EMPLOYER STATUS DETERMINATION

Port Railroads, Inc.

This is the determination of the Railroad Retirement Board

concerning the status of Port Railroads, Inc. (PRI), 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).

Information regarding PRI was provided by Fred L. Krebs, General

Manager of San Joaquin Valley Railroad Company. According to Mr.

Krebs, PRI is responsible for operating trackage which is leased

from Southern Pacific Transportation Company. Mr. Krebs also

advised that PRI has no employees and all services are performed by

San Joaquin Valley Railroad Company, which reports the creditable

compensation of the employees involved (B.A. Number 3780) .

In Interstate Commerce Commission Finance Docket 32457, PRI filed

a notice of exemption to lease and operate approximately 107 miles

of rail line in California owned by Southern Pacific, providing

services to former customers of Southern Pacific. As mentioned

above, PRI has no employees or equipment and contracts with the San

Joaquin Valley Railroad Company to provide service.

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, that entity will be found to be a covered employer with

respect to the operation of the line it has undertaken. 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. However, if 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.

PRI has no employees and operations are conducted by the employees

of another railroad carrier, which is an employer under the Acts.

That employer reports the employee service rendered to PRI to the

Board. Consistent with above-described analysis of cases such as

this, a majority of the Board finds that Port Railroads, Inc. is

not an employer subject to the Railroad Retirement and Railroad

Unemployment Insurance Acts.

BCD 1996-2 BA # 2748
-2-

Port Railroads, Inc.

Port Railroads, Inc. is reminded to inform the Board of any change

in the operation of the rail line in this case.

V. M/Speakman, Jir. (Dissenting

opinion attached)

Jerome F. Kever
DISSENT OF

V. M. SPEAKMAN, JR.

ON EMPLOYER STATVS DETERMINATION

OFPORTRAILROADS, INC

I take exception to the majority ofthe Board’s decision not to cover Port Railroads, Inc.,

(PRI) as an employer under the RailroadRetirementAct andRailroad Unemployment

Insurance Act. As an employer, subject to ICCjurisdiction, the RailroadRetirement Act

andRailroad Unemployment Insurance Act direct the Board tofindPRI covered despite

thefact that PRI may have no employees and all services are performed by another

railroad carrier. To decide otherwise, as the majority ofthe Board has done sets a bad

precedent and conflicts with current law. For the reasons stated, I dissent.

V. M. Speakman, Jr.

JAM 2 - 1955

Date