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###### Department of Transportation

###### Surface Transportation Board

          - [STB Finance Docket No. 35169]

                    Watco Companies, Inc. (Watco), a noncarrier, has filed a verified notice of exemption to continue in control of Baton Rouge Southern Railroad, LLC (BRSR), upon BRSR's becoming a Class III rail carrier.[1] 

                    This transaction is related to a concurrently filed verified notice of exemption in STB Finance Docket No. 35159,                     *Baton Rouge Southern Railroad, LLC—Lease and Operation Exemption—The Kansas City Southern Railway Company*. In that proceeding, BRSR seeks an exemption under 49 CFR 1150.31 to lease and to operate approximately 8.2 miles of rail line owned by The Kansas City Southern Railway Company between specified points in Louisiana.                

The parties intend to consummate the transaction on or shortly after August 19, 2008, and hence after the August 17, 2008 effective date of the exemption.

Watco currently controls 17 Class III rail carriers: South Kansas and Oklahoma Railroad Company, Palouse River & Coulee City Railroad, Inc., Timber Rock Railroad, Inc., Stillwater Central Railroad, Inc., Eastern Idaho Railroad, Inc., Kansas & Oklahoma Railroad, Inc., Pennsylvania Southwestern Railroad, Inc., Great Northwest Railroad, Inc., Kaw River Railroad, Inc., Mission Mountain Railroad, Inc., Mississippi Southern Railroad, Inc., Yellowstone Valley Railroad, Inc., Louisiana Southern Railroad, Inc., Arkansas Southern Railroad, Inc., Alabama Southern Railroad, Inc., Vicksburg Southern Railroad, Inc, and Austin Western Railroad, Inc.

                    Watco represents that: (1) The rail lines to be operated by BRSR do not connect with any other railroads in the                           ( print page 45101)                        Watco corporate family; (2) the continuance in control is not part of a series of anticipated transactions that would connect these rail lines with any other railroad in the Watco corporate family; and (3) the transaction does not involve a Class I rail carrier. Therefore, the transaction is exempt from the prior approval requirements of 49 U.S.C. 11323.                     *See*49 CFR 1180.2(d)(2).                

Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Section 11326(c), however, does not provide for labor protection for transactions under sections 11324 and 11325 that involve only Class III rail carriers. Accordingly, the Board may not impose labor protective conditions here, because all of the carriers involved are Class III carriers.

                    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 will not automatically stay the effectiveness of the exemption. Stay petitions must be filed no later than August 8, 2008 (at least 7 days before the exemption becomes effective).                

An original and 10 copies of all pleadings, referring to STB Finance Docket No. 35169, must be filed with the Surface Transportation Board, 395 E Street, SW., Washington, DC 20423-0001. In addition, one copy of each pleading must be served on Karl Morell, Of Counsel, Ball Janik, LLP, Suite 225, 1455 F Street, NW., Washington, DC 20005.

                    Board decisions and notices are available on our Web site at                     *http://www.stb.dot.gov*.                

Decided: July 25, 2008.

By the Board, David M. Konschnik, Director, Office of Proceedings.

Anne K. Quinlan,

Acting Secretary.

# Footnotes

1.                             Watco owns 100% of the issued and outstanding stock of BRSR.                    
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[FR Doc. E8-17450 Filed 7-31-08; 8:45 am]

BILLING CODE 4915-01-P