B.C.D. 01-2

EMPLOYER STATUS DETERMINATIONS

Indiana Southern Railroad, Inc. (ISRR-IN)(BA. No. 3382)

Indiana Southern Railroad, Inc. (ISRR-DEL)(Pre-assigned BA. No. 5334)

This is the determination of the Railroad Retirement Board concerning the

continued status of Indiana Southern Railroad, Inc. (ISRR-IN) (B.A. No. 3382), 

and the current status of Indiana Southern Railroad, Inc. (ISRR-DEL) as

employers 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 Board Notice No. 92-43, ISRR-IN was previously found to be a covered rail

carrier employer under the RRA and RUIA effective April 10, 1992, the date

that it first compensated employees.

In Surface Transportation Board (STB) Finance Docket Number 33809, service

date October 29, 1999, RailTex, Inc. (RailTex) (B. A. No. 6803), North Carolina &

Virginia Railroad Company, Inc. (NCVA) (B. A. No. 5507), Chesapeake and

Albemarle Railroad Company, Inc. (CARR) (B. A. No. 5531), Dallas, Garland &

Northeastern Railroad, Inc. (DGNO) (B. A. No. 3890), Mid-Michigan Railroad,

Inc. (MMRR) (B. A. No. 4268), and ISRR-IN filed a verified notice of exemption

to achieve a proposed corporate restructuring. According to the STB decision,

as part of the corporate restructuring: (1) the assets of DGNO and MMRR,

including assets of the Texas Northeastern Division, a division of MMRR,

would be merged into Dallas, Garland & Northeastern Railroad, Inc., a

Delaware Division (DGNO Delaware), with DGNO Delaware as the surviving

entity; (2) the assets of NCVA and CARR would be merged into North Carolina

& Virginia Railroad Company, Inc., a Delaware corporation (NCVA Delaware),

with NCVA Delaware as the surviving entity; and (3) ISRR-IN, an Indiana

Corporation, would be reincorporated in the State of Delaware.1 According to

the STB decision, the purpose ofthe transaction was to simplify RailTex’s

corporate structure and eliminate costs associated with separate accounting,

tax, bookkeeping, and reporting functions, as well as to allow for the

reincorporation of additional RailTex subsidiaries in the State of Delaware,

thereby simplifying RailTex’s corporate governance. As a result of the

restructuring, RailTex controlled 16 Class III railroads in the United States.

Information regarding ISRR-IN and ISRR-DEL was furnished by Ms. Kay

Acuff, Payroll Supervisor for RailAmerica (B. A. No. 9409). According to Ms.

’The status of DGNO, MMRR, DGNO Delaware, NCVA, CARR, and

NCVA Delaware is addressed in separate coverage decisions.

BA# 3382
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Indiana Southern Railroad, Inc. (ISRR-IN)(B.A. No. 3382)

Indiana Southern Railroad, Inc. (ISRR-DEL)(Pre-assigned B.A. No. 5334)

Acuff, employees of ISRR-IN last performed compensated service on

September 29, 1999. Ms. Acuff provided information which shows that ISRRIN’s “merger” with ISRR-DEL (with ISRR-DEL as the surviving entity) became

effective on September 30, 1999 , when the Agreement and Plan of Merger

between ISRR-IN and ISRR-DEL was filed with the Secretary of State of

Delaware. All former employees of ISRR-IN became employees of ISRR-DEL

as ofthe date of the merger, and their payroll and earnings reports were

assumed by ISRR-DEL on that date.

Section 202.11 (20 CFR 202.11) of the Board’s regulations states that:

The employer status of any company or person shall terminate

whenever such company or person loses any of the characteristics

essential to the existence of an employer status.

Also, section 1(a)(1) of the RRA defines the term “employer” to include:

(i) any carrier by railroad subject to the jurisdiction ofthe Surface

Transportation Board under Part A of subtitle IV of Title 49 [45

U.S.C. §231(a)(l)(i)].

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Section 1 of the RUIA contains the same definition.

The information summarized above indicates that, due to the merger of ISRRIN into and wnth ISRR-DEL, ISRR-IN no longer possesses the characteristics of

an operating railroad company. The Board therefore finds that effective with

the close of business on September 29, 1999, the date on which ISRR-IN last

compensated its employees, the Indiana Southern Railroad, Inc. (Indiana

Corporation) ceased being a covered employer under the Railroad Retirement

Act and the Railroad Unemployment Insurance Act. Additionally, the Board

finds that Indiana Southern Railroad, Inc. (Delaware Corporation) became a

covered rail carrier employer under the Railroad Retirement Act and the

Railroad Unemployment Insurance Act effective September 30, 1999, the date
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Indiana Southern Railroad, Inc. (ISRR-INXBA. No. 3382)

Indiana Southern Railroad, Inc. (ISRR-DEL)(Pre-assigned B.A. No. 5334)

operations began and employees were first compensated. ISRR-DEL has been

preassigned B. A. No. 5334.

Cherry^T. Thomas

V. M. Speakman, Jr.

Jerome F. Kever