EMPLOYER STATUS DETERMINATION

Greater Shenandoah Valley Development Company

d/b/a Shenandoah Valley Railroad Company

This is the determination of the Railroad Retirement Board 

concerning the status of the Greater Shenandoah Valley Development 

Company d/b/a Shenandoah Valley Railroad Company (SVR) as an

employer under the Railroad Retirement Act (45 U.S.C. §231 et sea.)

(RRA) and the Railroad Unemployment Insurance Act (45 U.S.C. §351

et sea.) (RUIA).

In Interstate Commerce Commission (ICC) Finance Docket No. 32470,

decided June 30, 1994, SVR and Buckingham Branch Railroad (BA No.

2410) (BB) sought an exemption from the prior approval requirements 

of 49 U.S.C. §11343 for BB to operate SVR's 20.2 mile line of

railroad between Pleasant Valley and Staunton, in Rockingham and

Augusta Counties, Virginia. SVR purchased the line in 1993 through 

an offer of financial assistance filed under 49 U.S.C. §10905 and

49 CFR 1152.27 (c) (2) . See Chesapeake Western Railway Company -­

Abandonment -- Between Pleasant Valiev and Staunton in Rockingham 

and Augusta Counties. VA. Docket No. AB-290 (Sub-No. 120) (ICC

served Oct. 8, 1992) .

The ICC decision in Finance Docket No. 32470 stated that SVR had

been providing service to the one shipper on the line by employing 

CSX Transportation, Inc. (CSXT) (BA No.1524), as SVR's agent.1 SVR

and BB entered into a one-year renewable agreement whereby BB would 

operate the line as an independent operator replacing the interim 

CSXT arrangement. Under the agreement, BB has exclusive control in

the management and operation of the rail service and provides rail

freight service to all shippers on the line, manages all

operations, establishes all freight rates, maintains all

appropriate books and records, and handles routine maintenance.

SVR is responsible for any rehabilitation and new construction on

the line and will pay BB for serving the shippers and managing the

rail freight operations. In addition, SVR retains the right to

conduct rail transportation service itself or to designate an

operator in the event of BB's default of its obligations under the

agreement.

BB began railroad operations over SVR's line on August 23, 1994.

SVR does not have any employees.

Section 1 of the RRA defines the term "employer" to include:

1In a letter dated March 17, 1994, to Mr. Edmund Fleming,

Chief of Audit and Compliance, Mr. V.J. Ludlum, General Manager of

SVR, stated that although an operating agreement with CSXT was "in

place during 1993", no customers chose to use the service.

BCD 1996-5
-2-

Greater Shenandoah Valley Development Company

d/b/a Shenandoah Valley Railroad Company

(i) any express company, sleeping car company, and

carrier by railroad, subject to subchapter I of chapter 

105 of title 49. [45 U.S.C. §231(a)(1)(i)].

Section 1 of the RUIA contains essentially the same definition.

In cases such as this where an entity has authority to operate a

rail line, but does not actually operate the line in question, the

Board looks to the identity of the entity operating the line and

the nature of the relationship of that entity to the ICC certified 

carrier to determine the status of the certified carrier under the

RRA and RUIA. If the operating entity is itself a carrier employer 

covered under the Acts administered by the Board, or if that entity 

has been recognized by the ICC as the operator of the line in

question, which will result in that entity being found to be a

covered employer with respect to the operation of the line it has

undertaken, and if the certified entity has no involvement in the

actual operation of the rail line, the Board will find the

certified entity not to be a covered employer under the RRA and the

RUIA. If, however, the operating entity is neither a covered 

employer nor an entity that has been recognized by the ICC as the

operator of the line, the Board will find the certified entity to

be a covered employer and persons operating that line to be

employees of the covered employer.

SVR does not operate the rail line in question, but rather has an

arrangement with another railroad carrier, which is an employer 

under the Acts, to do so. That employer would be responsible for

reporting employee service to the Board with respect to operation

of the SVR rail line. Consistent with above-described analysis of

cases such as this, a majority of the Board finds that SVR is not

an employer subject to the Railroad Retirement and Railroad

Unemployment Insurance Acts.

SVR is reminded to inform the Board of any change in the operation 

of the rail line in this case.

Glen L. Bower

/ // '.:h> s w ^/ v____________

V. M/ Speakman, Jr. (Dissenting

opinion attached)
DISSENT OF

V. M. SPEAKMAN, JR.

ON THE EMPLOYER STATUS DETERMINATION OF

GREATER SHENANDOAH VALLEY DEVELOPMENT COMPANY

D/B/A SHENANDOAH VALLEY RAILROAD COMPANY

The fact that Greater Shenandoah Valley Development Company d/b/a Shenandoah Valley

Railroad Company (SVR) has no employees and that it contracts with Buckingham 

Branch Railroad (BB) for railroad service over its line does not mean that SVR is not an

employer under the Acts. Its status as a carrier subject to ICC jurisdiction is what renders 

it a covered employer. See B. C. D. 94-112 (In re Texas and Oklahoma Railroad Co ).

See also Cheney Railroad Company, Inc, v. Railroad Retirement Board. In the United

States Court ofAppeals for the District ofColumbia, No. 93-1621, March 24, 1995.

SVR is clearly a rail carrier subject to ICC jurisdiction, as is evidenced by the fact that it

had to seek ICC approval in Finance Docket No. 32470 for its agreement with BB and by

the fact that it retains the right to conduct rail transportation service itself or to designate 

an operator in the event ofBB’s default ofits obligations under its agreement with SVR.

Moreover, SVR is responsible for any rehabilitation and new construction on its line.

The decision ofthe majority ofthe Board in this case sets a bad precedent and conflicts

with current law. For the reasons stated, I dissent.

"mkL*ihj 0

V. M.'Speakman, Jr.

JAN' l - 1555

Date