B.C.D. 03-42

EMPLOYER STATUS DETERMINATION MAY 0 8 2003

Cenex Harvest States Cooperatives

CHS Holdings, Inc.

This is the decision of the Railroad Retirement Board regarding the status of

Cenex Harvest States Cooperatives and CHS Holdings, Inc., as employers under

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

Unemployment Insurance Act (45 U.S.C. § 351 et seq.J(RUIA).

Cenex is the grains and foods division for CHS Cooperatives, a producer-toconsumer agricultural cooperative owned by some 325,000 farmers and their

local co-operatives. Cenex is the largest United States grain cooperative, and

performs a full complement of agricultural operations, from locally controlled

farm supply to grain marketing to food processing and distribution.

CHS Holdings, Inc., is a wholly-owned subsidiary of Cenex. Pursuant to a Notice

of Exemption filed by CHS (Surface Transportation Board Finance Docket No.

34207, decided June 13, 2002), on or about June 3, 2002, CHS acquired a 2.11

mile rail line from J. K. Line, Inc. (a covered employer under the Acts, B.A. No.

3371)’. CHS states that it has not had any employees and has not operated the

rail line, which was operated solely by Cenex employees with a locomotive

owned by Cenex. The Burlington Northern Santa Fe connects to the line and

drops off and picks up rail cars for the Cenex elevator facility. The operation

also occasionally switches cars to and from an adjacent facility, J. R. Simplot 

Company.

In Surface Transportation Board Finance Docket No. AB-845X, decided March

12, 2003, the Surface Transportation Board granted the petition of CHS to 

abandon the rail line, operation of which will be continued by Cenex.

Section 1 (a)(1) of the Railroad Retirement Act (45 U.S.C. § 231 (1)(a)(1)), insofar 

as relevant here, defines a covered employer as:

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

Transportation Board under Part A of subtitle IV of title 49, United States

Code;

(ii) any company which is directly or indirectly owned or controlled

by, or under common control with, one or more employers as

defined in paragraph (i) of this subdivision, and which

1 The line acquired did not represent the entire rail operation of J. K. Line, or even a significant

portion of its rail operations.

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operates any equipment or facility or performs any service (except

trucking service, casual service, and the casual operation of

equipment or facilities) in connection with the transportation of

passengers or property by railroad * * *.

Sections 1(a) and 1(b) of the Railroad Unemployment Insurance Act (45 U.S.C.

§ 351 (a) and (b)) contain substantially similar definitions.

The Surface Transportation Board has jurisdiction over common carriers

engaged in the interstate transportation of passengers or property by railroad

pursuant to section 10501 of title 49 of the United States Code. A common

carrier may be defined in general as one which holds itself out to the public as

engaging in the business of transporting people or property from place to place

for compensation. It is the right of the public to demand service that is the real

criterion determinative of an entity's character as a common carrier. In

contrast, a private carrier is one which, without making it a vocation or holding

itself out to the public as ready to act for all who desire the service, undertakes

by special agreement in a particular instance only, to transport property or

persons from place to place. Private carriers thus undertake not to carry for all

persons indiscriminately, but rather to transport only for those with whom they

see fit to contract individually. The Railroad Retirement Board has followed the

distinction made by the Surface Transportation Board, which is judicially

supported in The Tap Line Cases, 234 U.S. 1 (1913); also International Detective

Service, Inc, v. Interstate Commerce Commission. 595 F.2d 862, 865 (D.C. Cir.

1979).

CHS never operated the rail line which had authority to operate, and which it

has now abandoned with STB approval. The Board thus finds that CHS is not

now and has not ever been a carrier under the Acts. Cenex, the parent

company of CHS and the operator of the line, performs services over that line 

chiefly for itself, shipping agricultural products of the cooperative from it to the

Burlington Northern Santa Fe, and occasionally for one other company. Its

services are not provided to or offered to other parties. Consequently, it is not
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holding itself out to the public as engaging in the business of transportation of

persons or property over the line in question. The Board finds that CHS is a

private carrier, rather than a common carrier. Accordingly, the Board

determines that CHS and Cenex are not employers under the RRA and the RUIA.

Cherryl T/Thomas

; Qal.

V.M. Speakman, Jr.

Jerome F. Kever