B.C.D. 01-9

EMPLOYER STATUS DETERMINATION 1 0 2001

Delphos Terminal Company, Inc. (DTC)

This is the determination of the Railroad Retirement Board regarding the

status of Delphos Terminal Company. Inc. (DTC) as an employer under the

Railroad Retirement Act (45 U.S.C. § 231 et seep) (RRA) and the Railroad

Unemployment Insurance Act (45 U.S.C. § 351 et seep) (RUIA).

Information regarding DTC was provided by Terrence E. Quinlan, Corporate

Counsel for Central Soya Company, Inc. Mr. Quinlan stated that DTC is owned

by Central Soya Company, Inc. The Chief Executive Officer of DTC is Carl L.

Hausmann. Mr. Quinlan stated that DTC is incorporated and has no paid

employees. In a decision in STB Finance Docket No. 33496 entered on October

22, 1997, the STB indicated that DTC filed a verified notice of exemption to

acquire and operate approximately 3.8 miles of rail line owned and operated by

R. Franklin Unger, Trustee of the Indiana Hi-Rail Corporation (Hi-Rail). The

rail line is located between milepost 73.7, at or near Delphos. Ohio, and

milepost 77.5, at or near Landeck, Ohio, together with interchange trackage

connecting such line and Consolidated Rail Corporation (Conrail) (B.A. No.

1321) at or near Delphos. According to Mr. Quinlan, DTC does not operate any

trains or issue any shipping documentation. DTC entered into an agreement

with Conrail whereby Conrail agreed to perform as a contract operator all rail

transportation services over the subject rail line owned by DTC. Mr. Quinlan

stated that DTC does not provide rail service in connection with its ownership

of the rail line and right of way; according to him. service is provided

exclusively by Conrail (now by CSXT). DTC establishes the freight rates and

collects all freight revenues according to Mr. Quinlan. DTC is paid a fee by

Conrail (now CSXT) for use of its rail line. In addition, all maintenance of the

rail line owned by DTC is performed by an independent contractor.

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;

Sections 1(a) and 1(b) of the Railroad Unemployment Insurance Act (45 U.S.C.

§§ 351(a) and (b)) contain substantially the same definition, as does section 3231

of the Railroad Retirement Tax Act (26 U.S.C. § 3231).

In its decision regarding the employer status of Railroad Ventures, Inc. (B.C.D.

00-47), the Board held that an entity that has STB authority to operate a rail

line, but leases or contracts with another to operate the line in question, is

BA# 2391
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Delphos Terminal Company, Inc. (DTC)

covered under the Acts administered by the Board unless the Board

determines that the entity is not a carrier. The Board enunciated a three-part

test in B.C.D. 00-47 to be applied in making this determination. An entity that

leases a line to another company or contracts with another company to operate

the line is a carrier under the Railroad Retirement Act unless the Board finds

that all three of the following factors exist: 1) the entity does not have as a

primary business purpose to profit from railroad activities; 2) the entity does

not operate or retain the capacity to operate the rail line; and 3) the operator of

the rail line is already covered or would be found to be covered under the Acts

administered by the Board.

Applying this test to the facts of DTC. the Board determines that DTC is a

covered rail carrier employer. The record in this case indicates that DTC

establishes the freight rates for its rail line and collects all freight revenues. In

addition. DTC is paid a fee for the use of its rail line. Based upon this history

of DTC’s activities with respect to its rail line, we find that DTC has as a 

primary purpose to profit from railroad activities. We do not have to reach the

other two considerations, since all three need to be present to remain outside

the coverage of the RRA and the RUIA.

Accordingly, the Board finds that Delphos Terminal Company, Inc. became an

employer under the Railroad Retirement and Railroad Unemployment

Insurance Acts, effective October 24, 1997, the date it acquired its line of

railroad.

V. M. Speakman. Jr.

vJerome F. Kever