Notice2023-28716
Macquarie Infrastructure Partners V GP, LLC-Control Exemption-Northern Indiana Railroad Company, LLC
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 28, 2023
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 88 Issue 248 (Thursday, December 28, 2023)</title>
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[Federal Register Volume 88, Number 248 (Thursday, December 28, 2023)]
[Notices]
[Pages 89803-89804]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-28716]
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SURFACE TRANSPORTATION BOARD
[Docket No. FD 36729]
Macquarie Infrastructure Partners V GP, LLC--Control Exemption--
Northern Indiana Railroad Company, LLC
By petition filed on September 28, 2023, Macquarie Infrastructure
Partners V GP, LLC (MIP GP), on behalf of itself; Macquarie
Infrastructure Partners V fund vehicle (MIP V); MIP V Rail, LLC (MIP
Rail); and Gulf & Atlantic Railways, LLC (G&A) (collectively,
Petitioners), seeks an exemption under 49 U.S.C. 10502 from the prior
approval requirements of 49 U.S.C. 11323 to acquire and control the
Northern Indiana Railroad Company (NIRC), a Class III carrier. As
discussed below, the Board will grant the exemption.
Background
G&A is a noncarrier that directly controls \1\ the following rail
common carriers: Camp Chase Rail, LLC; Chesapeake and Indiana Railroad
LLC (CKIN); Vermilion Valley Railroad LLC;
[[Page 89804]]
Grenada Railroad, LLC; and Florida, Gulf & Atlantic Railroad, LLC. See
Macquarie Infrastructure Partners V GP, LLC--Control Exemption--Camp
Chase Rail, LLC, FD 36685 (STB served Apr. 7, 2023). G&A has also been
authorized to directly control (and MIP GP, MIP V, and MIP Rail
authorized to indirectly control) the Pioneer Valley Railroad Company.
See Macquarie Infrastructure Partners V GP, LLC--Control Exemption--
Pioneer Valley R.R., FD 36720 (STB served Sept. 13, 2023).
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\1\ G&A is wholly owned by MIP Rail, which is indirectly
controlled by MIP GP. (Pet. 5-6.) MIP V is controlled by MIP GP and
(indirectly) wholly owns MIP Rail. (Id. at 6.) Therefore, MIP GP,
MIP V, and MIP Rail indirectly control the above rail common
carriers. (Id. at 6.)
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Pursuant to a purchase agreement dated March 17, 2023, G&A has
agreed to acquire 100% of the equity interests in NIRC. Upon
consummation of this transaction, G&A would directly control NIRC,
while MIP GP, MIP V, and MIP Rail would indirectly control NIRC. (Pet.
5.) According to the petition, NIRC owns 32.97 miles of rail line in
Indiana, but has never conducted freight rail operations over the line.
(Id. at 4.) CKIN (which is controlled by G&A) has leased and operated
the NIRC line since 2004. (Id.) Currently, CKIN leases and operates
27.52 miles of line from NIRC because CKIN discontinued service over
the remaining 5.45-mile segment in 2017. (Id.) Petitioners state that
the 5.45-mile segment remains part of the national rail network, but
there have not been any freight operations over that segment since at
least 2015.\2\
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\2\ Petitioners note that pursuant to an agreement with the Town
of North Judson, the Hoosier Valley Railroad Museum operates
excursion trains on the 5.45-mile segment over which freight rail
service has been discontinued. (Id. at 4 n.10.) Petitioners further
state that the Museum will continue to have the right to provide
excursion passenger service on that segment. (Id. at 12 n.15.)
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In support of the petition, Petitioners assert that the transaction
will bring G&A's financial strength and management expertise to NIRC,
unite ownership and operation of the line in the same corporate family,
and enhance NIRC's access to capital, thereby ``facilitating future
strategic investment decisions with respect to the line.'' (Id. at 7.)
Petitioners state that the transaction will not affect operations or
service to customers because CKIN already serves those customers under
its lease agreement with NIRC.\3\ (Id. at 11-12.)
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\3\ Petitioners explain that the proposed transaction does not
qualify for the class exemption under 49 CFR 1180.2(d)(2) because
the class exemption is unavailable when one or more railroads in an
existing corporate family would connect with the railroad being
acquired. (Id. at 4.) Here, because CKIN's leasehold interest does
not overlap entirely with the line owned by NIRC, Petitioners have
concluded that there is a point of connection. (Id. at 4-5.)
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Discussion and Conclusions
The acquisition of control of a rail carrier by a person that is
not a rail carrier but that controls any number of rail carriers
requires prior approval from the Board under 49 U.S.C. 11323(a)(5).
Under 49 U.S.C. 10502(a), however, the Board shall, to the maximum
extent possible, exempt a transaction or service from regulation upon
finding that (1) the regulation is not necessary to carry out the rail
transportation policy (RTP) under 49 U.S.C. 10101 and (2) either the
transaction or service is of limited scope, or regulation is not needed
to protect shippers from the abuse of market power.
In this case, an exemption from the prior approval requirements of
49 U.S.C. 11323-25 is consistent with the standards of 49 U.S.C. 10502.
Detailed scrutiny of the proposed transaction through an application
for review and approval under sections 11323-25 is not necessary to
carry out the RTP. An exemption would promote the RTP by minimizing the
need for federal regulatory control over the transaction, 49 U.S.C.
10101(2), and providing for the expeditious resolution of this
proceeding, 49 U.S.C. 10101(15). Further, Petitioners assert that
consolidated ownership and operation of the line within the same
corporate family will improve operating economies and the financial
viability of the line. (Pet. 7). Therefore, an exemption would promote
the RTP by promoting a safe and efficient rail transportation system,
49 U.S.C. 10101(3); ensuring the development and continuation of a
sound rail transportation system that would continue to meet the needs
of the public, 49 U.S.C. 10101(4); and fostering sound economic
conditions in transportation, 49 U.S.C. 10101(5). Other aspects of the
RTP would not be adversely affected.
Regulation of the transaction is not needed to protect shippers
from abuse of market power.\4\ The record indicates that NIRC does not
conduct freight rail operations, and most of its line is currently
operated by CKIN pursuant to a lease. (Pet. 4.) Petitioners state that
``th[e]se leasehold operations will continue without change.'' (Id. at
13.) Thus, the proposed transaction will not result in any material
changes to the rates and services available to shippers along NIRC's
line. Moreover, no shipper or other entity has objected to the proposed
transaction.
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\4\ Given this finding, the Board need not determine whether the
transaction is limited in scope. See 49 U.S.C. 10502(a).
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Under 49 U.S.C. 10502(g), the Board may not use its exemption
authority to relieve a rail carrier of its statutory obligation to
protect the interests of its employees. Section 11326(c), however, does
not provide for labor protection for transactions under sections 11324
and 11325 that involve only Class III carriers. Therefore, because all
of the carriers involved in the transaction are Class III carriers, the
Board may not impose labor protective conditions.
Under 49 CFR 1105.6(c)(1), this action, which will not result in
significant changes in carrier operations, is categorically excluded
from environmental review. Similarly, under 49 CFR 1105.8(b)(1), no
historic report is required because the subject transaction is for
continued rail service; Petitioners have indicated no plans to alter
railroad properties 50 years old or older; and any future abandonment
of the Line would be subject to Board jurisdiction.
It is ordered:
1. Under 49 U.S.C. 10502, the Board exempts the above transaction
from the prior approval requirements of 49 U.S.C. 11323-25.
2. Notice of this exemption will be published in the Federal
Register.
3. This decision will be effective on January 21, 2024. Petitions
for stay must be filed by January 2, 2024. Petitions to reopen must be
filed by January 11, 2024.
Decided: December 21, 2023.
By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and
Schultz.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2023-28716 Filed 12-27-23; 8:45 am]
BILLING CODE 4915-01-P
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</html>Indexed from Federal Register on December 28, 2023.
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