Canadian Pacific Railway Company-Control Exemption-Detroit River Tunnel Company, 78913-78914 [2020-26811]

Download as PDF Federal Register / Vol. 85, No. 235 / Monday, December 7, 2020 / Notices SURFACE TRANSPORTATION BOARD [Docket No. FD 36448] Canadian Pacific Railway Company— Control Exemption—Detroit River Tunnel Company On October 16, 2020, Canadian Pacific Railway Company (CPRC),1 a Class I carrier, filed a petition under 49 U.S.C. 10502 for exemption from the prior approval requirements of 49 U.S.C. 11323–24 to allow CPRC and its wholly owned noncarrier subsidiary, DRTP Holdings ULC, ‘‘to acquire certain partnership interests’’ from Borealis Transportation Infrastructure Trust (BTIT) 2 in the Detroit River Tunnel Partnership (the Partnership), which indirectly owns the Detroit River Tunnel a/k/a the Michigan Central Railway Tunnel (Tunnel), and ‘‘to continue in control of the Tunnel.’’ (Pet. 1.) 3 The Board will grant CPRC’s petition for exemption, subject to standard labor protective conditions. khammond on DSKJM1Z7X2PROD with NOTICES Background Detroit River Tunnel Company (DRTC), which is indirectly owned by the Partnership,4 owns the Tunnel, a two-bore rail tunnel that connects Windsor, Ont., and Detroit, Mich. DRTC’s rail line extends 3.24 miles, between milepost 228.08 in Detroit and milepost 224.84 in Windsor, of which approximately 1.79 miles are located within the United States. (Pet. 1–2.) Pursuant to a 2001 Operating, Management, and Maintenance Agreement (OMM Agreement) and a 2009 Amended and Restated Partnership Agreement (Partnership Agreement) between CPRC and BTIT, CPRC currently exercises operational control over the Tunnel. (Id. at 3.) Under the OMM Agreement, CPRC maintains the Tunnel and dispatches and controls Tunnel rail operations.5 1 CPRC is the Canadian rail operating subsidiary of Canadian Pacific Railway Ltd. CPRC and its U.S. rail operating subsidiaries do business as Canadian Pacific (CP). 2 BTIT is an indirect subsidiary of OMERS Administration Corporation. (Pet. 2.) 3 CPRC filed its petition as a continuance-incontrol exemption. It appears, however, that the transaction involves CPRC acquiring BTIT’s 83.5% ownership interest, and as such, it has been captioned as a control exemption. 4 CPRC states that the Partnership owns the Detroit River Tunnel Holding Corporation, which owns DRTC. (Pet. 2, n.1.) 5 In 2001, the Board exempted a control transaction under which CPRC held 50% of ownership interests in the newly created Partnership as well as ‘‘increased operational control of the Tunnel.’’ See Borealis Infrastructure Trust Mgmt. Inc.—Acquis. Exemption—Detroit River Tunnel Co., FD 33984 et al., slip op. at 7 (STB served Dec. 19, 2001). BTIT also acquired the remaining 50% of ownership interests in the VerDate Sep<11>2014 18:32 Dec 04, 2020 Jkt 253001 (Id.) CPRC is also responsible for ensuring that other railroads can use the Tunnel pursuant to each railroad’s Tunnel User Agreement.6 (See Pet., Ex. 3, OMM Agreement, Article 2.4.) CPRC currently owns 16.5% of the ownership interests in the Partnership; BTIT owns the remaining 83.5%. (Pet. 2.) Under the proposed transaction, CPRC’s acquisition of BTIT’s 83.5% ownership interest in the Partnership would result in CPRC, directly and via DRTP Holdings ULC, holding 100% of the ownership interests in the Tunnel. (Pet. 4.) CPRC states that it would continue to dispatch, operate, and maintain the Tunnel, as the Partnership Agreement and OMM Agreement would remain in effect. (Id. at 3.) CPRC notes that other railroads would continue to maintain their access to the Tunnel. CPRC thus states that the transaction would not have an adverse effect on service levels and that no significant operational changes are planned. (Id. at 3–4.) Discussion and Conclusions Under 49 U.S.C. 11323(a)(3), the acquisition of control of a rail carrier by any number of rail carriers requires prior Board approval. Under section 10502(a), however, the Board must exempt a transaction or service from regulation if it finds that: (1) Regulation is not necessary to carry out the rail transportation policy (RTP) of 49 U.S.C. 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 sections 11323–24 is consistent with the standards of section 10502. Detailed scrutiny of the proposed transaction through an application for review and approval under sections 11323–24 is not Partnership from Canadian National Railway Company (CN). Id. at 3, 5 (finding that BTIT did not require Board authorization to acquire its 50% share in the Partnership). CPRC states that, in 2009, BTIT acquired an additional 33.5% ownership interest in the Partnership from CPRC, increasing its ownership to its current 83.5% share and reducing CPRC’s ownership interest to 16.5%, and that the OMM Agreement, under which CPRC dispatches trains and controls operations, continued in effect. (Pet. 2–3.) 6 CPRC states that operations in the Tunnel, including CPRC’s, are pursuant to DRTC-granted trackage rights. See, e.g., Canadian Pac. R.R.— Trackage Rights Exemption—Detroit River Tunnel Co., FD 34006 (STB served Mar. 16, 2001). CPRC notes that CP traffic currently accounts for approximately 98% of all Tunnel traffic and that, currently, CSX Transportation, Inc. (CSXT), is the only carrier with an active Tunnel User Agreement. CPRC further notes that CN’s occasional use of the Tunnel has been pursuant to detour agreements and that CN primarily moves traffic via a nearby Paul M. Tellier Tunnel. (Pet. 3, nn.6 & 8.) PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 78913 necessary here to carry out the RTP. Approval of the transaction would result in CPRC increasing its ownership share of the Partnership with no lessening of competition or change in dispatch and operations of the Tunnel. An exemption would promote the RTP by: Minimizing the need for federal regulatory control over the transaction, section 10101(2); ensuring the development and continuation of a sound rail transportation system that would continue to meet the needs of the public, section 10101(4); fostering sound economic conditions in transportation, section 10101(5); encouraging efficient management, section 10101(9); and providing for the expeditious resolution of this proceeding, section 10101(15). Other aspects of the RTP would not be adversely affected. Regulation of the control transaction is not needed to protect shippers from an abuse of market power.7 Nothing in the record indicates that any shipper would lose an existing rail service option as a result of the proposed transaction. According to CPRC, it would continue to dispatch, operate, and maintain the Tunnel, as it has since 2001. CPRC also states that, pursuant to the terms of the OMM Agreement, other railroads would continue to be able to use the Tunnel pursuant to Tunnel User Agreements. Currently, CP traffic accounts for approximately 98% of all Tunnel traffic and CSXT is the only carrier with an active Tunnel User Agreement. The transaction thus would not result in any shipper losing access to rail service or foreclose any transportation options currently available to shippers. Moreover, no shipper (or any other entity) has objected to the control transaction. Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a carrier of its statutory obligation to protect the interests of employees. Accordingly, as a condition to granting this exemption, the Board will impose the standard employee protective conditions in New York Dock Railway—Control—Brooklyn Eastern District Terminal, 360 I.C.C 60, aff’d New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 1979). The control transaction is exempt from environmental reporting requirements under 49 CFR 1105.6(c)(1)(i) because it will not result in any significant change in carrier operations. Similarly, the transaction is exempt from the historic reporting 7 Given this finding, the Board need not determine whether the transaction is limited in scope. See 49 U.S.C. 10502(a). E:\FR\FM\07DEN1.SGM 07DEN1 78914 Federal Register / Vol. 85, No. 235 / Monday, December 7, 2020 / Notices requirements under 49 CFR 1105.8(b)(3), because it will not substantially change the level of maintenance of railroad properties. CPRC requests authority to control the Tunnel by December 15, 2020, so that the parties can close the transaction before the end of the year. The exemption will be effective December 15, 2020, and petitions to stay will be due by December 10, 2020. Petitions to reopen will be due by December 22, 2020. It is ordered: 1. Under 49 U.S.C. 10502, the Board exempts from the prior approval requirements of 49 U.S.C. 11323–25 the control transaction described above, subject to the employee protective conditions in New York Dock Railway— Control—Brooklyn Eastern District Terminal, 360 I.C.C 60, aff’d New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 1979). 2. Notice of the exemption will be published in the Federal Register. 3. The exemption will become effective on December 15, 2020. Petitions for stay must be filed by December 10, 2020. Petitions to reopen must be filed by December 22, 2020. Decided: December 1, 2020. By the Board, Board Members Begeman, Fuchs, and Oberman. Tammy Lowery, Clearance Clerk. [FR Doc. 2020–26811 Filed 12–4–20; 8:45 am] BILLING CODE 4915–01–P DEPARTMENT OF TRANSPORTATION Federal Highway Administration [FHWA Docket No. FHWA–2020–0014] Surface Transportation Project Delivery Program; Alaska Department of Transportation Third Audit Report Federal Highway Administration (FHWA), U.S. Department of Transportation (DOT). ACTION: Notice; Request for comment. AGENCY: The Moving Ahead for Progress in the 21st Century Act (MAP– 21) established the Surface Transportation Project Delivery Program that allows a State to assume FHWA’s environmental responsibilities for environmental review, consultation, and compliance under the National Environmental Policy Act (NEPA) for Federal highway projects. When a State assumes these Federal responsibilities, the State becomes solely responsible and liable for carrying out the responsibilities it has assumed, in lieu khammond on DSKJM1Z7X2PROD with NOTICES SUMMARY: VerDate Sep<11>2014 18:32 Dec 04, 2020 Jkt 253001 of FHWA. This program mandates annual audits during each of the first 4 years of State participation to ensure compliance with program requirements. This notice announces and solicits comments on the third audit report for the Alaska Department of Transportation and Public Facilities (DOT&PF). DATES: Comments must be received on or before January 6, 2021. ADDRESSES: Mail or hand deliver comments to Docket Management Facility: U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W12–140, Washington, DC 20590. You may also submit comments electronically at www.regulations.gov. All comments should include the docket number that appears in the heading of this document. All comments received will be available for examination and copying at the above address from 9 a.m. to 5 p.m., e.t., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a selfaddressed, stamped postcard or you may print the acknowledgment page that appears after submitting comments electronically. Anyone can search the electronic form of all comments in any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, or labor union). The DOT posts these comments, without edits, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL–14 FDMS), which can be reviewed at www.dot.gov/privacy. FOR FURTHER INFORMATION CONTACT: Mr. David T. Williams, Office of Project Development and Environmental Review, (202) 366–5074, David.Williams@dot.gov, or Mr. Jay Payne, Office of the Chief Counsel, (202) 366–4241, James.O.Payne@dot.gov; Federal Highway Administration, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590. Office hours are from 8:00 a.m. to 4:30 p.m., e.t., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: Electronic Access An electronic copy of this notice may be downloaded from the specific docket page at www.regulations.gov. Background The Surface Transportation Project Delivery Program, codified at 23 U.S.C. 327, commonly known as the NEPA PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 Assignment Program, allows a State to assume FHWA’s environmental responsibilities for review, consultation, and compliance for Federal highway projects. When a State assumes these Federal responsibilities, the State becomes solely liable for carrying out the responsibilities it has assumed, in lieu of FHWA. The DOT&PF published its application for NEPA assumption on May 1, 2016, and made it available for public comment for 30 days. After considering public comments, DOT&PF submitted its application to FHWA on July 12, 2016. The application served as the basis for developing a memorandum of understanding (MOU) that identified the responsibilities and obligations that the DOT&PF would assume. The FHWA published a notice of the draft MOU in the Federal Register on August 25, 2017, with a 30-day comment period to solicit the views of the public and Federal agencies. After the close of the comment period, FHWA and DOT&PF considered comments and proceeded to execute the MOU. Effective November 13, 2017, DOT&PF assumed FHWA’s responsibilities under NEPA, and the responsibilities for NEPA-related Federal environmental laws described in the MOU. Section 327(g) of title 23, U.S.C., requires the Secretary to conduct annual audits to ensure compliance with the MOU during each of the first 4 years of State participation and, after the fourth year, monitor compliance. The FHWA must make the results of each audit available for public comment. The second audit report of DOT&PF compliance was finalized on February 25, 2020. This notice announces the availability of the third audit report for DOT&PF and solicits public comment on same. Authority: Section 1313 of Public Law 112–141; Section 6005 of Public Law 109–59; 23 U.S.C. 327; 23 CFR 773. Nicole R. Nason, Administrator, Federal Highway Administration. Surface Transportation Project Delivery Program, FHWA’s Audit of the Alaska Department of Transportation April 6–10, 2020 Executive Summary This report summarizes the results of the Federal Highway Administration’s (FHWA) third audit of the Alaska Department of Transportation and Public Facilities’ (DOT&PF) assumption of FHWA’s project-level National Environmental Policy Act (NEPA) responsibilities and obligations pursuant to a 23 U.S.C. 327 E:\FR\FM\07DEN1.SGM 07DEN1

Agencies

Surface Transportation Board

[Federal Register Volume 85, Number 235 (Monday, December 7, 2020)]
[Notices]
[Pages 78913-78914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26811]



[[Page 78913]]

=======================================================================
-----------------------------------------------------------------------

SURFACE TRANSPORTATION BOARD

[Docket No. FD 36448]


Canadian Pacific Railway Company--Control Exemption--Detroit 
River Tunnel Company

    On October 16, 2020, Canadian Pacific Railway Company (CPRC),\1\ a 
Class I carrier, filed a petition under 49 U.S.C. 10502 for exemption 
from the prior approval requirements of 49 U.S.C. 11323-24 to allow 
CPRC and its wholly owned noncarrier subsidiary, DRTP Holdings ULC, 
``to acquire certain partnership interests'' from Borealis 
Transportation Infrastructure Trust (BTIT) \2\ in the Detroit River 
Tunnel Partnership (the Partnership), which indirectly owns the Detroit 
River Tunnel a/k/a the Michigan Central Railway Tunnel (Tunnel), and 
``to continue in control of the Tunnel.'' (Pet. 1.) \3\ The Board will 
grant CPRC's petition for exemption, subject to standard labor 
protective conditions.
---------------------------------------------------------------------------

    \1\ CPRC is the Canadian rail operating subsidiary of Canadian 
Pacific Railway Ltd. CPRC and its U.S. rail operating subsidiaries 
do business as Canadian Pacific (CP).
    \2\ BTIT is an indirect subsidiary of OMERS Administration 
Corporation. (Pet. 2.)
    \3\ CPRC filed its petition as a continuance-in-control 
exemption. It appears, however, that the transaction involves CPRC 
acquiring BTIT's 83.5% ownership interest, and as such, it has been 
captioned as a control exemption.
---------------------------------------------------------------------------

Background

    Detroit River Tunnel Company (DRTC), which is indirectly owned by 
the Partnership,\4\ owns the Tunnel, a two-bore rail tunnel that 
connects Windsor, Ont., and Detroit, Mich. DRTC's rail line extends 
3.24 miles, between milepost 228.08 in Detroit and milepost 224.84 in 
Windsor, of which approximately 1.79 miles are located within the 
United States. (Pet. 1-2.) Pursuant to a 2001 Operating, Management, 
and Maintenance Agreement (OMM Agreement) and a 2009 Amended and 
Restated Partnership Agreement (Partnership Agreement) between CPRC and 
BTIT, CPRC currently exercises operational control over the Tunnel. 
(Id. at 3.) Under the OMM Agreement, CPRC maintains the Tunnel and 
dispatches and controls Tunnel rail operations.\5\ (Id.) CPRC is also 
responsible for ensuring that other railroads can use the Tunnel 
pursuant to each railroad's Tunnel User Agreement.\6\ (See Pet., Ex. 3, 
OMM Agreement, Article 2.4.) CPRC currently owns 16.5% of the ownership 
interests in the Partnership; BTIT owns the remaining 83.5%. (Pet. 2.)
---------------------------------------------------------------------------

    \4\ CPRC states that the Partnership owns the Detroit River 
Tunnel Holding Corporation, which owns DRTC. (Pet. 2, n.1.)
    \5\ In 2001, the Board exempted a control transaction under 
which CPRC held 50% of ownership interests in the newly created 
Partnership as well as ``increased operational control of the 
Tunnel.'' See Borealis Infrastructure Trust Mgmt. Inc.--Acquis. 
Exemption--Detroit River Tunnel Co., FD 33984 et al., slip op. at 7 
(STB served Dec. 19, 2001). BTIT also acquired the remaining 50% of 
ownership interests in the Partnership from Canadian National 
Railway Company (CN). Id. at 3, 5 (finding that BTIT did not require 
Board authorization to acquire its 50% share in the Partnership). 
CPRC states that, in 2009, BTIT acquired an additional 33.5% 
ownership interest in the Partnership from CPRC, increasing its 
ownership to its current 83.5% share and reducing CPRC's ownership 
interest to 16.5%, and that the OMM Agreement, under which CPRC 
dispatches trains and controls operations, continued in effect. 
(Pet. 2-3.)
    \6\ CPRC states that operations in the Tunnel, including CPRC's, 
are pursuant to DRTC-granted trackage rights. See, e.g., Canadian 
Pac. R.R.--Trackage Rights Exemption--Detroit River Tunnel Co., FD 
34006 (STB served Mar. 16, 2001). CPRC notes that CP traffic 
currently accounts for approximately 98% of all Tunnel traffic and 
that, currently, CSX Transportation, Inc. (CSXT), is the only 
carrier with an active Tunnel User Agreement. CPRC further notes 
that CN's occasional use of the Tunnel has been pursuant to detour 
agreements and that CN primarily moves traffic via a nearby Paul M. 
Tellier Tunnel. (Pet. 3, nn.6 & 8.)
---------------------------------------------------------------------------

    Under the proposed transaction, CPRC's acquisition of BTIT's 83.5% 
ownership interest in the Partnership would result in CPRC, directly 
and via DRTP Holdings ULC, holding 100% of the ownership interests in 
the Tunnel. (Pet. 4.) CPRC states that it would continue to dispatch, 
operate, and maintain the Tunnel, as the Partnership Agreement and OMM 
Agreement would remain in effect. (Id. at 3.) CPRC notes that other 
railroads would continue to maintain their access to the Tunnel. CPRC 
thus states that the transaction would not have an adverse effect on 
service levels and that no significant operational changes are planned. 
(Id. at 3-4.)

Discussion and Conclusions

    Under 49 U.S.C. 11323(a)(3), the acquisition of control of a rail 
carrier by any number of rail carriers requires prior Board approval. 
Under section 10502(a), however, the Board must exempt a transaction or 
service from regulation if it finds that: (1) Regulation is not 
necessary to carry out the rail transportation policy (RTP) of 49 
U.S.C. 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 
sections 11323-24 is consistent with the standards of section 10502. 
Detailed scrutiny of the proposed transaction through an application 
for review and approval under sections 11323-24 is not necessary here 
to carry out the RTP. Approval of the transaction would result in CPRC 
increasing its ownership share of the Partnership with no lessening of 
competition or change in dispatch and operations of the Tunnel. An 
exemption would promote the RTP by: Minimizing the need for federal 
regulatory control over the transaction, section 10101(2); ensuring the 
development and continuation of a sound rail transportation system that 
would continue to meet the needs of the public, section 10101(4); 
fostering sound economic conditions in transportation, section 
10101(5); encouraging efficient management, section 10101(9); and 
providing for the expeditious resolution of this proceeding, section 
10101(15). Other aspects of the RTP would not be adversely affected.
    Regulation of the control transaction is not needed to protect 
shippers from an abuse of market power.\7\ Nothing in the record 
indicates that any shipper would lose an existing rail service option 
as a result of the proposed transaction. According to CPRC, it would 
continue to dispatch, operate, and maintain the Tunnel, as it has since 
2001. CPRC also states that, pursuant to the terms of the OMM 
Agreement, other railroads would continue to be able to use the Tunnel 
pursuant to Tunnel User Agreements. Currently, CP traffic accounts for 
approximately 98% of all Tunnel traffic and CSXT is the only carrier 
with an active Tunnel User Agreement. The transaction thus would not 
result in any shipper losing access to rail service or foreclose any 
transportation options currently available to shippers. Moreover, no 
shipper (or any other entity) has objected to the control transaction.
---------------------------------------------------------------------------

    \7\ Given this finding, the Board need not determine whether the 
transaction is limited in scope. See 49 U.S.C. 10502(a).
---------------------------------------------------------------------------

    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a carrier of its statutory obligation to protect 
the interests of employees. Accordingly, as a condition to granting 
this exemption, the Board will impose the standard employee protective 
conditions in New York Dock Railway--Control--Brooklyn Eastern District 
Terminal, 360 I.C.C 60, aff'd New York Dock Railway v. United States, 
609 F.2d 83 (2d Cir. 1979).
    The control transaction is exempt from environmental reporting 
requirements under 49 CFR 1105.6(c)(1)(i) because it will not result in 
any significant change in carrier operations. Similarly, the 
transaction is exempt from the historic reporting

[[Page 78914]]

requirements under 49 CFR 1105.8(b)(3), because it will not 
substantially change the level of maintenance of railroad properties.
    CPRC requests authority to control the Tunnel by December 15, 2020, 
so that the parties can close the transaction before the end of the 
year. The exemption will be effective December 15, 2020, and petitions 
to stay will be due by December 10, 2020. Petitions to reopen will be 
due by December 22, 2020.
    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts from the prior approval 
requirements of 49 U.S.C. 11323-25 the control transaction described 
above, subject to the employee protective conditions in New York Dock 
Railway--Control--Brooklyn Eastern District Terminal, 360 I.C.C 60, 
aff'd New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 
1979).
    2. Notice of the exemption will be published in the Federal 
Register.
    3. The exemption will become effective on December 15, 2020. 
Petitions for stay must be filed by December 10, 2020. Petitions to 
reopen must be filed by December 22, 2020.

    Decided: December 1, 2020.

    By the Board, Board Members Begeman, Fuchs, and Oberman.
Tammy Lowery,
Clearance Clerk.
[FR Doc. 2020-26811 Filed 12-4-20; 8:45 am]
BILLING CODE 4915-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.