[Federal Register Volume 75, Number 151 (Friday, August 6, 2010)]
[Notices]
[Pages 47678-47679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19450]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket No. FD 35382]
Northern Plains Railroad, Inc.--Lease Exemption--Soo Line
Railroad Company
Under 49 CFR 1011.7(b)(10), the Director of the Office of
Proceedings (Director) is delegated the authority to determine whether
to issue notices of exemption for lease 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 the issuance of this notice
of exemption. The Board determines that this notice of lease and
operation exemption should be issued, and does so here.
Northern Plains Railroad, Inc. (NPR), a Class III rail carrier, has
filed a verified notice of exemption under 49 CFR 1150.41 to renew its
lease of approximately 290.31 miles of rail line of Soo Line Railroad
Company, d/b/a Canadian Pacific Railway (Soo), in Minnesota and North
Dakota (referred to as the Wheat Lines). NPR has operated the Wheat
Lines pursuant to an existing lease with Soo since 1997.\1\ According
to NPR, NPR and Soo have entered into a Lease Renewal Agreement and a
related Renewed Exchange and Operating Agreement, both dated July 19,
2010 (Agreements), which provide for NPR's continued lease of and
provision of rail service on the Wheat Lines.\2\ Pursuant to the
Agreements, NPR will renew its lease of the Wheat Lines extending: (a)
From milepost 309.69 at Thief River Falls, Minn., to milepost 474.5 at
Bisbee; (b) from milepost 390.99 at Fordville, N.D., to milepost 445.50
at Devils Lake; and (c) from milepost 535.00 at Kramer, to milepost
605.99 at Kenmare, N.D. NPR states that, as part of the Agreements, NPR
will lease 5 miles of abandoned Soo trackage at Kramer and 4.95 miles
of abandoned Soo trackage at Bisbee for rail supply and other
purposes.\3\ The term of the lease renewal is 20 years. As required at
49 CFR 1150.43(h), NPR has disclosed that the Lease Renewal Agreement
contains a provision that would limit NPR's future interchange of
traffic with a third-party connecting carrier at any location. NPR
notes that (other than with Soo) NPR has interchanges with BNSF Railway
Company at Ardoch, N.D., Devils Lake, and Warren, Minn.
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\1\ NPR acquired authority to lease and operate approximately
377.55 miles of Soo rail line. See Northern Plains R.R.--Lease and
Operation Exemption--Certain Lines of Soo Line R.R., Docket No. FD
33324 (STB served Jan. 9, 1997). In 2009, NPR was authorized to
discontinue service over certain lines covered by that lease:
between Bisbee, N.D., and Kramer, N.D., and between Devils Lake,
N.D., and Harlow, N.D. See Northern Plains R.R.--Discontinuance of
Serv. Exemption--in Ramsey and Benson Counties, N.D., Docket No. AB
1054X (STB served Dec. 28, 2009) (NPR discontinuance on Devils Lake-
Harlow line); and Northern Plains R.R.[horbar]Discontinuance of
Serv. Exemption--in Bottineau, Rolette, and Towner Counties, N.D.,
Docket No. AB 1054 (Sub-No. 1X) (STB served Dec. 28, 2009) (NPR
discontinuance on Bisbee-Kramer line). NPR states that it will renew
its lease with Soo but that the lease will only cover approximately
290.31 miles now because Soo has abandoned the lines (described
above) over which service had been discontinued. See Soo Line R.R.--
Aban. Exemption--in Ramsey and Benson Counties, N.D., Docket No. AB
57 (Sub-No. 54X) (STB served Oct. 22, 2004) (Soo abandonment of
Devils Lake-Harlow line) and Soo Line R.R.--Aban. Exemption--in
Bottineau, Rolette, and Towner Counties, N.D., Docket No. AB 57
(Sub-No. 56X) (STB served Sept. 5, 2008) (Soo abandonment of Bisbee-
Kramer line). NPR also notes a change to the Devils Lake endpoint,
from milepost 446.0+/- to milepost 445.50.
\2\ NPR's Agreements were filed under seal pursuant to 49 CFR
1150.43(h)(1)(ii). NPR states that the Lease Renewal Agreement
includes other changes beyond the extension of the lease term. As a
result, the class exemption at 49 CFR 1180.2(d)(4) covering lease
renewals where only an extension of time is involved is not
available here.
\3\ NPR states that it does not seek any authority here to
operate these previously abandoned segments.
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NPR states that it expects to remain a Class III rail carrier after
consummation of the proposed transaction, and certifies that its
projected annual revenues for the Wheat Lines as a result of the
proposed transaction will not result in the creation of a Class II or
Class I rail carrier. In accordance with the Board's requirements at 49
CFR 1150.42(e), NPR certified to the Board, on June 18, 2010, that it
had posted the 60-day notice of the transaction at the workplaces of
current NPR employees on the Wheat Lines on June 8 and 9, 2010, that it
had posted the notice at the workplaces of Soo employees whose
territory includes the Wheat Lines on June 17, 2010, and that it had
served the notice on the national offices of the labor unions for such
Soo employees on June 17, 2010. NPR stated that there are no labor
unions that represent employees of NPR.
NPR states that it expects to consummate the transaction on
September 1, 2010 (which is more than 60 days after NPR's certification
to the Board that it had complied with the labor notice requirements at
49 CFR 1150.42(e)).
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 will not automatically stay the transaction.
Petitions for stay must be filed no later than August 13, 2010 (at
least 7 days before the exemption becomes effective).
An original and 10 copies of all pleadings, referring to Docket No.
FD 35382, must be filed with the Surface Transportation Board, 395 E
Street, SW., Washington, DC 20423-0001. In addition, a copy of each
pleading must be served on Thomas J. Litwiler, Fletcher & Sippel LLC,
29 North Wacker Drive, Suite 920, Chicago, IL 60606-2832.
Board decisions and notices are available on our Web site at http://www.stb.dot.gov.
It is ordered:
1. The delegation of authority of the Office of Proceedings, under
49 CFR 1011.7(b)(10), 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: August 3, 2010.
By the Board, Chairman Elliott, Vice Chairman Mulvey, and
Commissioner Nottingham. Vice Chairman Mulvey dissented with a separate
expression.
VICE CHAIRMAN MULVEY, dissenting:
I disagree with the Board's decision today to allow this
transaction to be processed under the Board's class exemption
procedures at 49 CFR 1150.41. I believe that transactions which
prohibit the lessee carrier from interchanging with any rail carrier
other than the lessor carrier should be subject to close scrutiny by
the Board and that such scrutiny cannot take place within the expedited
notice of exemption process.
[[Page 47679]]
Here, NPR seeks authorization for a lease from Soo of nearly 300
miles of rail line in Minnesota and North Dakota (the ``Wheat Line'').
NPR has leased this line since 1997 and now seeks a 20-year renewal.
According to the notice (and further detailed in materials filed under
seal), the prospective lease includes ``a provision that would limit
NPR's future interchange of Wheat Line traffic with a third-party
connecting carrier at any location.'' Notice of Exemption at 4
(emphasis added).
I have indicated my view that interchange commitments should be
subject to a searching review by the Board to determine whether they
comport with the statute under which Board authorization is sought.
See, e.g., Washington & Idaho Ry.--Lease and Operation Exemption--BNSF
Ry., FD 35370 (STB served Apr. 23, 2010) (Mulvey, commenting). When the
Board adopted new disclosure rules regarding interchange commitments in
2008, we indicated that interchange commitments that contain a total
ban on interchange with other carriers would be closely scrutinized.
Review of Rail Access and Competition Issues--Renewed Petition of the
Western Coal Traffic League, EP 575, slip op. at 15 (STB served Oct.
30, 2007); Disclosure of Rail Interchange Commitments, EP 575 (Sub-No.
1) (STB served May 29, 2008). To fulfill that commitment in this case,
the Board should have required a full application (or individual
petition for exemption), so that the Board could analyze the
competitive impact of the interchange commitment. In certain cases, the
Board has required more extensive procedures in transactions that
otherwise qualify for the notice process but are deemed to be
controversial or non-routine. See, e.g., Northeast Interchange Ry.--
Lease and Operation Exemption--Line in Croton-on-Hudson, NY, FD 34734
(STB served Nov. 18, 2005). Our failure to do so here is disappointing,
particularly given the length of the leased line, the length of the
renewal period, and the fact that the 1997 Board decision authorizing
the original lease did not analyze the interchange commitment. See
Northern Plains R.R.--Lease and Operation Exemption--Certain Lines of
Soo Line R.R., FD 33324 (STB served Jan. 9, 1997).
It is time for the Board to build upon its interchange commitment
disclosure rules by also disallowing utilization of the class notice of
exemption procedure for transactions that prohibit interchange with
third party carriers.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2010-19450 Filed 8-5-10; 8:45 am]
BILLING CODE 4915-01-P