EMPLOYER DETERMINATION

Progressive Rail, Incorporated

JUN 1 9 2002

This is a determination of the Railroad Retirement Board concerning the

status of Progressive Rail, Incorporated (PRI) 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 1998, the Board’s Audit and Compliance Section requested information

from PRI to determine whether PRI’s operation was covered under the 

Railroad Retirement Act and the Railroad Unemployment Insurance Act.

On July 24, 1998, Mr. Byron D. Olsen, legal counsel for PRI, advised the

Board that PRI began operations on October 1, 1996. Mr. Olsen stated that

PRI had three part-time and two full-time employees who were first

compensated on October 1, 1996. PRI’s function was to facilitate

intermodal transfers within the Airlake Industrial Park located in Lakeville,

Minnesota. PRI employees loaded and unloaded trucks and rail cars and 

worked directly for shippers and receivers. One of PRI’s employees

worked full-time as a forklift operator. Mr. Olsen stated that PRI operated

industrial switching trackage consisting of approximately 2.25 miles of rail

line which is located entirely within the confines of Airlake Industrial Park.

It had no terminal points and no carrier reporting marks. Mr. Olsen stated

that PRI did not request or obtain operating authority from the Surface

Transportation Board because it operated a private industrial switching

service solely within the Airlake Industrial Park. Mr. Olsen further stated

that all contracts with the railroad industry were handled by Canadian

Pacific Railway (OPR), B.A. No. 1606. PRI did not interchange with other

railroad carriers and had no relationship with the railroad industry, except

through OPR. Mr. David Fellon owned PRI and served as its President.

In Surface Transportation Board Finance Docket No. 33943, decided

November 22, 2000, PRI filed a verified notice of exemption to acquire

from OPR and operate CPR’s Richfield Line located in Bloomington,

Richfield and Minneapolis, Minnesota. The rail line extends from Auto

Club, Minnesota at milepost 25.63 to the end of track at Pleasant Avenue

South and West 60th Street, Minneapolis, a total distance of approximately

9.1 miles (hereinafter referred to as the “Rail Line”).

BA# 4651
-2-

Progressive Rail, Incorporated

Additional information regarding PRI was provided by Mr. David Fellon,

who is still the owner and President of PRI. Mr. Fellon stated that PRI

initially commenced operations on September 26, 1996; however, on

February 5, 2001, PRI first conducted railroad operations over the 9.1

miles of the Rail Line leased from the Soo Line Railroad Company. He

further stated that PRI currently has seven employees, some of whom are

employed on a part-time basis. He stated that two of PRI’s employees will

service the 9.1 mile Rail Line. Mr. Fellon also stated that PRI provides

industrial switching, car spotting, and removal for businesses operating 

within the Airlake Industrial Park. PRI handles approximately 3,500

railroad cars in the Airlake Industrial Park. With respect to PRI’s operation

of the Rail Line, PRI will provide similar switching services and will handle

approximately 1,500 cars annually. He also stated that PRI interchanges 

with CPR.

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;

(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 contains essentially the same definitions, as does

section 3231 of the Railroad Retirement Tax Act.
-3-

Progressive Rail, Incorporated

The evidence of record establishes that prior to February 5, 2001, PRI did

not operate as a rail carrier in interstate commerce. In addition, the

evidence indicates that PRI is not under common control with nor is it

owned or controlled by a rail carrier employer. However, when PRI began

to conduct railroad operations over the 9.1 miles of the Rail Line on

February 5, 2001, it became a rail carrier operating in interstate commerce. 

Accordingly, it is determined that Progressive Rail, Inc. became an

employer within the meaning of section 1 (a)(1 )(i) of the Railroad

Retirement Act (45 U.S.C. 231 a(a)(1 )(i)) and the corresponding provision 

of the Railroad Unemployment Insurance Act effective February 5, 2001, 

the date on which it began railroad operations over the 9.1 miles of the Rail

Line.

V. M. Speakman, Jr.