[Federal Register Volume 61, Number 208 (Friday, October 25, 1996)]
[Notices]
[Page 55357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27422]


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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 33133]


Dakota Rail, Inc.--Acquisition of Control Exemption--Otter Tail 
Valley Railroad Company, Inc.

    Dakota Rail, Inc. (Dakota), has filed a notice of exemption to 
acquire control, through stock purchase, of Otter Tail Valley Railroad 
Company, Inc. (OTVR).1 OTVR, a Class III rail carrier, operates 
solely in Minnesota.2
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    \1\  On October 4, 1996, Dakota filed a request to amend its 
verified notice of exemption filed on September 25, 1996, in this 
proceeding to properly characterize the transaction as ``acquisition 
of control'' rather than ``acquisition of control and merger.'' 
Dakota states that, while it intends to merge OTVR into Dakota, 
there will be a period where OTVR will exist as a separate entity, 
with Dakota owning 100% of OTVR's outstanding stock and thus 
controlling OTVR. It indicates that it will seek separate approval 
of the merger of OTVR into Dakota.
    \2\  OTVR's main line runs from milepost 185.1, near Fergus 
Falls, MN, northwest to Barnesville Junction, MN (milepost 218.6 = 
0). From Barnesville Junction, milepost 0, the main line runs 
northwest to Moorehead, MN, at milepost 21.25. In addition, a branch 
line runs from milepost 49.0, at Fergus Falls, west to milepost 
61.5, at Foxhome, MN.
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    Dakota, a Class III rail carrier, is a wholly owned subsidiary of 
RailAmerica, Inc. It operates a noncontiguous rail line from 
Hutchinson, MN, to Wayzata, MN. Under the terms of an agreement with 
OTVR, Dakota will acquire 100% of the outstanding stock of OTVR.3 
The effective date of the exemption was October 11, 1996.
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    \3\  By decision served October 9, 1996, the Board's Secretary 
granted a motion for a protective order permitting the stock 
purchase agreement to be filed under seal.
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    This transaction is related to a notice of exemption filed in STB 
Finance Docket No. 33138, RailAmerica, Inc.--Acquisition of Control 
Exemption--Otter Tail Valley Railroad Company, Inc., wherein 
RailAmerica seeks to acquire control, through Dakota, of OTVR.
    Dakota indicates that: (1) OTVR does not connect with any other 
railroads in Dakota's corporate family; (2) the involved transaction is 
not part of a series of anticipated transactions that would connect 
Dakota with any other railroad in its corporate family; and (3) the 
transaction does not involve a Class I carrier. Therefore, the 
transaction is exempt from the prior approval requirements of 49 U.S.C. 
11323. See 49 CFR 1180.2(d)(2). The purpose of the transaction is to 
achieve operating economies and to improve service over the lines.
    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. Because this 
transaction involves Class III rail carriers only, the Board, under the 
statute, may not impose labor protective conditions for this 
transaction.
    If the 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 transaction.
    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 33133, must be filed with the Surface Transportation 
Board, Office of the Secretary, Case Control Branch, 1201 Constitution 
Avenue, N.W., Washington, DC 20423. In addition, one copy of all 
pleadings must be served on: Edward D. Greenberg, Canal Square, 1054 
Thirty-First Street, N.W., Washington, DC 20007.

    Decided: October 17, 1996.

    By the Board, Joseph H. Dettmar, Acting Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 96-27422 Filed 10-24-96; 8:45 am]
BILLING CODE 4915-00-P