EMPLOYER STATUS DETERMINATION

Coe Sun, Inc., d/b/a Tarantula Steam Train

FEB 0 3 2000

This is the determination ofthe Railroad Retirement Board concerning the

status of Coe Sun, Inc., d/b/a Tarantula Steam Train, as an employer under the

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

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

Information regarding Tarantula Steam Train was provided by Laurence I.

Coe, President and Chairman of Coe Sun, and by Sondra Y. Nations,

Administrator, Fort Worth & Western Railroad, an employer under the Acts

(B.A. No. 2861). Tarantula Steam Train operates a steam locomotive and six

coaches over approximately 21 miles of rail line within the state of Texas.

Coe Sun is a privately-held corporation owned by Mr. Coe, who is also the

President and Chairman of Coe Rail, Inc., an employer under the Acts (B.A. No.

3266) located in the state ofMichigan.

Tarantula Steam Train was formerly operated by the Tarantula Mercantile

Corporation, which leased the equipment and obtained a crew from the Fort

Worth & Western Railroad. The Tarantula Mercantile Corporation and the Fort

Worth & Western Railroad are subsidiaries of Tarantula Corporation. On April

10,1999, Tarantula Corporation entered into an agreement with Coe Sun under

the terms of which Coe Sun is to operate the Tarantula Steam Train. The rail

equipment and right to operate over the rail line is provided by Tarantula

Corporation.

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 ofsubtitle IV of title

49, United States Code * * * [45 U.S.C. § 231 (a)(1).]

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 ofthe United States Code provides in pertinent part

that the Surface Transportation Board has jurisdiction over rail carrier:

BCD 2000-07
Coe Sun Inc. d/b/a Tarantula Steam Train

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

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

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

The rail service provided by Coe Sun may be characterized as a tourist or

excursion railroad operated solely for recreational and amusement purposes.

Since passengers are transported solely within one state and the rail service is

not a part of an interstate rail network, under section 10501(a)(2), above, Coe

Sun would not be subject to Surface Transportation Board jurisdiction. It

would therefore also not fall within the definition of "employer" set out in

section l(a)(l)(i) ofthe Railroad Retirement Act. The Board thus finds that Coe

Sun is not a carrier by railroad.

The Railroad Retirement Act and the Railroad Unemployment Insurance Act

also define the term "employer" to include:

(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)(h).]

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

Unemployment Insurance Act (45 U.S.C. § 351(a) & (b)).

Section 202.4 of the Board's regulations (20 CFR 202.4) defines "control" as

follows:

A company or person is controlled by one or more carriers,

whenever there exists in one or more such carriers the right or

power by any means, method or circumstance, irrespective ofstock

ownership to direct, either directly or indirectly, the policies and

business of such a company or person and in any case in which a
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Coe Sun Inc. d/b/a Tarantula Steam Train

carrier is in fact exercising direction of the policies and business of

such a company or person.

Section 202.5 of the Board's regulations (20 CFR 202.5) defines "common

control" as follows:

A company or person is under common control with a carrier,

whenever the control (as the term is used in § 202.4) of such

company or person is in the same person, persons, or company as

that by which such carrier is controlled.

Coe Sun is under common control with a railroad employer by reason of its

being wholly owned by Mr. Coe, who also controls Coe Rail, Inc., a covered

employer under the Acts. Therefore, if Coe Sun provides a service in

connection with the transportation of passengers or property by railroad, it is

an employer under the Acts. Section 202.7 of the regulations (20 CFR 202.7)

defines a service as being in connection with railroad transportation ifit is

reasonably directly related, functionally or economically, to the performance of

rail carrier obligations.

There is no evidence that Coe Sun provides any service to Coe Rail or to any

other carrier. Rather, the evidence shows that Coe Sun operates solely to

provide public passenger excursion tours within one state. Because Coe Sun

does not perform a service in connection with rail transportation, the Board

finds that it is not a covered employer under the Railroad Retirement and

Railroad Unemployment Insurance Acts.

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