EMPLOYER STATUS DETERMINATION

Carolina Rail Service, Inc.

Carolina Rail Service, EEC.

MAR 0 8 2002

This is a determination ofthe Railroad Retirement Board concerning the continued

status of Carolina Rail Service, Inc. (CRS, Inc) (B.A. No. 4570) and the status of

Carolina Rail Service, LLC (CRS, EEC) as employers under the Railroad

Retirement Act (45 U.S.C. § 231 et seg.) (RRA) and the Railroad Unemployment

Insurance Act (45 U.S.C. § 351 et seg.) (RUIA).

Information regarding CRS, Inc. was provided by Ms. Sherry C. Smith ofCanal 

Holdings, LLC. According to Ms. Smith, CRS, Inc. merged with CRS Holdings, 

LLC. She stated that effective October 1, 2001, CRS Holdings, LLC changed its

name to Carolina Rail Service, LLC. Ms. Smith stated that an internal merger was

necessary due to changes to Canal Industries, Inc., the parent company of CRS,

Inc. She further stated that for tax reduction purposes, Canal Industries, Inc.

liquidated its assets by merging CRS, Inc. with a limited liability company. 

According to the State ofNorth Carolina’s Department ofthe Secretary of State, an

Articles ofMerger was filed with the state on September 27, 2001. The Articles of

Merger stated that the merger of CRS, Inc. with CRS Holdings, LLC became 

effective October 1, 2001. The Articles ofMerger further stated that effective the

same time, CRS Holdings, LLC changed its name to Carolina Rail Service, LLC.

Exhibit A ofthe Articles of Merger stated that each share ofCRS, Inc’s capital 

stock issued and outstanding prior to the merger were cancelled. However, Ms.

Smith stated that Carolina Rail, LLC continues to provide rail services as did its

predecessor, Carolina Rail, Inc.

Section 202.11 (20 CFR 202.11) ofthe Board’s regulations states:

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.

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.

BA# 4576
Carolina Rail Service, Inc.

Carolina Rail Service, LLC.

Section 1 ofthe RUIA contains essentially the same definition, as does section 

3231 ofthe Railroad Retirement Tax Act.

The evidence ofrecord establishes that Carolina Rail Service, Inc. no longer 

possesses the characteristics of an operating railroad. Therefore, effective 

October 1, 2001, the date on which Carolina Rail Service, Inc. merged with CRS

Holdings, LLC [which simultaneously changed its name to Carolina Rail Service,

LLC], Carolina Rail Service, Inc. ceased to be an employer under the Railroad

Retirement Act and the Railroad Unemployment Insurance Act. Further, the

evidence ofrecord also establishes that Carolina Rail Service, LLC is a rail carrier

operating in interstate commerce. Accordingly, it is determined that Carolina Rail

Service, LLC became an employer within the meaning ofsection 1 (a)( 1 )(i) ofthe

Railroad Retirement Act and the corresponding provision ofthe Railroad

Unemployment Insurance Act effective October 1, 2001, the effective date it

became the surviving rail entity.

e

V. M. Speakman, Jr.

Jerome F. Kever