JUN 0 4 2002

EMPLOYER STATUS DETERMINATION

Bulkmatic Railroad Corporation

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

Bulkmatic Railroad Corporation (BRC) 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 seep) (RUIA).

In Surface Transportation Board (STB) Finance Docket No. 34145 decided

January 4, 2002, BRC filed a notice of exemption to acquire by sublease from 

Bulkmatic Transport Company approximately 3.9 miles ofrailroad right-of-way

and trackage known as Bulkmatic Distribution Center, at Chicago Heights, Illinois. 

In a separate STB decision decided January 4, 2002 (STB Finance Docket No.

34146), Chicago Heights Switching Company (CHSC),1 filed a verified notice of

exemption to operate, pursuant to an agreement with BRC, over that same 3.9

miles ofrailroad right-of-way and trackage known as the Bulkmatic Distribution

Center, at Chicago Heights, Illinois.

Information regarding BRC was provided by Mr. David C. Dillon with the law

firm of Dillon & Nash, LTD. According to Mr. Dillon, Mr. Doug Harmison is 

BRC’s ChiefExecutive Officer. Mr. Dillon stated that BRC is a subsidiary of

Bulkmatic Transport Company. BRC was incorporated on November 16, 2001. It

began operations and first compensated its one part-time employee on January 1,

2002. Mr. Dillon stated that Mr. Harmison performs duties ofChief Executive

Officer on a part-time basis and that it is anticipated that two additional employees

of BRC will work on an intermittent allocated basis. Mr. Dillon also stated that

principal operation ofthe railroad is to be conducted by railroad contractor,

Chicago Heights Switching Company. Mr. Dillon advised that BRC’s purpose is

to conduct necessary freight car switching operations on the railroad tracks

contained within the limits ofthe Chicago Heights facility. BRC renders sendees

for Union Pacific Railroad (BA1713) and Elgin Joliet Eastern Railroad (BA 1309).

Mr. Dillon described Chicago Heights Switching Company as an independent

contractor with whom BRC contracts to provide maintenance ofthe track located

on the Chicago Heights facility and also to provide personnel to conduct switching

The Board’s Office of Audit and Compliance is reviewing the possible coverage of CHSC as an

employer under the RRA and RUIA.

BA# 4411
2

Bulkmatic Railroad Corporation

Section 1(a)(1) ofthe Railroad Retirement Act (45 U.S.C. § 231(a)(1)), insofar as

relevant here, defines a covered employer as:

(i) any earner by railroad subject to the jurisdiction ofthe Surface 

Transportation Board under Part A ofsubtitle IV oftitle 49, United States

Code;

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

351(a)and (b)) contain a substantially similar definition, as does section 3231 of

the Railroad Retirement Tax Act.

In its decision regarding the employer status ofRailroad 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 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. No. 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 ofthe 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 ofthe rail line is already covered or would be found to be

covered under the Acts administered by the Board.

There is no information in this case that would indicate that BRC ‘s intent in

subleasing the line is primarily designed to preserve rail service rather than profit

from railroading activities. In fact, Mr. Dillon indicated that 95 percent ofBRC’s

revenue was received from rail carriers. The Board therefore finds that BRC is an

enterprise which is intended to profit from railroad activities. The Board thus finds

that Bulkmatic Railroad Company became a rail carrier employer within the

meaning ofsection l(a)(l)(i) ofthe Railroad Retirement Act and the corresponding
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Bulkmatic Railroad Corporation

provision ofthe Railroad Unemployment Insurance Act effective January 1, 2002,

the date it began operations.

Cherry7! <T. Thomas

V. M. Speakman, Jr.

erome F. Kever