B.C.D. 02-2 JAN 1 6 2002

EMPLOYER STATUS DETERMINATION

Carrizo Gorge Railway, Inc. (CZRY)

This is the decision of the Railroad Retirement Board concerning the status of

Carrizo Gorge Railway, Inc. (CZRY) 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 Number 34078, decided

August 9, 2001, CZRY filed a verified notice of exemption to operate

approximately 6.2 miles of rail line owned by San Diego and Arizona Eastern

Railway Company (SD&AE) (B.A. No. 2738) and controlled through

management by San Diego & Imperial Valley Railroad Company, Inc. (SDIY)

(B.A. No. 3758). The rail line extends from the International Border between the

United States and Mexico, milepost 59.60 at Division, California, and milepost

65.80 at Campo, California.

Mr. Thomas F. McFarland, Attorney for CZRY, provided information regarding the

railroad. CZRY is owned by Mr. Gary R. Sweetwood, Mr. Benny L. Wright,

Mr. Vince J. Crisci, Jr., and Mr. John H. Zentmyer. Mr. Sweetwood is the Chief

Executive Officer of CZRY. According to Mr. McFarland, “CZRY’s operating

agreement covers 44 miles of frack in Mexico terminating on its west end at the

international border between Tijuana, Baja California, Mexico and San Ysidro,

California; terminating on the east end at the international border between

Tecate, Baja California, Mexico and Tecate, California." According to

information provided by Mr. McFarland, CZRY assumed freight operations on the

Mexican portion of what was formerly the SD&AE in the United States and the

Tijuana y Tecate (T&T) in Mexico. Prior to July 1,2001, and since 1984, the freight

operator for this portion of fhe rail line was SDIY. Mr. McFarland stated that SDIY

exchanges cars at its interchange point in San Diego with the Burlington

Northern and Santa Fe Railroad (BNSF). According to Mr. McFarland, SDIY "will

retain operating authority in the United States and will continue providing

transportation services to its customers on the west end of the rail line." Mr.

McFarland stated that CZRY "operates in the United States between Division, CA

and Campo, CA pursuant to a detour agreement and interchange agreement

with San Diego & Imperial Valley Railroad (SDIY)." Mr. McFarland stated that

CZRY "expects to initially move 300 to 400 carloads per month through

interchange with SDI[Y] and an additional 300 captive carloads between

Tecate, B.C., Mexico and Campo, California." Additionally, Mr. McFarland

stated that CZRY operates a tourist train several times a month between

Campo, California to Tecate, B.C., Mexico under an agreement with the San

BA# 2798
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Diego Railroad Museum. CZRY has eighteen employees who were first

compensated on July 1,2001, the date CZRY commenced operations,

according to Mr. McFarland. CZRY interchanges with SDIY.

Section 1 (a)(1) of the RRA defines the term “employer" to include:

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

Transportation Board under Part A of subtitle IV of Title 49 [45 U.S.C.

§ 231 (a)(1)(i)].

*****

Section 1 of the RUIA contains the same definition.

The information summarized above indicates that CZRY is a carrier by rail, since it

operates as a common rail carrier in interstate commerce. The information

further indicates that CZRY’s principal business consists of its rail freight

operations, although it also operates a tourist train several times a month. Cf.

20 CFR 202.3. CZRY's freight operations are subject to the jurisdiction of the

Surface Transportation Board (STB). See, 49 U.S.C. § 10501 (a)(2)(A) (the STB has

jurisdiction over rail carrier transportation in the United States between a place in

a State and a place in the same or another State as part of the interstate rail 

network).

The Board finds that since CZRY performs railroad freight service as a rail 

common carrier in interstate commerce, it is therefore an employer under the

Railroad Retirement and the Railroad Unemployment Insurance Acts. The Board

therefore finds that the Carrizo Gorge Railway, Inc. became an employer under

the Railroad Retirement and Railroad Unemployment Insurance Acts effective

July 1,2001, the date it commenced railroad operations.

Cherryl T/Thomas

fzJfcvL, Q-i-.

V. M. Speakman, Jr.7 u

&Jerome F. Kever