Omnitrax Holdings Combined, Inc.-Acquisition of Control Exemption-Alabama & Tennessee River Railway, LLC, et al., 45594-45596 [2016-16671]

Download as PDF 45594 Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Notices Notice of solicitation of comments. ACTION: NuStar Logistics, LP (‘‘NuStar’’) applied for an amended Presidential Permit from the Department of State (‘‘State Department’’) to authorize the operation and maintenance of existing pipeline facilities (the ‘‘Existing Burgos Pipeline’’) at the United States-Mexico border. Specifically, NuStar requested that the Department amend the 2006 Presidential Permit to: (1) Reflect NuStar’s name change from Valero Logistics Operations, LP to NuStar Logistics, LP as the owner and operator of the Existing Burgos Pipeline and (2) authorize the Existing Burgos Pipeline border facilities to transport a broader range of petroleum products than allowed by the 2006 Presidential Permit, including diesel, gasoline, jet fuel, liquefied petroleum gas, and natural gas liquids. The 2006 Presidential Permit only allows transportation of light naphtha. After consulting with the public and interested agencies, on June 10, 2016, the State Department approved a Final Environmental Assessment (‘‘EA’’) for the Existing Burgos Pipeline and New Burgos Pipeline and a Finding of No Significant Impact (‘‘FONSI’’). Background information related to the application, including the EA and FONSI may be found at: https:// www.state.gov/e/enr/applicant/ applicants/index.htm. Executive Order 13337 (69 FR 25299) calls on the Secretary of State, or his designee, to determine if issuance of a Presidential Permit would serve the national interest. This decision will take into account a wide range of factors, including energy security; environmental, cultural, and economic impacts; foreign policy; and compliance with relevant federal regulations and issues. The State Department invites members of the public to comment on any factor they deem relevant to the national interest determination that will be made for this permit application. Along with other factors such as those listed above, these comments will be considered in the final national interest determination. The public comment period will end 30 days from the publication of this notice. Comments are not private. They will be posted on the site https:// www.regulations.gov. The comments will not be edited to remove identifying or contact information, and the State Department cautions against including any information that one does not want publicly disclosed. The State asabaliauskas on DSK3SPTVN1PROD with NOTICES SUMMARY: VerDate Sep<11>2014 19:33 Jul 13, 2016 Jkt 238001 Department requests that any part soliciting or aggregating comments received from other persons for submission to the State Department inform those persons that the State Department will not edit their comments to remove identifying or contact information, and that they should not include any information in their comments that they do not want publicly disclosed. DATES: Comments must be submitted no later than August 15, 2016 at 11:59 p.m. ADDRESSES: For reasons of efficiency, the State Department encourages the electronic submission of comments through the federal government’s eRulemaking Portal (https:// www.regulations.gov), enter the Docket No. DOS–2016–0050 and follow the prompts to submit a comment. The State Department also will accept comments submitted in hard copy by mail and postmarked no later than August 15, 2016. Please note that standard mail delivery to the State Department can be delayed due to security screening. To submit comments by mail, use the following address: Office of Energy Diplomacy, Energy Resources Bureau (ENR/EDP/EWA) Department of State 2201 C St. NW., Ste. 4428, Attn: Sydney Kaufman, Washington, DC 20520. Dated: July 7, 2016. R. Chris Davy, Deputy Director, Office of Europe, Western Hemisphere and Africa, Bureau of Energy Resource, Department of State. [FR Doc. 2016–16677 Filed 7–13–16; 8:45 am] BILLING CODE 4710–AE–P DEPARTMENT OF STATE [Public Notice: 9633] Executive Order 13224 Designation of Ayrat Nasimovich Vakhitov, aka Aiat Nasimovich Vahitov, aka Airat Vakhitov, aka Aryat Vakhitov, aka Airat Wakhitov, aka Taub Ayrat Vakhitov, aka Salman Bulgarsky, aka Salman Bulgarskiy, as a Specially Designated Global Terrorist Acting under the authority of and in accordance with section 1(b) of Executive Order 13224 of September 23, 2001, as amended by Executive Order 13268 of July 2, 2002, and Executive Order 13284 of January 23, 2003, I hereby determine that the individual known as Ayrat Nasimovich Vakhitov, also known as Aiat Nasimovich Vahitov, also known as Airat Vakhitov, also known as Aryat Vakhitov, also known as Airat Wakhitov, also known as Taub Ayrat Vakhitov, also known as Salman PO 00000 Frm 00146 Fmt 4703 Sfmt 4703 Bulgarsky, also known as Salman Bulgarskiy, committed, or poses a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States. Consistent with the determination in section 10 of Executive Order 13224 that prior notice to persons determined to be subject to the Order who might have a constitutional presence in the United States would render ineffectual the blocking and other measures authorized in the Order because of the ability to transfer funds instantaneously, I determine that no prior notice needs to be provided to any person subject to this determination who might have a constitutional presence in the United States, because to do so would render ineffectual the measures authorized in the Order. This notice shall be published in the Federal Register. Dated: June 29, 2016. John F. Kerry, Secretary of State. [FR Doc. 2016–16569 Filed 7–13–16; 8:45 am] BILLING CODE 4710–AD–P SURFACE TRANSPORTATION BOARD [Docket No. FD 36032] Omnitrax Holdings Combined, Inc.— Acquisition of Control Exemption— Alabama & Tennessee River Railway, LLC, et al. On May 5, 2016, OmniTRAX Holdings Combined, Inc. (OmniTRAX) filed a petition for exemption from the requirements of 49 U.S.C. 11323–25.1 OmniTRAX seeks after-the-fact Board authority for transactions that occurred on December 31, 2015, where OmniTRAX acquired direct and exclusive control over 18 Class III railroads.2 (Pet. 2–5.) OmniTRAX states 1 Although the petition initially states that it is seeking an exemption from the requirements of only 11324 and 11325 (Pet. 2), it later specifically references 11323 as well (Pet. 6, 9). 2 The railroads and the state(s) they operate in are as follows: * Alabama & Tennessee River Railway, LLC: Alabama * Alliance Terminal Railroad, LLC: Texas (not currently in operation) * Brownsville & Rio Grande International Railway, LLC: Texas * Chicago Rail Link, LLC: Illinois * Fulton County Railway, LLC: Georgia + Georgia & Florida Railway, LLC: Georgia, Florida * Georgia Woodlands Railroad, LLC: Georgia * Great Western Railway of Colorado, LLC: Colorado + Illinois Railway, LLC: Illinois E:\FR\FM\14JYN1.SGM 14JYN1 Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Notices that its failure to obtain proper Board authority prior to the transactions was due to inadvertent oversight. (Pet. 2.) This proceeding is related to two pending class exemption proceedings: Docket No. FD 36018, in which Central Texas & Colorado River Railway, LLC (CTCR), a noncarrier subsidiary of OmniTRAX, seeks to acquire and operate a line of railroad, and Docket No. FD 36019, in which OmniTRAX seeks to continue in control of CTCR upon its becoming a Class III rail carrier. On May 24, 2016, OmniTRAX filed a supplement to its petition for exemption, providing additional information and a request for expedited action so as not to delay capital improvement plans for the CTCR. By decision served on May 26, 2016, the Board held the related proceedings in Docket Nos. FD 36018 and FD 36019 in abeyance pending action on OmniTRAX’s petition for exemption in this proceeding. Cent. Tex. & Colo. River Ry.—Acquis. & Operation Exemption— Line of Heart of Tex. R.R., FD 36018, et al. (STB served May 26, 2016). OmniTRAX’s petition for exemption will be granted. Because we are granting the petition for exemption in this proceeding, we are also reactivating the proceedings in Docket Nos. FD 36018 and FD 36019 by serving and publishing those notices in the Federal Register. asabaliauskas on DSK3SPTVN1PROD with NOTICES Background OmniTRAX is a non-carrier holding company established to control short line railroads. (Pet. 2.) OmniTRAX states that it is owned by three separate and independent corporations, none of which possess a controlling interest in OmniTRAX.3 (Id. at 5.) Prior to the December 31, 2015 transactions in which OmniTRAX acquired direct and exclusive control of 18 Class III rail carriers, Patrick D. Broe (Broe) indirectly controlled 17 of the 18 Class III railroads. Twelve of the * Kettle Falls International Railway, LLC: Washington (and British Columbia, Canada) * Manufacturers’ Junction Railway, LLC: Illinois + Nebraska, Kansas & Colorado Railway, LLC: Nebraska, Kansas, Colorado * Newburgh & South Shore Railroad, LLC: Ohio * Northern Ohio & Western Railway, LLC: Ohio * Panhandle Northern Railroad, LLC: Texas Peru Industrial Railroad, LLC: Illinois + Sand Springs Railway Company: Oklahoma + Stockton Terminal and Eastern Railroad: California (Pet. 3.) 3 OmniTRAX states that ‘‘no individual or corporate entity possesses a direct or indirect controlling interest in OmniTRAX at this time.’’ (Pet. 5.) Control is a fact-intensive determination, and this decision makes no finding based on this statement by OmniTRAX. If, as one example, an individual directly or indirectly controlled two of the three parent corporations of OmniTRAX, that individual would also need Board authority. VerDate Sep<11>2014 19:33 Jul 13, 2016 Jkt 238001 railroads 4 were directly controlled by OmniTRAX Holdings, LLC (OTH), which was controlled by OmniTRAX, Inc. (OTI), which was in turn controlled by Broe. In addition, Broe also indirectly controlled 5 other railroads,5 but through other ‘‘corporate arrangements not involving OTI or OTH.’’ (Pet. 4.) Additionally, Broe held a noncontrolling interest in the 18th railroad, Peru Industrial Railroad, LLC (PIR), an independent short line operating in Illinois. PIR connects with one of the other Class III railroads—Illinois Railway, LLC (IR)—that was acquired in the OmniTRAX transactions. These two railroads connect at Peru, Ill., but OmniTRAX asserts that the respective railroad lines do not access or serve any common industry or customer(s). OmniTRAX states that IR previously obtained exemption authority to lease and operate over PIR’s lines in Illinois Railway—Lease & Operation Exemption—Rail Line of Peru Land Acquisition 2, LLC, FD 35886 (STB served Dec. 24, 2014). (Suppl. 6.) As mentioned above, OmniTRAX requests expedited action because this proceeding is the limiting factor to obtaining regulatory authority in the two related proceedings in Docket Nos. FD 36018 and FD 36019. OmniTRAX states that holding those dockets in abeyance could result in delays to critical railroad physical plant improvements. (Suppl. 7.) Discussion and Conclusions The acquisition of control of a rail carrier (or carriers) by a person that is not a rail carrier but that controls any number of rail carriers requires approval by the Board pursuant to 49 U.S.C. 11323(a)(5). Under 10502(a), however, we must exempt a transaction or service from regulation if we find that: (1) Regulation is not necessary to carry out 4 These twelve carriers are denoted with an asterisk in footnote 3. 5 These five carriers are denoted with a plus symbol in footnote 3. Although the petition did not provide details of the relationship between Broe and these carriers, in Patrick D. Broe—Acquisition of Control Exemption—Stockton Terminal & Eastern Railroad, FD 35525 (STB served July 15, 2011), Broe obtained authority to acquire indirect control via ST&E Holdings, Inc., of one of the five carriers, the Stockton Terminal & Eastern Railroad Company. Later, in Patrick D. Broe—Acquisition of Control Exemption—Sand Springs Railway, FD 35829 (STB served June 12, 2014), Broe obtained authority to acquire indirect control via Sand Springs Holdings, LLC, of another of the five carriers, the Sand Springs Railway Company. In Broe’s 2014 filings with the Board in the latter docket, he noted that he controls BNS Holdings, Inc., a noncarrier that indirectly controlled the three remaining carriers. Broe Notice of Exemption 4, Patrick D. Broe—Acquis. of Control Exemption— Sand Springs Ry., FD 35829. PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 45595 the rail transportation policy (RTP) of 10101; and (2) either the transaction or service is limited in scope, or regulation is not needed to protect shippers from the abuse of market power. In this case, an exemption from the prior approval requirements of 49 U.S.C. 11323–25 is consistent with the standards of 10502. Detailed scrutiny of the proposed transactions through an application for review and approval under 11323–25 is not necessary here to carry out the RTP. Approval of the transactions at issue will result in a change in ownership of the 18 aforementioned rail carriers with no lessening of competition and will bring those railroads under the oversight of established short-line management. An exemption will promote the RTP by minimizing the need for federal regulatory control over the transactions, 10101(2); ensuring the development and continuation of a sound rail transportation system that will continue to meet the needs of the public, 10101(4); reducing the barriers to entry and exit from the rail transportation industry, 10101(7); encouraging efficient management, 10101(9); and providing for the expeditious resolution of this and the related proceedings, 10101(15). Other aspects of the RTP will not be adversely affected. Nor is detailed scrutiny of the proposed transactions necessary to protect shippers from an abuse of market power. According to OmniTRAX, no shipper will lose access to rail service as a result of the transactions, and operations will continue as they did before OmniTRAX assumed control. (Pet. 9.) Further, OmniTRAX states that the relevant agreements related to the acquisitions contain no provision that would limit any of the 18 railroads’ future interchange of traffic to or from thirdparty connecting carriers. (Id.) Although PIR connects with IR, OmniTRAX states that their lines do not access or serve any common industry or customers. In addition, OmniTRAX states that ‘‘PIR’s only outlet to the balance of the interstate railroad network is via its connection to IR,’’ that PIR and its customers would continue to rely upon intermediate IR service to reach linehaul carriers. (Suppl. 6.) Accordingly, based on the record, these transactions do not appear to shift or consolidate market power; therefore, we do not find that regulation is necessary to protect shippers from the abuse of market power.6 6 As there is no evidence that regulation is needed to protect shippers from the abuse of market power, E:\FR\FM\14JYN1.SGM Continued 14JYN1 45596 Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Notices Under 49 U.S.C. 10502(g), we may not use our exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. The Board, however, is not required to impose labor protective conditions when only Class III rail carriers are involved in a transaction that falls under 49 U.S.C. 11324–25, as is the case here. 49 U.S.C. 11326(c). These transactions are categorically excluded from environmental review under 49 CFR. 1105.6(c)(2)(i) because they will not result in any significant change in carrier operations. Similarly, the transactions are exempt from the historic reporting requirements under 49 CFR. 1105.8(b)(3) because they will not substantially change the level of maintenance of railroad properties. As indicated, OmniTRAX has requested expedited action to avoid delays to critical railroad physical plant improvements. We find OmniTRAX’s request to be reasonable. We will grant the exemption and the exemption will be effective immediately. It is ordered: 1. Under 49 U.S.C. 10502, the Board exempts the above-described transactions from the prior approval requirements of 11323–25. 2. Notice will be published in the Federal Register. 3. This exemption will be effective on July 14, 2016. Decided: July 11, 2016. By the Board, Chairman Elliott, Vice Chairman Miller, and Commissioner Begeman. Brendetta S. Jones, Clearance Clerk. [FR Doc. 2016–16671 Filed 7–13–16; 8:45 am] BILLING CODE 4915–01–P SURFACE TRANSPORTATION BOARD [Docket No. FD 36018] asabaliauskas on DSK3SPTVN1PROD with NOTICES Central Texas & Colorado River Railway, LLC—Acquisition and Operation Exemption—Line of Heart of Texas Railroad, L.P. Central Texas & Colorado River Railway, LLC (CTCR), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to acquire from Heart of Texas Railroad, L.P. (HTR), and to operate a line of railroad extending between Lometa, Tex., and Brady, Tex. (the Brady Line). CTCR will acquire the 67.5-mile Brady Line, which connects with a BNSF Railway Company line at milepost 0.0 in Lometa and continues to we do not need to determine whether the transaction is limited in scope. See 49 U.S.C. 10502(a). VerDate Sep<11>2014 19:33 Jul 13, 2016 Jkt 238001 the end of the track in Brady, pursuant to a purchase and sale agreement. CTCR states that HTR has operated the Brady Line since 2013 when HTR acquired the Brady Line from the bankruptcy estate of the prior owner.1 CTCR is a subsidiary of OmniTRAX Holdings Combined, Inc. (OmniTRAX). This transaction is related to a concurrently filed verified notice of exemption in OmniTRAX Holdings Combined, Inc.—Continuance in Control Exemption—Central Texas & Colorado River Railway, Docket No. FD 36019, in which OmniTRAX seeks Board approval under 49 CFR 1180.2(d)(2) to continue in control of CTCR upon CTCR’s becoming a Class III rail carrier. OmniTRAX currently controls 18 Class III rail carriers (OmniTRAX Railroads) in the United States.2 This exemption is effective July 28, 2016. CTCR certifies that its projected annual revenues as a result of this transaction will not result in the creation of a Class II or Class I rail carrier and does not exceed $5 million. CTCR also certifies that the purchase and sale agreement between HTR and CTCR does not involve any provision limiting CTCR’s future interchange of traffic with a third-party connecting carrier. 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 to stay must be filed no later than July 21, 2016 (at least seven days before the exemption becomes effective). An original and 10 copies of all pleadings, referring to Docket No. FD 36018, must be filed with the Surface 1 See Heart of Tex. R.R.—Acquis. & Operation Exemption—Gulf Colo. & San Saba Ry., FD 35710 (STB served Jan. 4, 2013). 2 In its verified notice filed in Docket No FD. 36019, OmniTRAX explains that in preparing the two related class exemption filings, it was discovered that OmniTRAX had acquired direct and exclusive control of the 18 OmniTRAX Railroads on December 31, 2015. It states that it inadvertently did not seek advanced authority to engage in the acquisition of control, ‘‘in part because of the preexisting close association among all of the involved carriers and their largely common short line heritage.’’ On May 5, 2016, OmniTRAX filed a petition for exemption in Docket No. FD 36032 to seek the requisite authority to acquire control of the OmniTRAX Railroads, and by decision served on May 26, 2016, the Board held the notice of exemption proceedings in abeyance pending a ruling on the petition. The Board granted the petition in a decision served July 14, 2016, and therefore is removing this proceeding from abeyance and publishing this notice. PO 00000 Frm 00148 Fmt 4703 Sfmt 4703 Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, a copy of each pleading must be served on William C. Sippel, Fletcher & Sippel LLC, 29 North Wacker Drive, Suite 920, Chicago, IL 60606. According to CTCR, this action is categorically excluded from environmental review under 49 CFR 1105.6(c). Board decisions and notices are available on our Web site at ‘‘WWW.STB.DOT.GOV.’’ Decided: July 11, 2016. By the Board, Rachel D. Campbell, Director, Office of Proceedings. Tia Delano, Clearance Clerk. [FR Doc. 2016–16673 Filed 7–13–16; 8:45 am] BILLING CODE 4915–01–P SURFACE TRANSPORTATION BOARD [Docket No. FD 36019] OmniTRAX Holdings Combined, Inc.— Continuance in Control Exemption— Central Texas & Colorado River Railway, LLC OmniTRAX Holdings Combined, Inc. (OmniTRAX) has filed a verified notice of exemption pursuant to 49 CFR 1180.2(d)(2) to continue in control of Central Texas & Colorado River Railway, LLC (CTCR), a noncarrier, upon CTCR’s becoming a Class III rail carrier. CTCR is a wholly owned subsidiary of OmniTRAX. This transaction is related to a concurrently filed verified notice of exemption in Central Texas & Colorado River Railway—Acquisition & Operation Exemption—Line of Heart of Texas Railroad, Docket No. FD 36018, in which CTCR seeks Board approval under 49 CFR 1150.31 to acquire and operate a line of railroad extending 67.5 miles from Lometa, Tex., to the end of the track at Brady, Tex. (the Brady Line). OmniTRAX is a noncarrier holding company that controls 18 Class III rail carrier subsidiaries (the OmniTRAX Railroads) subject to the Board’s jurisdiction.1 This transaction will 1 In its verified notice, OmniTRAX explains that in preparing the two related class exemption filings, it was discovered that OmniTRAX had acquired direct and exclusive control of the 18 OmniTRAX Railroads on December 31, 2015. It states that it inadvertently did not seek advanced authority to engage in the acquisition of control, ‘‘in part because of the preexisting close association among all of the involved carriers and their largely common short line heritage.’’ On May 5, 2016, OmniTRAX filed a petition for exemption in Docket No. FD 36032 to seek the requisite authority to acquire control of the OmniTRAX Railroads, and by decision served on May 26, 2016, the Board held the notice of exemption proceedings in abeyance E:\FR\FM\14JYN1.SGM 14JYN1

Agencies

[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Notices]
[Pages 45594-45596]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16671]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36032]


Omnitrax Holdings Combined, Inc.--Acquisition of Control 
Exemption--Alabama & Tennessee River Railway, LLC, et al.

    On May 5, 2016, OmniTRAX Holdings Combined, Inc. (OmniTRAX) filed a 
petition for exemption from the requirements of 49 U.S.C. 11323-25.\1\ 
OmniTRAX seeks after-the-fact Board authority for transactions that 
occurred on December 31, 2015, where OmniTRAX acquired direct and 
exclusive control over 18 Class III railroads.\2\ (Pet. 2-5.) OmniTRAX 
states

[[Page 45595]]

that its failure to obtain proper Board authority prior to the 
transactions was due to inadvertent oversight. (Pet. 2.)
---------------------------------------------------------------------------

    \1\ Although the petition initially states that it is seeking an 
exemption from the requirements of only 11324 and 11325 (Pet. 2), it 
later specifically references 11323 as well (Pet. 6, 9).
    \2\ The railroads and the state(s) they operate in are as 
follows:
    * Alabama & Tennessee River Railway, LLC: Alabama
    * Alliance Terminal Railroad, LLC: Texas (not currently in 
operation)
    * Brownsville & Rio Grande International Railway, LLC: Texas
    * Chicago Rail Link, LLC: Illinois
    * Fulton County Railway, LLC: Georgia
    \+\ Georgia & Florida Railway, LLC: Georgia, Florida
    * Georgia Woodlands Railroad, LLC: Georgia
    * Great Western Railway of Colorado, LLC: Colorado
    \+\ Illinois Railway, LLC: Illinois
    * Kettle Falls International Railway, LLC: Washington (and 
British Columbia, Canada)
    * Manufacturers' Junction Railway, LLC: Illinois
    \+\ Nebraska, Kansas & Colorado Railway, LLC: Nebraska, Kansas, 
Colorado
    * Newburgh & South Shore Railroad, LLC: Ohio
    * Northern Ohio & Western Railway, LLC: Ohio
    * Panhandle Northern Railroad, LLC: Texas Peru Industrial 
Railroad, LLC: Illinois
    \+\ Sand Springs Railway Company: Oklahoma
    \+\ Stockton Terminal and Eastern Railroad: California (Pet. 3.)
---------------------------------------------------------------------------

    This proceeding is related to two pending class exemption 
proceedings: Docket No. FD 36018, in which Central Texas & Colorado 
River Railway, LLC (CTCR), a noncarrier subsidiary of OmniTRAX, seeks 
to acquire and operate a line of railroad, and Docket No. FD 36019, in 
which OmniTRAX seeks to continue in control of CTCR upon its becoming a 
Class III rail carrier. On May 24, 2016, OmniTRAX filed a supplement to 
its petition for exemption, providing additional information and a 
request for expedited action so as not to delay capital improvement 
plans for the CTCR. By decision served on May 26, 2016, the Board held 
the related proceedings in Docket Nos. FD 36018 and FD 36019 in 
abeyance pending action on OmniTRAX's petition for exemption in this 
proceeding. Cent. Tex. & Colo. River Ry.--Acquis. & Operation 
Exemption--Line of Heart of Tex. R.R., FD 36018, et al. (STB served May 
26, 2016).
    OmniTRAX's petition for exemption will be granted. Because we are 
granting the petition for exemption in this proceeding, we are also 
reactivating the proceedings in Docket Nos. FD 36018 and FD 36019 by 
serving and publishing those notices in the Federal Register.

Background

    OmniTRAX is a non-carrier holding company established to control 
short line railroads. (Pet. 2.) OmniTRAX states that it is owned by 
three separate and independent corporations, none of which possess a 
controlling interest in OmniTRAX.\3\ (Id. at 5.)
---------------------------------------------------------------------------

    \3\ OmniTRAX states that ``no individual or corporate entity 
possesses a direct or indirect controlling interest in OmniTRAX at 
this time.'' (Pet. 5.) Control is a fact-intensive determination, 
and this decision makes no finding based on this statement by 
OmniTRAX. If, as one example, an individual directly or indirectly 
controlled two of the three parent corporations of OmniTRAX, that 
individual would also need Board authority.
---------------------------------------------------------------------------

    Prior to the December 31, 2015 transactions in which OmniTRAX 
acquired direct and exclusive control of 18 Class III rail carriers, 
Patrick D. Broe (Broe) indirectly controlled 17 of the 18 Class III 
railroads. Twelve of the railroads \4\ were directly controlled by 
OmniTRAX Holdings, LLC (OTH), which was controlled by OmniTRAX, Inc. 
(OTI), which was in turn controlled by Broe. In addition, Broe also 
indirectly controlled 5 other railroads,\5\ but through other 
``corporate arrangements not involving OTI or OTH.'' (Pet. 4.)
---------------------------------------------------------------------------

    \4\ These twelve carriers are denoted with an asterisk in 
footnote 3.
    \5\ These five carriers are denoted with a plus symbol in 
footnote 3. Although the petition did not provide details of the 
relationship between Broe and these carriers, in Patrick D. Broe--
Acquisition of Control Exemption--Stockton Terminal & Eastern 
Railroad, FD 35525 (STB served July 15, 2011), Broe obtained 
authority to acquire indirect control via ST&E Holdings, Inc., of 
one of the five carriers, the Stockton Terminal & Eastern Railroad 
Company. Later, in Patrick D. Broe--Acquisition of Control 
Exemption--Sand Springs Railway, FD 35829 (STB served June 12, 
2014), Broe obtained authority to acquire indirect control via Sand 
Springs Holdings, LLC, of another of the five carriers, the Sand 
Springs Railway Company. In Broe's 2014 filings with the Board in 
the latter docket, he noted that he controls BNS Holdings, Inc., a 
noncarrier that indirectly controlled the three remaining carriers. 
Broe Notice of Exemption 4, Patrick D. Broe--Acquis. of Control 
Exemption--Sand Springs Ry., FD 35829.
---------------------------------------------------------------------------

    Additionally, Broe held a non-controlling interest in the 18th 
railroad, Peru Industrial Railroad, LLC (PIR), an independent short 
line operating in Illinois. PIR connects with one of the other Class 
III railroads--Illinois Railway, LLC (IR)--that was acquired in the 
OmniTRAX transactions. These two railroads connect at Peru, Ill., but 
OmniTRAX asserts that the respective railroad lines do not access or 
serve any common industry or customer(s). OmniTRAX states that IR 
previously obtained exemption authority to lease and operate over PIR's 
lines in Illinois Railway--Lease & Operation Exemption--Rail Line of 
Peru Land Acquisition 2, LLC, FD 35886 (STB served Dec. 24, 2014). 
(Suppl. 6.)
    As mentioned above, OmniTRAX requests expedited action because this 
proceeding is the limiting factor to obtaining regulatory authority in 
the two related proceedings in Docket Nos. FD 36018 and FD 36019. 
OmniTRAX states that holding those dockets in abeyance could result in 
delays to critical railroad physical plant improvements. (Suppl. 7.)

Discussion and Conclusions

    The acquisition of control of a rail carrier (or carriers) by a 
person that is not a rail carrier but that controls any number of rail 
carriers requires approval by the Board pursuant to 49 U.S.C. 
11323(a)(5). Under 10502(a), however, we must exempt a transaction or 
service from regulation if we find that: (1) Regulation is not 
necessary to carry out the rail transportation policy (RTP) of 10101; 
and (2) either the transaction or service is limited in scope, or 
regulation is not needed to protect shippers from the abuse of market 
power.
    In this case, an exemption from the prior approval requirements of 
49 U.S.C. 11323-25 is consistent with the standards of 10502. Detailed 
scrutiny of the proposed transactions through an application for review 
and approval under 11323-25 is not necessary here to carry out the RTP. 
Approval of the transactions at issue will result in a change in 
ownership of the 18 aforementioned rail carriers with no lessening of 
competition and will bring those railroads under the oversight of 
established short-line management. An exemption will promote the RTP by 
minimizing the need for federal regulatory control over the 
transactions, 10101(2); ensuring the development and continuation of a 
sound rail transportation system that will continue to meet the needs 
of the public, 10101(4); reducing the barriers to entry and exit from 
the rail transportation industry, 10101(7); encouraging efficient 
management, 10101(9); and providing for the expeditious resolution of 
this and the related proceedings, 10101(15). Other aspects of the RTP 
will not be adversely affected.
    Nor is detailed scrutiny of the proposed transactions necessary to 
protect shippers from an abuse of market power. According to OmniTRAX, 
no shipper will lose access to rail service as a result of the 
transactions, and operations will continue as they did before OmniTRAX 
assumed control. (Pet. 9.) Further, OmniTRAX states that the relevant 
agreements related to the acquisitions contain no provision that would 
limit any of the 18 railroads' future interchange of traffic to or from 
third-party connecting carriers. (Id.) Although PIR connects with IR, 
OmniTRAX states that their lines do not access or serve any common 
industry or customers. In addition, OmniTRAX states that ``PIR's only 
outlet to the balance of the interstate railroad network is via its 
connection to IR,'' that PIR and its customers would continue to rely 
upon intermediate IR service to reach line-haul carriers. (Suppl. 6.) 
Accordingly, based on the record, these transactions do not appear to 
shift or consolidate market power; therefore, we do not find that 
regulation is necessary to protect shippers from the abuse of market 
power.\6\
---------------------------------------------------------------------------

    \6\ As there is no evidence that regulation is needed to protect 
shippers from the abuse of market power, we do not need to determine 
whether the transaction is limited in scope. See 49 U.S.C. 10502(a).

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

[[Page 45596]]

    Under 49 U.S.C. 10502(g), we may not use our exemption authority to 
relieve a rail carrier of its statutory obligation to protect the 
interests of its employees. The Board, however, is not required to 
impose labor protective conditions when only Class III rail carriers 
are involved in a transaction that falls under 49 U.S.C. 11324-25, as 
is the case here. 49 U.S.C. 11326(c).
    These transactions are categorically excluded from environmental 
review under 49 CFR. 1105.6(c)(2)(i) because they will not result in 
any significant change in carrier operations. Similarly, the 
transactions are exempt from the historic reporting requirements under 
49 CFR. 1105.8(b)(3) because they will not substantially change the 
level of maintenance of railroad properties.
    As indicated, OmniTRAX has requested expedited action to avoid 
delays to critical railroad physical plant improvements. We find 
OmniTRAX's request to be reasonable. We will grant the exemption and 
the exemption will be effective immediately.
    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts the above-described 
transactions from the prior approval requirements of 11323-25.
    2. Notice will be published in the Federal Register.
    3. This exemption will be effective on July 14, 2016.

    Decided: July 11, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Brendetta S. Jones,
Clearance Clerk.
[FR Doc. 2016-16671 Filed 7-13-16; 8:45 am]
 BILLING CODE 4915-01-P
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