Notice2024-19341
Waterloo Railroad, LLC-Change of Operator Exemption With Interchange Commitment-Union Pacific Railroad Company; and Iowa Northern Railway Company-Discontinuance of Service Exemption-in Black Hawk County, Iowa
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 28, 2024
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 89 Issue 167 (Wednesday, August 28, 2024)</title>
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[Federal Register Volume 89, Number 167 (Wednesday, August 28, 2024)]
[Notices]
[Pages 68977-68978]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-19341]
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SURFACE TRANSPORTATION BOARD
[Docket Nos. FD 36798; and AB 284 (Sub-No. 5X)]
Waterloo Railroad, LLC--Change of Operator Exemption With
Interchange Commitment--Union Pacific Railroad Company; and Iowa
Northern Railway Company--Discontinuance of Service Exemption--in Black
Hawk County, Iowa
On July 25, 2024, in Docket No. FD 36798, Waterloo Railroad, LLC
(WTRL), filed a verified notice for a change in operator exemption.
Under this exemption, WTRL would lease and operate approximately 6.9
miles of rail line owned by Union Pacific Railroad Company (UP),
between milepost 325.1 and milepost 332.0, along with connecting
ancillary trackage (yard and side tracks), in Black Hawk County, Iowa
(the Line). In doing so, WTRL would replace the Line's current lessee
and operator, Iowa Northern Railway Company (IANR). On August 7, 2024,
in Docket No. AB 284 (Sub-No. 5X), IANR filed a petition for exemption
to discontinue its operations on the Line.\1\
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\1\ These proceedings are not consolidated but are being
addressed in the same decision for administrative convenience.
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As discussed below, WTRL's notice of exemption will be issued, and
IANR's petition for exemption will be denied as moot.
WTRL's Notice of Exemption, Docket No. FD 36798
Under 49 CFR 1011.7(a)(2)(x)(A), the Director of the Office of
Proceedings (Director) is delegated the authority to determine whether
to issue notices of exemption under 49 U.S.C. 10502 for lease and
operation transactions under 49 U.S.C. 10901. 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 will revoke the delegation to the
Director with respect to issuance of the pending notice of exemption
for a change in operator on the Line. The Board determines that this
notice of exemption should be issued and does so here.
Notice
WTRL, a noncarrier, has filed a verified notice of exemption
pursuant to 49 CFR 1150.31 to lease and operate approximately 6.9 miles
of rail line owned by UP, between milepost 325.1 and milepost 332.0,
along with connecting ancillary trackage (yard and side tracks), in
Black Hawk County, Iowa. The Line, known as the Waterloo Industrial
Line, is currently operated by IANR, pursuant to a lease with UP. See
Iowa N. Ry.--Lease Exemption with Interchange Commitment--Rail Line of
Union Pac. R.R., FD 36277 (STB served March 20, 2019).
According to the verified notice, WTRL will replace IANR as the
operator of the Line. Upon WTRL's assumption of operations, IANR will
have no common carrier obligation on the Line.
Although IANR stated in its July 26 Reply that it ``could not
consent to the change in operator filing,'' (IANR Reply 1, July 26,
2024, FD 36798; see also IANR Pet. 6, Aug. 7, 2024, AB 284 (Sub-No.
5X); IANR Reply 2, Aug. 14, 2024, FD 36798), IANR subsequently filed a
petition in Docket No. AB 284 (Sub-No. 5X), itself seeking Board
authorization to discontinue its operations on the Line. Prior to that
submission, IANR acknowledged termination of its lease with UP and
stated it is working ``cooperatively and expeditiously'' with WTRL and
UP to coordinate the transfer of operations to WTRL. (See IANR Reply 1,
July 26, 2024, FD 36798; IANR Reply 2, July 31, 2024, FD 36798.) While
IANR states that the ``steps necessary for a smooth transition of
operations have not been completed,'' (IANR Pet. 6, Aug. 7, 2024, AB
284 (Sub-No. 5X)), it offers no support for this assertion nor any
indication as to what such steps entail. Nor does IANR, in requesting
expedited consideration of its petition, indicate that the standard 14-
day period between publication of a change in operator notice and its
effectiveness,\2\ which the Board will apply here, would be
insufficient.
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\2\ See 49 CFR 1150.32(b).
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This transaction is related to a concurrently filed verified notice
of exemption in OPSEU Pension Plan Trust Fund, Jaguar Transport
Holdings, LLC, and Jaguar Rail Holdings, LLC--Continuance in Control
Exemption--Waterloo Railroad, LLC, Docket No. FD 36797, in which OPSEU
Pension Plan Trust Fund, Jaguar Transport Holdings, LLC, and Jaguar
Rail Holdings, LLC, seek to continue in control of WTRL upon WTRL's
becoming a Class III rail carrier.
WTRL certifies that the draft lease agreement between WTRL and UP
contains an interchange commitment that affects interchange with third-
party connecting carriers.\3\ WTRL has provided additional information
regarding the interchange commitment as required by 49 CFR 1150.33(h).
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\3\ A copy of the draft lease agreement was submitted under seal
with the verified notice. See 49 CFR 1150.33(h)(1). WTRL states that
it will submit a copy of the executed agreement when it is fully
executed.
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WTRL certifies that its projected annual revenues as a result of
this transaction will not result in it becoming a Class II or Class I
rail carrier and that its projected annual revenues will not exceed $5
million.
Under 49 CFR 1150.32(b), a change of operator requires that notice
be given to shippers. The verified notice indicates
[[Page 68978]]
that WTRL provided notice of the transaction and interchange commitment
to shippers on the Line.
The earliest this transaction may be consummated is September 6,
2024, the effective date of the exemption.
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 effectiveness of the
exemption. Petitions for stay must be filed no later than August 30,
2024 (at least seven days before the exemption becomes effective).
All pleadings, referring to Docket No. FD 36798, must be filed with
the Surface Transportation Board either via e-filing on the Board's
website or in writing addressed to 395 E Street SW, Washington, DC
20423-0001. In addition, a copy of each pleading must be served on
WTRL's representative, William A. Mullins, Mullins Law Group PLLC, 2001
L Street NW, Suite 720, Washington, DC 20036.
According to WTRL, this action is categorically excluded from
environmental review under 49 CFR 1105.6(c) and from historic
preservation reporting requirement under 49 CFR 1105.8(b).
Decisions of the Board are available at <a href="http://www.stb.gov">www.stb.gov</a>.
IANR's Petition for Exemption, Docket No. AB 284 (Sub-No. 5X)
IANR filed its petition under 49 U.S.C. 10502 for exemption from
the prior approval requirements of 49 U.S.C. 10903 to discontinue its
lease operations over the Line. IANR states that the proposed
discontinuance of service would allow IANR ``to effectuate an orderly
transfer of rail operations from IANR to WTRL.'' (IANR Pet. 2, Aug. 7,
2024, AB 284 (Sub-No. 5X).) IANR requests expedited consideration of
its petition. (Id. at 6.)
Because the change of operator exemption issued here in Docket No.
FD 36798 effectively discontinues IANR's common carrier obligation on
the Line, IANR's petition to discontinue its operations on the Line
will be denied as moot, effective concurrently with effectiveness of
the change in operator exemption.
It is ordered:
1. The delegation of authority to the Director under 49 CFR
1011.7(a)(2)(x)(A) to determine whether to issue a notice of exemption
in this proceeding is revoked.
2. WTRL's notice of exemption is issued and is effective September
6, 2024.
3. IANR's petition for exemption is denied as moot, effective on
September 6, 2024.
4. This decision will be published in the Federal Register.
5. This decision is effective on its service date.
Decided: August 22, 2024.
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Board Member Fuchs concurred with a separate expression.
BOARD MEMBER FUCHS, concurring:
While I agree with the today's decision and find sufficient
indication that IANR consents to exiting the Line,\1\ I write
separately to suggest that the Board consider revising its change-in-
operator exemption regulations to explicitly require a verified notice
to indicate that the exiting carrier consents to the transaction. The
notice of exemption process is built for speed and typically involves
little to no opposition or controversy,\2\ and the process allows
simultaneous entry and exit licensing to facilitate efficient changes
in operators. Consistent with this purpose, the Board--in case law--has
rightly required an indication that the exiting carrier consents to the
change-in-operator notice. See SMS Rail Serv., Inc.--Change in Operator
Exemption Including Acquisition by Lease--Salem Branch Line in Salem
and Gloucester Counties, N.J., FD 36529, slip op. at 2, 2 n.4 (STB
served July 15, 2022) (notice of change-in-operator exemption under 49
CFR 1150.41 discontinuing operating authority for a carrier that
consented, but not for a second carrier that was unreachable and thus
had not consented). However, the Board's regulations contain no
explicit requirement. Here, when IANR contested the transaction, the
case soon generated an atypical amount of litigation for a notice of
exemption proceeding, and the controversy showed the potential for
further complications if a carrier were to never consent to exiting.
Forcing a carrier off a line is no simple, permissive matter, and--in
stand-alone exit licensing proceedings brought by a third party where
the subject carrier does not consent (i.e., a typical ``adverse''
discontinuance or abandonment case)--the Board has rightly rejected the
use of exemptions. Wisconsin Dept. of Transp.--Aban. Exemption, FD
31303, slip op. at 4 (ICC served Dec. 5, 1988) (holding that the
exemption authority could not be used to force abandonment or
discontinuance where the carrier opposes this action).\3\ Revising the
change-in-operator regulations \4\ to explicitly include a consent
requirement would promote the purpose of the regulations, provide
needed clarity for parties, and mitigate potential inconsistencies
across exit licensing proceedings.
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\1\ I also agree that IANR has not demonstrated that the
standard 14-day period before the change-in-operator exemption
becomes effective is insufficient to permit the ``orderly transfer
of operations from IANR to WTRL.'' (IANR Pet. 2, Aug. 7, 2024, AB
284 (Sub-No. 5X).)
\2\ Class Exemption for the Acquisition and Operation of Rail
Lines under 49 U.S.C. 10901, EP 392 (Sub-No. 1), slip op. at 3 (STB
served Jan. 15, 1986) (stating that the exemption process ``is
designed to meet the need for expeditious handling of a large number
of requests that are rarely opposed,'' and ``to reduce regulatory
delay and costs'').
\3\ If, in a future proceeding, the Board were to conclude that
it does not have adverse discontinuance or abandonment authority,
the agency would have an independent reason to require consent in
this type of proceeding.
\4\ I note that the agency's decision promulgating the
applicable regulations appears to focus on the agency's entry
licensing statute, and not the exit licensing statute for
discontinuances and abandonments, even though a change in operator
involves an exit. See Class Exemption, EP 392 (Sub-No. 1), slip op.
at 10 (adopting final rule by citing to 49 U.S.C. 10901 [acquisition
and operation] but not Sec. 10903 [abandonments]). The Board should
address this apparent omission in any future rulemaking.
Eden Besera,
Clearance Clerk.
[FR Doc. 2024-19341 Filed 8-27-24; 8:45 am]
BILLING CODE 4915-01-P
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</html>Indexed from Federal Register on August 28, 2024.
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