B.C.D. 03-21

EMPLOYER STATUS DETERMINATION

North Carolina Ports Railway Commission

Beaufort & Morehead Railway

FEB 2 6 2003

This is the decision of the Railroad Retirement Board regarding the

continued status of the North Carolina Ports Railway Commission d/b/a

Beaufort & Morehead Railway, 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).

The Beaufort & Morehead was held to be an employer under the Acts

effective February 4, 1991, when it assumed operation of approximately

three miles of rail line between Morehead City and Beaufort, North

Carolina. On March 7, 2000, the North Carolina Ports Railway

Commission (Railway Commission) reported that the Surface

Transportation Board had approved the acquisition of the lease and

operation of the railway line by the Railway Commission. See: North

Carolina Ports Railway Commission d/b/a Beaufort & Morehead

Railway-Acquisition and Operation Exemption-Beaufort & Morehead

Railway, Inc., STB Finance Docket No. 33826, 64 Fed. Reg. 67619, 

December 2, 1999. Accordingly, the Board held the Railway

Commission to be a reactivated employer (B.A. No. 4560) effective

January 1, 2000, and terminated the coverage under the Acts of the

Beaufort & Morehead effective December 31, 1999 (B.C.D. 00-41).

The Beaufort & Morehead filed a notice of exemption to re-acquire and

operate the rail line which had been previously transferred to the

Railway Commission. See: Beaufort & Morehead Railway-Acquisition

and Operation Exemption - North Carolina Ports Railway Commission

d/b/a Beaufort & Morehead Railway. Inc., STB Finance Docket No.

34151, 67 Fed. Reg. 2729, January 11, 2002. Consequently, the Board

held the Beaufort & Morehead to be an employer under the Acts

effective December 28, 2001 (B.A. Number 5557; B.C.D. Number 02-29).

No action was taken regarding the Railway Commission.

Legislation enacted September 20, 2002, abolished the Railway

Commission, resulting in the transfer of the Beaufort & Morehead to

the North Carolina State Ports Authority. The Beaufort & Morehead

ceased operations and last compensated employees on November 30,

BA#4560
North Carolina Ports Railway Commission

Beaufort & Morehead Railway

2002. Those operations were taken over by Carolina Rail Service, LLC,

a covered employer under the Acts (B.A. Number 4576) (STB Finance

Docket No. 34268).

Section 202.11 of the Board’s regulations provides that:

The employer status of any company or person shall

terminate whenever such company or person loses any of the

characteristics essential to the existence of an employer

status.

The Beaufort & Morehead and the Railway Commission, through the

cessation of operations, have lost the characteristics essential to the

existence of an employer status. Accordingly, the Board holds that the

Beaufort & Morehead and the North Carolina Ports Railway

Commission ceased to be employers under the Railroad Retirement and 

Railroad Unemployment Insurance Acts effective with the close of 

business on November 30, 2002. Cf. 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.