Notice2024-12259
Tarantula Corporation-Acquisition of Control Exemption-Texas Central Railroad Company
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
June 5, 2024
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 89 Issue 109 (Wednesday, June 5, 2024)</title>
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[Federal Register Volume 89, Number 109 (Wednesday, June 5, 2024)]
[Notices]
[Pages 48208-48209]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-12259]
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SURFACE TRANSPORTATION BOARD
[Docket No. FD 36759]
Tarantula Corporation--Acquisition of Control Exemption--Texas
Central Railroad Company
By petition filed on March 22, 2024, Tarantula Corporation
(Tarantula), seeks an exemption under 49 U.S.C. 10502 from the prior
approval requirements of 49 U.S.C. 11323 to acquire control of Texas
Central Railroad Company (Texas Central), a Class III carrier, through
the purchase of all outstanding Texas Central capital stock from
Birdsong Corporation (Birdsong).\1\ As discussed below, the Board will
grant the exemption.
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\1\ Texas Central Railroad Company is a separate and distinct
entity from Texas Central Partners, LLC, which is proposing to
construct high-speed passenger rail between Dallas-Fort Worth and
Houston, Tex.
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Background
Tarantula is a noncarrier holding company that controls Fort Worth
& Western Railroad Company (FWWR), Fort Worth & Dallas Railroad
Company, and Fort Worth & Dallas Belt Railroad Company, all of which
are Class III rail carriers. (Pet. 1 & n.1); see also Tarantula Corp.--
Continuance in Control Exemption--Fort Worth & Dall. Belt R.R., FD
32515 (ICC served July 25, 1994).
Pursuant to a stock purchase agreement dated March 21, 2024,
Tarantula has reached an agreement to acquire from Birdsong all of the
outstanding capital stock of Texas Central. (See Pet., Ex. B at 1.)
Upon consummation of this transaction, Tarantula would indirectly
control Texas Central. (Id.) According to the petition, Texas Central
owns--but does not operate--24.9 miles of rail line running from
Dublin, Tex., to Gorman, Tex. (the Line). (Pet. 2.) FWWR, a Tarantula
subsidiary, has leased and operated the Line since 1998. (Id.); see
also Fort Worth & W. R.R.--Acquis. Exemption--S. Orient R.R., FD 33681
(STB served Nov. 30, 1998).\2\
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\2\ Texas Central's Line connects with FWWR's rail line at
Dublin. Tarantula explains that, for that reason, the transaction
does not qualify for the class exemption under 49 CFR 1180.2(d)(2).
(Pet. 1.)
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In support of the petition, Tarantula asserts that the transaction
will allow it to make capital improvements to infrastructure on the
Line. (Pet. 3, 7.) Tarantula states that, as FWWR already operates over
the Line, the transaction will not affect the level of operations or
maintenance of the Line or any of the other lines operated by the other
railroads in the Tarantula corporate family. (Id. at 6-7.) Tarantula
has attached to the petition letters supporting the transaction from
both shippers located on the Line, Birdsong and Gorman Milling Company,
Inc. (See Pet., Ex. C.) Tarantula has also asked the Board for
expedited consideration of its petition and a decision issued and
effective by June 15, 2024. (Pet. 7.) Tarantula states that it would
like an earlier effective date to commence infrastructure improvements
on a faster schedule in support of increased safety, improved
reliability, enhanced efficiency, and improved connectivity which can
lead to greater marketability
[[Page 48209]]
and competitiveness for communities and businesses in the rural area
served by FWWR. (Id.) Tarantula further states that an earlier
effective date would support an expansion project and make a stronger
application for a CRISI grant. (Id.)
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 consistent with title 49, subtitle IV, part A, 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.
Here, 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), reducing regulatory barriers to entry, 49 U.S.C. 10101(7),
encouraging efficient management of railroads, 49 U.S.C. 10101(9), and
providing for the expeditious resolution of this proceeding, 49 U.S.C.
10101(15). Further, Tarantula asserts that the acquisition will allow
it to make capital improvements to infrastructure on the Line. (Pet. 3,
7.) Therefore, an exemption would promote the RTP by 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.\3\ The record indicates that Texas Central
does not conduct freight rail operations over the Line; rather, FWWR
has leased and operated the Line since 1998. (Pet. 2.) Tarantula states
that the transaction will have no adverse effect on rail operations
over the Line because FWWR will continue operations over it. (Id. at 1,
5.) Thus, the proposed transaction will not result in any material
changes to the services available to shippers along the Line. Moreover,
there have been no objections to the proposed transaction, and the
shippers along the Line have filed letters supporting the transaction.
(Pet., Ex. C.)
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\3\ 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
carriers involved in the transaction are Class III carriers, the Board
may not impose labor protective conditions.
The acquisition of control is exempt from environmental reporting
requirements under 49 CFR 1105.6(c)(1) because it will not result in
significant changes in carrier operations. Similarly, under 49 CFR
1105.8(b)(3), no historic report is required because the proposed
transaction will not substantially change the level of operations or
maintenance of railroad properties.
As noted, Tarantula has requested expedited consideration of its
petition for exemption. The Board finds that Tarantula's request is
reasonable under the circumstances. Accordingly, the effective date of
the exemption will be June 15, 2024. See 49 CFR 1121.4(e) (``Unless
otherwise specified in the decision, an exemption generally will be
effective 30 days from the service date of the decision.''). Petitions
for stay must be filed by June 7, 2024. Petitions to reopen will be due
by June 20, 2024.
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 June 15, 2024. Petitions for
stay must be filed by June 7, 2024. Petitions to reopen must be filed
by June 20, 2024.
Decided: May 30, 2024.
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Kenyatta Clay,
Clearance Clerk.
[FR Doc. 2024-12259 Filed 6-4-24; 8:45 am]
BILLING CODE 4915-01-P
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</html>Indexed from Federal Register on June 5, 2024.
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