[Federal Register Volume 61, Number 230 (Wednesday, November 27, 1996)]
[Notices]
[Pages 60320-60321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30289]


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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board 1 
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    \1\ The ICC Termination Act of 1995 (ICCTA), Pub. L. No. 104-88, 
109 Stat. 803, abolished the Interstate Commerce Commission and 
transferred certain functions to the Surface Transportation Board 
(Board) effective January 1, 1996. This notice relates to a 
transaction that is subject to Board jurisdiction pursuant to 49 
U.S.C. 10902.
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[STB Finance Docket No. 33116]


Wisconsin Central Ltd.--Acquisition Exemption--Lines of Union 
Pacific Railroad Company

AGENCY: Surface Transportation Board.

ACTION: Notice of filing of a petition for exemption and a request for 
public comments, including comments on labor protective arrangements to 
be provided by a Class II railroad under 49 U.S.C. 10902.

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SUMMARY: Wisconsin Central Ltd. (WCL), a Class II rail carrier, seeks 
an exemption under 49 U.S.C. 10502 from the prior approval requirements 
of 49 U.S.C. 10902 for its acquisition of two lines of railroad from 
Union Pacific Railroad Company (UP) in central Wisconsin. Section 10902 
is a new provision added by the ICCTA governing purchases of active 
rail lines by Class II (medium sized) and Class III (small) carriers. 
Under subsection 10902(d), a Class II railroad that acquires a rail 
line subject to the Board's jurisdiction must provide a fair and 
equitable arrangement for the protection of employees who may be 
affected by the transaction. The arrangement shall consist exclusively 
of 1 year of severance pay equal to the employee's earnings during the 
12 months preceding the application filing date.
    WCL has proposed an employee protective arrangement to comply with 
subsection 10902(d). The labor protective arrangement that results from 
this proceeding may be used as a model for conditions we impose 
governing the minimum labor protective arrangements we require with 
respect to acquisitions by Class II railroads. Such arrangements have 
in the past consisted of two elements: (1) Procedural (i.e., when must 
employees be notified of their options and by whom); and (2) 
substantive (i.e., how many years of protection should be provided and 
what should that level of protection be). Plainly the new provision 
explicitly limits substantive aspects of any arrangement we may 
require. We seek comments on whether WCL's proposed arrangement meets 
the statutory requirements, and on whether and to what extent we should 
establish and/or oversee the procedural aspects of labor protective 
arrangements under this statute.

DATES: Comments are due on December 27, 1996.

ADDRESSES: Send comments (an original and 10 copies) referring to STB 
Finance Docket No. 33116 to: Surface Transportation Board, Office of 
the Secretary, Case Control Branch, 1201 Constitution Avenue, N.W., 
Washington, DC 20423. In addition, send one copy of comments to 
petitioner's representative: Janet H. Gilbert, General Counsel, 
Wisconsin Central Ltd., P.O. Box 5062, Rosemont, IL 60017-5062.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar (202) 927-5660. [TDD 
for hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: WCL, a wholly owned subsidiary of Wisconsin 
Central Transportation Corporation, proposes to acquire from UP two 
rail lines, the ``Hayward Line'' between Hayward and Hayward Junction, 
WI, and the ``Wausau Pocket'' between Kelly and Wausau-Schofield, WI, 
totaling 17.8 miles in central Wisconsin. There are two shippers on the 
Hayward Line and eight shippers on the Wausau Pocket that jointly 
generate approximately 12,300 carloads a year. WCL submitted supporting 
statements from each shipper on the two lines. The Board seeks comments 
on the proposed transaction.
    As noted, the ICCTA included a new statutory provision--49 U.S.C. 
10902--that applies to the acquisition or operation of additional rail 
lines by Class II and Class III railroads. As enacted, subsection 
10902(c) requires the Board, after application by a Class II or III 
rail carrier, to issue a certificate

[[Page 60321]]

authorizing the transaction ``unless the Board finds that such 
activities are inconsistent with the public convenience and 
necessity.'' Under subsection 10902(d), a Class II railroad receiving 
such a certificate must provide a fair and equitable arrangement for 
the protection of employees who may be adversely affected by the 
transaction. The arrangement shall consist exclusively of 1 year of 
severance pay equal to the employee's earnings during the 12 months 
preceding the application filing date. The parties may agree to terms 
other than as provided. The Board may approve the requested certificate 
as filed or may include conditions (other than labor protection 
conditions) the Board finds necessary in the public interest. 49 U.S.C. 
10902(c). While petitioner seeks an exemption from subsection 10902, 
the Board's exemption authority may not be used to relieve a rail 
carrier of its obligation to protect the interests of employees. 49 
U.S.C. 10502(g).
    Petitioner expects that the transaction, while eliminating nine UP 
positions, will create eight new positions on WCL. WCL indicates that 
it will offer these new positions to displaced UP employees on a 
priority basis, subject to application and employee qualification. WCL 
will provide affected UP employees with written notice of the 
positions, including wage and benefit levels, job responsibilities, and 
other relevant data, at least 1 month before consummation of the 
transaction. WCL proposes to inform displaced UP employees of any 
option they may have to decline a WCL job and elect a severance 
payment.
    Under petitioner's protective arrangement, for any severed UP 
employee not hired by WCL, WCL will provide a single payment equal to 
the employee's railroad earnings for the 12-month period ending October 
18, 1996. For severed UP employees hired by WCL, severance payments 
will be paid for 1 year on a prorated, monthly basis, reduced each 
month by the employee's WCL earnings for the corresponding month. WCL 
estimates that its pay scales are 90% of those of Class I carriers.
    In view of the requirement of subsection 10902(d) that a Class II 
railroad provide a fair and equitable arrangement for the protection of 
employees adversely affected by the carrier's acquisition, the Board 
invites comments on whether WCL's proposed employee protective 
arrangement meets the requirements of 49 U.S.C. 10902. As noted, such 
arrangements have in the past consisted of two elements: (1) Procedural 
(i.e., when must employees be notified of their options and by whom); 
and (2) substantive (i.e., how many years of protection should be 
provided and what should that level of protection be). Plainly the new 
provision explicitly limits substantive aspects of any arrangement we 
may require. Thus, specifically we seek comments on whether and to what 
extent we should establish and/or oversee the procedural aspects of 
labor protective arrangements under this statute.
    Comments may address such issues as the minimum standards or 
conditions for the arrangement, the carrier's responsibility to 
negotiate an arrangement or, failing agreement, to disclose those 
standards or conditions prior to consummation, and criteria for 
determining whether the arrangement is fair and equitable. The 
resulting labor protective arrangement imposed in this proceeding may 
be used as precedent for the labor protection we impose on future 
acquisitions by Class II railroads.
    Comments (an original and 10 copies) must be in writing, and are 
due on December 27, 1996. Additional information may be obtained from 
petitioner's representative. We encourage any commenter to submit its 
comments as computer data on a 3.5-inch floppy diskette formatted for 
WordPerfect 5.1, or formatted so that it can be readily converted into 
WordPerfect 5.1. Any diskette submission (one diskette will be 
sufficient) should be in addition to the written submission.
    This action will not significantly affect the quality of the human 
environment or the conservation of energy resources.

    Decided: November 15, 1996.

    By the Board, Chairman Morgan, Vice Chairman Simmons, and 
Commissioner Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 96-30289 Filed 11-26-96; 8:45 am]
BILLING CODE 4915-00-P