EMPLOYER STATUS DETERMINATIONS 

Bad Water Line (BWL)

Bad Water Railway, LLC (BWR-LLC)

OCT 0 4 2000

This is the determination ofthe Railroad Retirement Board concerning the

continued status of Bad Water Line (BWL), BA No. 3768, and the current status

of Bad Water Railway, LLC, (BWR-LLC) as employers 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).

BWL operated approximately 26.6 miles of rail line between Shobon, Wyoming

and Riverton, Wyoming. In Board Notice No. 89-82, BWL was found to be a

covered railroad employer effective August 22, 1989.

Information regarding BWL and BWR-LLC was furnished by Mr. Steven W.

Herkal, Executive Vice President of BWR-LLC. According to Mr. Herkal,

employees of BWL last performed compensated service on April 30, 2000.

Mr. Herkal stated that BWR-LLC commenced business on May 1, 2000.

According to Mr. Herkal, “BWT-’s assets were issued to the LLC for ownership

interest in the LLC. BWL then owns 100% of LLC.” In a letter dated June 28,

2000, Mr. Herkal stated that although Articles of Dissolution had not yet been

completed for BWL, the attorneys and accountants for BWR were currently in

the process of completing them. Mr. Herkal stated that no merger was taking

place, but that “a new entity totally independent as to payroll reporting and tax

filing” was being created and further, that “the decision to dissolve BWL and

continue business as Bad Water Railway, LLC was a business & tax decision

based upon future opportunities and projections.”

According to Mr. Herkal, BWR-LLC is a limited liability company and will elect

to be treated as a partnership for federal tax purposes. Mr. Ron Vosika and

Mr. Jim King serve as Chief Executive Officers of BWR-LLC. Mr. Herkal stated

the ownership of BWR-LLC as follows: Ron Vosika 29%, Jim King 29%, Linda

Vosika 12 %, Linda King 12%, Cliff Root 7%, Steve Herkal 6%, and Tom Kasper

5%. These individuals also own respective interests in BT, Inc. a trucking

company. Mr. Herkal stated that BWR-LLC currently operates 3.5 miles of

track running from Shobon, Wyoming to Shoshoni, Wyoming and moves

commodities such as molten sulfur, sand, spent acid, ammonium nitrate, and

lime. BWR-LLC’s annual volume is approximately 2500 to 3000 railcars. BWRLLC interchanges with the Burlington Northern Santa Fe Railroad (B. A. No.

1621). The five employees of BWL became employees of BWR-LLC as May 1,

2000, and their payroll and earnings reports were assumed by BWR-LLC on

that date.

BA# 3768
Bad Water Line (BWL)

Bad Water Railway, LLC (BWR-LLC)

-2-

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

Also, section 1(a)(1) of the RRA defines the term “employer” to include:

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

Transportation Board under Part A ofsubtitle IV of Title 49 [45

U.S.C. §231(a)(l)(i)].

Section 1 ofthe RUIA contains the same definition.

The information summarized above indicates that BWL no longer possesses

the characteristics of an operating railroad company. The Board therefore

finds that effective with the close of business on April 30, 2000, the date BWL

last compensated its employees, the Bad Water Line ceased being a covered

employer under the Railroad Retirement Act and the Railroad Unemployment

Insurance Act. Additionally, the Board finds that Bad Water Railway, LLC

became a covered rail carrier employer under the Railroad Retirement Act and

the Railroad Unemployment Insurance Act effective May 1, 2000, the date

operations began and employees were first compensated. BWR-LLC has been

preassigned BA No. 2792.

V. M. Speakman, Jr.