EMPLOYER STATUS DETERMINATION

Nobles Rock Railroad, Inc. (NRRR) (B.A. No. 2650)

AUG 2 7 2001

This is the determination of the Railroad Retirement Board concerning

the continued status of Nobles Rock Railroad, Inc. (NRRR) (B.A. No.

2650) as an employer under the Railroad Retirement Act (45 U.S.C.

§ 231 et setp) (RRA) and the Railroad Unemployment Insurance Act (45

U.S.C. § 351 et sea.) (RUIA).

In Board Coverage Decision No. 99-41, NRRR was previously found to 

be a covered rail carrier employer under the RRA and RUIA effective 

December 21, 1998, the date on which it commenced railroad

operations.

In Surface Transportation Board (STB) Finance Docket Number 33925,

decided September 14, 2000, Buffalo Ridge Regional Railroad Authority

(BRRRA)1 filed a verified notice of exemption to operate over its own

rail line between milepost 0.0, at or near Agate, Minnesota, and

milepost 41.44, at or near Manley, Minnesota, a distance of

approximately 41.44 miles. The STB decision noted that BRRRA stated

that NRRR “appears to have become insolvent or close to insolvency”

and that termination of its [BRRRA’s] lease to NRRR appeared to be

imminent. BRRRA notified the STB that it (BRRRA) intended to 

operate the line itself.

Information regarding NRRR was furnished by Mr. Timothy S.

Tennant, President of NRRR. According to Mr. Tennant, NRRR ceased

operations on July 23, 2000 when its operating lease with BRRRA was

terminated. Mr. Tenant stated that BRRRA last compensated NRRR

employees on NRRR’s account in late July, 2000, on account of BRRRA

retaining NRRR’s freight revenues. Mr. Tennant provided information

which shows that the assets of NRRR were reclaimed by BRRRA as a

result of NRRR’s failure to continue operations and to operate in

accordance with its lease because of NRRR’s insolvency. Mr. Tennant

1 Buffalo Ridge Regional Railroad Authority is currently being reviewed by the Board’s Audit and Compliance

BA# 2650
Nobles Rock Railroad, Inc. (NRRR) (B.A. No. 2650)

stated that NRRR’s corporate charter had not been renewed for 2001

and “therefore the corporation has been dissolved in this fashion.”

Additional information regarding BRRRA’s assumption of the 

terminated lease with NRRR was provided by Mr. Donald R.

Klosterbuer, Executive Secretary of BRRRA. According to Mr.

Klosterbuer, BRRRA commenced operations on or about July 24, 2000

and terminated on or about November 30, 2000. Mr. Klosterbuer stated

that BRRRA became involved in the operation of the line only for a brief

period as a result of the failure of its prior lease operator, NRRR, to

continue operations and to operate in accordance with the lease because 

of NRRR’s insolvency. As stated by Mr. Klosterbuer, operations by the

BRRRA were commenced only for the purpose of providing rail service 

to the rail customers during the interim period until a new operator was

obtained. Mr. Klosterbuer stated that after November 30, 2000,

railroad operations were assumed by Minnesota Southern, Inc.2 (MSI)

(Pre-assigned B.A. No. 2655), the present operator of the line.

Section 202.11 (20 CFR 202.11) of the 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 of the

Surface Transportation Board under Part A of subtitle IV of

Title 49 [45 U.S.C. § 231(a)(l)(i)].

*****

Section 1 of the RUIA contains the same definition.

2 Minnesota Southern, Inc. is currently being reviewed by the Board’s Audit and Compliance Section.
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Nobles Rock Railroad (NRRR) (B.A. No. 2650)

The information summarized above indicates that, due to the cessation

of operations by NRRR and the effective dissolution caused by the nonrenewal of its corporate charter, NRRR no longer possesses the

characteristics of an operating railroad company. The Board therefore

finds that effective with the close of business on July 23, 2000, the date

on which NRRR ceased operation, the Nobles Rock Railroad, Inc. ceased 

being a covered employer under the Railroad Retirement Act and the

Railroad Unemployment Insurance Act.