[Federal Register Volume 61, Number 102 (Friday, May 24, 1996)]
[Notices]
[Pages 26248-26250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13130]



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[[Page 26249]]


DEPARTMENT OF TRANSPORTATION
Surface Transportation Board \1\

[STB Finance Docket No. 32905]


CSX Transportation, Inc.--Acquisition--Certain Rail Lines of 
Indiana Hi-Rail Corporation in Henderson, KY, and Evansville, IN

AGENCY: Surface Transportation Board, DOT.

ACTION: Notice of acceptance of application.

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SUMMARY: The Board accepts for consideration the application filed 
April 25, 1996, by CSX Transportation, Inc. (CSXT), and Indiana Hi-Rail 
Corporation (IHRC) (collectively referred to as applicants) for CSXT to 
acquire from IHRC approximately 8.2 miles of rail line located in 
Indiana and Kentucky.<SUP>2 In accordance with 49 CFR 1180.4(b)(2)(iv), 
the Board finds that this is a minor transaction as described in 49 CFR 
1180.2(c).

    \1\  The ICC Termination Act of 1995, Pub. L. No. 104-88, 109 
Stat. 803 (ICCTA), which was enacted on December 29, 1995, and took 
effect on January 1, 1996, abolished the Interstate Commerce 
Commission (ICC) and transferred certain functions to the Surface 
Transportation Board (Board). This notice relates to a railroad 
acquisition that is subject to Board jurisdiction pursuant to 49 
U.S.C. 11323-25.
    \2\  CSXT seeks to acquire from IHRC and operate 8.2 miles of 
track, and the application is styled accordingly. However, we note 
that CSXT does not require separate authority to operate. When a 
rail carrier sought to purchase a rail line from another rail 
carrier in a transaction governed by former 49 U.S.C. 11343 of the 
Interstate Commerce Act, the ICC would approve or exempt the 
operation of the line, if requested, but the authority or exemption 
to operate was not necessary. The purchaser's status as a carrier, 
coupled with the acquisition of the line, constituted sufficient 
authority to conduct operations. Similarly, a purchase by a carrier 
of a line under current 49 U.S.C. 11323-25 provides the purchaser 
with the authority to conduct rail service over the line.
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DATES: This decision is effective on May 24, 1996. Written comments, 
including comments from the Secretary of Transportation and the 
Attorney General of the United States, must be filed with the Board no 
later than June 24, 1996. The Board will issue a service list shortly 
thereafter. Copies of the comments must be served on all parties of 
record within 10 days after the Board issues the service list and must 
be confirmed by certificate of service filed with the Board indicating 
that all designated individuals and organizations on the service list 
have been properly served. Applicants' reply is due July 15, 1996.

ADDRESSES: Send an original and 10 copies of pleadings referring to STB 
Finance Docket No. 32905 to: Surface Transportation Board, Office of 
the Secretary, Case Control Branch, 1201 Constitution Avenue, N.W., 
Washington, DC 20423. In addition, send one copy of all pleadings to 
applicants' representatives: (1) Paul R. Hitchcock, 500 Water St.-J150, 
Jacksonville, FL 32202; and (2) Charles H. White, Galland, Kharasch, 
Morse & Garfinkle, P.C., Canal Square, 1054 Thirty-First Street, N.W., 
Washington, DC 20007-4492.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-7513. [TDD for 
the hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: Applicants seek approval under 49 U.S.C. 
11323-25 for CSXT to acquire certain rail lines of IHRC and, as part of 
the transaction, for IHRC to discontinue certain trackage rights over 
portions of CSXT track, all in Indiana and Kentucky.
    Applicants state that this is a minor transaction as defined in 49 
CFR part 1180, the regulations that implemented former 49 U.S.C. 11343-
45. The ICCTA revised those statutory provisions and reenacted them as 
49 U.S.C. 11323-25. Because the proposed transaction does not involve 
the merger or control of two Class I railroads, it is subject to the 
standards of 49 U.S.C. 11324(d). Also, as discussed below, because we 
have determined that the transaction is not of regional or national 
significance, the procedural schedule set out at 49 U.S.C. 11325(d) 
applies. Under section 204(a) of the ICCTA, all ICC rules in effect on 
the date of enactment of the ICCTA ``shall continue in effect according 
to their terms until modified, terminated, superseded, set aside, or 
revoked in accordance with law by the Board * * * or operation of 
law.'' While the standards and procedures of former sections 11343-45 
and current sections 11323-25 are substantially similar, insofar as 
minor transactions are concerned, the procedures of current section 
11325(d) differ slightly from those at 49 CFR 1180.4 and shall govern. 
Otherwise, the use of the regulations at 49 CFR part 1180 for this 
proceeding appears proper.
    CSXT, a Class I rail carrier wholly owned by CSX Corporation (a 
noncarrier), operates approximately 19,000 miles of track in 19 states, 
the District of Columbia, and Ontario, Canada. IHRC, a Class III rail 
carrier, operates eight rail lines, comprising approximately 283 miles 
of track, in Indiana, Illinois, Ohio, and Kentucky. CSXT proposes to 
purchase from IHRC approximately 7.8 miles of branch line and 0.4 miles 
of siding track, for a total of 8.2 miles, as follows: (1) A 5.8-mile 
line segment, located in Henderson, KY, extending from CSXT milepost H-
312.63 to the end of IHRC's track, the site of the Henderson County 
Port Authority; (2) a 1-mile line segment, located in Henderson, 
extending from CSXT milepost H-312.90 to the end of IHRC's track; 
<SUP>3 and (3) a 1-mile line segment, located in Evansville, IN, 
extending from CSXT milepost OZA-285.22 to the end of IHRC's 
track.<SUP>4 IHRC will also transfer its one-half ownership interest in 
two unused siding tracks, No. 277 and No. 279, that are jointly owned 
with CSXT; they are located at CSXT milepost H-312.79, and each is 
approximately 0.2 mile in length.
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    \3\ The application identifies three rail-served industries on 
this line segment, CPS, J-Ron, and Bakery Feeds.
    \4\ The operating plan and map accompanying the application 
identify one rail-served industry (Modern Maid) on the Evansville 
line segment.
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    Additionally, as part of this transaction, IHRC will discontinue 
its trackage rights between Evansville and Henderson over CSXT's main 
service lane connecting Chicago, IL, and Nashville, TN.<SUP>5 Also, 
IHRC's trackage rights over a portion of CSXT track in Evansville (the 
``Evansville Belt'' and the ``running track'') will be discontinued.
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    \5\ The trackage rights include a single-track bridge over the 
Ohio River, seemingly a point of congestion.
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    IHRC is in bankruptcy. The U.S. Bankruptcy Court, Southern District 
of Indiana, Indianapolis Division, has approved the transaction subject 
only to our approval. In an order dated March 5, 1996, in Case No. 
IP94-08502-RLB-11, the court authorized the sale and approved the 
closing of the transaction in escrow, with Board approval as the basic 
condition to take the transaction out of escrow.
    Applicants maintain that the proposed transaction will not result 
in any substantial lessening of competition in any affected market or 
region. Only 8.2 miles, or 2% of IHRC's track, are involved, and, for 
the most part, the track is used for switching operations. Instead of 
lessening competition, applicants argue that the proposed transaction 
will serve the public interest by reducing their costs, improving the 
quality and competitiveness of rail service, and strengthening IHRC's 
ability to provide rail service on the remainder of its system.
    The line segments connect with CSXT's system and assertedly fit 
well into its network. On the other hand, IHRC can only reach the three 
Henderson line segments via the trackage rights over CSXT's main line. 
Thus, traffic originating or terminating on these line segments must be 
handled in interchange service, which is

[[Page 26250]]

inherently more costly and results in delay to shippers.
    Moreover, the trackage rights operations place schedules at risk 
and otherwise threaten significant disruptions with a line 
characterized by applicants as ``the backbone of CSXT's Chicago to 
Nashville Service Lane * * * one of CSXT's heaviest trafficked lines on 
its system.'' Operations over this line reportedly are conducted using 
a highly successful corridor concept that decentralizes many aspects of 
operational management and instead emphasizes scheduled operations 
based on a preexisting plan that accounts for essential operational 
inputs by time and location.
    Overall, applicants maintain the proposed transaction will result 
in rail service becoming even more competitive with motor carriage in 
the affected area. By replacing the bankrupt IHRC with CSXT, applicants 
contend that the shippers served by these line segments will receive 
improved rail service. Also, they state that service reliability will 
improve for hundreds of other customers shipping via CSXT's Chicago-
Nashville main line. The uncertainty engendered by IHRC's trackage 
rights will be eliminated, giving CSXT the greater measure of control 
it seeks over operations in this service-critical corridor.
    Additionally, applicants state that the proposed transaction will 
help IHRC to restructure for its future survival, and the shipping 
public will benefit as a result. By enabling IHRC to retire a 
substantial amount of debt, they contend that the transaction will 
reduce IHRC's monthly fixed costs and strengthen both its financial 
situation and its ability to serve customers on its remaining lines.
    Applicants state that the proposed transaction will have only a 
slight effect on employees. Additional work, switching cars to 
industries located on the line segments, will be created for CSXT 
employees, and only two IHRC train crewmen, the ones who operate the 
line segments for IHRC, will be affected. The IHRC employees have 
system-wide seniority, and the Trustee anticipates that they will be 
reassigned to other work on IHRC's system. An implementing agreement 
has already been negotiated with their representatives, and applicants 
anticipate that employees will be protected under the conditions set 
forth in New York Dock Ry.--Control--Brooklyn East. Dist., 360 I.C.C. 
60 (1979), as clarified in Wilmington Terminal RR, Inc. Co.--Pur. & 
Lease--CSX Transp., Inc., 6 I.C.C.2d 799 (1990), modified, 7 I.C.C.2d 
60 (1990), aff'd sub nom. Rail Labor Executives' Ass'n v. ICC, 930 F.2d 
511 (6th Cir. 1991).
    Under 49 CFR part 1180, we must determine whether a proposed 
transaction is major, significant, or minor. The proposed transaction, 
which involves the purchase by a single Class I carrier of only short 
line segments belonging to a bankrupt Class III carrier, has no 
regional or national significance and will clearly not have any 
anticompetitive effects. Accordingly, we find the proposal to be a 
minor transaction under 49 CFR 1180.2(c), as now defined under 49 
U.S.C. 11325(a). Because the application substantially complies with 
the applicable regulations governing minor transactions, we are 
accepting it for consideration.
    The application and exhibits are available for inspection in the 
Public Docket Room at the Offices of the Board in Washington, DC. In 
addition, they may be obtained upon request from applicants' above 
named representatives.
    Interested persons, including government entities, may participate 
in this proceeding by submitting written comments. Any person who files 
timely comments will be considered a party of record if the person so 
requests. No petition for leave to intervene need be filed.
    Consistent with 49 CFR 1180.4(d)(1)(iii), written comments must 
contain:
    (a) the docket number and title of the proceeding;
    (b) the name, address, and telephone number of the commenting party 
and its representative upon whom service shall be made;
    (c) the commenting party's position, i.e., whether it supports or 
opposes the proposed transaction;
    (d) a statement whether the commenting party intends to participate 
formally in the proceeding, or merely comment on the proposal;
    (e) if desired, a request for an oral hearing with reasons 
supporting this request; the request must indicate the disputed 
material facts that can be resolved only at a hearing; and
    (f) a list of all information sought to be discovered from the 
applicant carriers.
    Because we have determined that this proposal is a minor 
transaction, no responsive applications will be permitted. The time 
limits for processing this transaction are set forth at 49 U.S.C. 
11325(d).
    Discovery may begin immediately. We admonish the parties to resolve 
all discovery matters expeditiously and amicably.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. This application is accepted for consideration under 49 U.S.C. 
11323-25 as a minor transaction under 49 CFR 1180.2(c).
    2. The parties shall comply with all provisions stated above.
    3. This decision is effective on May 24, 1996.

    Decided: May 20, 1996.

    By the Board, Chairman Morgan, Vice Chairman Simmons, and 
Commissioner Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 96-13130 Filed 5-23-96; 8:45 am]
BILLING CODE 4915-00-P