EMPLOYER STATUS DETERMINATION

Buffalo Ridge Regional Railroad Authority

JUL 0 3 2002

This is the determination ofthe Railroad Retirement Board concerning the status of

individuals who performed services for Buffalo Ridge Regional Railroad Authority

during the period, July 24, 2000, to November 27, 2000, when it was an employer 

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).

Prior to July 24, 2000, Nobles Rock Railroad, Inc., (B.A. No. 2650) provided rail

operations over a rail line owned by Buffalo Ridge Regional Railroad Authority. 

Nobles Rock ceased rail operations on July 23, 2000'. In Surface Transportation

Board (STB) Finance Docket No. 33925, decided September 14, 2000, Buffalo 

Ridge filed a verified notice of exemption to operate its rail line. Buffalo Ridge is

a political subdivision formed pursuant to Minnesota Statutes Chapter 398A 

primarily for the purpose of acquiring a railroad line that was about to be

abandoned and to own the line for the purpose ofleasing the line to different rail

operators. Since 1988 the line has historically been leased to operators who were

responsible for the operations on the line. Buffalo Ridge began rail operations on

July 24, 2000 because its previous operator, Nobles Rock, was unable to provide 

continued service on the rail line. However, on November 27, 2000, Minnesota

Southern Railway, Inc., (B.A. No. 2655) began rail operations over Buffalo 

Ridge’s rail line.

Consequently, the Board held Buffalo Ridge to be an employer under the Acts for

the period July 24, 2000, to November 27, 2000. See B.C.D. 01-84, decided 

December 4, 2001. However, Buffalo Ridge did not report any employee service 

for that period, and advised that it utilized the sendees of four individuals1 2 referred

to as independent contractors. Information provided on behalf ofBuffalo Ridge 

indicates that the:

1 In a decision dated August 27, 2001 (B.C.D. 01-72), we held that effective with the close of business on July 23,

2000, Nobles Rock ceased being a covered employer under the Railroad Retirement Act and the Railroad

Unemployment Insurance Act.

2 Herb Tollefson, Herb Tollefson, Jr., Kurt Kester, and Dan DeWispelaere.

BA # 2657
-2-

Buffalo Ridge Regional Railroad Authority

Services consisted ofthe operation ofthe leased engines and the interchange 

of cars with both the Santa Fe-Burlington Northern railroad at Manley, MN

and the Union Pacific at Org, MN. They [the four individuals] would spot 

the cars on the shortline for the individual shippers and would assist the

shippers, as needed, in the movement and loading ofthe cars. They would

then assemble the cars and transport them to the appropriate interchange

point. They did complete the necessary reports as relates to the car

interchange. They were not involved in marketing. In addition they 

performed routine track maintenance and inspection but there was limited, if

• any, actual work undertaken in this short time period. Any required

maintenance on the leased equipment was performed by Mr. Tollefson as

well.

Section 1 (b) ofthe Railroad Retirement Act and section 1 (d) ofthe Railroad

Unemployment Insurance Act both define a covered employee as an individual in

the service of an employer for compensation. Section 1(d)(1) ofthe RRA further

defines an individual as "in the service of an employer" when:

(i)(A) he is subject to the continuing authority ofthe employer 

to supervise and direct the manner ofrendition of his service, or (B)

he is rendering professional or technical services and is integrated into 

the staff ofthe employer, or (C) he is rendering, on the property used 

in the employer's operations, personal services the rendition of which 

is integrated into the employer's operations; and

(ii) he renders such service for compensation * * *

Section 1(e) ofthe RUIA contains a definition ofservice substantially identical to

the above, as do sections 3231(b) and 3231(d) ofthe Railroad Retirement Tax Act

(26 U.S.C.. 3231(b) and (d)). The focus ofthe test under paragraph (A) is whether

the individual performing the service is subject to the control ofthe servicerecipient not only with respect to the outcome of his work but also with respect to

the way he performs such work.
Buffalo Ridge Regional Railroad Authority

The information submitted shows that the work performed by the four individuals 

for Buffalo Ridge is that ofthe various functions involved in operating the trains,

work which could only be performed under the control ofthe rail carrier obligated 

to operate the rail line. Accordingly, it is the determination ofthe Board that the

individuals who performed rail-related service for Buffalo Ridge were employees

ofBuffalo Ridge during the period from July 24, 2000 to November 27, 2000,

when it was an employer under the Railroad Retirement and Railroad

Unemployment Insurance Acts.

CherryIn. Thomas

V. M. Speakman, Jr.

lerome F. Kever