B.C.D. 02-28 APR 0 2 2002

EMPLOYER STATUS DETERMINATION

SF&L Railway Company

This is a determination of the Railroad Retirement Board concerning 

the status of SF&L Railway Company (SF&L) as an employer under

the Railroad Retirement Act (45 U.S.C. § 231 et seg.) (RRA) and the 

Railroad Unemployment Insurance Act (45 U.S.C. § 351 et seg.)

(RUIA).

In Surface Transportation Board (STB) Finance Docket No. 33995

decided January 30, 2001, SF&L filed a notice of exemption to

acquire from Toledo, Peoria and Western Railway Corporation (TP &

W) (B.A. No. 2346), an operating easement over, and the rail, ties,

and improvements of, a 71.5 mile segment of track. The rail line

extends between milepost 194.5 at La Harpe 61450 and milepost

123.0 at Peoria 61607, serving the intermediate points of

Blandinsville 61420, Sciota 61475, Good Hope 61438, Bushnell

61422, New Philadelphia 61459, Smithfield 61477, Cuba 61427,

Canton 61520, Glasford 61533, and Mapleton 61547 in Hancock,

McDonough, Fulton and Peoria Counties, Illinois. According to the

STB decision, TP & W would retain the realty underlying the line,

subject to a permanent and unconditional easement to permit SF&L

to fulfill its obligations as a railroad common carrier. The STB

decision noted that although SF&L will be responsible for rendering

service, SF&L planned to employ TP & W as a contract operator.

Although early information indicated that TP & W would operate the

line as a contract operator, a decision of the Surface Transportation 

Board (STB) issued December 26, 2001 cited an argument made by

petitioners in that STB proceeding that TP & W would not be retained

as a contract operator. See STB Finance Docket Nos. 33995 and

33996, decided December 26, 2001. The latest information in the

record, a letter from Steven Van Wagenen, transmitted by telefax to

the Board on January 18, 2002, makes no mention of TP & W as a

contract operator of the line and, in fact, states that SF&L Railway

hired three employees who began working December 10, 2001. That

letter also describes rail operations as being conducted by SF & L

Railway. We will therefore address the issue of SF&L Railway’s

coverage based on that most recent letter.

BA# 3791
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SF&L Railway Company

Information regarding SF&L was provided by Steven Van Wagenen, 

Assistant Vice President, of SF&L in the letter of January 18, 2002

cited in the preceding paragraph. According to Mr. Van Wagenen,

Mr. Kern W. Schumacher and Mr. Morris H. Kulmer are the owners of 

SF&L. Mr. Morris H. Kulmer serves as SF&L’s Chief Executive

Officer. Mr. Van Wagenen stated that SF&L began rail operations on

December 12, 2001; however, it first compensated its three

employees on December 10, 2001. He stated that SF&L is a freight 

railroad that primarily hauls bridge traffic (grain, railway wheels, coal

and other miscellaneous traffic) between TP & W and Keokuk

Junction Railway (KJRY) (B.A. No. 3755). Mr. Van Wagenen further 

stated that SF&L also handles a limited amount of originating (grain)

and terminating (stone) traffic. Mr. Van Wagenen stated that SF&L

anticipates handling approximately 2000 carloads per year. SF&L

interchanges with TP & W and KJRY, both covered employers under

the Acts.

Section 1 (a)(1) of the Railroad Retirement Act (45 U.S.C. §

231(a)(1)), insofar as relevant here, defines a covered employer as:

(i) any carrier by railroad subject to the

jurisdiction of the Surface Transportation Board under

Part A of subtitle IV of title 49, United States Code.

Section 1 of the RUIA contains essentially the same definition, as

does section 3231 of the Railroad Retirement Tax Act.

The evidence of record establishes that SF&L Railway Company is a

rail carrier operating in interstate commerce. Accordingly, it is

determined that SF&L Railway Company became an employer within

the meaning of section 1 (a)(1 )(i) of the Railroad Retirement Act and

the corresponding provision of the Railroad Unemployment Insurance

Act effective December 10, 2001, the date its employees were first
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SF&L Railway Company

compensated. [CF. Rev. Rul. 82-100, 1982-1 C.B. 155, wherein the

IRS held that a company became an employer under the Railroad

Retirement Tax Act on the date it hired employees to perform

functions directly related to its carrier operations.]

V. M. Speakman, Jr.