EMPLOYER STATUS DETERMINATION

Iowa, Chicago & Eastern Railroad Corporation

DEC 2 6 2002

This is the decision ofthe Railroad Retirement Board regarding the status of Iowa,

Chicago & Eastern Railroad Corporation (IC&E RR) as an employer under the

Railroad Retirement and Railroad Unemployment Insurance Acts. The status of

this company has not previously been considered.

The evidence is that in Surface Transportation Board (STB) Finance Docket No.

34177, decided June 12, 2002, IC&E RR filed a verified notice of exemption to

acquire from I & M Rail Link1 and to operate approximately 1,125 miles oftrack 

running between Chicago, Kansas City, Minneapolis/St. Paul, and parts of Iowa and

Minnesota; to acquire the interest ofI & M Rail Link in trackage rights over

approximately 275 additional miles ofrail line of other carriers; and to acquire the

interest of I & M Rail Link in various otherjoint agencies and industrial trackage. 

See: Iowa. Chicago & Eastern Railroad Corporation— Acquisition and Operation

Exemption - Lines of I&M Rail Link. LLC , 67 Fed. Reg. 41297. In a subsequent

decision, the STB allowed the acquisition to proceed, subject to pending petitions to

revoke. Id., July 22, 2002.

Information regarding IC&E RR was provided by Ms. Kristi Stein, Assistant

Comptroller ofCedar American Rail Holdings, Inc.2 The original notice of

exemption filed in June stated that IC&E RR intended to consummate the

transaction on or after June 28, 2002. According to Ms. Stein, after the temporary

stay ofthe transaction was lifted by the STB in its July 22 decision, IC&E closed its

purchase ofthe assets of I&M Rail Link, first compensated employees, and began 

operations on July 30, 2002. Ms. Stein states that IC&E RR interchanges directly 

or indirectly with 17 rail carriers, including the Burlington Northern Santa Fe and

the Union Pacific. She also advises that between 500 and 550 employees ofI&M

Rail Link became employees of IC&E RR.

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

relevant here, defines a covered employer as:

1 The Board determined I&M Rail Link, LLC, to be a rail carrier employer covered by the Acts in Board

Coverage Decision 97-79, with service creditable from January 30, 1997. See BA no. 5623.

2 The status under the Acts ofCedar American Rail Holdings, Inc., which is the parent company ofIC&E

RR, is currently under review.

BA# 2661
-2-

Iowa, Chicago & Eastern Railroad Corporation

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

Surface Transportation Board under Part A ofsubtitle IV oftitle 49,

United States Code;

Section 1 ofthe RUIA contains essentially the same definition, as does section 3231

ofthe Railroad Retirement Tax Act.

The evidence ofrecord establishes that IC&E RR is a rail carrier operating in

interstate commerce, having acquired the rail lines and trackage rights of I&M Rail

Link, LLC.3 Accordingly, it is determined that the Iowa, Chicago & Eastern

Railroad Corporation became an employer within the meaning ofsection 1 (a)( 1 )(i)

of the Railroad Retirement Act and its corresponding provision ofthe Railroad

Unemployment Insurance Act effective July 30, 2002, the date as of which its first

employee was first compensated. Cf. Rev. Rule. 82-100, 1982-1 C.B. 155, wherein

the IRS held that a company became an employer under the Railroad Retirement

Tax Act on the date it hired employees to perform functions directly related to its

carrier operations.

- 'a.MAa (

Cherryl ft. Thomas

WAm QV. M. Speakman, Jr.

Xo-ntL^' eerome F. Kever

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3 As the evidence is that I&M Rail Link currently retains a few employees in connection with termination 

ofits operations, the status ofthat company under the Acts must be the subject of a later determination.