[Federal Register Volume 76, Number 77 (Thursday, April 21, 2011)]
[Notices]
[Page 22449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9652]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35490]


Sierra Northern Railway--Acquisition and Operation Exemption--
Union Pacific Railroad Company

    Sierra Northern Railway (SERA), a Class III rail carrier, has filed 
a verified notice of exemption under 49 CFR 1150.41 to acquire from 
Union Pacific Railroad Company (UP), and to operate, pursuant to an 
Administration, Coordination, and License Agreement (License Agreement) 
between SERA and the Santa Cruz County Regional Transportation 
Commission (SCCRTC), a freight operating easement over a portion of a 
line of railroad known as the Santa Cruz Branch located between 
milepost 0.433, at the east boundary of Salinas Road, near Watsonville 
Junction, Cal., and milepost 31.39, near Davenport, Cal., including the 
interconnection with the Santa Cruz and Big Trees Railroad at milepost 
20.4, at Santa Cruz, Cal. The total length of the line is approximately 
31.0 miles, and there is an additional 3.6 miles of sidings and 
spurs.\1\
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    \1\ SERA currently operates the line pursuant to a lease 
agreement with UP authorized in Sierra Northern Railway--Lease and 
Operation Exemption--Union Pacific Railroad Company, FD 35331 (STB 
served Dec. 17, 2009). SERA's existing lease with UP will remain in 
effect in part and be amended in part to account for UP's assignment 
of its freight operating easement to SERA, the SCCRTC's purchase of 
the physical assets of the line from UP, the License Agreement 
between SERA and the SCCRTC, and SERA's retained lease rights over 
the portion of the Santa Cruz Branch that is not the subject of the 
freight operating easement and the License Agreement.
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    SERA states that SCCRTC and UP have entered into a Purchase and 
Sale Agreement (Purchase Agreement) under which UP will assign its 
retained freight operating easement to SERA at the closing of UP's sale 
of the physical assets of the line to SCCRTC. SERA further states that 
the License Agreement between SERA and SCCRTC will govern SERA's 
operation of the line following the closing of SCCRTC's purchase of the 
physical assets of the line from UP. SERA has disclosed that neither 
the freight rail easement nor the License Agreement contains a 
provision that may limit future interchange with a third-party 
connecting carrier.
    On April 8, 2011, SCCRTC filed a related petition for a declaratory 
order in Docket No. FD 35491, Santa Cruz County Regional Transportation 
Commission--Petition For Declaratory Order. In that proceeding, SCCRTC 
seeks a determination that it will not become a common carrier as a 
result of its acquisition of the physical assets of the line pursuant 
to the Purchase Agreement.\2\
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    \2\ On April 8, 2011, UP filed a letter of support and a request 
for expedited review for SERA's notice of exemption filed in Docket 
No. FD 35490 and SCCRTC's petition for declaratory order filed in 
Docket No. FD 35491.
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    SERA states that it expects the transaction to be consummated in 
April 2011, on or shortly after the effective date of this exemption, 
and after a determination that the SCCRTC will not become a carrier by 
acquiring the physical assets of the line. However, the earliest this 
transaction may be consummated is May 5, 2011, the effective date of 
the exemption (30 days after the notice was filed).
    SERA certifies that its projected annual revenues as a result of 
this transaction will not result in SERA becoming a Class II or Class I 
rail carrier and will not exceed $5 million annually.
    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 to stay must be filed no later than April 28, 2011 
(7 days before the exemption becomes effective).
    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35490, must be filed with the Surface Transportation Board, 395 E 
Street, SW., Washington, DC 20423-0001. In addition, a copy must be 
served on David Magaw, President, Sierra Northern Railway, 341 
Industrial Way, Woodland, CA 95776.
    Board decisions and notices are available on our Web site at http://www.stb.dot.gov.

    Decided: April 15, 2011.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2011-9652 Filed 4-20-11; 8:45 am]
BILLING CODE 4915-01-P