Pyco Industries, Inc.-Feeder Line Acquisition-South Plains Switching, Ltd. Co.; Pyco Industries, Inc.-Feeder Line Application-Lines Of South Plains Switching, Ltd. Co.1, 40187-40190 [E6-10831]
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Federal Register / Vol. 71, No. 135 / Friday, July 14, 2006 / Notices
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impacts of their programs, policies, and
activities on minority and low-income
populations within their jurisdictions.
B. Reporting Requirements
Five individuals or organizations
commented on the reporting
requirements of the Title VI Circular.
One commenter urged that FTA make a
concerted effort to minimize the record
keeping and reporting burdens
associated with its Title VI
requirements, and that FTA seek to
avoid redundancy within specific
requirements as well as between Title VI
and other oversight programs. FTA’s
Title VI requirements for transit
agencies should dovetail with Statemandated recordkeeping and reporting
requirements.
Another commenter noted that the
updated Circular should incorporate
changes with the Paperwork Reduction
Act of 1995. Another commenter
suggested that the Title VI reporting
cycle should be moved to a four-year
cycle to be consistent with the MPO
cycle specified under SAFETEA–LU. A
third commenter asked whether
recipients’ triennial Title VI
submissions are due three years after the
earlier submission date or three years
after the date the previous plan was
approved.
Commenters also requested that FTA
provide training and technical
assistance to help recipients complete
the reporting requirements and provide
guidance on how to respond to the Title
VI questions in the triennial review.
The proposed Circular would reduce
record keeping and reporting
requirements by allowing recipients to
submit the standard annual certification
and assurance in lieu of separate FTA
and DOT Title VI assurances. It would
eliminate the existing Circular’s
requirement that recipients provide FTA
with a list of existing and pending grant
applications. Recipients and
subrecipients could collect Census data
on the demographics of households
affected by construction projects in lieu
of submitting a detailed list of minority
households and businesses (per the
fixed facility impact analysis
requirement of the existing Circular).
The Circular would eliminate the
redundant requirements in the
provision to provide an assessment of
Title VI compliance by grantees (in
Chapter III Part 3(a)(3) of Circular
4702.1). It would require that recipients
include in their triennial Title VI reports
to FTA only information that has
changed or been updated since the prior
submittal (the proposed Circular would
also clarify that these submittals are due
three years after the due date of the
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17:44 Jul 13, 2006
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previous submittal). Additional changes
to reporting requirements will be
considered pursuant to comments
received in this comment period.
The proposed Circular would not
convert the Title VI reporting
requirements to a four-year cycle
because FTA has an interest in
coordinating recipients’ Title VI
submittals with its triennial review
process.
FTA will consider including in the
final draft of the Circular a list of
effective practices used to assist
recipients in responding to the reporting
requirements, as well as a list of people
to contact for technical assistance.
In addition, those grantees that are
allowed to use a portion of the funds
that they receive from FTA for planning
and administrative purposes can use
these funds to support their Title VI
monitoring and reporting activities.
C. The Process for Revising the Title VI
Circular
Three individuals or organizations
commented on the process of revising
the Title VI Circular. One commenter
suggested that FTA undertake a 60-day
comment period to allow interested
parties to review the draft Circular and
that FTA engage compliance officers
from a broad swath of the industry in
tailoring requirements. Other
commenters stated that FTA should
seek public input on the draft circulars
and address the concerns and needs of
transit providers that use this guidance.
This notice begins a 60-day comment
period on the draft circular. During this
comment period, FTA will make a
concerted effort to notify stakeholders of
the opportunity to comment on the draft
document.
D. Comments Unrelated to the Notice
and Request for Comment
FTA received comments concerning
the relative lack of attention and
resources devoted by FTA’s Office of
Civil Rights to Title VI, compared to the
Americans with Disabilities Act of 1990.
It also received comments related to
information posted on its Title VI
website and to recent power point
presentations made on Title VI. FTA
regards all civil rights as important and
strives to allocate resources accordingly.
This notice does not provide a specific
response to these comments as they are
outside the scope of the December 15,
2005 notice and request for comment.
Issued on July 10, 2006.
Sandra K. Bushue,
Deputy Administrator.
[FR Doc. E6–11071 Filed 7–13–06; 8:45 am]
BILLING CODE 4910–57–P
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 34844; STB
Finance Docket No. 34890]
Pyco Industries, Inc.—Feeder Line
Acquisition—South Plains Switching,
Ltd. Co.; Pyco Industries, Inc.—Feeder
Line Application—Lines Of South
Plains Switching, Ltd. Co.1
In a decision in STB Finance Docket
No. 34844 served on June 2, 2006, the
Director of the Office of Proceedings
(the Director) rejected as incomplete the
application of PYCO Industries, Inc.
(PYCO), under the feeder line
provisions of 49 U.S.C. 10907 and 49
CFR part 1151, to acquire all of the rail
lines of South Plains Switching, Ltd. Co.
(SAW), in Lubbock, TX (the ‘‘All-SAW
option’’). The Director also rejected as
incomplete PYCO’s alternative request
to acquire a portion of SAW’s rail lines
to allow PYCO to provide rail service to
itself and to two other shippers located
in close proximity to one of PYCO’s two
plants in Lubbock, TX (‘‘Alternative
Two’’).2 The rejections were without
prejudice to PYCO’s filing a new
application.
Track 5, SAW yard, .....................
(continued * * *) ........................
(* * * continued) ........................
Track 1, SAW yard, .....................
Track 9200, ..................................
Track 9298, east of BNSF main,
Track lead to PYCO plant 2 to
50th St.,.
Track 231 lead to 9200/9298, .....
Track 310 through Farmers 1, ....
Total: .....................................
2,400 feet;
2,100
3,900
4,320
6,280
feet;
feet;
feet;
feet;
960 feet;
5,600 feet
25,560 feet
In addition, PYCO seeks to acquire all
of Track No. 6 from the western end of
SAW yard to the western clearpoint of
the easternmost switch of the ‘‘wye’’
track connecting to Track No. 6 from the
south, and also the western branch of
said ‘‘wye’’ from its southern clearpoint
north to and including its connection
with Track No. 6, estimated to be 1,100
feet. Also, PYCO would acquire a
crossing right as follows: Crossing right
Track 9298 to and through SAW yard,
5,000 feet.
On June 12, 2006, PYCO appealed the
Director’s decision and petitioned to
1 These proceedings are not consolidated. A
single decision is being issued for administrative
convenience. For the same reason, the Board, rather
than the Director of the Office of Proceedings, is
deciding whether to accept or reject the new feeder
line application submitted in STB Finance Docket
No. 34890.
2 PYCO describes the rail lines it seeks to acquire
under Alternative Two as follows: (See reference
above.)
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amend its original application with
newly tendered evidence. SAW opposed
both the appeal and the petition to
amend in pleadings filed on June 22 and
June 28, 2006, respectively.
In STB Finance Docket No. 34890,
filed on June 14, 2006, PYCO has
submitted a new feeder line application
for Alternative Two, renewed its earlier
request for issuance of a protective
order, and indicated that it wishes to
propound discovery requests tendered
with its original application.3 SAW
moved to reject the new feeder line
application in a pleading filed on July
3, 2006.
We will deny the appeal of the
Director’s rejection of the original feeder
line application in STB Finance Docket
No. 34844; accept the new feeder line
application for Alternative Two in STB
Finance Docket No.34890, authorize
discovery, and set a procedural
schedule; and deny SAW’s motion to
reject the new feeder line application.
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Background
In 1999, SAW acquired approximately
14.1 miles of rail lines in Lubbock, TX,
from The Burlington Northern and
Santa Fe Railway Company (BNSF).4
PYCO, whose rail service was provided
only by SAW, experienced a substantial,
measurable deterioration in SAW’s
service in 2005. This led us to issue,
under 49 U.S.C. 11123 and 49 CFR part
1146, an alternative service order
authorizing West Texas & Lubbock
Railway Company, Inc. (WTL), to
provide service to PYCO, over SAW’s
lines, for an initial period of 30 days.
PYCO Industries, Inc.—Alernative Rail
Service—South Plains Switching, Ltd.
Co., STB Finance Docket No. 34802
(STB served Jan. 26, 2006). In two
subsequent decisions, we extended the
authorization for alternative service to
the full 270 days permitted by the
statute, through October 23, 2006.5
During the period of alternative service,
SAW has continued to provide rail
service to the other shippers on its lines.
Seeking a permanent solution to the
inadequate rail service it experienced
from SAW, PYCO filed a feeder line
application in May 2006. The Director
found that the application was
incomplete for both the All-SAW option
and Alternative Two because PYCO had
not made a sufficient showing as to all
3 The Director found that the rejection of PYCO’s
feeder line application rendered moot PYCO’s
requests for a protective order and a procedural
schedule.
4 BNSF has since changed its name to BNSF
Railway Company. We will refer to both entities as
BNSF.
5 See decisions in STB Finance Docket No. 34802
served February 24, and June 21, 2006.
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of the required elements of a feeder line
application (set forth at 49 CFR
1151.3(a)), and some of these
deficiencies would not have been cured
by obtaining discovery of information in
SAW’s possession.
Discussion and Conclusions
[STB Finance Docket No. 34844]
I. Appeal of Rejection of PYCO’s
Original Application.
PYCO appeals the Director’s decision
rejecting its application as deficient.
A. Inadequacy of SAW’s Rail Service
(49 CFR 1151.3(a)(11)). The Director
found that PYCO did not provide
evidence required under 49 U.S.C.
10907(c)(1)(B) showing that the majority
of shippers using SAW’s lines
experienced inadequate service from
SAW. PYCO argues that its application
met that requirement by showing that
service was inadequate for a majority of
the shipments on the line. PYCO also
claims that other shippers were too
intimidated to state that their rail
service was inadequate for fear that
SAW would retaliate by degrading or
cutting off their rail service.
We do not find any error in the
Director’s interpretation of the statutory
language of 49 U.S.C. 10907(c)(1)(B) as
requiring evidence to support a finding
that there is inadequate service for a
majority of the line’s shippers. We agree
with the Director that the statutory
language is clear and that to grant a
feeder line application, the Board must
make a finding that the owning carrier’s
service is inadequate for a majority of
the line’s shippers, not a majority of the
shipments by volume. See discussion in
the Director’s order, slip op. at 6.
There is a fundamental problem with
PYCO’s argument that silence of a
majority of the shippers should be
excused because shippers may be
reluctant to speak out for fear of
retribution by SAW. The other shippers’
silence can just as well be read to
indicate that they are satisfied with the
service that SAW is providing to them.
We contrast this application with
another feeder line proceeding cited by
SAW in its appeal, Keokuk Junction
Railway Company—Feeder Line
Acquisition—Line of Toledo Peoria and
Western Railway, STB Finance Docket
No. 34335 (STB served Oct. 28, 2004)
(Keokuk Junction). In that case, the
initial application included statements
from five of the six shippers located on
the line and five of ten ‘‘overhead’’
shippers (those not located on the line,
but transporting shipments over the
line) that the incumbent’s rail service
was inadequate. See Keokuk Junction,
slip op. at 7 (describing the shipper
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statements included in the initial feeder
line application). In contrast, here, the
majority of the shippers on SAW’s lines
provided no statements at all.
In light of the silence from a majority
of the lines’ shippers, the Director
correctly found that the original
application did not provide evidence to
permit the Board to find that the
transportation over the line is adequate
for the majority of shippers who
transport traffic over the line, as
required by statute and our own
regulations at 49 CFR
1151.3(a)(11)(i)(B).
B. Financial Responsibility (49 CFR
1151.3(a)(3)). Citing an early decision in
Keokuk Junction (STB served May 9,
2003), PYCO contends that the Director
should have conditionally accepted its
showing and afforded the opportunity to
submit additional financial evidence
under a protective order preserving
confidentiality.
But the application in Keokuk
Junction did not have the ‘‘fatal’’
deficiency in the evidence concerning
adequacy of service to a majority of
shippers, as discussed above. Given that
deficiency, the Director correctly found
that PYCO’s request for issuance of a
protective order was moot and that there
was no basis for issuance of a
procedural schedule.
Accordingly, PYCO has not met the
standard for granting an appeal.
II. Petition To Allow Amendment of
Feeder Line Application
Together with its appeal, PYCO
petitioned to amend the original
application, tendering additional
evidence that could have been included
in the original application. We will not
permit PYCO to amend the original
application with this evidence, but we
will permit PYCO to submit the
additional evidence in a new
application and will incorporate by
reference the information in its original
application, as discussed below.
[STB Finance Docket No. 34890]
In its new feeder line application,
PYCO seeks to acquire the rail lines
described as Alternative Two in the
original application and provides
information to make the required
showing. The new application also
includes newly tendered evidence. This
evidence and related issues will be
discussed below.
I. Newly Tendered Evidence
A. Financial Responsibility. The
newly tendered evidence 6 clearly
6 The new evidence of financial responsibility
consists of a letter from PYCO’s Chief Financial
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demonstrates that PYCO has sufficient
financial resources, through its own
strong financial position and an
operating line of credit, to purchase the
rail lines at issue at the higher of net
liquidation value or going concern value
and to cover expenses associated with
providing services over those lines for at
least 3 years. 49 U.S.C. 10907(a); 49 CFR
1151.3(a)(3).
B. Inadequacy of Rail Service for a
Majority of the Shippers. There are
currently three shippers on the portions
of the lines comprising Alternative Two:
PYCO, Farmers Cooperative Compress,
and Attebury Grain, LLC. The revised
application includes letters from the
latter two shippers indicating that, in
light of incidents in which SAW
threatened retaliation against, and
degraded service to, shippers that
questioned the quality of SAW’s service,
both Farmers Compress and Attebury
Grain consider SAW’s service to them to
be unreliable and inadequate.
SAW contends that service can be
considered inadequate to a shipper only
if the rail carrier either is unduly late,
or fails altogether, in picking up or
delivering a specific shipment as
requested by that shipper. We disagree.
A shipper’s affirmative statement that it
fears that it could suffer retaliation in
the form of poor service for criticizing
its rail service provider is sufficient in
our view to constitute a showing of
inadequate service to the shipper that
makes the statement.7
When combined with PYCO’s
convincing statements of the
inadequacy of the service it received
from SAW (in the original application),
the statements of Farmers Compress and
Attebury Grain constitute credible
evidence of the inadequacy of SAW’s
rail service for all of the shippers in
Alternative Two. Thus, PYCO’s new
application is complete as to that
alternative.
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II. SAW’s Renewed Motion to Reject
Application for Alternative Two and
Motion to Reject New Application 8
In its opposition to PYCO’s appeal,
SAW renewed its earlier motion to
reject the application for Alternative
Officer, a new letter from CoBank of Denver, CO,
and PYCO’s 2005 Annual Report.
7 A shipper’s affirmative statement is different
from shipper silence, from which no inference can
be made.
8 SAW treated PYCO’s new feeder line
application as encompassing both the All-SAW
option and Alternative Two. PYCO contends that
the new application is complete only as to
Alternative Two. See Cover Letter submitted with
new application on June 14, 2006. Therefore, we
will not further discuss SAW’s arguments directed
at rejection of the All-SAW option, which stands
rejected.
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Two.9 SAW argues that Alternative Two
constitutes less than the entirety of a rail
line that is operated as a unit, contrary
to the language in the feeder line
provision authorizing the sale of ‘‘a
particular line of railroad,’’ 49 U.S.C.
10907(b)(1)(A)(i). Citing Caddo Antoine
and Little Mo. R.R. v. United States, 95
F.3d 740, 747 (8th Cir. 1996) (Caddo
Antoine), SAW contends that a feeder
line applicant may not ‘‘cherry pick’’ by
seeking to acquire only the most
attractive part of a rail line, while
leaving the incumbent rail line owner
with a remaining portion that allegedly
cannot be operated successfully.
The Caddo Antoine decision is
inapposite, however, because in that
case it was the incumbent rail carrier
that arguably sought to ‘‘cherry pick’’
the line’s heaviest user. Initially in
Caddo Antoine, the incumbent listed
the entire rail line as subject to future
abandonment—a listing that
automatically subjects a line to potential
acquisition under the feeder line
provision at 49 U.S.C. 10907(b)(1)(A)(ii).
See Caddo Antoine, 95 F.3d at 742.
Preferring to retain the revenue from the
line’s heaviest shipper, however, the
incumbent subsequently removed from
that listing the very small portion of the
line that was needed to serve that one
shipper.
In contrast, PYCO, the heaviest user of
SAW’s rail services in the past, would
like to purchase the entirety of SAW’s
lines and serve all of SAW’s shippers,
both large and small. It is only PYCO’s
inability to make the requisite showing
that SAW’s rail service is inadequate for
a majority of the shippers on the
entirety of SAW’s rail lines that
prevents the All-SAW application from
going forward. SAW’s claim that PYCO
is ‘‘cherry picking’’ therefore falls flat.
Rather, in Alternative Two, PYCO seeks
to purchase the amount of rail lines
necessary to assure adequate rail service
to itself and to two other shippers
located in close proximity to one of
PYCO’s two plants in Lubbock. Because
we have no doubt that PYCO has
demonstrated that SAW’s rail service to
PYCO was inadequate and has now
shown the inadequacy of service to the
other two shippers on the lines at issue
in Alternative Two as well, its
application for Alternative Two lawfully
may go forward. For these reasons, we
deny SAW’s renewed motion to reject
the application for Alternative Two.
In its motion to reject the new
application for Alternative Two, SAW
argues that PYCO’s application does not
have sufficient evidence to show that
9 The motion was filed on May 16, 2006; PYCO
submitted a reply on May 18, 2006.
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40189
sale of the tracks comprising Alternative
Two will not have a significant adverse
financial effect on SAW. See 49 U.S.C.
10907(c)(1)(C). In the decision rejecting
PYCO’s original application, the
Director found that, with regard to
PYCO purchasing the tracks comprising
Alternative Two, PYCO’s showing was
sufficient that the remainder of SAW’s
system would be viable both financially
and operationally. We agree that PYCO
has made a sufficient showing in this
regard, which of course SAW is free to
contest as the new application in STB
Finance Docket No. 34890 goes forward.
See PYCO’s original application in STB
Finance Docket No. 34844, at 38–39. For
this reason, we will deny PYCO’s
motion to reject the new application.
III. Discovery
PYCO requests discovery against
SAW and BNSF (Exhibits P and Q of its
original application) and reserves the
right to amend its tendered valuations of
the rail lines involved in Alternative
Two after discovery. PYCO may
propound discovery requests under our
regulations 10 and may amend its
valuations to reflect the responses it
receives from SAW and/or BNSF. A
protective order issued separately
should facilitate discovery responses by
ensuring confidentiality. Because PYCO
served its original application on the
entities from which it seeks discovery,
SAW and BNSF, we deem those
discovery requests to be propounded as
of the date this decision takes effect for
the purpose of calculating the time for
responses.
IV. Environmental Issues
Under the regulations of the
President’s Council on Environmental
Quality and the Board’s own
environmental rules, actions are
separated into three classes that
prescribe the level of documentation
required in the process under the
National Environmental Protection Act
(NEPA). As pertinent here, actions
whose environmental effects are
ordinarily insignificant may normally be
excluded from the need to prepare
environmental documentation under 40
CFR 1500.4(p), 1501.4(a)(2), 1508.4 and
49 CFR 1105.6(c). Included in this
category are rail line acquisitions that
will not result in operating changes that
exceed certain thresholds: Generally, an
increase in rail traffic of at least eight
trains per day or 100% in traffic volume
(measured in gross ton miles annually).
Here, because the acquisition would
simply replace the rail carrier serving
three shippers (PYCO, Farmers
10 49
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Compress, and Attebury Grain) with
either PYCO itself or a rail carrier of
PYCO’s choosing, it would not result in
more than eight additional trains per
day or an increase of 100% in rail traffic
volume on these lines. Accordingly, we
find that PYCO’s proposed operations
do not exceed the Board’s thresholds for
environmental review, and that no
environmental documentation is
required.
V. Schedule
Our regulations set forth time periods
that apply for submitting competing
applications, verified statements and
comments addressing feeder line
applications and any competing
applications, and replies, unless
otherwise provided. In light of the
expiration date for alternative rail
service to PYCO, October 23, 2006, we
shall provide a shortened schedule for
the submission of these pleadings in
this case, as set forth below. Although
our regulations provide that extensions
of filing dates may be granted for good
cause, 49 CFR 1151.2(k), the parties
should be aware that, to facilitate
prompt resolution of this application,
we will disfavor requests for extensions
of filing dates in this proceeding except
in the most extraordinary
circumstances.
In summary, PYCO has submitted
sufficient information in its new
application for Alternative Two to meet
the requirements of 49 CFR 1151.3. The
Board will rule on the merits of the
application when the record is
complete.
It is ordered:
1. PYCO’s appeal of the order
rejecting its original application is
denied.
2. SAW’s renewed petition to reject
the application for Alternative Two and
motion to reject the new application are
denied.
3. PYCO’s new application for
Alternative Two is accepted. Notice will
be published in the Federal Register on
July 14, 2006.
4. Competing applications by any
person seeking to acquire the rail lines
comprising Alternative Two must be
filed by July 18, 2006.
5. Verified statements and comments
addressing the initial and/or any
competing application(s) must be filed
by August 2, 2006.
6. Any amendment by PYCO to its
valuation of the rail lines, based upon
discovery responses, must be filed by 7
days after it receives the discovery
responses. If the resulting filing date
falls after the submission of the verified
statements and comments in paragraph
5, the parties that filed such statements
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and comments shall have 7 days after
the filing of the amended valuations to
file any verified statements and
comments concerning the amended
valuations.
7. Verified replies by applicants and
other interested parties must be filed by
August 14, 2006, unless parties have
filed any verified statements and
comments concerning the amendment
to valuations referred to in paragraph 6.
In the event of such filings, applicants
and other interested parties shall have
15 days after the filing of such verified
statements and comments to file replies.
8. This decision is effective on July
14, 2006.
9. A copy of this decision will be
served on BNSF.
Decided: July 3, 2006.
By the Board, Chairman Buttrey and Vice
Chairman Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E6–10831 Filed 7–13–06; 8:45 am]
BILLING CODE 4915–01–P
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Docket No. AB–6 (Sub-No. 439X)]
BNSF Railway Company—
Abandonment Exemption—in
Bottineau County, ND
BNSF Railway Company (BNSF) has
filed a notice of exemption under 49
CFR Part 1152 Subpart F—Exempt
Abandonments to abandon
approximately 11.90 miles of rail line,
extending from milepost 40.10, near
Bottineau, to milepost 52.00, near
Souris, in Bottineau County, ND. The
line traverses United States Postal
Service Zip Codes 58783 and 58318.
BNSF has certified that: (1) No local
traffic has moved over the line for at
least 2 years; (2) there is no overhead
traffic on the line to be rerouted; (3) no
formal complaint filed by a user of rail
service on the line (or by a state or local
government entity acting on behalf of
such user) regarding cessation of service
over the line either is pending with the
Surface Transportation Board or with
any U.S. District Court or has been
decided in favor of complainant within
the 2-year period; and (4) the
requirements at 49 CFR 1105.7
(environmental reports), 49 CFR 1105.8
(historic reports), 49 CFR 1105.11
(transmittal letter), 49 CFR 1105.12
(newspaper publication), and 49 CFR
1152.50(d)(1) (notice to governmental
agencies) have been met.
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As a condition to this exemption, any
employee adversely affected by the
abandonment shall be protected under
Oregon Short Line R. Co.—
Abandonment—Goshen, 360 I.C.C. 91
(1979). To address whether this
condition adequately protects affected
employees, a petition for partial
revocation under 49 U.S.C. 10502(d)
must be filed.
Provided no formal expression of
intent to file an offer of financial
assistance (OFA) has been received, this
exemption will be effective on August
15, 2006, unless stayed pending
reconsideration. Petitions to stay that do
not involve environmental issues,1
formal expressions of intent to file an
OFA under 49 CFR 1152.27(c)(2),2 and
trail use/rail banking requests under 49
CFR 1152.29 must be filed by July 24,
2006. Petitions to reopen or requests for
public use conditions under 49 CFR
1152.28 must be filed by August 3,
2006, with the Surface Transportation
Board, 1925 K Street, NW., Washington,
DC 20423–0001.
A copy of any petition filed with the
Board should be sent to BNSF’s
representative: Sidney L. Strickland, Jr.,
Sidney Strickland and Associates,
PLLC, 3050 K Street, NW., Suite 101,
Washington, DC 20007.
If the verified notice contains false or
misleading information, the exemption
is void ab initio.
BNSF has filed a combined
environmental and historic report
which addresses the effects, if any, of
the abandonment on the environment
and historic resources. SEA will issue
an environmental assessment (EA) by
July 21, 2006. Interested persons may
obtain a copy of the EA by writing to
SEA (Room 500, Surface Transportation
Board, Washington, DC 20423–0001) or
by calling SEA, at (202) 565–1539.
[Assistance for the hearing impaired is
available through the Federal
Information Relay Service (FIRS) at 1–
800–877–8339.] Comments on
environmental and historic preservation
matters must be filed within 15 days
after the EA becomes available to the
public.
1 The Board will grant a stay if an informed
decision on environmental issues (whether raised
by a party or by the Board’s Section of
Environmental Analysis (SEA) in its independent
investigation) cannot be made before the
exemption’s effective date. See Exemption of Outof-Service Rail Lines, 5 I.C.C.2d 377 (1989). Any
request for a stay should be filed as soon as possible
so that the Board may take appropriate action before
the exemption’s effective date.
2 Each OFA must be accompanied by the filing
fee, which was increased to $1,300 effective on
April 19, 2006. See Regulations Governing Fees for
Services Performed in Connection with Licensing
and Related Services—2006 Update, STB Ex Parte
No. 542 (Sub-No. 13) (STB served Mar. 20, 2006).
E:\FR\FM\14JYN1.SGM
14JYN1
]]>Agencies
[Federal Register Volume 71, Number 135 (Friday, July 14, 2006)]
[Notices]
[Pages 40187-40190]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10831]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 34844; STB Finance Docket No. 34890]
Pyco Industries, Inc.--Feeder Line Acquisition--South Plains
Switching, Ltd. Co.; Pyco Industries, Inc.--Feeder Line Application--
Lines Of South Plains Switching, Ltd. Co.\1\
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\1\ These proceedings are not consolidated. A single decision is
being issued for administrative convenience. For the same reason,
the Board, rather than the Director of the Office of Proceedings, is
deciding whether to accept or reject the new feeder line application
submitted in STB Finance Docket No. 34890.
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In a decision in STB Finance Docket No. 34844 served on June 2,
2006, the Director of the Office of Proceedings (the Director) rejected
as incomplete the application of PYCO Industries, Inc. (PYCO), under
the feeder line provisions of 49 U.S.C. 10907 and 49 CFR part 1151, to
acquire all of the rail lines of South Plains Switching, Ltd. Co.
(SAW), in Lubbock, TX (the ``All-SAW option''). The Director also
rejected as incomplete PYCO's alternative request to acquire a portion
of SAW's rail lines to allow PYCO to provide rail service to itself and
to two other shippers located in close proximity to one of PYCO's two
plants in Lubbock, TX (``Alternative Two'').\2\ The rejections were
without prejudice to PYCO's filing a new application.
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\2\ PYCO describes the rail lines it seeks to acquire under
Alternative Two as follows: (See reference above.)
Track 5, SAW yard,........................ 2,400 feet;
(continued * * *)......................... ............................
(* * * continued)......................... ............................
Track 1, SAW yard,........................ 2,100 feet;
Track 9200,.............................. 3,900 feet;
Track 9298, east of BNSF main,............ 4,320 feet;
Track lead to PYCO plant 2 to 50th St.,... 6,280 feet;
Track 231 lead to 9200/9298,.............. 960 feet;
Track 310 through Farmers 1,.............. 5,600 feet
-----------------------------
Total:.................................. 25,560 feet
In addition, PYCO seeks to acquire all of Track No. 6 from the
western end of SAW yard to the western clearpoint of the easternmost
switch of the ``wye'' track connecting to Track No. 6 from the south,
and also the western branch of said ``wye'' from its southern
clearpoint north to and including its connection with Track No. 6,
estimated to be 1,100 feet. Also, PYCO would acquire a crossing right
as follows: Crossing right Track 9298 to and through SAW yard, 5,000
feet.
On June 12, 2006, PYCO appealed the Director's decision and
petitioned to
[[Page 40188]]
amend its original application with newly tendered evidence. SAW
opposed both the appeal and the petition to amend in pleadings filed on
June 22 and June 28, 2006, respectively.
In STB Finance Docket No. 34890, filed on June 14, 2006, PYCO has
submitted a new feeder line application for Alternative Two, renewed
its earlier request for issuance of a protective order, and indicated
that it wishes to propound discovery requests tendered with its
original application.\3\ SAW moved to reject the new feeder line
application in a pleading filed on July 3, 2006.
---------------------------------------------------------------------------
\3\ The Director found that the rejection of PYCO's feeder line
application rendered moot PYCO's requests for a protective order and
a procedural schedule.
---------------------------------------------------------------------------
We will deny the appeal of the Director's rejection of the original
feeder line application in STB Finance Docket No. 34844; accept the new
feeder line application for Alternative Two in STB Finance Docket
No.34890, authorize discovery, and set a procedural schedule; and deny
SAW's motion to reject the new feeder line application.
Background
In 1999, SAW acquired approximately 14.1 miles of rail lines in
Lubbock, TX, from The Burlington Northern and Santa Fe Railway Company
(BNSF).\4\ PYCO, whose rail service was provided only by SAW,
experienced a substantial, measurable deterioration in SAW's service in
2005. This led us to issue, under 49 U.S.C. 11123 and 49 CFR part 1146,
an alternative service order authorizing West Texas & Lubbock Railway
Company, Inc. (WTL), to provide service to PYCO, over SAW's lines, for
an initial period of 30 days. PYCO Industries, Inc.--Alernative Rail
Service--South Plains Switching, Ltd. Co., STB Finance Docket No. 34802
(STB served Jan. 26, 2006). In two subsequent decisions, we extended
the authorization for alternative service to the full 270 days
permitted by the statute, through October 23, 2006.\5\ During the
period of alternative service, SAW has continued to provide rail
service to the other shippers on its lines.
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\4\ BNSF has since changed its name to BNSF Railway Company. We
will refer to both entities as BNSF.
\5\ See decisions in STB Finance Docket No. 34802 served
February 24, and June 21, 2006.
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Seeking a permanent solution to the inadequate rail service it
experienced from SAW, PYCO filed a feeder line application in May 2006.
The Director found that the application was incomplete for both the
All-SAW option and Alternative Two because PYCO had not made a
sufficient showing as to all of the required elements of a feeder line
application (set forth at 49 CFR 1151.3(a)), and some of these
deficiencies would not have been cured by obtaining discovery of
information in SAW's possession.
Discussion and Conclusions
[STB Finance Docket No. 34844]
I. Appeal of Rejection of PYCO's Original Application.
PYCO appeals the Director's decision rejecting its application as
deficient.
A. Inadequacy of SAW's Rail Service (49 CFR 1151.3(a)(11)). The
Director found that PYCO did not provide evidence required under 49
U.S.C. 10907(c)(1)(B) showing that the majority of shippers using SAW's
lines experienced inadequate service from SAW. PYCO argues that its
application met that requirement by showing that service was inadequate
for a majority of the shipments on the line. PYCO also claims that
other shippers were too intimidated to state that their rail service
was inadequate for fear that SAW would retaliate by degrading or
cutting off their rail service.
We do not find any error in the Director's interpretation of the
statutory language of 49 U.S.C. 10907(c)(1)(B) as requiring evidence to
support a finding that there is inadequate service for a majority of
the line's shippers. We agree with the Director that the statutory
language is clear and that to grant a feeder line application, the
Board must make a finding that the owning carrier's service is
inadequate for a majority of the line's shippers, not a majority of the
shipments by volume. See discussion in the Director's order, slip op.
at 6.
There is a fundamental problem with PYCO's argument that silence of
a majority of the shippers should be excused because shippers may be
reluctant to speak out for fear of retribution by SAW. The other
shippers' silence can just as well be read to indicate that they are
satisfied with the service that SAW is providing to them.
We contrast this application with another feeder line proceeding
cited by SAW in its appeal, Keokuk Junction Railway Company--Feeder
Line Acquisition--Line of Toledo Peoria and Western Railway, STB
Finance Docket No. 34335 (STB served Oct. 28, 2004) (Keokuk Junction).
In that case, the initial application included statements from five of
the six shippers located on the line and five of ten ``overhead''
shippers (those not located on the line, but transporting shipments
over the line) that the incumbent's rail service was inadequate. See
Keokuk Junction, slip op. at 7 (describing the shipper statements
included in the initial feeder line application). In contrast, here,
the majority of the shippers on SAW's lines provided no statements at
all.
In light of the silence from a majority of the lines' shippers, the
Director correctly found that the original application did not provide
evidence to permit the Board to find that the transportation over the
line is adequate for the majority of shippers who transport traffic
over the line, as required by statute and our own regulations at 49 CFR
1151.3(a)(11)(i)(B).
B. Financial Responsibility (49 CFR 1151.3(a)(3)). Citing an early
decision in Keokuk Junction (STB served May 9, 2003), PYCO contends
that the Director should have conditionally accepted its showing and
afforded the opportunity to submit additional financial evidence under
a protective order preserving confidentiality.
But the application in Keokuk Junction did not have the ``fatal''
deficiency in the evidence concerning adequacy of service to a majority
of shippers, as discussed above. Given that deficiency, the Director
correctly found that PYCO's request for issuance of a protective order
was moot and that there was no basis for issuance of a procedural
schedule.
Accordingly, PYCO has not met the standard for granting an appeal.
II. Petition To Allow Amendment of Feeder Line Application
Together with its appeal, PYCO petitioned to amend the original
application, tendering additional evidence that could have been
included in the original application. We will not permit PYCO to amend
the original application with this evidence, but we will permit PYCO to
submit the additional evidence in a new application and will
incorporate by reference the information in its original application,
as discussed below.
[STB Finance Docket No. 34890]
In its new feeder line application, PYCO seeks to acquire the rail
lines described as Alternative Two in the original application and
provides information to make the required showing. The new application
also includes newly tendered evidence. This evidence and related issues
will be discussed below.
I. Newly Tendered Evidence
A. Financial Responsibility. The newly tendered evidence \6\
clearly
[[Page 40189]]
demonstrates that PYCO has sufficient financial resources, through its
own strong financial position and an operating line of credit, to
purchase the rail lines at issue at the higher of net liquidation value
or going concern value and to cover expenses associated with providing
services over those lines for at least 3 years. 49 U.S.C. 10907(a); 49
CFR 1151.3(a)(3).
---------------------------------------------------------------------------
\6\ The new evidence of financial responsibility consists of a
letter from PYCO's Chief Financial Officer, a new letter from CoBank
of Denver, CO, and PYCO's 2005 Annual Report.
---------------------------------------------------------------------------
B. Inadequacy of Rail Service for a Majority of the Shippers. There
are currently three shippers on the portions of the lines comprising
Alternative Two: PYCO, Farmers Cooperative Compress, and Attebury
Grain, LLC. The revised application includes letters from the latter
two shippers indicating that, in light of incidents in which SAW
threatened retaliation against, and degraded service to, shippers that
questioned the quality of SAW's service, both Farmers Compress and
Attebury Grain consider SAW's service to them to be unreliable and
inadequate.
SAW contends that service can be considered inadequate to a shipper
only if the rail carrier either is unduly late, or fails altogether, in
picking up or delivering a specific shipment as requested by that
shipper. We disagree. A shipper's affirmative statement that it fears
that it could suffer retaliation in the form of poor service for
criticizing its rail service provider is sufficient in our view to
constitute a showing of inadequate service to the shipper that makes
the statement.\7\
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\7\ A shipper's affirmative statement is different from shipper
silence, from which no inference can be made.
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When combined with PYCO's convincing statements of the inadequacy
of the service it received from SAW (in the original application), the
statements of Farmers Compress and Attebury Grain constitute credible
evidence of the inadequacy of SAW's rail service for all of the
shippers in Alternative Two. Thus, PYCO's new application is complete
as to that alternative.
II. SAW's Renewed Motion to Reject Application for Alternative Two and
Motion to Reject New Application \8\
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\8\ SAW treated PYCO's new feeder line application as
encompassing both the All-SAW option and Alternative Two. PYCO
contends that the new application is complete only as to Alternative
Two. See Cover Letter submitted with new application on June 14,
2006. Therefore, we will not further discuss SAW's arguments
directed at rejection of the All-SAW option, which stands rejected.
---------------------------------------------------------------------------
In its opposition to PYCO's appeal, SAW renewed its earlier motion
to reject the application for Alternative Two.\9\ SAW argues that
Alternative Two constitutes less than the entirety of a rail line that
is operated as a unit, contrary to the language in the feeder line
provision authorizing the sale of ``a particular line of railroad,'' 49
U.S.C. 10907(b)(1)(A)(i). Citing Caddo Antoine and Little Mo. R.R. v.
United States, 95 F.3d 740, 747 (8th Cir. 1996) (Caddo Antoine), SAW
contends that a feeder line applicant may not ``cherry pick'' by
seeking to acquire only the most attractive part of a rail line, while
leaving the incumbent rail line owner with a remaining portion that
allegedly cannot be operated successfully.
---------------------------------------------------------------------------
\9\ The motion was filed on May 16, 2006; PYCO submitted a reply
on May 18, 2006.
---------------------------------------------------------------------------
The Caddo Antoine decision is inapposite, however, because in that
case it was the incumbent rail carrier that arguably sought to ``cherry
pick'' the line's heaviest user. Initially in Caddo Antoine, the
incumbent listed the entire rail line as subject to future
abandonment--a listing that automatically subjects a line to potential
acquisition under the feeder line provision at 49 U.S.C.
10907(b)(1)(A)(ii). See Caddo Antoine, 95 F.3d at 742. Preferring to
retain the revenue from the line's heaviest shipper, however, the
incumbent subsequently removed from that listing the very small portion
of the line that was needed to serve that one shipper.
In contrast, PYCO, the heaviest user of SAW's rail services in the
past, would like to purchase the entirety of SAW's lines and serve all
of SAW's shippers, both large and small. It is only PYCO's inability to
make the requisite showing that SAW's rail service is inadequate for a
majority of the shippers on the entirety of SAW's rail lines that
prevents the All-SAW application from going forward. SAW's claim that
PYCO is ``cherry picking'' therefore falls flat. Rather, in Alternative
Two, PYCO seeks to purchase the amount of rail lines necessary to
assure adequate rail service to itself and to two other shippers
located in close proximity to one of PYCO's two plants in Lubbock.
Because we have no doubt that PYCO has demonstrated that SAW's rail
service to PYCO was inadequate and has now shown the inadequacy of
service to the other two shippers on the lines at issue in Alternative
Two as well, its application for Alternative Two lawfully may go
forward. For these reasons, we deny SAW's renewed motion to reject the
application for Alternative Two.
In its motion to reject the new application for Alternative Two,
SAW argues that PYCO's application does not have sufficient evidence to
show that sale of the tracks comprising Alternative Two will not have a
significant adverse financial effect on SAW. See 49 U.S.C.
10907(c)(1)(C). In the decision rejecting PYCO's original application,
the Director found that, with regard to PYCO purchasing the tracks
comprising Alternative Two, PYCO's showing was sufficient that the
remainder of SAW's system would be viable both financially and
operationally. We agree that PYCO has made a sufficient showing in this
regard, which of course SAW is free to contest as the new application
in STB Finance Docket No. 34890 goes forward. See PYCO's original
application in STB Finance Docket No. 34844, at 38-39. For this reason,
we will deny PYCO's motion to reject the new application.
III. Discovery
PYCO requests discovery against SAW and BNSF (Exhibits P and Q of
its original application) and reserves the right to amend its tendered
valuations of the rail lines involved in Alternative Two after
discovery. PYCO may propound discovery requests under our regulations
\10\ and may amend its valuations to reflect the responses it receives
from SAW and/or BNSF. A protective order issued separately should
facilitate discovery responses by ensuring confidentiality. Because
PYCO served its original application on the entities from which it
seeks discovery, SAW and BNSF, we deem those discovery requests to be
propounded as of the date this decision takes effect for the purpose of
calculating the time for responses.
---------------------------------------------------------------------------
\10\ 49 CFR part 1114.
---------------------------------------------------------------------------
IV. Environmental Issues
Under the regulations of the President's Council on Environmental
Quality and the Board's own environmental rules, actions are separated
into three classes that prescribe the level of documentation required
in the process under the National Environmental Protection Act (NEPA).
As pertinent here, actions whose environmental effects are ordinarily
insignificant may normally be excluded from the need to prepare
environmental documentation under 40 CFR 1500.4(p), 1501.4(a)(2),
1508.4 and 49 CFR 1105.6(c). Included in this category are rail line
acquisitions that will not result in operating changes that exceed
certain thresholds: Generally, an increase in rail traffic of at least
eight trains per day or 100% in traffic volume (measured in gross ton
miles annually).
Here, because the acquisition would simply replace the rail carrier
serving three shippers (PYCO, Farmers
[[Page 40190]]
Compress, and Attebury Grain) with either PYCO itself or a rail carrier
of PYCO's choosing, it would not result in more than eight additional
trains per day or an increase of 100% in rail traffic volume on these
lines. Accordingly, we find that PYCO's proposed operations do not
exceed the Board's thresholds for environmental review, and that no
environmental documentation is required.
V. Schedule
Our regulations set forth time periods that apply for submitting
competing applications, verified statements and comments addressing
feeder line applications and any competing applications, and replies,
unless otherwise provided. In light of the expiration date for
alternative rail service to PYCO, October 23, 2006, we shall provide a
shortened schedule for the submission of these pleadings in this case,
as set forth below. Although our regulations provide that extensions of
filing dates may be granted for good cause, 49 CFR 1151.2(k), the
parties should be aware that, to facilitate prompt resolution of this
application, we will disfavor requests for extensions of filing dates
in this proceeding except in the most extraordinary circumstances.
In summary, PYCO has submitted sufficient information in its new
application for Alternative Two to meet the requirements of 49 CFR
1151.3. The Board will rule on the merits of the application when the
record is complete.
It is ordered:
1. PYCO's appeal of the order rejecting its original application is
denied.
2. SAW's renewed petition to reject the application for Alternative
Two and motion to reject the new application are denied.
3. PYCO's new application for Alternative Two is accepted. Notice
will be published in the Federal Register on July 14, 2006.
4. Competing applications by any person seeking to acquire the rail
lines comprising Alternative Two must be filed by July 18, 2006.
5. Verified statements and comments addressing the initial and/or
any competing application(s) must be filed by August 2, 2006.
6. Any amendment by PYCO to its valuation of the rail lines, based
upon discovery responses, must be filed by 7 days after it receives the
discovery responses. If the resulting filing date falls after the
submission of the verified statements and comments in paragraph 5, the
parties that filed such statements and comments shall have 7 days after
the filing of the amended valuations to file any verified statements
and comments concerning the amended valuations.
7. Verified replies by applicants and other interested parties must
be filed by August 14, 2006, unless parties have filed any verified
statements and comments concerning the amendment to valuations referred
to in paragraph 6. In the event of such filings, applicants and other
interested parties shall have 15 days after the filing of such verified
statements and comments to file replies.
8. This decision is effective on July 14, 2006.
9. A copy of this decision will be served on BNSF.
Decided: July 3, 2006.
By the Board, Chairman Buttrey and Vice Chairman Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E6-10831 Filed 7-13-06; 8:45 am]
BILLING CODE 4915-01-P
