Notice2024-03305
Union Pacific Railroad Company-Operation Exemption-in Tooele County, Utah
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
February 16, 2024
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 89 Issue 33 (Friday, February 16, 2024)</title>
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[Federal Register Volume 89, Number 33 (Friday, February 16, 2024)]
[Notices]
[Pages 12407-12409]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-03305]
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SURFACE TRANSPORTATION BOARD
[Docket No. FD 36741]
Union Pacific Railroad Company--Operation Exemption--in Tooele
County, Utah
On November 21, 2023, Union Pacific Railroad Company (UP) filed a
petition under 49 U.S.C. 10502(a) for exemption from the prior approval
requirements of 49 U.S.C. 10901 to reinstitute common carrier service
over an approximately 1.04-mile portion of rail line known as the
Warner Branch, between milepost 0.0 connecting to the Shafter
Subdivision and milepost 1.04, in Tooele County, Utah (the Line). On
December 11, 2023, BNSF Railway Company (BNSF) moved for the Board to
instead institute a proceeding under 49 U.S.C. 10502(b) and set a
procedural schedule for consideration of UP's petition. As discussed
below, the Board will grant UP's petition and deny BNSF's motion.
Background
According to UP, the Warner Branch was formerly owned and operated
by its
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predecessor, Western Pacific Railroad Company (WP). (UP Pet. 2.) In
1983, WP sought and received authority to abandon the Warner Branch in
Western Pacific Railroad--Abandonment Exemption--in Tooele County,
Utah, FD 30208 (ICC served Aug. 9, 1983). (UP Pet. 2.) UP says that it
is seeking to reinstitute common carrier service over the Line as part
of a transaction with Savage Tooele Railroad Company (STR), in which UP
agreed to sell STR the right-of-way and track assets between milepost
1.04 and milepost 6.94 of the Warner Branch so STR could construct
approximately 11 miles of new rail line connecting to the Warner Branch
to serve shippers located at Lakeview Business Park and connect to the
national rail network.\1\ (UP Pet. 2-3). UP further states that it did
not want to sell the Line to STR because it has been using it as
ancillary track to support operations on the Shafter Subdivision. (Id.
at 3.)
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\1\ STR's petition to construct the new line is currently before
the Board in Savage Tooele Railroad--Construction & Operation
Exemption--Line of Railroad in Tooele County, Utah, Docket No. FD
36616. STR had originally indicated that either UP would retain
ownership of the Line for use as ancillary track or STR would
acquire the Line and reinstate common carrier service over it. STR
Pet. 4-5, June 30, 2022, Savage Tooele R.R., FD 36616. After the
Board questioned how STR's proposed line would connect (and remain
connected) to the national rail network should UP continue to retain
the Line as ancillary track under 49 U.S.C. 10906, and requested
supplemental information, see Savage Tooele R.R.--Construction &
Operation Exemption--Line of R.R. in Tooele Cnty., Utah, FD 36616,
slip op. at 2 (STB served Aug. 24, 2022), STR confirmed that UP
decided to retain ownership of the Line and petition to reinstate
common carrier operating authority over this segment, STR Verified
Suppl. at 1, Sept. 20, 2022, Savage Tooele R.R., FD 36616.
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In its December 11 motion, BNSF states that, as a condition of the
Board's 1996 approval of the merger between UP and the Southern Pacific
Rail Corporation (SP),\2\ it was granted trackage rights to operate
over the Shafter Subdivision and the right to interchange with any new
short line railroad connecting to the Shafter Subdivision. (BNSF Mot.
1.) BNSF argues that it appears UP structured its transaction with STR
in such a way as to establish a physical barrier between the Shafter
Subdivision and STR so that BNSF cannot interchange with STR, as BNSF
asserts it is entitled to do under the UP/SP merger conditions and the
Restated and Amended Settlement Agreement (RASA) between UP and BNSF,
which the Board approved in the context of its review of the merger
transaction. (Id. at 1-2.)
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\2\ See Union Pac. Corp.--Control & Merger--S. Pac. Rail Corp.,
1 S.T.B. 233, 419 (1996).
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UP and STR separately replied to BNSF's motion on January 10, 2024.
UP asks the Board to deny BNSF's motion, asserting that it has not
violated BNSF's rights and that BNSF can demand arbitration under the
RASA's arbitration provision if BNSF believes its rights were violated
by UP. (UP Reply 4-5.) STR does not take a position on the merits of
BNSF's motion but asks the Board to deny the motion because considering
BNSF's claim and the relief it seeks in the context of this exemption
proceeding would significantly prolong the proceeding and delay the
rail construction project, thereby delaying STR's ability to meet the
needs of rail shippers locating in Lakeview Business Park. (STR Reply
4.)
Discussion and Conclusions
BNSF's Motion. BNSF asks the Board to institute a proceeding under
49 U.S.C. 10502(b) and set a procedural schedule for consideration of
UP's petition. BNSF maintains that UP structured its transaction with
STR and acted with respect to the Line so that BNSF cannot interchange
with STR, thus violating its rights under the RASA. (BNSF Mot. 1-2.)
According to BNSF, ``UP's action is consistent with other recent
attempts by UP to frustrate the competition-preserving conditions
imposed by the Board in connection with its approval of the UP/SP
merger.'' (Id. at 2.)
UP's effort to seek common carrier operating authority over the
Line is separate and distinct from BNSF's claimed right to access STR
and its future shippers via the Line under the terms of the RASA. See
Union Pac. R.R.--Operation Exemption--in Bexar & Wilson Cntys., Tex.,
FD 35776, slip op. at 3-4 (STB served Dec. 24, 2013). BNSF itself has
stated that it ``believes that, regardless of the ownership or
regulatory status of the [Line], BNSF should have the right to
interchange with STR once the new short[ ]line begins operating,
consistent with STR's stated intent and UP's obligations under RASA
Section 8(k) and the UP/SP merger conditions.'' (BNSF Mot. 3.) Granting
UP the authority to reinstitute common carrier service over the Line
does not preclude BNSF from seeking, through either arbitration or a
new, separate Board proceeding, a determination that BNSF is entitled
to access STR via the Line. Moreover, granting UP common carrier
operating authority over the Line will help avoid delay to STR's
project and ensure that its business park shippers are connected to the
national rail network. The Board notes that, in any future proceeding,
whether before an arbitrator or the Board, this decision shall not be
construed as permitting UP to defeat any rights that BNSF may have had
to interchange with STR or serve shippers at Lakeview Business Park had
the exemption not become effective.
BNSF's motion to institute a proceeding and set a procedural
schedule will therefore be denied.
UP's Petition for Exemption. Under 49 U.S.C. 10901, a rail carrier
may not reinstitute operations over abandoned rail line without the
prior approval of the Board. However, under 49 U.S.C. 10502(a), the
Board shall, to the maximum extent consistent with 49 U.S.C. subtitle
IV, part A, exempt a transaction or service from regulation upon
finding that: (1) regulation is not necessary to carry out the rail
transportation policy of 49 U.S.C. 10101 (RTP); and (2) either (a) the
transaction or service is of limited scope, or (b) regulation is not
needed to protect shippers from the abuse of market power.
Detailed scrutiny of the proposed transaction through an
application for review and approval under 49 U.S.C. 10901 is not
necessary to carry out the RTP. Reinstitution of service on the Line
would facilitate rail transportation to tenants of the Lakeview
Business Park and thus promote the RTP by minimizing the need for
federal regulatory control (49 U.S.C. 10101(2)), ensuring the
development and continuation of a sound rail transportation system with
effective competition among rail carriers and with other modes, to meet
the needs of the public (49 U.S.C. 10101(4)), reducing regulatory entry
and exit barriers (49 U.S.C. 10101(7)), and providing for the
expeditious handling and resolution of proceedings (49 U.S.C.
10101(15)). Other aspects of the RTP would not be adversely affected.
Regulation of this transaction is not needed to protect shippers
from the abuse of market power. Rather, reinstitution of service is a
step toward providing the shippers at Lakeview Business Park with a
rail transportation option that otherwise would not exist. See Savage
Tooele R.R.--Constr. & Operation Exemption--Line of R.R. in Tooele
Cnty., Utah, FD 36616, slip op. at 2 (STB served Aug. 24, 2022) (``[I]t
is not clear how STR's proposed line will connect (and remain
connected) to the national rail network'' should UP ``retain the right-
of-way between milepost 0.0 and milepost 1.04 to use as ancillary
track. . . .''). And, as noted above, this decision does not affect
BNSF's rights under RASA Section 8(k) and the UP/SP merger conditions.
Moreover, the transaction is limited in
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scope since the Line is only 1.04 miles long and reinstitution of
common carrier service will merely connect STR's proposed line to the
interstate rail network.
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. However, labor protective
conditions may not be imposed on transactions under 49 U.S.C. 10901.
See 49 U.S.C. 10901(c).
UP states that the proposed action will not result in changes to
existing rail carrier operations or existing operations on the Line
that would exceed the applicable thresholds of 49 CFR 1105.7(e)(4) or
(5). Therefore, under 49 CFR 1105.6(c), this transaction 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 reinstituted rail service, UP has indicated no plans
to alter railroad properties 50 years old or older, and any abandonment
of service would be subject to Board jurisdiction.
It is ordered:
1. BNSF's motion to institute a proceeding and set a procedural
schedule is denied.
2. Under 49 U.S.C. 10502, the Board exempts UP's reinstitution of
service over the Line from the prior approval requirements of 49 U.S.C.
10901.
3. Notice of the exemption will be published in the Federal
Register.
4. The exemption will be effective on March 14, 2024.
5. Petitions to stay must be filed by February 23, 2024. Petitions
for reconsideration and petitions to reopen must be filed by March 4,
2024.
6. This decision is effective on its service date.
By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and
Schultz.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2024-03305 Filed 2-15-24; 8:45 am]
BILLING CODE 4915-01-P
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</html>Indexed from Federal Register on February 16, 2024.
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