[Federal Register Volume 78, Number 134 (Friday, July 12, 2013)]
[Notices]
[Pages 41993-41994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-16782]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket No. FD 35729]
Ann Arbor Railroad, Inc.--Lease Exemption--Norfolk Southern
Railway Company
Under 49 CFR 1011.7(a)(2)(x)(A), the Director of the Office of
Proceedings (Director) is delegated the authority to determine whether
to issue notices of exemption under 49 U.S.C. 10502 for lease and
operation transactions under 49 U.S.C. 10902. However, the Board
reserves to itself the consideration and disposition of all matters
involving issues of general transportation importance. 49 CFR
1011.2(a)(6). Accordingly, the Board revokes the delegation to the
Director with respect to issuance of the notice of exemption for lease
and operation of the rail line at issue in this case. The Board
determines that this notice of exemption should be issued, and does so
here.
Notice
Ann Arbor Railroad, Inc. (AARR), a Class III rail carrier, has
filed a verified notice of exemption under 49 CFR 1150.41 to lease from
Norfolk Southern Railway Company (NSR) two rail lines totaling 3.69
miles: (1) A line of railroad between milepost CS 1.26 and milepost CS
2.65 in Toledo, Ohio; and (2) a line of railroad between milepost GY
85.40 and GY 87.70 in Toledo (the Lines). According to AARR, it has
entered into a Lease Agreement (Agreement) with NSR whereby AARR will
lease the Lines from NSR. The term of the lease is 10 years.
Pursuant to 49 CFR 1150.43(h), AARR has disclosed that the
Agreement contains an interchange commitment in the form of lease
credits, depending on the number of carloads interchanged with NSR in a
given year.\1\ AARR states that the interchange commitment will enable
it to ``invest in improvements on the lines and increase traffic
levels.'' \2\
[[Page 41994]]
The Lines connect with AARR at AARR milepost 0.0 (Galena Street) and
AARR milepost 1.0 (Manhattan Junction) in Toledo. Traffic moving to and
from the Lines will have access to AARR connecting carriers NSR,
Canadian National Railway Company (CN), CSX Transportation, Inc., and
Wheeling & Lake Erie Railway in Toledo; the Indiana and Ohio Railway
and CN in Diann, Mich.; NSR in Milan, Mich.; and Great Lakes Central
Railroad in Ann Arbor, Mich.\3\
---------------------------------------------------------------------------
\1\ AARR has filed under seal, pursuant to 49 CFR
1150.43(h)(1)(ii), a confidential, complete version of the
Agreement. On July 1, 2013, the Brotherhood of Locomotive Engineers
and Trainmen filed a motion for access to the Agreement. That motion
will be addressed in a separate decision.
\2\ Notice 4.
\3\ Id. at 5.
---------------------------------------------------------------------------
AARR certifies that its projected annual revenues as a result of
this transaction will not result in AARR becoming a Class I or Class II
rail carrier but that its projected annual revenues will exceed $5
million. On June 24, 2013, AARR certified to the Board that it posted
the notice required by 49 CFR 1150.42(e) at the workplace of the
employees on the Lines, and that it served a copy of the notice on the
national offices of the labor unions with employees on the Lines.
The earliest the transaction can be consummated is August 23, 2013,
(60 days after AARR submitted its certification to the Board). See 49
CFR 1150.42(e); Progressive Rail Inc.--Acquis. & Operation Exemption--
Rail Lines of Crab Orchard & Egyptian R.R., FD 35656, slip op. at 2-3
(STB served Oct. 5, 2012).
If the verified notice contains false or misleading information,
the exemption is void ab initio. Petitions to revoke the exemption
under 49 U.S.C. 10502(d) may be filed at any time. The filing of a
petition to revoke would not automatically stay the effectiveness of
the exemption. Stay petitions must be filed no later than August 16,
2013 (at least seven days before the exemption becomes effective).
An original and 10 copies of all pleadings, referring to Docket No.
FD 35729, must be filed with the Surface Transportation Board, 395 E
Street SW., Washington, DC 20423-0001. In addition, one copy of each
pleading must be served on Karl Morell, BALL JANIK LLP, 655 Fifteenth
Street NW., Suite 225, Washington, DC 20005.
Board decisions and notices are available on our Web site at
``www.stb.dot.gov.''
It is ordered:
1. The delegation of authority to the Director of the Office of
Proceedings under 49 CFR 1011.7(a)(2)(x)(A) to determine whether to
issue a notice of exemption in this proceeding is revoked.
2. This decision is effective on the date of service.
Decided: July 9, 2013.
By the Board, Chairman Elliott, Vice Chairman Begeman, and
Commissioner Mulvey. Commissioner Mulvey dissented with a separate
expression.
Jeffrey Herzig,
Clearance Clerk.
Commissioner Mulvey, Dissenting
I disagree with the Board's decision to allow this transaction
to be processed under the class exemption procedures because I
believe that additional scrutiny of the interchange commitment is
necessary. Although AARR asserts that the interchange commitment
(which takes the form of a per car lease credit) will enable it to
invest in the two leased lines, this is a generic rationale that
sheds no light on how the interchange commitment will affect
competition. Moreover, the leased lines, although short, contain
many potential interchange points. The interchange commitment in the
lease agreement creates a disincentive for AARR to interchange with
the five other carriers with which it connects. The Board needs to
take a closer look at transactions such as these that purport to
increase investment incentives but also serve to limit competition
that might otherwise develop.\1\
---------------------------------------------------------------------------
\1\ In Information Required in Notices and Petitions Containing
Interchange Commitments, EP 714 (STB served Nov. 1, 2012), the Board
proposed new rules that would require carriers to disclose more
information when proposing transactions, such as this one, that
contain an interchange commitment. The comment period in this
rulemaking closed in January 2013 and the matter remains pending at
the Board.
---------------------------------------------------------------------------
[FR Doc. 2013-16782 Filed 7-11-13; 8:45 am]
BILLING CODE 4915-01-P