EMPLOYER DETERMINATION

Bighorn Divide & Wyoming Railroad. Inc.

SEP 0 6 2002

This is a determination of the Railroad Retirement Board concerning

the status of Bighorn Divide & Wyoming Railroad, Inc. (BD&WRR) as 

an employer under the Railroad Retirement Act (45 U.S.C. § 231 et

seq.) (RRA) and the Railroad Unemployment Insurance Act (45 U.S.C. §

351 et seq.) (RUIA).

In Surface Transportation Board (STB) Finance Docket No. 34195,

decided May 15, 2002, BD&WRR filed a verified notice of exemption to

operate an approximately 8 mile line of track between Lost Cabin and

Lysite, Wyoming formerly owned and operated by Bad Water Line LLC

(B.A. No. 2792), and to acquire from Bad Water Line a trackage rights

agreement over an additional 23 miles of track owned by Burlington

Northern Santa Fe Railway between Lysite and Shobun, Wyoming.

The STB decision stated that BD&WRR and Bad Water Line intended

to consummate the transaction on or after May 1, 2002. See: Bighorn

Divide & Wyoming Railroad Inc. - Acquisition and Operation

Exemption—Rail Lines of Bad Water Line Inc., et. al 67 Fed. Reg.

35843, May 21, 2002.

Information regarding BD&WRR was provided by Mr. Marvin

Leonhardt, Chief Financial Officer of BD&WRR. According to Mr.

Leonhardt, BD&WRR filed articles of incorporation with the Wyoming

Secretary of State on April 17, 2002; and all employees of Bad Water

Line Railway LLC became employees of BD&WRR on June 1, 2002.

Mr. Leonhardt also stated that Bad Water Line continues to exist solely 

as title holder to real estate for tax purposes, and that ownership of 

both entities remains the same.1 However, Bad Water Line Railway

LLC has changed its name to BDW LLC.2

1 In B.C.D. 00-40, which determined Bad Water Railway LLC to be an employer under the Acts,

ownership was stated as: Ron Vosika 29%, Jim King 29%, Linda Vosika 12%, Linda King 12%, Cliff

Root 7%, Steve Herkal 6%, and Tom Kasper 5%.

2 The continuing coverage status of Bad Water Line Railway, LLC is considered in a separate Board

determination.

BA# 3792
Bighorn Divide & Wyoming Railroad, Inc.

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 BD&WRR is a rail carrier

operating in interstate commerce. Accordingly, it is determined that

Bighorn Divide & Wyoming Railroad, Inc., became an employer within

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

corresponding provision of the Railroad Unemployment Insurance Act

effective June 1, 2002, the date as of which its first employee was first

compensated. [Cf. Rev. Rule. 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.

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( ime F. Kever