B.C.D. 15-16

EMPLOYER STATUS DETERMINATION

Eastern Berks Gateway Railroad

July 9, 2015

This is the determination ofthe Railroad Retirement Board concerning the status of

Eastern Berks Gateway Railroad (Eastern Berks), as an employer under the

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

Insurance Act (45 U.S.C. § 351 et seq.).

Information regarding Eastern Berks was provided by Nathaniel C. Guest,

President of Eastern Berks. Eastern Berks was previously owned by U.S. Rail

Partners, Ltd. and sole ownership was transferred to the Colebrookdale Railroad

Preservation Trust (Colebrook), a Pennsylvania not-for-profit corporation which

has no other corporate affiliates, effective January 2, 2014. Operations by Eastern

Berks began at that time with Colebrook as the parent company. The railroad is

8.6 miles in length and its terminal points are Pottstown and Boyertown,

Pennsylvania. It interchanges with Norfolk Southern, a covered employer, at 

Pottstown, Pennsylvania.

Mr. Guest stated that Eastern Berks expects to operate tourist excursions on behalf

of Colebrookdale and to provide local freight and switching services on an asneeded basis to industries between Boyertown and Pottstown, Pennsylvania. This

is done through a lease with the Redevelopment Authority of the County of Berks 

which has ownership of the property and fixed assets constituting the rail line. At 

the time of Mr. Guest’s response, he did not have an estimate of freight traffic

volume and Eastern Berks did not have any employees and did not expect to hire 

any. He also stated that he was unable to confirm if Eastern Berks had any 

employees under the previous ownership but he did state that Colebrook did not

acquire any rail equipment from the previous owners.

According to Surface Transportation Board (STB) Finance Docket No. 35383 

(decided October 6, 2010), on September 13, 2010, Eastern Berks Gateway

Railroad Company (EBGRC) filed an application for a modified certificate of

public convenience and necessity to operate an approximately 8.6-mile line of

railroad between milepost 0.0 at Pottstown and milepost 8.6 at Boyerstown in

Berks County, Pennsylvania1. The line was authorized for abandonment by the

1 As noted above, the line in question was previously owned and operated by U.S. Rail Partners, 

Ltd. until January 2, 2014, when it was sold to Colebrookdale, Eastern Berks’ parent company. 

As a result, this STB decision was issued while the line was owned by U.S. Rail Partners. To

BA # 4418
2

STB in East Penn Railroad- Abandonment Exemption- In Berks and Montgomery

Counties. Pa., Docket No. AB 1020X (STB served Nov. 18, 2008). Although

authorized for abandonment, the line was subsequently acquired by the county of

Berks County, Pennsylvania. Pursuant to a lease and operating agreement between

Berks County and EBGRC, EBGRC agreed to commence freight rail operation on 

or about September 15, 2010, for a term of 5 years. EBGRC agreed to provide

freight service twice weekly or on an as-needed basis to the only interline

connection, Norfolk Southern Railway Company at milepost 0.0 at Pottstown,

Pennsylvania. The STB decided that the rail segment qualified for a modified

certificate of public convenience and necessity.

Section 1(a)(1) of the Railroad Retirement Act 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, 

United States Code * * *.

A virtually identical definition is found in sections 1(a) and (b) of the Railroad

Unemployment Insurance Act (45 U.S.C. §§ 351(a) & (b)). Section 10501 of Title 

49 of the United States Code provides in pertinent part that the Surface

Transportation Board has jurisdiction over rail carrier:

* * * transportation in the United States between a place in -

(A) a State and a place in the same or another State as part of the 

interstate rail network. [49 U.S.C. § 10501(a)(2)(A).]

In addition, section 202.3 ofthe Board’s regulations states that:

§ 202.3 Company or person principally engaged in non-carrier

business.

distinguish between the line under U.S. Rail Partners, Ltd. ownership and Colebrookdale

ownership, this decision refers to the line as EBGRC, the same abbreviation used in the STB

decision, under U.S. Rail Partners, Ltd. ownership. Eastern Berks states that no Surface

Transportation Board Financial Docket was required for the transition of Eastern Berks stock

ownership to Colebrookdale.
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(a) With respect to any company or person principally engaged in

business other than carrier business, but which, in addition to such

principal business, engages in some carrier business, the Board will

require submission of information pertaining to the history and all

operations of such company or person with a view to determining

whether some identifiable and separable enterprise conducted by the

person or company is to be considered to be the employer. The

determination will be made in the light of considerations such as the

following:

(1) The primary purpose of the company or person on and since the

date it was established;

(2) The functional dominance or subservience of its carrier business in

relation to its non-carrier business;

(3) The amount of its carrier business and the ratio ofsuch business to

its entire business;

(4) Whether its carrier business is a separate and distinct enterprise.

20 CFR §202.3

With respect to the common carrier operations related to freight and switching

services, the evidence of record indicates that Eastern Berks is a carrier operating

in interstate commerce. But the tourist excursion service provided by Eastern

Berks may be characterized as a tourist or excursion railroad operated solely for

recreational and amusement purposes. Since passengers are transported solely

within one state, under section 10501(a) (2)(A), above, Eastern Berks would not be

subject to Surface Transportation Board jurisdiction and would therefore also not 

fall within the definition of "employer" set out in section 1 (a)( 1 )(i) ofthe Railroad

Retirement Act with respect to the excursion services which provides. The

information submitted also shows that the primary purpose of Colebrookdale’s

acquisition of Eastern Berks was not interstate commerce, but rather operation of a

tourist train. Colebrookdale is a not-for profit corporation and Eastern Berks was

acquired in order to provide tourist excursion service on behalf of Colebrookdale.

The freight operation would only be done on an as-needed basis and no estimates

ofthe volume were available.
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Accordingly, Eastern Berks is an employer within the meaning ofsection l(a)(l)(i)

of the Railroad Retirement Act (45 U.S.C. §23 l(a)(l)(i)) and the corresponding

provision ofthe Railroad Unemployment Insurance Act with respect to its common

carrier, freight and switching operations. Employees engaged in this part of

Eastern Berks’ operations are considered covered by the Acts as of January 2,

2014, the date on which Colebrook acquired the line and operations began.

Regarding Eastern Berks’ tourist excursion service, Eastern Berks is not

considered an employer under the Acts and therefore may segregate those

employees under section 202.3 ofthe Board’s regulations.

Walter Barrows

Steven J. Anthony