|SURFACE TRANSPORTATION BOARD DECISION DOCUMENT|
|IOWA INTERSTATE RAILROAD, LTD.-ACQUISITION OF CONTROL EXEMPTION-LINCOLN & SOUTHERN RAILROAD COMPANY|
|GRANTED IOWA INTERSTATE RAILROAD, LTD. AN EXEMPTION UNDER 49 U.S.C. 10502 FROM THE PRIOR APPROVAL REQUIREMENTS OF 49 U.S.C. 11323, ET SEQ., TO ACQUIRE CONTROL BY STOCK PURCHASE OF LINCOLN & SOUTHERN RAILROAD COMPANY, SUBJECT TO STANDARD LABOR PROTECTIVE CONDITIONS.|
| 14 KB|
|Approximate download time at 28.8 kb: 23 Seconds|
If you do not have Acrobat Reader, or if you have problems reading our files with your current version of Acrobat Reader, the latest version of Acrobat Reader is available free at www.adobe.com.
|Full Text of Decision|
37481 SERVICE DATE – DECEMBER 22, 2006
SURFACE TRANSPORTATION BOARD
STB Finance Docket No. 34942
IOWA INTERSTATE RAILROAD, LTD.—ACQUISITION OF CONTROL EXEMPTION—LINCOLN & SOUTHERN RAILROAD COMPANY
Decided: December 15, 2006
By amended petition filed on October 30, 2006, Iowa Interstate Railroad, Ltd. (IAIS) seeks an exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 11323, et seq., to acquire control by stock purchase of Lincoln & Southern Railroad Company (L&S). IAIS also requests expedited consideration of the petition to permit closing of the transaction by December 31, 2006. We will grant the exemption, subject to standard labor protective conditions, but provide for the exemption to be effective 8 days after the date of publication in the Federal Register.
is a Class II rail carrier that owns or operates approximately 552 miles of
rail line in
Pursuant to an Agreement for Purchase of Stock dated October 19, 2006, between IAIS and L&S, IAIS proposes to acquire all of L&S shares of stock (and, accordingly, its property, including a rail line), and petitioner will have 100% controlling interest in the corporation. The entire L&S line has been operated by IAIS since 1995 under a longstanding arrangement. The sole customer on the L&S line is an aggregates company, Galena Sand and Gravel (Galena Sand), that accounted for approximately 1,500 rail cars of sand per year in 2004 and 2005. IAIS asserts that Galena Sand will not lose any existing rail service or competitive rail options, and in fact, will gain transit options as a consequence of this transaction.
IAIS also claims that all of its current
customers could benefit from the transaction as it plans to rehabilitate the L&S
rail line after acquisition to handle loads up to 286,000 pounds. IAIS states that its main line has been
rehabilitated to handle such loads, and claims that it is vital that the L&S
line be upgraded to move 286,000 pound loads of grain and other products to
DISCUSSION AND CONCLUSIONS
Under 49 U.S.C. 11323(a)(3), prior Board approval is required for a rail carrier to acquire control of another rail carrier. Under 49 U.S.C. 10502, however, we must exempt a transaction or service from regulation when we find that: (1) regulation is not necessary to carry out the rail transportation policy of 49 U.S.C. 10101; 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.
exemption from the prior approval requirements of 49 U.S.C. 11323(a)(3)
for IAIS’s acquisition of control of L&S is consistent with the standards
of 49 U.S.C. 10502. Detailed
scrutiny of this transaction is not necessary to carry out the rail
transportation policy. An exemption from
the application process will minimize the need for Federal regulatory control
[49 U.S.C. 10101(2)], ensure the development and continuation of a
sound rail transportation system [49 U.S.C. 10101(4)], foster sound economic
conditions in transportation [49 U.S.C. 10101(5)], reduce regulatory
barriers to entry into and exit from the rail industry [49 U.S.C. 10101(7)],
and encourage honest and efficient management of railroads [49 U.S.C. 10101(9)]. According to IAIS, the acquisition of the L&S
rail line will benefit all of IAIS’s current customers by rehabilitating the
existing line to handle more weight and facilitate the movement of grain and
other heavy load traffic to
of this transaction is not necessary to protect shippers from the abuse of
market power. IAIS’s acquisition of control
of L&S will have no adverse impact on competition, and rail operations on
the line will not change in any manner.
The sole shipper, Galena Sand, will not lose access to any rail service
which it currently receives, and this transaction will not lessen competition
or transportation options for the sole shipper.
The proposed acquisition will ensure the continued efficiency of IAIS’s
service by providing IAIS with certainty about its ability to continue
operating on the
Regarding labor protection, IAIS argues that, because the level of service on the L&S line will not be reduced, none of its employees will be adversely affected and no labor conditions need be imposed here. Under 49 U.S.C. 10502(g), however, we may not use our exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Because this transaction involves at least one Class II and one or more Class III rail carriers, our grant will be made subject to the labor protection requirements of 49 U.S.C. 11326(b).
This transaction is exempt from environmental reporting requirements under 49 CFR 1105.6(c)(2) because it will not result in significant changes in carrier operations, i.e., changes that will exceed the thresholds of 49 CFR 1105.7(e)(4) or (5). Similarly, the transaction is exempt from the historic reporting requirements under 49 CFR 1105.8(b)(1). IAIS’s acquisition of L&S and its rail line is for the purpose of continued rail operations, further Board approval is required to abandon or discontinue service, and there are no plans to alter or dispose of properties subject to Board jurisdiction that are 50 years old or older.
This action will not significantly affect either the quality of the human environment or the conservation of energy resources.
It is ordered:
1. Under 49 U.S.C. 10502, we exempt the above-described transaction from the prior approval requirements of 49 U.S.C. 11323, et seq., subject to the labor protective conditions at 49 U.S.C. 11326(b).
2. Notice of the exemption will be published in the Federal Register on December 22, 2006.
3. This decision will be effective on December 30, 2006.
4. Petitions to stay must be filed by December 26, 2006. Petitions to reopen must be filed by January 11, 2007.
By the Board, Chairman Nottingham, Vice Chairman Mulvey, and Commissioner Buttrey.