[Federal Register Volume 75, Number 193 (Wednesday, October 6, 2010)]
[Notices]
[Pages 61817-61818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-25159]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35411]


Jackson & Lansing Railroad Company--Lease and Operation 
Exemption--Norfolk Southern Railway Company

    Under 49 CFR 1011.7(b)(10), the Director of the Office of 
Proceedings (Director) is delegated the authority to determine whether 
to issue notices of exemption for lease transactions under

[[Page 61818]]

49 U.S.C. 10902. However, the Board reserves to itself the 
consideration and disposition of all matters involving issues of 
general transportation importance. 49 CFR 1011.2(a)(6). Accordingly, 
the Board revokes the delegation to the Director with respect to the 
issuance of this notice of exemption. The Board determines that this 
notice of lease and operation exemption should be issued, and does so 
here.
    Jackson & Lansing Railroad Company (JAIL), a noncarrier, has filed 
a verified notice of exemption under 49 CFR 1150.31, et seq., to lease 
and operate certain rail lines from Norfolk Southern Railway Company 
(NSR). Pursuant to the lease agreement, JAIL will lease the following 
rail lines from NSR: (1) The Lansing Secondary, located between the 
connection with NSR's Michigan Main Line at milepost LZ 0.0 in Jackson, 
Mich., and milepost LZ 36.9 in Lansing, Mich. (36.9 miles in length); 
(2) the Lansing Manufacturers Railroad, located between milepost XF 0.0 
and milepost XF 5.1 in Lansing (5.1 miles in length); (3) the Lansing 
Industrial Track line segment located between milepost XM 57.1 and 
milepost XM 58.9 in Lansing (1.8 miles in length); and (4) the Lansing 
Industrial Track line segment between milepost UA 60.7 and milepost UA 
61.4 in Lansing (approximately 0.7 miles in length).\1\ The total 
length of the lines to be leased is 44.5 miles. In conjunction with the 
lease of these lines, NSR will also grant to JAIL limited incidental 
trackage rights over 2.6 miles of NSR's Michigan Main Line, between 
milepost NS 72.73 and milepost NS 75.67 (equal to milepost LZ 0.0) in 
Jackson, for the sole purpose of interchanging with NSR at NSR's 
Jackson Yard. The lease agreement will expire on December 31, 2030.
---------------------------------------------------------------------------

    \1\ JAIL's lease and operation agreement was filed under seal 
pursuant to 49 CFR 1150.43(h)(1)(ii).
---------------------------------------------------------------------------

    As required at 49 CFR 1150.33(h), JAIL has disclosed that the lease 
agreement contains a provision that would provide for a ``Lease 
Credit'' whereby JAIL may reduce its lease payments by receiving a 
credit for each car interchanged with NSR. JAIL notes that NSR 
initially proposed a fixed rental payment with no option to reduce the 
rent, but JAIL insisted on a lease credit option to provide an 
opportunity for JAIL to earn a lower rental payment so it would be able 
to invest in improvements on the lease lines to increase traffic 
levels. According to JAIL, the affected interchange point is Jackson.
    This transaction is related to 2 other transactions for which 
notices of exemption have been simultaneously filed: Docket No. FD 
35410, Adrian & Blissfield Rail Road Company--Continuance in Control 
Exemption--Jackson & Lansing Railroad Company, in which Adrian & 
Blissfield Rail Road Company seeks to continue in control of JAIL, upon 
JAIL's becoming a Class III rail carrier; and Docket No. FD 35418, 
Jackson & Lansing Railroad Company--Trackage Rights Exemption--Norfolk 
Southern Railway Company, in which JAIL seeks to acquire, pursuant to 
an agreement with NSR, non-exclusive local and overhead trackage rights 
over approximately 1.06 miles of line owned by NSR and currently leased 
to CSX Transportation, Inc., on the Lansing Secondary, between milepost 
LZ 36.8 \2\ in Lansing and milepost 37.86 in North Lansing, Mich., for 
the sole purpose of interchanging with NSR.
---------------------------------------------------------------------------

    \2\ JAIL states that, despite the apparent overlap, the boundary 
of the assigned trackage rights is distinct from the boundary of the 
Lansing Secondary. The apparent overlap is the result of an 
historical rounding error in NSR's engineering maps.
---------------------------------------------------------------------------

    JAIL certifies that the projected annual revenues as a result of 
the proposed transaction will not exceed $5 million, and that JAIL will 
be a Class III carrier.
    The transaction may not be consummated until October 20, 2010, the 
effective date of the exemption (30 days after the exemption was 
filed).
    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. Petitions for stay must be filed not later than October 13, 
2010 (at least 7 days before the exemption becomes effective).
    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35411, must be filed with the Surface Transportation Board, 395 E 
Street, SW., Washington, DC 20423-0001. In addition, a copy of each 
pleading must be served on John D. Heffner, PLLC, and James H. M. 
Savage, Of Counsel, 1750 K Street, NW., Washington, DC 20006.
    Board decisions and notices are available at our Web site at http://www.stb.dot.gov.
    It is ordered:
    1. The delegation of authority to the Director of the Office of 
Proceedings, under 49 CFR 1011.7(b)(10), to determine whether to issue 
a notice of exemption in this proceeding is revoked.
    2. This decision is effective on the date of service.

    Decided: October 1, 2010.
Jeffrey Herzig,
Clearance Clerk.

    By the Board, Chairman Elliott, Vice Chairman Mulvey, and 
Commissioner Nottingham. Vice Chairman Mulvey dissented with a separate 
expression.
    Vice Chairman Mulvey, dissenting:
    I disagree with the Board's decision to allow this transaction to 
be processed under the Board's class exemption procedures. In this 
case, I would like to have more information about the likely impact of 
the proposed interchange commitment prior to permitting the exemption 
to become effective. I believe that it is incumbent for the Board to 
take a close look at interchange commitments, particularly when they 
contain outright bans on interchange with third-party carriers or, as 
here, economic incentives that can only be evaluated with the provision 
of additional information.

[FR Doc. 2010-25159 Filed 10-5-10; 8:45 am]
BILLING CODE 4915-01-P