B.C.D. 00-61 DEC 2 1 2000

EMPLOYER STATUS DETERMINATION

ILLINOIS INDIANA DEVELOPMENT COMPANY, L.L.C

This is the determination of the Railroad Retirement Board regarding the

status of Illinois Indiana Development Co., L.L.C. (IIDC), 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 IIDC was provided Rose-Michelle Weinryb, Counsel for

IIDC. Information was also found in Surface Transportation Board (STB)

Finance Docket No.’s 33819 and 33845.

IIDC purchased a rail line of 25.888 miles in Indiana from the Norfolk Southern

Railway Company. IIDC reportedly has no employees but has contracted with

the Chicago South Shore and South Bend Railroad (CSS), an employer under

the RRA and RUIA (B.A. No. 5325), to operate the rail line. The rail operation

interchanges with CSXT, NS, CNIC and most other railroads serving Chicago.

The beginning date of operation was February 4, 2000.

Section 1(a)(1) ofthe Railroad Retirement Act (45 U.S.C. § 231(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 ofsubtitle IV of title

49, United States Code;

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

§§ 351(a) and (b)) contain substantially the same definition, as does section 3231

of the Railroad Retirement Tax Act (26 U.S.C. § 3231).

In our decision on reconsideration of the employer status of Railroad Ventures,

Inc. (B.C.D. 00-47), the Board held that an entity that has STB authority to

operate a rail line, but leases or contracts with another to operate the line in

question, is covered under the Acts administered by the Board unless the

Board determines that the entity is not a carrier. The Board enunciated a

three-part test in B.C.D. No. 00-47 to be applied in making this determination.

An entity that leases a line to another company or contracts with another

company to operate the line is a carrier under the Railroad Retirement Act

unless the Board finds that all three of the following factors exist: 1) the entity

does not have as a primary business purpose to profit from railroad activities;

2) the entity does not operate or retain the capacity to operate the rail line; and

3) the operator of the rail line is already covered or would be found to be

covered under the Acts administered by the Board.

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ILLINOIS INDIANA DEVELOPMENT COMPANY, L.L.C

According to the above-cited Surface Transportation Board decisions, the

acquisition and operation of the rail line by IIDC, through its contract carrier,

CSS, is for the purpose of conducting freight operations previously conducted

by NS. Moreover, as stated in STB Finance Docket No. 33845, "IIDC further

states that it will retain a residual common carrier obligation." IIDC also

advised the STB that its projected revenues would not exceed those that would

qualify it as a Class III carrier. Accordingly, the Board finds that IIDC has as a

primary business purpose to profit from railroad activities. The Board

therefore finds that IIDC became a rail carrier employer under section l(a)(l)(i)

of the RRA and the corresponding sections of the RUIA beginning February 4,

2000, the date it began operations.