B.C.D. 03-79

EMPLOYER STATUS DETERMINATION

ISG Railways Inc.

Brandywine Valley Railroad Corporation, LLC

Upper Merion & Plymouth Railroad Company, LLC

Patapsco & Back Rivers Railroad Company, LLC

Lake Michigan & Indiana Railroad Company, LLC

Cambria & Indian Railroad Company, LLC

Steelton & Highspire Railroad Company, LLC

OCT 2 8 2003

This is the determination ofthe Railroad Retirement Board concerning the status of ISG

Railways, Inc., 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 seq.), and the

continued status of Brandywine Valley Railroad Corporation, LLC (B.A. No. 3342),

Upper Merion & Plymouth Railroad Company, LLC (B.A. No. 3370), Patapsco & Back

Rivers Railroad Company, LLC (B.A. No. 4341), Lake Michigan & Indiana Railroad

Company, LLC (B.A. No. 2281), Cambria & Indian Railroad Company, LLC (B.A. No.

2231), and Steelton & Highspire Railroad Company, LLC (B.A. No. 4349), as employers

under those Acts.

ISG began operations May 7, 2003, and currently has 169 employees. In Surface

Transportation Board Finance Docket No. 34344, ISG filed a notice of exemption to

acquire and operate the rail lines and substantially all other assets of a number of

railroads, including those listed above, which are stated to be switching and terminal

properties. ISG interchanges with the Norfolk Southern Corporation, CSX

Transportation, Inc., and Chicago South Shore & South Bend Railroad, covered

employers under the Acts (B.A. Numbers 9408.1524, 5325, respectively).

Under an asset purchase agreement with Bethlehem Steel Corporation, which then

assigned the assets to ISG, ISG acquired the assets of Brandywine Valley, Upper Merion

& Plymouth, Patapsco & Back Rivers, Lake Michigan & Indiana, Cambria & Indian, and

Steelton & Highspire, all ofwhich ceased operations as of May 7, 2003. ISG has hired a

majority ofthe former employees ofthese railroads.

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 carrier by railroad subject to the jurisdiction ofthe Surface

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

Code;

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

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

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

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BA#4349
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ISG Railways Inc.

Brandywine Valley Railroad Corporation, LLC

Upper Merion & Plymouth Railroad Company, LLC

Patapsco & Back Rivers Railroad Company, LLC

Lake Michigan & Indiana Railroad Company, LLC

Cambria & Indian Railroad Company, LLC

Steelton & Highspire Railroad Company, LLC

The evidence of record establishes that ISG is a carrier operating in interstate

commerce. Accordingly, it is determined that ISG is an employer within the meaning of

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

corresponding provision ofthe Railroad Unemployment Insurance Act as of May 7,

2003, the date as of which it commenced operations.

Section 202.11 ofthe Board’s regulations provides that:

The employer status of any company or person shall terminate

whenever such company or person loses any ofthe characteristics

essential to the existence of an employer status.

Through the sale oftheir rail and other assets and their cessation of operations, the

following railroads have lost the characteristics essential to the existence of an employer

status: Brandywine Valley Railroad Corporation, LLC (B.A. No. 3342), Upper Merion &

Plymouth Railroad Company, LLC. (B.A. No. 3370), Patapsco & Back Rivers Railroad

Company, LLC (B.A. No. 4341), Lake Michigan & Indiana Railroad Company, LLC (B.A.

No. 2281), Cambria & Indian Railroad Company, LLC (B.A. No. 2231), and Steelton &

Highspire Railroad Company, LLC (B.A. No. 4349). Accordingly, the Board holds that

those railroads ceased to be employers under the Railroad Retirement and Railroad

Unemployment Insurance Acts effective with the close of business on May 7, 2003. C£.

Rev Ruling 82-99,1982-2 C.B. 154, wherein the Internal Revenue Service ruled that a

railroad ceases to be an employer subject to taxes under the Railroad Retirement Tax

Act when the railroad’s employees stop performing services in connection with the

railroad’s carrier activities.

V. M. Speakman, Jr.

erome F. Kever