[Federal Register Volume 69, Number 249 (Wednesday, December 29, 2004)]
[Notices]
[Pages 78095-78096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28336]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34630]


MRC Regional Railroad Authority--Trackage Rights Exemption--Lines 
of the State of South Dakota

    MRC Regional Railroad Authority (MRC), a noncarrier, has filed a 
verified notice of exemption under 49 CFR 1150.31 to acquire from the 
State of South Dakota (the State) \1\ overhead trackage rights over a 
line of railroad extending between milepost 654 near Mitchell, SD, and 
milepost 511.90 in Sioux City, IA, including such yard tracks, 
sidetracks, and connecting tracks (existing or to be constructed) as 
are reasonable: (a) To interchange railcars with The Burlington 
Northern and Santa Fe Railway Company (BNSF) and Dakota, Minnesota & 
Eastern Railroad Corporation at Mitchell; (b) to access the State-owned 
line extending westerly from Napa Junction, SD, to Platte, SD; and (c) 
to interchange railcars with BNSF, Union Pacific Railroad Company, and 
Canadian National Railway Company at Sioux City. MRC will also acquire 
from the State limited local trackage rights on the Mitchell-Sioux City 
Line: (i) to move loaded cars of corn, soybeans, and wheat originating 
at points on the line between Mitchell and Kadoka, SD,\2\ and 
terminating at the Mitchell Elevator in Mitchell and the Beardsley 
Elevator in Beardsley, SD; and (ii) to move empty cars via the reverse 
route. The total distance of the trackage rights to be acquired is 
approximately 142.1 miles.
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    \1\ The trackage rights will be granted by the State acting by 
and through the South Dakota State Railroad Board and the South 
Dakota Department of Transportation, Office of Railroads.
    \2\ The previously abandoned Mitchell-Kadoka Line, which is now 
owned by the State, has been leased to MRC. And MRC, in turn, has 
subleased the Mitchell-Kadoka Line to Dakota Southern Railway 
Company (DSRC), which operates over the line.
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    MRC certifies that its projected revenues as a result of the MRC-
South Dakota transaction will not result in MRC becoming a Class I or 
Class II rail carrier, and further certifies that its projected 
revenues will not exceed $5 million. The MRC-South Dakota transaction 
was scheduled to be consummated on or after December 17, 2004.
    If the verified notice contains false or misleading information, 
the exemption is void ab initio. Petitions to revoke the exemption 
under 49 U.S.C. 10502(d) may be filed at any time. The filing of a 
petition to revoke does not automatically stay the transaction.

[[Page 78096]]

    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 34630, must be filed with the Surface Transportation 
Board, 1925 K Street, N.W., Washington, DC 20423-0001. In addition, a 
copy of each pleading must be served on MRC's representative: Kenneth 
W. Cotton, Wipf & Cotton Law Offices, LLC, 107 South Main Street, 
Wagner, SD 57380.
    The notice of exemption filed with respect to the MRC-South Dakota 
transaction in this docket is related to a notice of exemption 
concurrently filed in a related docket: STB Finance Docket No. 34630 
(Sub-No. 1), Dakota Southern Railway Company--Trackage Rights 
Exemption--State of South Dakota and MRC Regional Railroad Authority. 
The notice of exemption filed in the related docket contemplates the 
operation of MRC's Mitchell-Sioux City Line trackage rights by DSRC on 
behalf of MRC.
    MRC and DSRC have advised that the Mitchell-Sioux City Line, which 
is owned by the State, is now operated on behalf of the State by BNSF, 
pursuant to a 1986 Operating Agreement. MRC and DSRC have also advised: 
that, under the Operating Agreement, the State has the right to grant 
trackage rights on the Mitchell-Sioux City Line subject to certain BNSF 
consent; that, although the State has the right to grant trackage 
rights to MRC for operations by MRC's third-party operator (DSRC), BNSF 
has not consented to the grant of those rights; and that the failure to 
provide this consent is now the subject of litigation between the State 
and BNSF in The Burlington Northern and Santa Fe Railway Company v. 
State of South Dakota, Case No. 04-470 (S.D. 6th Circuit). MRC and DSRC 
have further advised that they recognize that BNSF consent may have to 
be obtained, either voluntarily or through litigation, before DSRC can 
commence trackage rights operations on the Mitchell-Sioux City Line. 
MRC and DSRC have suggested, however, that, inasmuch as the Board's 
authority respecting the notices filed in this docket and in the 
related docket is ``permissive'' in nature, the filing of the notices 
in the two dockets is appropriate as a ``prelude'' to obtaining any 
necessary consent.
    By letter filed December 17, 2004, BNSF has advised that it has not 
given its consent, and does not intend to give its consent, to the 
third-party trackage rights operation contemplated by MRC and DSRC. 
BNSF has further advised that, in its view, the filings by MRC and DSRC 
in this docket and in the related docket are intended to improperly 
influence the pending state court litigation. BNSF has asked that the 
Board stress that issuance by the Board of the notices filed in this 
docket and in the related docket: does not constitute any finding by 
the Board concerning either the Board's jurisdiction over these 
transactions or DSRC's right to operate over the line without BNSF's 
consent; and does not provide any basis for MRC or DSRC to claim that 
the Board has permitted DSRC to operate over the line in the absence of 
a final decision by the courts that DSRC has a legal right to conduct 
such operations.
    In view of the ongoing litigation concerning the right of the State 
to grant the trackage rights contemplated in this docket and in the 
related docket, it seems best to note that the Board has made no 
determination, one way or the other, concerning either the right of the 
State to grant these trackage rights without BNSF's consent or the 
right of DSRC to operate over the line without BNSF's consent. The 
contractual dispute respecting the scope of the rights retained by or 
granted to the State and/or BNSF under the 1986 Operating Agreement 
must be resolved in a court of competent jurisdiction.
    Board decisions and notices are available on its Web site at 
``http://www.stb.dot.gov.''

    Decided: December 21, 2004.
    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 04-28336 Filed 12-28-04; 8:45 am]
BILLING CODE 4915-01-P