B.C.D. 02-47

JUN 2 7 2002

EMPLOYER STATUS DETERMINATION

Appalachian Railcar Services, Inc.

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

Appalachian Railcar Services, Inc., as an employer under the Railroad Retirement

Act (RRA)(45 U.S.C. § 231 et seep) and the Railroad Unemployment Insurance

Act (RUIA)(45 U.S.C. § 351 et seq.).

Appalachian was incorporated February 29, 2000, and began operations

performing rail car repairs in May 2000. Appalachian also operates a shortline

railroad under contract with Big Eagle Rail, LLC. In Surface Transportation Board 

Finance Docket No. 33920, Big Eagle filed a verified notice of exemption to lease 

and operate a rail line which interchanges with CSX Transportation. Big Eagle

began operations August 20, 2000, and was held by the Board to be an employer

under the RRA and the RUIA as ofthat date (B.C.D. No. 01-85, December 4,

2001). Approximately 8.8 percent of Appalachian’s revenue is attributable to the 

Big Eagle operation.

Section 1(a)(1) ofthe RRA (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 ofthe

Surface Transportation Board under Part A ofsubtitle IV oftitle 49,

United States Code;

Sections 1(a) and 1(b) ofthe RUIA (45 U.S.C. §§ 351(a) and (b)) contain

substantially the same definition, as does section 3231 ofthe Railroad Retirement

Tax Act (26 U.S.C. § 3231).

The evidence ofrecord establishes that Appalachian is a carrier operating in

interstate commerce. Contrary to the contention ofAppalachian that Big Eagle is a

private carrier, Big Eagle is as noted above subject to the jurisdiction ofthe 

Surface Transportation Board and consequently has been held to be a carrier under

the RR4. and RUIA. Accordingly, because Appalachian is conducting rail

operations over Big Eagle’s rail line, it is determined that Appalachian became an

BA# 9410
Appalachian Railcar Services, Inc.

employer within the meaning ofsection l(a)(l)(i) ofthe RJRA (45 U.S.C. §

231 (a)(l)(i)) and the corresponding provision ofthe RUIA effective August 20,

2000, the date on which it commenced operation ofthe Big Eagle rail line.

Because the evidence indicates that only about 8.8 percent ofAppalachian’s

revenue is attributable to the Big Eagle operations, we will consider next whether 

the concept ofsegregation should be applied to Appalachian.

Section 202.3 ofthe regulations ofthe Board provides that:

(a) With respect to any company or person principally engaged in

business other than carrier business, but which, in addition to such

principal business, engages in some carrier business, the Board will

require submission ofinformation pertaining to the history and all

operations ofsuch company or person with a view to determining

whether some identifiable and separable enterprise conducted by the

person or company is to be considered to be the employer. The

determination will be made in the light of considerations such as the

following:

(1) The primary purpose ofthe company or person on and since the

date it was established;

(2) The functional dominance or subservience ofits carrier business 

in relation to its non-carrier business;

' (3) The amount ofits carrier business and the ratio ofsuch business 

to its entire business;

(4) Whether its carrier business is a separate and distinct enterprise.

(b) In the event that the employer is found to be an aggregate of

persons or legal entities or less than the whole of a legal entity or a

person operating in only one ofseveral capacities, then the unit or
Appalachian Railcar Services, Inc.

units competent to assume legal obligations shall be responsible for

the discharge ofthe duties ofthe employer. (Emphasis added.)

Since Appalachian is not predominantly engaged in carrier business, and its only

carrier business is the operation ofBig Eagle, it is the determination ofthe Board

that section 202.3 ofthe regulations applies so that Appalachian is a covered

employer only to the extent that its employees engage in the operation of Big

Eagle. Thus, only sendee performed while conducting Big Eagle's rail operations 

is creditable under the RRA and the RUIA.

In our decision with respect to the status of Big Eagle, (B.C.D. No. 01-85, issued 

December 4, 2001), we described Big Eagle’s operations by stating that Big 

Eagle’s primary purpose is to transport an average of 70,000 tons of coal per

month from the point ofmining operations to loading facilities on the Kanawha

River and that Big Eagle loads coal onto CSXT’s rail cars, which CSXT transports 

to the respective destination. We must point out that our decision to apply 

segregation to Appalachian Railcar Services, Inc. (ARS) is intended to cover all

ARS employees who work in any capacity in the operation of Big Eagle.