B.C.D. 01-73 SEP 2 0 2001

EMPLOYER STATUS DETERMINATION

Central Illinois Railroad Company

This is the determination of the Railroad Retirement Board concerning

the status of Central Illinois Railroad Company, 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 seep).

Information regarding Central Illinois was provided by Thomas F.

McFarland, counsel for Central Illinois. According to Mr. McFarland,

Central Illinois began doing business May 1, 2001. Central Illinois

reports that it currently has three employees.

In Surface Transportation Board Finance Docket No. 34035, Central

Illinois filed a notice of exemption to lease and operate approximately

25 miles of rail line owned by Union Pacific Railroad Company and the

Canadian Pacific Rail System. Central Illinois’s operations involve 

switching freight cars to and from the facilities of shippers and

receivers in Centex Industrial Park, Elk Grove Village, Illinois, as agent 

for Union Pacific. According to Mr. McFarland, annual freight traffic

volume is expected to be about 3,500 to 4, 000 cars. Union Pacific has

full control over the rates and charges for that traffic, and bills the

shippers and receivers for the entire transportation services for that

traffic. Central Illinois is compensated for its services by a monthly fee

paid by Union Pacific.

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 ofsubtitle

IV oftitle 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

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Central Illinois Railroad Company

does section 3231 of the Railroad Retirement Tax Act (26 U.S.C.

§ 3231).

The definition section of Part A of Subtitle IV of Title 49 of the United

States Code defines “railroad” to include a switch, spur, track, terminal,

or terminal facility as well as a freight depot, yard, and ground used or

necessary for transportation (49 U.S.C. § 10102(6)(C)). It is well settled

that a terminal or switching company is a common carrier rather than a

private carrier if it holds itself out to be one, acts in that capacity, and

is dealt with in that capacity by railroads in general. U.S. v. California,

297 U.S. 175 (1936). The portion of Title 49 that is cited in the

definition of “employer” in the Railroad Retirement Act gives to the

Surface Transportation Board jurisdiction over railroad 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” (49 U.S.C.

§ 10501(a)(2)(A)). Consistent with the foregoing, the Board has held

switching railroads to be covered employers under the Railroad

Retirement and Railroad Unemployment Insurance Acts where they act 

in the capacity of a common carrier subject to the jurisdiction of the

Surface Transportation Board. Conversely, where switching operations

are conducted by a plant owner for itself, these operations do not result

in the plant owner being a covered employer under the Acts.

Although Central Illinois conducts its switching operation within

Centex Industrial Park (which is owned by the Village of Elk Grove,

Illinois), it performs those operations as a liaison between Union Pacific 

and shippers and receivers, holding itself out to the public as engaging

in the business of transporting freight to and from the Union Pacific.

The Board therefore finds that Central Illinois became a rail carrier

employer within the definition set out in section l(a)(l)(i) of the
Central Illinois Railroad Company

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

provision of the Railroad Unemployment Insurance Act effective May 1.

2001, the date as of which it commenced operations.

CherryFT. Thomas

1/m,

V. M. Speakm

(j

eakman, Jr. (j

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erome F. Kever