 1998. Decided: September 15, 1998. Service Date - September 22, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33656] Wisconsin Central Ltd. and Sault Ste. Marie Bridge Company Joint Relocation Project Exemption Hermansville, MI, to North Escanaba, MI On September 4, 1998, Wisconsin Central Ltd. (WCL), a Class II railroad, and Sault Ste. Marie Bridge Company (SSAM), a Class III railroad, filed a notice of exemption to relocate certain lines of railroad from Hermansville, MI, to North Escanaba, MI. Between Hermansville and North Escanaba, WCL and SSAM currently own and operate adjacent and parallel lines of railroad. The WCL MS Line runs, in part, from WCL milepost 310.75, in Hermansville, where it meets in a diamond with the SSAM MS Line, to WCL milepost 336.25, in North Escanaba (WCL Line). The SSAM MS Line runs, in part, from SSAM milepost 4.1, in Hermansville, where it meets in a diamond with WCL's MS Line, to SSAM milepost 0.0/92.1, in Powers, MI, where it meets SSAM's FV Line, and on to milepost 113.0 in North Escanaba (SSAM Line). Both the WCL Line and the SSAM Line run in a generally east-west direction. The joint relocation project will reroute operations from, and allow removal of, one of these duplicative rail lines, thus simplifying rail operations and accommodating efforts to reduce rail interference with vehicular traffic. Under the joint project, WCL and SSAM propose the following transactions: (1) WCL will abandon its line of railroad on the WCL Line from milepost 310.75, in Hermansville, to milepost 336.25, in North Escanaba, a distance of approximately 25.5 miles. (2) SSAM will discontinue its trackage rights operations on the WCL Line from milepost 310.75, in Hermansville, to milepost 336.25, in North Escanaba, a distance of approximately 25.5 miles. (3) WCL and SSAM will construct a connecting track of approximately nine-tenths of a mile between the WCL Line, at WCL milepost 336.25, and the SSAM Line, at SSAM milepost 113.0. This will connect the SSAM Line with the WCL tracks in North Escanaba. WCL will own the northern portion of the connection track (milepost 336.25 to milepost 335.85), while SSAM will own the southern portion of the connection track (milepost 113.5 to milepost 113.0). (4) SSAM will grant WCL trackage rights over the SSAM Line between SSAM milepost 4.1, in Hermansville, through SSAM milepost 0.0/92.1 in Powers, MI, to SSAM milepost 113.0, in North Escanaba, and from there: (a) to the division of ownership of the new connecting track, at SSAM milepost 113.5, in North Escanaba; and (b) to SSAM milepost 118.0, in Larch, MI, a total distance of approximately 30.5 miles. WCL's existing trackage rights over the SSAM Line from Hermansville through Powers and North Escanaba to Larch, MI, will be superseded and expanded by these new rights. (5) WCL will grant SSAM trackage rights from the division of ownership of the new connecting track, at WCL milepost 335.85, in North Escanaba, through WCL milepost 336.25, in North Escanaba, to WCL milepost 342.7. in Gladstone, MI. The transaction was scheduled to be consummated on or after September 11, 1998. Decided: September 15, 1998. Service Date - September 22, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT Docket No. AB-397 (Sub-No. 3X) TULARE VALLEY RAILROAD COMPANY--ABANDONMENT AND DISCONTINUANCE EXEMPTION--IN TULARE AND FRESNO COUNTIES, CA By decision served and notice published in the Federal Register on February 9, 1995, the Tulare Valley Railroad Company (TVR) was granted an exemption to abandon 55.7 miles of rail line between: (1) milepost 51.0 near Lac Jac and milepost 67.0 near Calwa, in Fresno County, CA, a distance of 16 miles (Calwa Line); (2) milepost 49.8 near Reedley and milepost 38.5 near Cutler, in Tulare County, CA, a distance of 11.3 miles (Cutler Line); (3) milepost 19.0 near Cutler and milepost 38.0 near Exeter, in Tulare County, a distance of 19.0 miles (Exeter Line); and (4) milepost 20.6 near Wyeth and milepost 11.2 near Orange Cove, in Tulare County, a distance of 9.4 miles (Orange Cove Spur). In addition, TVR was granted exemption authority to discontinue service over 1.2 miles of line between milepost 51.0 near Lac Jac and milepost 49.8 at Manning Avenue in Reedley. Subsequently, on April 24, 1995, the Board served a decision and notice of interim trail use or abandonment (NITU) authorizing American Trails Association, Inc. (ATA) to negotiate an interim trail use/rail banking agreement, under the National Trails System Act, with TVR for the above-described 55.7-mile right-of-way. Thereafter, on August 13, 1996, a second NITU was served, authorizing ATA to negotiate with TVR for approximately 25 miles of rights-of-way: (1) between milepost 38.5 at or near Cutler and milepost 48+1888 at or near Dinuba Avenue in Reedley; (2) between milepost 50+3780 at or near Lac Jac and milepost 58+2025 at or near Del Rey; and (3) between milepost 58+4500 at or near American Avenue near Del Rey and milepost 67.0 at or near Calwa, in Tulare and Fresno Counties, CA. ATA subsequently notified the Board that it had acquired these segments for trail purposes. When it notified the Board of the acquisition on February 10, 1997, ATA also requested issuance of a NITU to negotiate with TVR for acquisition of an additional segment of right-of- way in Reedley, between milepost 48+1888 at or near Dinuba Avenue and milepost 49+3125 at or near Manning Avenue, a distance of approximately 1 mile in Fresno County. A NITU covering this segment was served on April 17, 1997. The segment is not a subject of the pleadings now before the Board. On February 13, 1998, ATA filed a notice of intent to terminate trail use with respect to the line segment between milepost 58+4500 at or near American Avenue near Del Rey and milepost 67.0 at or near Calwa, a distance of approximately 8.5 miles in Fresno County. Shortly thereafter, on February 17, 1998, ATA filed a notice of intent to terminate trail use with respect to the line segment between milepost 58+2025 near Del Rey and milepost 58+3100 near Parlier, a distance of approximately 5 miles in Fresno County. On March 3, 1998, the Rails to Trails Conservancy (RTC) filed a statement opposing ATA's requests to terminate trail use with respect to the above-described segments. On March 23, 1998, ATA filed a reply. The Tulare County Farm Bureau and the Fresno County Farm Bureau (the Farm Bureaus), on April 20 and 21, 1998, respectively, also filed replies supporting the termination of trail use. On April 27, 1998, ATA filed a third notice of intent to terminate trail use, relating to the following segments: (1) between milepost 51+0300 at or near Lac Jac and milepost 53+3100 at or near Parlier, a distance of approximately 2 miles, in Fresno County; (2) between milepost 58+2025 and milepost 58+4500 in Del Rey, a distance of 2,475 feet, in Fresno County; and (3) between milepost 38.5 at or near Cutler and milepost 47+0650 near Reedley, a distance of approximately 8.5 miles, in Tulare County. It appears that, as this second segment was not specified in the NITU served August 13, 1996, an agreement covering it must have been reached pursuant to the NITU served April 24, 1995. The record does not clarify this point. Nevertheless, since ATA has requested termination of trail use as to this segment, and this decision authorizes TVR to discontinue interim trail use and abandon the segments for which the NITUs have been vacated, the issue is moot. The two segments specified in ATA's February 13 and February 17 termination notices and the first two segments specified in the April 27 notice connect to form the entire 16-mile Calwa Line, except for the short end segment extending between milepost 51.0 and milepost 51+0300. The record does not reveal whether ATA ever negotiated a trail use agreement covering this short segment. The third segment specified in the April 27 notice constitutes all but approximately 2.8 miles at the end of the 11.3-mile Cutler Line. The record does not reveal whether ATA ever negotiated trail use agreements covering the segments of the Cutler Line between milepost 47+0650 and the end of the line. In its opposition, RTC contends that ATA is abusing the Trails Act and taking advantage of owners of property adjacent to railroad rights-of-way. RTC asserts that ATA is a for-profit organization that has never actually developed a trail on any property for which it has served as an interim trail manager. Nor did ATA transfer the segments at issue here to a new trail manager. According to RTC, ATA has engaged in a pattern of behavior demonstrating that its objective is to act as a land company that seeks to extort excessive prices from adjacent landowners for portions of right-of-way. In RTC's view, the only reason ATA seeks to terminate trail use here is to facilitate the sale of the rail banked corridor to adjacent landowners. It asks that this agency decline to facilitate and sanction ATA's assertedly illegal practices. ATA replies that RTC misapprehends the statutory and regulatory schemes. ATA emphasizes that interim trail use is strictly voluntary, that the Board's role under the statute is ministerial, and that the Board's regulations essentially give a trail operator the unqualified right at any time to terminate trail use and ask that a trail condition be vacated. In response to RTC's claim that ATA is abusing the Trails Act process, ATA replies that it was established to acquire rights-of-way of railroad lines authorized for abandonment and to hold them under the Trails Act with the intent of finding long-term trail operators who will develop the property for interim trail use. ATA claims that it asks the Board to relieve it of its responsibilities as a trail manager only when it is unable to find a successor operator, as here. It then assertedly gives adjacent landowners the opportunity to acquire its interests in the land parcels for payment of what it describes as a modest administrative fee. ATA claims that neither the adjacent landowners nor the public are left in a worse position than they would have faced absent ATA's interim trail use. The Farm Bureaus support ATA's requests that the NITUs be vacated because they oppose continued trail use, and they want TVR to be allowed to fully abandon the involved lines. Under 49 CFR 1152.29(d)(2), whenever a trail manager intends to terminate trail use over a portion of a right-of-way and sends the Board a request that a NITU be vacated, the Board will reopen the exemption proceeding, vacate the NITU, and issue a decision reinstating the exemption for that portion of the right-of-way. Thus, as ATA states, the duration of interim trail use on a particular right-of-way is entirely voluntary and the Board's role is ministerial. RTC has raised troubling allegations in its opposition. But no landowners have come forward to support RTC's arguments that ATA is taking advantage of them. Indeed, the only local interests that have participated are the Farm Bureaus, which support ATA's requests. Further, no substitute trail user has come forward or been identified. Finally, ATA has complied with the requirements regarding requests to vacate NITUs. In these circumstances, ATA's requests to vacate the NITUs will be granted with respect to the line segments identified above, and TVR will be permitted to fully abandon those line segments. It is ordered: 1. This proceeding is reopened. 2. The NITUs served in this proceeding are vacated with respect to the line segments: (1) between milepost 51+0300 at or near Lac Jac and milepost 67.0 at or near Calwa (Calwa Line), in Fresno County, CA, and (2) between milepost 38.5 at or near Cutler and milepost 47+0650 near Reedley, in Tulare County, CA. TVR may fully abandon the segments for which the NITUs have been vacated. Decided: September 22, 1998 Service Date - September 24, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33649] Ventura County Railroad Company--Lease and Operation Exemption--Ventura County Railway Company Ventura County Railroad Company (VCRR), a noncarrier, has filed a verified notice of exemption to lease from Ventura County Railway Company (VCRC) and operate approximately 12.09 miles of rail line. VCRR and VCRC have entered into an agreement for VCRR to lease from VCRC the line and all improvements thereon, all rail ties, spikes, tie plates, rail anchors, bridges, culverts, signaling equipment, and other supporting structures, ballast, and track materials, while excluding some real property and a building, and the purchase of certain assets, all located in the Port of Hueneme, Oxnard, CA. The rail lines to be leased include: the mainline from milepost 0.0 (the interchange with Union Pacific Railroad Company) to milepost 5.7 on the docks at Port Hueneme, and three branches: the 1.05-mile Diamond Branch; the 1.71-mile Edison Branch, and the 3.63-mile Patterson Branch in the Port of Hueneme and Oxnard, CA. The transaction was scheduled to be consummated on or shortly after September 1, 1998. The transaction is related to STB Finance Docket No. 33650, wherein RailAmerica, Inc., has concurrently filed a verified notice to continue in control of VCRR, upon its becoming a Class III rail carrier. Decided: September 16, 1998. Service Date - September 24, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33650] RailAmerica, Inc.--Continuance in Control Exemption--Ventura County Railroad Company RailAmerica, Inc. (RailAmerica) has filed a verified notice of exemption to continue in control of Ventura County Railroad Company (VCRR), upon VCRR's becoming a Class III railroad. The transaction was scheduled to be consummated on or shortly after September 1, 1998. This transaction is related to STB Finance Docket No. 33649, wherein VCRR seeks to lease and operate certain rail lines from Ventura County Railway Company (VCRC). VCRR and VCRC have entered into an agreement for VCRR to lease the line and purchase certain assets and equipment from VCRC. RailAmerica currently controls 10 common carrier Class III rail carriers operating in 7 states: the Cascade and Columbia River Railroad Company; the Delaware Valley Railway Company, Inc.; the Huron & Eastern Railway Company, Inc.; Minnesota Northern Railroad, Inc.; the Otter Tail Valley Railroad Company; the Saginaw Valley Railway Company, Inc.; the West Texas & Lubbock Railroad Company, Inc.; the Dakota Rail, Inc.; and the South Central Tennessee Railroad Corp. Decided: September 16, 1998. Service Date - September 24, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-55 (Sub-No. 563X) CSX TRANSPORTATION, INC.--ABANDONMENT EXEMPTION--IN HARRISON COUNTY, WV By petition filed June 8, 1998, CSX Transportation, Inc. (CSXT) seeks an 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. Notice of the institution of an exemption proceeding was published in the Federal Register on June 26, 1998. On June 23, July 15, and August 17, 1998, Hartland Planing Mill Company (Hartland) filed opposition to the proposed abandonment and requested an oral hearing. The city of Clarksburg and the Harrison County Commission also filed letters opposing the abandonment. CSXT filed a reply on August 7, 1998. The United Transportation Union (UTU) requests imposition of labor protective conditions. We will grant the petition, subject to labor protective conditions. Hartland's request for oral hearing will be denied. An oral hearing does not appear necessary for the development of a complete and accurate record. No showing of a need to observe witness demeanor or to cross examine witnesses has been made here. CSXT currently operates the WVA&P Subdivision as part of its Cumberland Coal Business Unit. The proposed abandonment involves the terminal 0.87-mile portion of the WVA&P Subdivision that connects to the Bridgeport Subdivision in Clarksburg, WV. According to CSXT, only one shipper, Hartland, is located on the Line, at milepost 2.1. CSXT states that traffic for Hartland consists of occasional inbound carloads of lumber and gypsum wallboard and that there are no outbound shipments. Traffic data submitted by CSXT shows that Hartland received no traffic for 1990, 1991, and 1993; 2 carloads in 1992; 6 carloads in 1994; 1 carload in 1995; 4 carloads in 1996; and 8 carloads in 1997. CSXT points out that this averages to less than 3 carloads per year over the last 8 years. CSXT claims that the entire rail line, including a bridge, Bridge 1A at milepost 1.6, is in extremely poor condition and will require extensive repairs within the next 12 months if operations are to continue. In a verified statement, CSXT witness J.D. Conley estimates that CSXT would need to spend $91,000 for installation of crossties, as well as undertaking ditching, brush cutting, switch work, and anchor/spiking work. In addition, CSXT witness G.A. Simpson submitted a verified statement indicating that needed repairs to Bridge 1A total $110,275 and must not be delayed later than 1999. Thus, CSXT estimates that it would need to spend a total of $201,275 to keep the Line in operation. Hartland does not dispute that $201,275 must be spent to keep the line in operation. Rather it argues that this maintenance should have been done over a number of years. CSXT counters that that simply would have exacerbated its prior losses. CSXT replied that it would not be a prudent use of its resources to spend over $200,000 to maintain a line that averages less than 3 carloads a year. In a verified statement, CSXT witness Nikki M. Eskow states that an economic analysis of the Line was done, which indicated that, even if traffic levels were to increase to 20 carloads a year, this line would still experience a loss from operations. CSXT asserts that Hartland has adequate rail and motor transportation alternatives available. Ms. Eskow indicates that CSXT personnel have met with Hartland to offer other CSXT rail transportation alternatives, i.e., its TransFlo Yard facility and its team track on Baltimore Avenue, located within a mile of Hartland's facility. CSXT asserts that Hartland could use motor carriers exclusively or seek to acquire the Line for continued rail service. Hartland avers that it does not have transportation alternatives. Mr. Steve Turner, President of Hartland, claims that motor carrier transportation is cost prohibitive and would run him out of business. He says truck freight would increase some material costs from 7% to 18%. Mr. Turner asserts that use of the CSXT team track facilities would require two forklifts, 1 tow truck, 2 trucks, and 5 men for 3 evenings at a cost of $2,746.63, while current rail service requires only 2 men and one forklift at a cost of $310.20. The City and the County generally support Hartland and express concern that the loss of the rail line will impact the local economy and its ability to attract future economic development. On July 20, 1998, the West Virginia State Rail Authority notified CSXT and the Board that it was making an offer of financial assistance to either subsidize or purchase the Line for continued rail service. Because the sole shipper has made little use of the Line over the last 8 years and appears to have adequate rail and motor transportation alternatives available, we find that regulation is not necessary to protect shippers from an abuse of market power. While Hartland's transportation costs may increase as a result of the abandonment, it is well settled that a railroad will not be required to operate a segment of trackage at a loss simply to prevent shippers from incurring higher transportation costs by truck. Based on SEA's recommendation, we conclude that the proposed abandonment, if implemented, will not significantly affect either the quality of the human environment or conservation of energy resources. Although SEA has indicated that the right-of-way may be suitable for public use under 49 U.S.C. 10905, no one has sought a public use condition, and none will be imposed. It is ordered: 1. Hartland's request for an oral hearing is denied. 2. 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 0.87-mile rail line, subject to the employee protective conditions in Oregon Short Line R. Co.--Abandonment--Goshen, 360 I.C.C. 91 (1979). 3. CSXT must serve a copy of this decision on Hartland within 5 days after the service date of this decision and certify to the Board that it has done so. 4. Provided no OFA has been received, this exemption will be effective on October 25, 1998. 5. CSXT shall file a 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 September 25, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: September 22, 1998 Service Date - September 25, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-57 (Sub-No. 45X) SOO LINE RAILROAD COMPANY--ABANDONMENT EXEMPTION-- IN DAKOTA COUNTY, MN In the above-entitled proceeding, no environmental or historic preservation issues have been raised by any party or identified by the Section of Environmental Analysis. Accordingly, a Finding of No Significant Impact will be made. It is ordered: 1. Abandonment of the involved rail line will have no significant effect on the quality of the human environment and conservation of energy resources or on historic resources. Decided: September 16, 1998 Service Date - September 25, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-31 (Sub-No. 33)] Grand Trunk Western Railroad Incorporated--Abandonment--In Macomb and Oakland Counties, MI On September 8, 1998, Grand Trunk Western Railroad Incorporated (GTW) filed with the Surface Transportation Board an application for permission for the abandonment of a portion of a line of railroad known as the Romeo Subdivision extending from railroad milepost 19.5 near Washington Station (#55532 at MP 19.9) in Washington, MI, to milepost 37.7 near Pontiac Station (#55610 at MP 25.8 on the Holly Subdivision) in Pontiac, MI, a distance of 18.2 miles, in Macomb and Oakland Counties, MI. The line includes the stations of Washington (#55532 at MP 19.9), Rochester (#55535 at MP 26.3), and Auburn Heights (#55536 at MP 31.7), and traverses United States Postal Service ZIP Codes 48094, 48316, 48307, 48309, 48326, and 48341. Neither Pontiac Station nor the Holly Subdivision is included in the line proposed to be abandoned. This line of railroad has appeared on the applicant's system diagram map in category 1 since April 3, 1998. Decided: September 21, 1998. Service Date - September 28, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-441 (Sub-No. 2X) SWKR OPERATING CO.--ABANDONMENT EXEMPTION-- IN COCHISE COUNTY, AZ This decision denies: (1) a petition to reopen the Board's December 2, 1997 decision in this matter, and (2) a petition to withdraw an extension request related to that decision. By decision served February 14, 1997, the Board permitted SWKR Operating Co. to abandon a 41.5-mile line of railroad running between Charleston and Paul Spur, AZ. Chemical Lime Company (CLC), a shipper on the line, filed an offer of financial assistance and a request that the Board set terms and conditions for subsidy and purchase of the line. CLC rejected the terms set by the Board and, in a decision served December 2, 1997, the abandonment was made effective on that date. On March 30, 1998, Representative Gail Griffin of the Arizona House of Representatives filed a letter-petition requesting a 90-day extension of the December 2 decision to allow the Arizona Department of Transportation time to hire a consultant to conduct a feasibility study on the practicable uses, economic benefits, and potential purchase of the line. SWKR replied on April 13, 1998. Also on April 13, 1998, San Pedro Trails, Inc. (SPT) filed a request for issuance of a notice of interim trail use (NITU) for 180 days under the National Trails System Act. By decision and NITU served on July 7, 1998, the Board denied the extension request and modified the February 14, 1997 decision to allow SPT to negotiate an interim trail use/rail banking agreement with SWKR for the right-of-way, for 180 days, until January 3, 1999. On July 23, 1998, Representative Griffin filed a petition to reopen the December 2 decision. Also, on that same date, the Representative filed a petition to withdraw her March 30, 1998 extension request related to that decision. On July 27, 1998, SWKR filed a reply. By letter filed August 17, 1998, SWKR notified the Board that it and SPT have negotiated an agreement to rail bank the right-of-way and that, pursuant to the agreement's terms, SPT has assumed responsibility for management of the right-of-way and the tax and tort liability associated therewith. In her petition to reopen, Representative Griffin contends that the December 2 decision involves material error because the Board lacked jurisdiction in approving the abandonment. According to petitioner, because the subject line of railroad is situated wholly within Arizona, this case is a local concern. Petitioner further contends that changed circumstances warrant reopening the proceeding because there has been entrepreneurial interest, in both the United States and Mexico, in keeping the track in place, upgrading the line, and reconnecting the line to the Mexican rail system. Petitioner wants the Board to vacate its prior decision and allow local entities to conduct a feasibility study related to the possible purchase of the line. The Board may reopen an administratively final decision when a petitioner submits new evidence, shows that the Board has committed material error, or demonstrates that substantially changed circumstances have arisen that warrant a different result. Although the Representative's petition alleges both material error and changed circumstances here, it establishes neither. It is well settled that a railroad line can be located in a single state and yet be engaged in interstate commerce, conferring jurisdiction upon this Board. Moreover, the Representative's assertion concerning the possible connection of the Charleston-to-Paul Spur line with the Mexican railroad system is not a changed circumstance warranting reopening. That matter was raised in a prior filing by CLC and was discussed in the Board's February 14 decision. Finally, it appears from the evidence submitted that there has been ample opportunity for interested parties to complete a feasibility study on the practicable uses, economic benefits, and potential purchase of this line. Thus, we have no grounds before us for reopening our prior decision. The request to withdraw the extension request will also be denied. As stated earlier, the extension request was discussed and disposed of in our July 7, 1998 decision. It is ordered: 1. The petition to reopen and the petition to withdraw are denied. Decided: September 22, 1998 Service Date - September 29, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33630 THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY AND UNION PACIFIC RAILROAD COMPANY--ACQUISITION EXEMPTION--LINES BETWEEN DAWES, TX, AND AVONDALE, LA By joint petition filed July 1, 1998, The Burlington Northern and Santa Fe Railway Company (BNSF) and Union Pacific Railroad Company (UP) seek an exemption for the acquisition of joint ownership of a line of railroad between Dawes, TX, and Avondale, LA, a distance of approximately 338 miles. Prior to the UP's merger with Southern Pacific Transportation Company (SP), this line was SP's main line between Houston, TX, and New Orleans, LA. The United Transportation Union requests the imposition of labor protective conditions. The ownership of the railroad line between Dawes and Avondale is presently divided between UP and BNSF. UP owns the 147.5-mile segment between Dawes, at milepost 352.8, and Iowa Junction, LA, at milepost 205.3 (the Beaumont Segment), and BNSF owns the 190.4- mile segment between Iowa Junction and Avondale, at milepost 14.9 (the Avondale Segment), having acquired it pursuant to the UP/SP-BNSF Settlement Agreement in Finance Docket No. 32760 (the UP/SP merger). As part of the Settlement Agreement, UP retained trackage rights over the Avondale Segment, including the right to serve all local industries on that line. In addition, BNSF received overhead trackage rights on the Beaumont Segment, with access to all new facilities customers, Lake Charles area customers, and all shippers that would have had their railroad service options reduced from 2 to 1 as a result of the UP/SP merger. On February 12, 1998, BNSF and UP entered into a Term Sheet agreement relating to the two railroads operations in and around Houston and along the Gulf Coast between Houston and New Orleans. As one part of that agreement, BNSF and UP agreed to exchange 50% ownership interests in their respective main line segments, including operating sidings used for meeting and passing trains. Under the Term Sheet agreement, BNSF will acquire an undivided 50% interest in UP's Beaumont Segment and UP will acquire an undivided 50% interest in BNSF's Avondale Segment. Other elements of the Term Sheet agreement include the establishment of a regional dispatching center in Spring, TX, for UP and BNSF lines in and around Houston and between Houston and New Orleans. In addition, BNSF will gain access to all present and future shipper facilities on the line and on former SP branches or spurs that connect to the line, as well as on new branches and spurs added to the line. The ownership exchange will be made subject to the existing trackage rights of the Texas Mexican Railway Company (TexMex) between Houston and Beaumont, as well as Amtrak's service over the entire line. Under the proposed operating agreement, capital additions and betterments on the line will be split on a user basis; maintenance capital, ordinary maintenance, and operations costs will be split on an annualized usage basis. Petitioners state that the exchange of ownership interests will improve coordination between BNSF and UP of maintenance and improvements on the line. Either railroad will be permitted to use the Louisiana & Delta Railroad (L&D) as its agent to provide service over the line. TexMex trackage rights charges will be paid to UP, and TexMex usage of the line will be considered as UP usage. BNSF's and UP's contracts with Amtrak will not be affected by the ownership exchange. Amtrak usage will be considered usage of the pre-exchange owner of the particular segment. Petitioners maintain that the exchange of ownership interests is an element of an arrangement that will provide significant benefits to Houston-area and Gulf Coast shippers. The new regional dispatching center in Spring, which has been in use since March 15, 1998, will coordinate the lines of the Houston Belt & Terminal Railway Company, the lines of the Port Terminal Railroad Association between Bridge 5A and Deer Park, and the trackage in the Houston terminal area that was formerly dispatched by the control operator at SP Tower 68. UP and BNSF personnel engaged in joint dispatching are located in the same area, operating from the same system, and are under the supervision of a neutral joint director. Petitioners are also conducting consolidated dispatching of other area lines from the Spring facility. UP and BNSF dispatchers control from Spring their respective lines along the entire Gulf Coast region from New Orleans through Houston to Brownsville, TX, and radiating north and south from Houston. Provisions have also been made for TexMex dispatchers to operate out of the new center. By placing each railroad's dispatching operations for these lines in one location, the railroads will be able to increase coordination and improve operations by reducing on-line congestion, permitting trains of both UP and BNSF to operate more reliably and more in accord with customers expectations. According to petitioners, these steps will fulfill a vital need to coordinate and improve UP and BNSF operations in the Houston area. In addition, petitioners state that the operations of both Kansas City Southern Railway Company and TexMex will benefit from this consolidated dispatching. Regulation of the transaction is not needed to protect shippers from the abuse of market power. The ownership exchange is the type of private-sector arrangement that we have encouraged in addressing rail service in the West. It is part of a larger agreement entered into by UP and BNSF not only to help alleviate any rail congestion on this rail line, the ownership of which is already divided between the two carriers, but to improve rail service in general in the Houston/Gulf Coast region. Indeed, some of the earliest service problems that eventually led to the service emergency in the West occurred on this line. Thus, we expect the transaction to facilitate improved service to shippers served by the subject line and throughout the region. It is ordered: 1. Under 49 U.S.C. 10502, we exempt this transaction from the prior approval requirements of 49 U.S.C. 11323-25, subject to the employee protective conditions in New York Dock Ry.--Control--Brooklyn Eastern Dist., 360 I.C.C. 60 (1979). 2. Notice of the exemption will be published in the Federal Register on September 29, 1998. 3. The exemption is effective on October 29, 1998. 4. Petitions to stay must be filed by October 9, 1998. Petitions to reopen must be filed by October 19, 1998. Decided: September 22, 1998 Service Date - September 29, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33637] Missouri & Northern Arkansas Railroad Company, Inc.--Acquisition and Operation Exemption-- The Burlington Northern and Santa Fe Railway Company Missouri & Northern Arkansas Railroad Company, Inc. (MNA), a Class III rail carrier, has filed a notice to acquire and operate approximately 9.6 miles of rail line owned by The Burlington Northern and Santa Fe Railway Company. The lines being acquired by MNA are located between: (1) milepost 334.39 and milepost 330.2 in Joplin, MO; and (2) milepost 309.9 and milepost 315.3 in Carthage, MO. The transaction was scheduled to be consummated on or shortly after September 9, 1998. Decided: September 22, 1998 Service Date - September 29, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-33 (Sub-No. 116X) UNION PACIFIC RAILROAD COMPANY--ABANDONMENT EXEMPTION-- IN SALT LAKE COUNTY, UT By petition filed June 12, 1998, Union Pacific Railroad Company (UP) seeks an exemption to abandon three rail line segments as follows: (1) the Provo Subdivision, between milepost 799.0 and milepost 800.26 (1.26 miles); (2) the Passenger Line Industrial Lead, between milepost 782.32 and milepost 782.79 (0.47-mile); and (3) the Provo Subdivision Running Track Passenger Line, between milepost 744.20 and milepost 745.48 (1.28 miles), a total distance of 3.01 miles in Salt Lake City, Salt Lake County, UT. UP also seeks to be exempted from the offer of financial assistance (OFA) requirements and the public use requirements. The Board served and published a notice in the Federal Register on July 2, 1998, instituting an exemption proceeding. The United Transportation Union seeks the imposition of labor protective conditions. We will grant the exemption, subject to two environmental conditions and standard employee protective conditions. According to UP, there are four shippers on the line segments: Cereal Food Processors (CFP), Tenneco Packaging (Tenneco), Holnam, Inc. (Holnam) and Mountain Cement Company (Mountain Cement). CFP and Holnam are located adjacent to the Provo Subdivision, Mountain Cement is located adjacent to the Passenger Line Industrial Lead, and Tenneco is located adjacent to the Provo Subdivision Running Track Passenger Line. Shippers CFP and Mountain Cement will continue to receive rail service from UP: CFP will continue to be served from a new siding and Mountain Cement will acquire some of the abandoned track, which it will use as industrial track for continued rail service. Shippers Holnam and Tenneco will no longer use UP rail service. The National Railroad Passenger Corporation (Amtrak) also uses the Provo Subdivision Running Track Passenger Line. According to UP, Amtrak has agreed to relocate its passenger operations to the intermodal transportation facility in the Gateway area which is located adjacent to another UP line. In a letter filed July 22, 1998, Amtrak states that it does not oppose the petition, based on petitioner's representation that it will postpone consummation of the abandonment until such time as Amtrak is able to move to a new temporary station facility in Salt Lake City. Any overhead traffic can and will be rerouted to an alternate line. UP states that the commodities transported over these line segments consist of wheat, flour and other milled grain products, pulpboard or fibreboard, portland cement, railway equipment, and scrap paper. In 1996, 4,068 carloads of traffic moved inbound and 1,877 carloads moved outbound over the line, totaling 5,945 carloads; in 1997, the numbers were 3,347 carloads inbound and 1,649 carloads outbound, totaling 4,996 carloads. UP states that the wheat, flour, and cement traffic will continue to move by rail to and from the area after abandonment. UP indicates that the line segments do not require any rehabilitation to meet class 1 FRA track standards. Petitioner adds that the Provo Subdivision currently consists of 133-pound rail, the Passenger Line Industrial Lead consists of 131-pound rail, and the Provo Subdivision Running Track Passenger Line consists of 115-pound rail. Petitioner states that the line segments are located on Salt Lake City streets within a city project area which is commonly referred to as the Gateway Project. UP avers that it is seeking authority to discontinue operations and to abandon the segments because the underlying right-of- way is required for other public purposes, i.e., for the Gateway Project. The project requires, in part, the shortening of the viaducts at ground level at 500 West Street and construction of an intermodal transportation facility in the Gateway area. According to UP, the Utah Department of Transportation (UDOT) plans to: (1) reconstruct a segment of Interstate Highway 15 which requires demolition and reconstruction of the viaducts; and (2) shorten the viaducts in order to accommodate the Gateway Project. Petitioner indicates that the shortening of the viaducts and the redevelopment will require removal of portions of the trackage proposed for abandonment here. UP states that it wants to promptly convey the right-of-way underlying the line segments to UDOT and the City. For this reason, petitioner indicates that it will not negotiate with any party for the transfer of the segments for trail use. Under the proposed exemption, petitioner will be able to consummate the abandonment more expeditiously and transfer the right-of-way to the City and UDOT for a redevelopment project. In the EA, SEA stated that, following the abandonment, the right-of-way may be suitable for other public use. SEA further indicated that: (1) the State of Utah, Department of Environmental Quality, Division of Environmental Response and Remediation (DERR), has informed SEA that eight CERCLA (superfund) sites are in close proximity to the rail segments proposed for abandonment; and (2) the National Geodetic Survey (NGS) has identified three geodetic station markers along the rail segments and requests 90 days notice to plan relocation of any markers which may be disturbed or destroyed. SEA, therefore, recommended that the following conditions be imposed on any decision granting abandonment authority: (1) during salvage of the rail right-of-way, if any potentially hazardous CERCLA (superfund) sites should be uncovered, salvage should cease and DERR should be consulted; and (2) UP shall consult with NGS and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers. We will impose the conditions recommended by SEA. As previously noted, to expedite the post-abandonment transfer of the right-of-way needed by UDOT and the City, UP has requested that the abandonment be exempted from the OFA requirements and the public use requirements. It has also requested that the exemption be made effective on the date after the date of service of this decision. Exemptions from 49 U.S.C. 10904-05 have been granted from time to time, but only when the right-of-way is needed for a valid public purpose and there is no overriding public need for continued rail service. Here UP has agreed to transfer the subject right-of-way to the City and UDOT for a valid public purpose, i.e., a major reconstruction project. Moreover, the shippers on the line segments and Amtrak do not oppose the abandonment and any overhead traffic moving over the line segments can and will be rerouted. There is therefore no overriding public need for continued rail service. On the other hand, imposition of the OFA procedures could delay the transfer of the line segments to UDOT and the City for pressing public use and jeopardize the timely completion of the project. Additionally, as a public use for the right-of- way here has already been established by agreement between UP, the City, and UDOT, there is no need for a public use condition in the circumstances. Accordingly, we will grant an exemption from the OFA and public use requirements. We will also not provide any further opportunity for interested persons to file trail use/rail banking requests. Trail use/rail banking is voluntary and can only be implemented if an abandoning railroad agrees to negotiate an agreement. Here, UP has made it clear that it will not entertain trail use requests. Finally, we will also grant petitioner's request for expedited effectiveness of the exemptions granted here. The record supports a need for such expedition. In a letter filed July 29, 1997, the City points out that time is of the essence here as the Gateway Project is being completed in the midst of the design-build reconstruction of Interstate Highway 15 -- the largest public design-build project in the country's history. Accordingly, we will make the subject exemption effective on the service date of this decision. It is ordered: 1. Under 49 U.S.C. 10502, we exempt from the requirements of 49 U.S.C. 10903-10905 the abandonment of the above-described line, subject to the employee protective conditions in Oregon Short Line R. Co.--Abandonment--Goshen, 360 I.C.C. 91 (1979), and subject to the conditions that: (1) during salvage of the rail right-of-way, if any potentially hazardous CERCLA (superfund) sites should be uncovered, salvage should cease and DERR should be consulted; and (2) UP shall consult with NGS and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers. 2. UP is directed to serve a copy of this decision on the shippers on the line and on Amtrak within 5 days after the service date of this decision and to certify to the Board that it has done so. 3. This exemption will be effective September 30, 1998. 4. UP shall file a 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 September 30, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: September 28, 1998 Service Date - September 30, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-57 (SUB-NO. 47X) SOO LINE RAILROAD COMPANY --ABANDONMENT EXEMPTION--IN HENNEPIN COUNTY, MN In this proceeding, the SOO Line Railroad Company (SOO) has filed a petition in connection with the abandonment of a portion its railroad line known as the Minneapolis Terminal Line. The portion of the line to be abandoned is located between milepost 4.09, near the western edge of Colfax Avenue North, and milepost 4.19, near the western edge of Aldrich Avenue North, a distance of 0.1 mile, in the City of Minneapolis, Hennepin County, Minnesota. SOO has not handled any traffic on the line for over two years, and no shippers are located on the line. The line is located in an urban industrial area. We recommend that no environmental conditions be placed on any decision granting abandonment authority. Service Date - September 30, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-290 (Sub-No. 194X) NORFOLK AND WESTERN RAILWAY COMPANY--ABANDONMENT EXEMPTION-- BETWEEN SOUTH BEND AND DILLON JUNCTION IN ST. JOSEPH AND LAPORTE COUNTIES, IN In a decision served on July 23, 1998, the Board granted Norfolk and Western Railway Company (NW), a wholly owned subsidiary of Norfolk Southern Railway Company (NS), an exemption to abandon a 21.5-mile line of railroad, the South Bend to Dillon Junction branchline, extending from milepost SK-2.5, near South Bend, to milepost SK-24.0, near Dillon Junction, in St. Joseph and LaPorte Counties, IN, subject to public use, trail use, environmental, and standard employee protective conditions. The decision stated that the exemption will be effective on Day One, (the date on which CSX and NS will effect the division of the operation and use of Conrail's assets) unless stayed by the Board or unless a formal offer of financial assistance (OFA) was filed by August 21, 1998. On August 21, 1998, American Electric Power Service Corporation (AEP) submitted an OFA to subsidize rail operations over the line operated by NW. In its OFA, AEP did not submit an actual dollar amount, but stated that NS is willing to negotiate with AEP over a mutually agreeable amount to permit it to continue rail operations over the line, and that negotiations would commence as soon as possible. By decision served September 2, 1998, the Board postponed the effective date of the decision authorizing abandonment of the line in order to permit the OFA process to proceed. The Board ordered that if NS and AEP cannot agree on terms and conditions, either party may request the Board to establish the terms and conditions on or before September 21, 1998. By letter received September 18, 1998, AEP requests that the Board grant it and NS an extension of time, through November 30, 1998, to attempt to agree on the amount of financial assistance that NS requires in order to continue rail service over the line in question. AEP states that it has had amicable discussions with NS about the amount of financial assistance required, but they have not yet been able to agree on an amount that would allow operations to continue. AEP adds that the process is complicated because its facility is located approximately midway along the line, and because of the fact that it requires rail service only on an occasional basis. Because of these reasons, AEP states, there is a need to develop additional information. In a letter to AEP's counsel dated September 17, 1998, NS advises that it is agreeable to and consents to AEP's request to extend the deadline to a date on or before November 30, 1998. The AEP request is reasonable and will be granted. Accordingly, the time period for NS and AEP to arrive at a mutually agreeable amount of financial assistance will be tolled until November 30, 1998, and the effective date of the exemption authorizing abandonment of the line will be postponed, pending completion of the OFA process. It is ordered: 1. The time period for AEP and NS to arrive at a mutually agreeable amount of financial assistance is tolled until November 30, 1998. 2. With respect to STB Docket No. AB-290 (Sub-No. 194X), the effective date of the decision authorizing abandonment of the line, see CSX/NS/CR No. 89, slip op. at 182 (ordering 75), is further postponed in order to permit the OFA process under 49 U.S.C. 10904 and 49 CFR 1152.27 to proceed. 3. With respect to STB Docket No. AB-290 (Sub-No. 194X), the effectiveness of the condition providing an opportunity for public use negotiations, see CSX/NS/CR No. 89, slip op. at 182 (ordering 74), is further postponed in order to permit the OFA process under 49 U.S.C. 10904 and 49 CFR 1152.27 to proceed. Decided: September 29, 1998 Service Date - September 30, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33657] Union Pacific Railroad Company--Trackage Rights Exemption--The Burlington Northern and Santa Fe Railway Company The Burlington Northern and Santa Fe Railway Company (BNSF) has agreed to grant overhead trackage rights to Union Pacific Railroad Company (UP) over BNSF's rail line between milepost 618.0 at Pueblo, CO, and milepost 170 at Peabody, KS, a distance of 448 miles, for the period September 10, 1998, through December 31, 1998. The transaction was scheduled to be consummated on or shortly after September 10, 1998. The purpose of the trackage rights is to permit UP to use the BNSF trackage when UP's trackage is out of service for scheduled programmed track, roadbed and structural maintenance. Decided: September 23, 1998. Service Date - September 30, 1998 ============================================================ Comments or questions about this compilation should be directed to Paul Moore at 71367.1057@Compuserve.com. ============================================================