Notice2024-17187
Great Lakes Terminal Railroad, LLC-Acquisition and Operation Exemption-Great Lakes Terminal, LLC, CRRC Sifang America Incorporated, and Chicago Enterprise Owners' Association
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
August 5, 2024
Issuing agencies
Surface Transportation Board
Full Text
<html>
<head>
<title>Federal Register, Volume 89 Issue 150 (Monday, August 5, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 150 (Monday, August 5, 2024)]
[Notices]
[Pages 63458-63459]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-17187]
=======================================================================
-----------------------------------------------------------------------
SURFACE TRANSPORTATION BOARD
[Docket No. FD 36764 (Sub-No. 1)]
Great Lakes Terminal Railroad, LLC--Acquisition and Operation
Exemption--Great Lakes Terminal, LLC, CRRC Sifang America Incorporated,
and Chicago Enterprise Owners' Association
On May 2, 2024, Great Lakes Terminal Railroad, LLC (GLTRR), a Class
III carrier, filed for an exemption under 49 U.S.C. 10502 from the
provisions of 49 U.S.C. 10902 for after-the-fact authorization to
acquire and operate approximately 22,568 feet of track in Chicago,
Ill., owned by Great Lakes Terminal, LLC (GLT), CRRC Sifang America
Incorporated (CRRC), and Chicago Enterprise Center Owners' Association
(Owners' Association). For the reasons explained below, the Board will
grant GLTRR's petition.
Background
GLTRR's petition seeks after-the-fact authority for the acquisition
and operation of 22,568 feet of track (the Line) located in and
adjacent to a transloading facility at 13535 South Torrence Avenue in
Chicago (the Facility). GLTRR states that ownership of the Line is
divided between GLT \1\ (owning 14,215 feet of track inside the
Facility), CRRC (owning 850 feet of track outside the Facility), and
the Owners' Association (owning 7,503 feet of track outside the
Facility). (GLTRR Petition 3, 6 & n.11.) According to GLTRR, it
previously operated over 12,500 feet of track that is now part of the
Line that was owned by CenterPoint Chicago Enterprise, LLC
(CenterPoint), leased to Great Lakes Reloading LLC (GLR), an affiliate
of GLTRR, and operated by GLTRR under a sublease between GLTRR and GLR.
GLTRR Notice 4 & n.5, Great Lakes Terminal R.R.--Acquis. & Operation
Exemption--Norfolk S. Ry., FD 36764. GLTRR's authority to operate those
12,500 feet of track under the sublease with GLR was obtained through a
notice of exemption. See Great Lakes Terminal R.R.--Lease & Operation
Exemption--Rail Line of Great Lake Reloading, LLC (January 5, 2018
Decision), FD 36160 (STB served Jan. 5, 2018). GLTRR asserts that a few
months after the January 5, 2018 Decision, in April 2018, GLT acquired
a fee simple interest in the Facility from CenterPoint, including the
portion of the Line inside the Facility, and that as part of that
transaction, GLT obtained rights held by CenterPoint allowing it to
conduct rail operations over the Owners' Association's and CRRC's
tracks.\2\ (GLTRR Pet. 6.) GLTRR further states that in April 2018,
soon after GLT's acquisition of these rights and the fee simple
interest in the Facility, GLT entered into an agreement (2018
Agreement) with GLTRR to lease GLTRR the track it acquired from
CenterPoint and to assign to GLTRR the rights to conduct rail
operations over CRRC's and the Owners' Association's tracks. (Id. at 6,
10.) As GLTRR explains, it did not seek Board authority to enter into
the 2018 Agreement. (Id. at 6-7.) GLTRR claims that it did not seek
authority for the 2018 Agreement at that time based on a mistaken
belief that no additional authority was needed because it had just
received Board authority to operate at the Facility under a sublease
with GLT in Docket No. FD 36160 and would continue to operate at the
Facility. (See id. at 5.)
---------------------------------------------------------------------------
\1\ GLT is an affiliate of GLTRR, both of which are owned by the
Transload Group, LLC.
\2\ GLTRR states that CenterPoint obtained the right to conduct
rail operations on the Owners' Association's property pursuant to a
March 23, 2018 declaration and obtained an easement to conduct rail
operations over CRRC's property pursuant to an August 2017 easement.
---------------------------------------------------------------------------
Prior to GLTRR filing its petition, it filed a notice of exemption
stating that GLT planned to sell its portion of the Line to Norfolk
Southern Railway (NSR) and that GLTRR would then lease that portion of
the Line from NSR and continue to operate as it does today. GLTRR
Notice 5, Great Lakes Terminal R.R.--Acquis. & Operation Exemption--
Norfolk S. Ry., FD 36764. The verified notice sought Board authority to
enter into the lease with NSR and to continue to operate over the track
that would be sold to NSR, as well as the track that would continue to
be owned by CRRC and the Owners' Association. Id. In that verified
notice, GLTRR also explained its previous failure to seek authority for
GLTRR's 2018 acquisition by lease and operation of GLT's tracks and
requested that the Board grant, ``on its own motion,'' after-the-fact
authority for that transaction. Id. at 4-5.
The verified notice was rejected on the grounds that this case was
not appropriate for the notice of exemption process, which is designed
for routine cases that do not raise issues requiring significant
scrutiny. Great Lakes Terminal R.R.--Acquis. & Operation Exemption--
Norfolk S. Ry. (Director Order), FD 36764, slip op. at 2-3 (STB served
Apr. 26, 2024). The Director Order explained that use of a notice of
exemption to seek after-the-fact authority for a prior transaction that
is not the subject of the notice is not routine. Id. at 2. The Director
Order further stated that the verified notice had raised unanswered
questions regarding whether GLTRR should have also sought Board
authority to enter into agreements with CRRC and the Owners'
Association to operate over their tracks. Id. at 2-3. The Board ordered
GLTRR to file a petition for exemption for after-the-fact authority for
the prior acquisition and operation of GLT's tracks and to file a
petition for exemption for after-the-fact authority for the acquisition
and operation of CRRC's and the Owners' Association's tracks or to
explain why such authority is not required. Id. at 3.\3\ As explained
below, GLTRR's petition adequately addresses the questions raised by
the Board and otherwise provides information sufficient to grant its
petition.\4\
---------------------------------------------------------------------------
\3\ The Director Order further stated that once GLTRR obtains
all necessary after-the-fact authority for prior transactions, it
can proceed with a notice of exemption for its proposed lease with
NSR. Id. at 3.
\4\ GLTRR requested expedited consideration of its petition.
(GLTRR Pet. 4.) On July 12, 2024, GLTRR filed a letter renewing its
request for expedited consideration.
---------------------------------------------------------------------------
[[Page 63459]]
GLTRR's verified notice failed to explain why GLTRR had never
requested authority for agreements pursuant to which it operated over
the Owners' Association's and CRRC's tracks. Director Order, FD 36764,
slip op. at 3. Rather, GLTRR only stated that at some point after the
January 5, 2018 Decision authorized GLTRR to operate 12,500 feet of
track at the Facility, ``additional trackage was added,'' and that
GLTRR now operates over 22,568 feet of track, including the track owned
by the Owners' Association and CRRC. Id. at 2. In its petition, GLTRR
clarifies that its agreement to lease the track GLT acquired from
CenterPoint also included an assignment to GLTRR of the rights GLT
acquired from CenterPoint to operate over track owned by CRRC and the
Owner's Association.\5\ (GLTRR Pet. 5-6.) For the reasons explained
below, the Board will grant GLTRR's petition for exemption for after-
the-fact authority for the Line.
---------------------------------------------------------------------------
\5\ The Director Order also noted GLTRR's statement that ``today
GLTRR is leasing 14,215 linear feet (2.69 miles) of trackage from
NSR and will continue to operate over [it],'' and explained that
``[t]his language suggests that GLT has already sold the track to
NSR and GLTRR has entered into a lease with NSR without the
necessary Board authority.'' Director Order, FD 36764, slip op. at
3. GLTRR's petition explains that the language quoted by the Board
contained a typo and should have referred to GLT rather than NSR as
the party currently leasing the track to GLTRR, and that NSR has not
yet purchased GLT's track or consummated a lease with GLTRR. (GLTRR
Pet. 7.)
---------------------------------------------------------------------------
The acquisition of a rail line by a Class III carrier requires
prior approval from the Board under 49 U.S.C. 10902(a). Under 49 U.S.C.
10502(a), however, the Board shall, to the maximum extent consistent
with U.S. Code Title 49, subtitle IV, part A, exempt a transaction from
the detailed application procedures of 49 U.S.C. 10902 when it finds
that: (1) those procedures are not necessary to carry out the rail
transportation policy of 49 U.S.C. 10101 (RTP); and (2) either (a) the
proposal is of limited scope, or (b) the full application procedures
are not necessary to protect shippers from an abuse of market power.
The Board finds an after-the-fact exemption should be granted to
GLTRR for its acquisition and operation of the Line pursuant to the
2018 Agreement. Prior to the 2018 Agreement, in January 2018, GLTRR
sought and obtained authority to sublease from GLR and operate track at
the Facility. See January 5, 2018 Decision, FD 36160. A few months
later, the Facility was sold to GLT and GLTRR entered into the 2018
Agreement so that it could continue its operations at that facility
after the change in ownership.\6\ (See GLTRR Pet. 5.) GLTRR states that
it failed to seek authority for the 2018 Agreement and subsequent
operations because it mistakenly believed that the authority it
obtained in January 2018 to operate pursuant to an agreement with one
of its affiliates, GLR, was sufficient to allow it to continue to
operate at the Facility pursuant to an agreement with another of its
affiliates, GLT. (Id.) Based on the nature of the transaction at issue
and the inadvertent nature of the failure to seek an exemption prior to
completing the transaction, an exemption from the prior approval
requirements of section 10902 is consistent with section 10502(a) and
detailed scrutiny of the transaction through an application for review
under 49 U.S.C. 10902 is not necessary here to carry out the RTP.\7\
Granting an exemption to correct GLTRR's past error so that it is
authorized to continue operations at the Facility and can proceed to
file a notice of exemption for its proposed transaction with NSR would
promote the RTP by minimizing the need for regulatory control over the
transaction (49 U.S.C. 10101(2)), ensuring the development and
continuation of a sound rail transportation system able to compete with
other modes of transportation and meet the needs of the public (49
U.S.C. 10101(4)), minimizing the need for regulatory barriers for entry
into and exit from the industry (49 U.S.C. 10101(7)), and providing for
the expeditious handling and resolution of proceedings required or
permitted to be brought under this part (49 U.S.C. 10101(15)). Other
aspects of the RTP will not be adversely affected.
---------------------------------------------------------------------------
\6\ As noted above, the 2018 Agreement also allowed GLTRR to
operate over additional trackage immediately outside the Facility
owned by the Owners' Association and CRRC.
\7\ The Board has granted after-the-fact authority in similar
circumstances. See Ark.-Okla. R.R.--Acquis. & Operation Exemption--
Okla., FD 36323 (STB served Sept. 19, 2019) (granting an exemption
for after-the-fact authority where a carrier was previously
authorized by the Board to operate a rail line pursuant to a lease
but mistakenly believed it did not require additional authority to
exercise a purchase option and continue its operations as owner of
the line); Elk River R.R.--Merger Exemption--Buffalo Creek R.R., FD
36434 (STB served Nov. 6, 2020) (granting an exemption for after-
the-fact authority where a rail carrier authorized by the Board to
operate mistakenly believed it did not need additional authority to
merge with its affiliate and for the surviving entity to continue
operations post-merger).
---------------------------------------------------------------------------
Regulation of the transaction is not needed to protect shippers
from an abuse of market power. GLTRR states that both before and after
the 2018 Agreement, its operations consisted of providing transloading
services to shippers seeking to ship steel rebar and steel piping by
truck after arrival at the Facility by rail, as well as agriculture and
construction equipment by rail after arrival at the Facility by truck.
(GLTRR Pet. 10.) Granting the requested exemption for after-the-fact
authority would give GLTRR authority to provide these same services to
shippers that it has been providing since 2018.\8\ In addition, and as
GLTRR contends, there was no apparent loss of rail competition and no
change in the level of rail service to the shippers as a result of the
2018 Agreement.
---------------------------------------------------------------------------
\8\ Because regulation of the proposed acquisition and operation
is not needed to protect shippers from the abuse of market power,
the Board need not determine whether the transaction is limited in
scope. 49 U.S.C. 10502(a)(2).
---------------------------------------------------------------------------
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, GLT does not intend to dispose of or alter
properties subject to the Board's jurisdiction that are 50 years old or
older, (GLTRR Pet. 14), and discontinuance of service or abandonment by
GLTRR would be subject to Board jurisdiction.
It is ordered:
1. Under 49 U.S.C. 10502, the Board grants GLTRR's petition for
exemption for after-the-fact authority to acquire and operate the Line.
2. Notice of this exemption will be published in the Federal
Register.
3. This decision will be effective on August 30, 2024. Petitions
for stay must be filed by August 12, 2024. Petitions to reopen must be
filed by August 20, 2024.
Decided: July 30, 2024.
By the Board, By the Board, Board Members Fuchs, Hedlund,
Primus, and Schultz.
Eden Besera,
Clearance Clerk.
[FR Doc. 2024-17187 Filed 8-2-24; 8:45 am]
BILLING CODE 4915-01-P
</pre></body>
</html>Indexed from Federal Register on August 5, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.