Quarterly Rail Cost Adjustment Factor
The Board has approved the rebased first quarter 2008 rail cost adjustment factor (RCAF) and cost index filed by the Association of American Railroads. As required by statute, the RCAF is rebased using the fourth quarter 2007 index value as the denominator and first quarter 2008 index value as the numerator (10/1/07 = 1.00). Rebasing is required every five years. The rebased first quarter 2008 RCAF (Unadjusted) is 1.050. The rebased first quarter 2008 RCAF (Adjusted) is 0.486. The rebased first quarter 2008 RCAF-5 is 0.461.
Canadian National Railway Company and Grand Trunk Corporation-Control-EJ&E West Company
On October 30, 2007, Canadian National Railway Corporation (CNR) and Grand Trunk Corporation (GTC), a noncarrier holding company through which CNR controls its U.S. rail subsidiaries, filed an application with the Surface Transportation Board (Board) seeking the Board's approval of the acquisition of control of EJ&E West Company (EJ&EW), a wholly owned noncarrier subsidiary of Elgin, Joliet and Eastern Railway Company (EJ&E). In this document, the action before the Board will be referred to as the proposal or the proposed acquisition and CNR and GTC will be referred to collectively as CN or as Applicants. CN is one of Canada's two major railroads. It extends from Halifax, Nova Scotia, to Vancouver and Prince Rupert, British Columbia. EJ&E is a Class II railroad that currently operates over 198 miles of track in northeastern Illinois and northwestern Indiana, consisting primarily of an arc of roughly 190 miles around Chicago, IL, extending from Waukegan, IL, southwards to Joliet, IL, then eastward to Gary, IN, and then northwest to South Chicago along Lake Michigan. EJ&E provides rail service to approximately 100 customers, including steel mills, coal utilities, plastics and chemical producers, steel processors, distribution centers, and scrap processors. Applicants' proposed acquisition of the EJ&E would shift rail traffic currently moving over CN's rail lines inside the EJ&E arc in Chicago to the EJ&E, which traverses the suburbs generally to the west and south of Chicago. Rail traffic on CNR lines inside the EJ&E arc would generally decrease. The decreases in rail traffic would be offset by increases in the number of trains operating on the EJ&E rail line outside of Chicago (approximately 15-27 more trains would operate on various segments of the EJ&E). Applicants also proposed to construct six new rail connections and approximately 19 miles of new sidings/ double tracking. Applicants give three primary reasons for seeking approval of the proposed acquisition: Improved rail operations in the Chicago area; availability to EJ&E's Kirk Yard in Gary, Indiana, and other smaller facilities in Joliet, Illinois, and Whiting, Indiana; and improved service to companies dealing in steel, chemicals, and petrochemicals, as well as Chicago area utilities. To thoroughly assess the potential environmental impacts that may result from the proposed acquisition, the Board, through its Section of Environmental Analysis (SEA), will prepare an Environmental Impact Statement (EIS). The purpose of this Notice is to give all interested persons the opportunity to actively participate in the forthcoming environmental review, the first step of which is ``scoping.'' Scoping is an open process for determining the range of issues that should be examined and assessed in the EIS. In addition to announcing that the Board will prepare an EIS for this proceeding, this Notice also announces the availability of a draft scope of study, requests comments on the draft scope of study, and presents the schedule of Open-House meetings to be held in the project area.
The Surface Transportation Board provides notice that all railroads required to submit a waybill sample under 49 CFR part 1244 shall report fuel surcharge revenues in the waybill field ``Freight Revenue,'' columns 83-91 in the waybill file record layout.
The Kansas City Southern Railway Company-Acquisition and Operation Exemption-Columbus and Greenville Railway Company
Under 49 U.S.C. 10502, the Board is granting a petition for exemption from the prior approval requirements of 49 U.S.C. 11323 et seq., for The Kansas City Southern Railway Company (KCSR), a Class I rail carrier, to acquire and operate a 2.23-mile rail line owned by Columbus and Greenville Railway Company (CAGY), a Class III rail carrier, subject to CAGY's reservation of nonexclusive limited local trackage rights.\1\ The rail line extends between, at one end, a connection between KCSR's Artesia Subdivision and CAGY's main track near KCSR milepost 230.4 and, at the other end, two connections between CAGY's main track and KCSR's Louisville Subdivision near KCSR milepost 88.5, near West Point, MS.\2\
Iowa, Chicago & Eastern Railroad Corporation-Acquisition Exemption-Line of BNSF Railway Company
The Board grants an exemption, under 49 U.S.C. 10502, from the prior approval requirements of 49 U.S.C. 10902 for the acquisition by Iowa, Chicago & Eastern Railroad Corporation (IC&E), a Class II rail carrier, of approximately 18.5 miles of rail line owned by BNSF Railway Company (BNSF), a Class I rail carrier, extending from a connection with another BNSF line at milepost 1.74 near East Moline, IL, to the end of the line at milepost 20.31 at Ceffco, IL, near Albany, IL, subject to the labor protection required by 49 U.S.C. 10902(d), including a 60-day notice requirement.
Canadian National Railway Company and Grand Trunk Corporation-Control-EJ&E West Company 1
The Surface Transportation Board (Board) is accepting for consideration the primary application filed October 30, 2007, by Canadian National Railway Corporation (CNR) and Grand Trunk Corporation (GTC), a noncarrier holding company through which CNR controls its U.S. rail subsidiaries, and seven related filings. The primary application seeks Board approval under 49 U.S.C. 11321-26 of the acquisition of control of EJ&E West Company (EJ&EW), a wholly owned noncarrier subsidiary of Elgin, Joliet and Eastern Railway Company (EJ&E), by CNR and GTC. This proposal is referred to as the Control Transaction, and CNR and GTC are referred to collectively as applicants. The related filings are notices of exemption involving an intra- corporate family transaction and the granting of trackage rights. The Sub-No. 1 filing provides for EJ&E to transfer property to EJ&EW, which, at that time, would become a rail common carrier, prior to applicants acquiring control of EJ&EW. The Sub-Nos. 2 through 7 filings provide for grants of trackage rights by EJ&EW to Grand Trunk Western Railroad (GTW), Illinois Central Railroad Company (IC), Chicago, Central & Pacific Railroad Company (CCP), and Wisconsin Central Ltd. (WCL), and by IC and CCP to EJ&EW, promptly upon applicants' acquisition of control of EJ&EW, should the Board approve the proposed Control Transaction. The Board finds that the Control Transaction is a ``minor transaction'' under 49 CFR 1180.2(c), and adopts a procedural schedule for consideration of the application. In finding that the transaction is a minor transaction, the Board has preliminarily determined that any anticompetitive effects of the transaction will clearly be outweighed by the transaction's anticipated contribution to the public interest in meeting significant transportation needs. 49 CFR 1180.2(b)(2). The Board makes this determination based solely on evidence presented in the application. The Board stresses that this is not a final determination, and its finding may be rebutted by filings and evidence submitted into the record for this proceeding. The Board will give careful consideration to any claims that the transaction will have anticompetitive effects that are not apparent from the application itself. Moreover, the Board has determined to prepare an Environmental Impact Statement (EIS) with respect to the transaction.
Canadian Pacific Railway Company, et al.-Control-Dakota, Minnesota & Eastern Railroad Corp., et al.
The Surface Transportation Board (Board) invites public comments on a proposed procedural schedule for this proceeding. On October 5, 2007, Canadian Pacific Railway Corporation (CPRC), Soo Line Holding Company, a Delaware Corporation and indirect subsidiary of CPRC (Soo Holding), Dakota, Minnesota & Eastern Railroad Corporation (DM&E), and Iowa, Chicago & Eastern Railroad Corporation, a wholly-owned rail subsidiary of DM&E (IC&E) (collectively referred to as the ``Applicants'') submitted a filing with the Board seeking approval under 49 U.S.C. 11321-26 of the acquisition of control of DM&E and IC&E by Soo Holding (and, indirectly, by CPRC). In Decision No. 2, served on November 2, 2007, and published in the Federal Register at 72 FR 63232- 36 on November 8, 2007, the Board accepted the October 5 submission as a prefiling notification, thus allowing the Applicants to perfect their application, and provide any supplemental materials or information, on or after December 5, 2007.\1\
Canadian Pacific Railway Company, et al.-Control-Dakota, Minnesota, & Eastern Railroad Corp., et al.
The Surface Transportation Board (Board) has reviewed the submission filed October 5, 2007, by Canadian Pacific Railway Corporation (CPRC), Soo Line Holding Company, a Delaware Corporation and indirect subsidiary of CPRC (Soo Holding), Dakota, Minnesota & Eastern Railroad Corporation (DM&E), and Iowa, Chicago & Eastern Railroad Corporation, a wholly owned rail subsidiary of DM&E (IC&E). The submission is styled as an application seeking Board approval under 49 U.S.C. 11321-26 of the acquisition of control of DM&E and IC&E by Soo Holding (and, indirectly, by CPRC). This proposal is referred to as the ``transaction,'' and, for ease, CPRC, Soo Holding, DM&E, and IC&E are referred to collectively as ``Applicants.'' The Board finds that the transaction would be a ``significant transaction'' under 49 CFR 1180.2(b). The Board's rules at 49 CFR 1180.4(b) require that applicants give notice 2 to 4 months prior to the filing of an application in a ``significant'' transaction. Because Applicants did not file the required prefiling notification before their October 5 submission seeking Board approval of this ``significant'' transaction, and did not pay the filing fee for a ``significant'' transaction, their submission cannot be treated as an application at this time. The Board will, however, consider the October 5 submission a prefiling notification and publish notice of it in the Federal Register, which has the effect of permitting Applicants to perfect their application, and provide any supplemental materials or information, on or after December 5, 2007. When filing a prefiling notification, merger applicants in a ``significant'' transaction must propose a procedural schedule for Board review of their proposed transaction. As part of their tender of an application for a ``minor'' transaction, Applicants had proposed a procedural schedule that tracks the statutory deadlines for processing ``minor'' applications. Because the Board finds the proposed transaction to be ``significant,'' Applicants must file with the Board no later than November 13, 2007, a revised proposed procedural schedule that reflects the Board's determination that this is a ``significant'' transaction. The Board will promptly seek public comments on a proposed procedural schedule, with comments due 10 days after publication of the proposed procedural schedule in the Federal Register. Section 1180.4(b) also calls for merger applicants to indicate in their prefiling notification the year to be used for the impact analysis required in ``significant'' transactions. In their October 5 submission, Applicants cite the 2005 Carload Waybill Sample in their market analysis. The Board therefore designates 2005 as the year to be used for impact analysis in the application. In addition, Applicants must submit the difference between the filing fee for a ``minor'' transaction (which Applicants already have paid) and the fee for a ``significant'' transaction when they perfect their application on or after December 5, 2007.
Disclosure of Rail Interchange Commitments
The Surface Transportation Board is requesting comments on proposed rules to require that parties seeking to exempt, or to invoke class exemptions covering, transactions involving the sale or lease of railroad lines, identify provisions in their agreements that restrict the ability of the purchaser or tenant railroad to interchange traffic with rail carriers other than the seller or landlord railroad (interchange commitments). The proposed rules also provide a procedure whereby shippers or other affected parties may obtain access to such provisions. The Board is taking this action to facilitate the case- specific review of the reasonableness of interchange commitments and to facilitate the Board's monitoring of their usage.
Methodology to be Employed in Determining the Railroad Industry's Cost of Capital
The Surface Transportation Board will hold a public hearing beginning at 10 a.m. on Tuesday, December 4, 2007, at its offices in Washington, DC. The purpose of the hearing will be to allow current parties of record to comment on the proposed methodology to be employed in determining the railroad industry's estimated cost of capital and the record developed in this proceeding. Parties of record wishing to speak at the hearing should notify the Board in writing.
Rail Fuel Surcharges
Pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501 et. seq. (PRA) and Office of Management and Budget (OMB) regulations at 5 CFR 1320.11, the Surface Transportation Board has obtained OMB approval for the collection of information adopted by the Board in Rail Fuel Surcharges, STB Ex Parte No. 661 (Sub-No. 1) (STB served Aug. 14, 2007). This collection, which is codified at 49 CFR 1243.3, has been assigned OMB Control No. 2140-0014. Unless renewed, OMB approval expires on October 31, 2010. The display of a currently valid OMB control number for this collection is required by law. Under the PRA and 5 CFR 1320.8, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.
Southwest Gulf Railroad-Construction and Operation Exemption-In Medina County, Texas
The Surface Transportation Board's (STB or Board) Section of Environmental Analysis (SEA) is making available to the public, the official ``Section 106'' consulting parties, Indian tribes, and Federal, State, and local agencies, a Draft Programmatic Agreement (PA) for review and comment in the rail line construction and operation proposal described below. The Draft PA addresses historic preservation and cultural resource issues and is being developed to satisfy the requirements of section 106 of the National Historic Preservation Act (NHPA) (16 U.S.C. 470f) and the regulations of the Advisory Council on Historic Preservation at 36 CFR 800.14 (b). Comments on the PA must be post-marked to the address below by November 19, 2007. To be considered, comments must focus on the contents of the PA. Comments addressing matters outside the PA or post-marked after the due date will not be considered. On February 27, 2003, the Southwest Gulf Railroad (SGR) filed a petition with the STB seeking the Board's authorization to construct and operate a new rail line in Medina County, Texas (Finance Docket No. 34284). SGR's proposal involves the construction and operation of a rail line approximately seven miles long from a Vulcan Construction Materials, LP (VCM) proposed limestone quarry to the Union Pacific (UP) rail line near Dunlay, Texas. The Board issued a decision on May 19, 2003, finding that, from a transportation perspective, the proposed construction and operation met the standards of 49 U.S.C. 10502. SEA issued a Draft Environmental Impact Statement (DEIS) for public review and comment in this proceeding in 2004. The DEIS assessed four potential rail routes for SGR's proposed rail line to the VCM proposed quarry, as well as the No-Action Alternative (the use of trucks to transport the limestone to the UP rail line if SGR's rail line were not built). Based on the comments received on the DEIS, SEA decided to prepare a Supplemental Draft Environmental Impact Statement (SDEIS) for public review and comment. SEA issued the SDEIS on December 8, 2006. The SDEIS included additional historic property evaluation and analyzed three additional rail routes to the east of the routes originally considered. The SDEIS preliminarily concluded that two of these eastern routes would be environmentally preferable to the routes previously studied in the DEIS because they would avoid or minimize impacts to rural historic landscapes in the project area discovered during the course of the environmental review. The comment period on the SDEIS closed on January 29, 2007. SEA is currently reviewing the comments received and preparing a Final Environmental Impact Statement (FEIS) that responds to the comments received on the DEIS and SDEIS. Once SEA issues the FEIS, the environmental review process will be concluded, and the Board will issue a final decision on SGR's proposal. Before issuing the FEIS, SEA will first complete the ``Section 106 process'' of the NHPA, which requires Federal agencies to consider the effects of their licensing actions on historic sites and structures. An executed PA is evidence of the agencies compliance with section 106. The Draft PA is available for review on the Board's Web site at http://www.stb.dot.gov by clicking on the ``Environmental Matters'' link, then ``Key Cases'' then the ``Medina County, Texas'' link. Please refer to Finance Docket No. 34284 in all correspondence, including any e-filings.