Iowa Pacific Holdings, LLC, Permian Basin Railways, and San Luis & Rio Grande Railway-Corporate Family Transaction Exemption-Grenada Railroad, LLC, 23326 [2018-10664]

Agencies

• Surface Transportation Board

[Federal Register Volume 83, Number 97 (Friday, May 18, 2018)]
[Notices]
[Page 23326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10664]



[[Page 23326]]

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

SURFACE TRANSPORTATION BOARD

[Docket No. FD 36191]


Iowa Pacific Holdings, LLC, Permian Basin Railways, and San Luis 
& Rio Grande Railway--Corporate Family Transaction Exemption--Grenada 
Railroad, LLC

    Iowa Pacific Holdings, LLC (IPH), Permian Basin Railways (PBR), and 
San Luis & Rio Grande Railway (SLRG) (collectively, the Parties) have 
jointly filed a verified notice of exemption under 49 CFR 1180.2(d)(3) 
for an intra-corporate family transaction.
    According to the Parties, IPH is a noncarrier established for the 
purpose of owning and operating common carrier short line railroads and 
non-common carrier excursion passenger railroads. The Parties state 
that PBR is a wholly owned corporate subsidiary of IPH established for 
the purpose of owning common carrier short line railroads. The Parties 
further state that PBR directly controls the following Class III common 
carrier short line railroads: Chicago Terminal Railroad, Mount Hood 
Railroad, and SLRG. According to the Parties, through SLRG, PBR 
controls three additional Class III common carrier short line 
railroads: Saratoga & North Creek Railway, Grenada Railroad, LLC (GRR), 
and an 80% interest in Massachusetts Coastal Railroad.
    The Parties state that GRR was initially established as a direct 
subsidiary of PBR; however, on or about October 13, 2015, IPH's 
management decided to place control of GRR under SLRG rather than 
directly under PBR. The Parties state that IPH and PBR transferred 
their direct ownership of GRR to their subsidiary, SLRG, without 
realizing that authority from the Surface Transportation Board (Board) 
would be required. According to the Parties, upon learning that 
authority was required, the Parties instructed their counsel to seek 
Board approval.
    According to the Parties, IPH's management transferred ownership of 
GRR from PBR to SLRG for business and tax reasons. The Parties further 
state that they propose to sell a majority interest in GRR to a third 
party ``that will invest substantial assets in the Line to more fully 
develop its potential.'' \1\
---------------------------------------------------------------------------

    \1\ This notice of exemption applies only to the intra-corporate 
family transfer of GRR from PBR to SLRG, not to any proposed sale of 
GRR to a third party.
---------------------------------------------------------------------------

    The Parties certify that the transaction involved no provision or 
agreement that would limit future interchange with a third-party 
connecting carrier.\2\
---------------------------------------------------------------------------

    \2\ The Parties' certification cites to 49 CFR 1180.3(g)(4); 
however, the correct cite is 49 CFR 1180.4(g)(4).
---------------------------------------------------------------------------

    This is a transaction within a corporate family of the type 
specifically exempted from prior review and approval under 49 CFR 
1180.2(d)(3).\3\ Unless stayed, the exemption will be effective on June 
3, 2018 \4\ (30 days after the verified notice was filed).\5\
---------------------------------------------------------------------------

    \3\ Section 1180.2(d)(3) exempts transactions within a corporate 
family that do not result in adverse changes in service levels, 
significant operational changes, or a change in the competitive 
balance with carriers outside the corporate family.
    \4\ The Parties did not request retroactive authorization, and 
the exemption invoked by the Parties does not provide for 
retroactive effectiveness. See Wendelin--Continuance in Control--RMW 
Ventures, LLC, FD 35801, slip op. at 2 n.1 (STB served Mar. 21, 
2014) (noting that the authority for a continuance in control 
exemption under 49 CFR 1180.2(d)(2) would be effective prospectively 
only); see also Kan. City S. Lines, Inc.--Corp. Family Transaction 
Exemption--KCS Transp. Co., FD 33510, slip op. at 1 n.1 (STB served 
Dec. 10, 1997) (``no class exemption provides for retroactive 
application''). Accordingly, the authority will be effective 
prospectively only.
    \5\ The Parties initially filed their verified notice of 
exemption on April 27, 2018, but supplemented it on May 4, 2018. 
Therefore, May 4, 2018, is the official filing date.
---------------------------------------------------------------------------

    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a rail carrier of its statutory obligation to 
protect the interests of its employees. Section 11326(c), however, does 
not provide for labor protection for transactions under sections 11324 
and 11325 that involve only Class III rail carriers. Accordingly, the 
Board may not impose labor protective conditions here, because all the 
carriers involved are Class III carriers.
    If the verified notice contains false or misleading information, 
the exemption is void ab initio. Petitions to revoke the exemption 
under 49 U.S.C. 10502(d) may be filed at any time. The filing of a 
petition to revoke will not automatically stay the exemption. Petitions 
for stay must be filed no later than May 25, 2018 (at least seven days 
before the exemption becomes effective).
    An original and 10 copies of all pleadings, referring to Docket No. 
FD 36191, must be filed with the Surface Transportation Board, 395 E 
Street SW, Washington, DC 20423-0001. In addition, one copy of each 
pleading must be served on John D. Heffner, Clark Hill Strasburger, 
1025 Connecticut Ave. NW, Suite 717, Washington, DC 20036.
    According to the Parties, this action is categorically excluded 
from environmental review under 49 CFR 1105.6(c).
    Board decisions and notices are available on our website at 
``WWW.STB.GOV.''

    Decided: May 15, 2018.

    By the Board, Scott M. Zimmerman, Acting Director, Office of 
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2018-10664 Filed 5-17-18; 8:45 am]
 BILLING CODE 4915-01-P