EMPLOYER STATUS DETERMINATION

Beard Land and Investment Company

This is a determination as to the employer status of Beard Land and

Investment Company (Beard) under the Railroad Retirement Act (RRA)

(45 U.S.C. §231 et seq.) and the Railroad Unemployment Insurance

Act (RUIA) (45 U.S.C. §351 et sea.). Beard has not previously been

held to be an employer under the Acts.

The evidence is that Beard was incorporated in 1926 as a close

corporation. Prior to April 1992, Beard owned 100 percent of the

stock of the Modesto Interurban Railway (Modesto Interurban), which

in turn owned all the stock of Modesto Empire and Traction Company

(Modesto Traction); Modesto Traction owned Beard Land Improvement

Company (Beard Improvement). Modesto Traction owned track and

equipment, and operated rail carrier service. Modesto Interurban

and Beard Improvement owned only right of way and equipment. In

Beard Land and Investment Co. and Modesto Empire and Traction Co.,

Merger Exemption. Modesto Interurban Railway. ICC Finance Docket

31965, 57 Fed. Reg. 13119 (April 15, 1992), the Interstate Commerce

Commission exempted from regulation a merger of Modesto Interurban

into Modesto Traction, with the surviving company to be renamed

Modesto and Empire Traction (Modesto and Empire). Currently, Beard

owns Modesto and Empire, a rail carrier, and Del Este Water, a

water utility company. Beard itself is a holding company with no

employees.

Section 1 of the RRA defines "employer" to include:

(i) any express company, sleeping car company, and

carrier by railroad, subject to subchapter I of chapter

105 of Title 49;

(ii) any company which is directly or indirectly

owned or controlled by, or under common control with, one

or more employers as defined in paragraph (i) of this

subdivision, and which operates any equipment or facility

or performs any service (except trucking service, casual

service, and the casual operation of equipment or

facilities) in connection with the transportation of

passengers or property by railroad, or the receipt,

delivery, elevation, transfer in transit, refrigeration

or icing, storage, or handling of property transported by

railroad. (45 U.S.C. §231 (a) (1) (i) and (ii)) .

Section 1 of the RUIA (45 U.S.C. § 351) and section 3231 of the

Railroad Retirement Tax Act (RRTA) (26 U.S.C. § 3231) contain

essentially the same definition.

A recent decision of the United States Court of Appeals for the

Federal Circuit regarding a claim for refund of taxes under the

RRTA held that a parent corporation which owns a rail carrier

subsidiary is not under common control with the subsidiary within

BCD 1995-24
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Beard Land and Investment Company

the meaning of §3231. Union Pacific Corporation v. United States.

5 F. 3d 523 (Fed. Cir., 1993) .

The facts in the Union Pacific case are indistinguishable from

those presented by Beard. Accordingly, a majority of the Board

determines that Beard Land and Investment Company is not and has

never been an employer covered by the RRA and the RUIA, because it

is not under common control with its rail carrier subsidiaries.

An appropriate Form G-215 is attached.

Glen L. Bower

//

V. M. Speakman, Jr. j£Uis senting

opinion attached)

Jerome F. Kever