[Federal Register Volume 62, Number 141 (Wednesday, July 23, 1997)]
[Notices]
[Pages 39593-39595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19377]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Finance Docket No. 33388 (Sub-No. 2)]


CSX Transportation, Inc.; Construction and Operation Exemption; 
Connection Track at Willow Creek, IN

AGENCY: Surface Transportation Board (Board).

ACTION: Notice of exemption; request for comments.

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SUMMARY: On June 23, 1997, CSX Transportation, Inc. (CSXT) and 
Consolidated Rail Corporation (CRC), pursuant to 49 U.S.C. 10502, filed 
a petition for exemption from the prior approval requirements of 49 
U.S.C. 10901 to construct and operate a connection track at Willow 
Creek, IN.1 The Board seeks comments from interested persons 
respecting the exemption criteria and any other non-environmental 
concerns 2 involved in our approval of the construction and 
operation of CSXT's and CRC's Willow Creek construction project sought 
in STB Finance Docket No. 33388 (Sub-No. 2).
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    \1\ This proceeding is related to STB Finance Docket No. 33388, 
CSX Corporation and CSX Transportation, Inc., Norfolk Southern 
Corporation and Norfolk Southern Railway Company--Control and 
Operating Leases/Agreements--Conrail Inc. and Consolidated Rail 
Corporation (CSX/NS/CR). In CSX/NS/CR, Decision No. 9, served June 
12, 1997, we granted a petition for waiver that would allow CSXT and 
CRC to seek approval for construction of four construction projects, 
including this proposed construction at Willow Creek, following the 
completion of our environmental review of the construction projects, 
and our issuance of further decisions exempting or approving the 
proposals, but prior to our approval of the primary application.
    \2\ The handling of environmental issues will be discussed 
below.

DATES: Written comments must be filed with the Board by August 22, 
1997. Replies may be filed by CSX and CRC on or before September 11, 
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1997.

ADDRESSES: An original and 25 copies of all documents must refer to STB 
Finance Docket No. 33388 (Sub-No. 2) and must be sent to the Office of 
the Secretary, Case Control Unit, ATTN: STB Finance Docket No. 33388 
(Sub-No. 2), Surface Transportation Board, 1925 K Street, N.W., 
Washington, DC 20423-00013 In addition, one copy of all 
documents in this proceeding must be sent to Administrative Law Judge 
Jacob Leventhal, Federal Energy Regulatory Commission, 888 First 
Street, N.E., Suite 11F, Washington, DC 20426 [(202) 219-2538; FAX: 
(202) 219-3289] and to petitioners' representatives: Charles M. 
Rosenberger, 500 Water Street--J150, Jacksonville, FL 32202; and John 
J. Paylor, 2001 Market Street--16A, Philadelphia, PA 19101. Parties to 
STB Finance Docket No. 33388 will not be automatically placed on the 
service list for this proceeding.

    \3\ In addition to submitting an original and 25 copies of all 
documents filed with the Board, the parties are encouraged to submit 
all pleadings and attachments as computer data contained on a 3.5-
inch floppy diskette formatted for WordPerfect 7.0 (or formatted so 
that it can be converted into WordPerfect 7.0) and clearly labeled 
with the identification acronym and number of the pleading contained 
on the diskette. See 49 CFR 1180.4(a)(2). The computer data 
contained on the computer diskettes submitted to the Board will be 
subject to the protective order granted in Decision No. 1, served 
April 16, 1997 (as modified in Decision No. 4, served May 2, 1997), 
and is for the exclusive use of Board employees reviewing 
substantive and/or procedural matters in this proceeding. The 
flexibility provided by such computer data will facilitate timely 
review by the Board and its staff.
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FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 565-1613. [TDD 
for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: On June 23, 1997, CSX Corporation (CSXC), 
CSXT, Norfolk Southern Corporation (NSC), Norfolk Southern Railway 
Company (NSR), Conrail Inc. (CRR), and CRC 4 filed their 
primary application in the CSX/NS/CR proceeding seeking our 
authorization for: (a) The acquisition by CSX and NS of control of 
Conrail; and

[[Page 39594]]

(b) division of Conrail's assets by and between CSX and NS. In Decision 
No. 9 in that proceeding, we granted the requests by applicants, with 
respect to four CSX construction projects and three NS construction 
projects, for waivers of our otherwise applicable ``everything goes 
together'' rule. 5 The waivers would allow CSX and NS to 
begin the physical construction following the completion of our 
environmental review of the construction projects, and our issuance of 
further decisions exempting or approving the proposals, but prior to 
our approval of the primary application. This petition for exemption 
for the construction at Willow Creek, IN, concerns one of the seven 
construction projects. By this notice, we are inviting comments on 
whether the proposed transaction meets the applicable exemption 
criteria and on any other non-environmental concerns regarding the 
construction and operation of this particular project.
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    \4\ CSXC and CSXT are referred to collectively as CSX. NSC and 
NSR are referred to collectively as NS. CRR and CRC are referred to 
collectively as Conrail. CSX, NS, and Conrail are referred to 
collectively as applicants.
    \5\ See 49 CFR 1180.4(c)(2)(vi).
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    Pursuant to 49 U.S.C. 10502, CSXT and CRC have filed a petition for 
exemption from the prior approval provisions of 49 U.S.C. 10901 to 
construct and operate a connection track in Willow Creek, IN. 
6 CSXT and CRC cross each other at Willow Creek. CSXT and 
CRC propose to construct a connection track in the southeast quadrant 
between CSXT's main line and CRC's main line. The connection will 
extend approximately 2,800 feet between approximately milepost BI-236.5 
on CSXT's main line between Garrett, IN, and Chicago, IL, and 
approximately milepost 248.8 7 on CRC's main line between 
Porter and Gibson Yard, IN, near Chicago. CSXT anticipates that it must 
acquire approximately 0.2 acres of right-of-way to construct this 
connection. As an exhibit to its petition, CSXT attached a map showing 
the proposed connection at Willow Creek. 8
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    \6\ CSXT filed a petition for exemption to construct and operate 
a connection track in Willow Creek, IN, as a related filing in 
Volume 5 of the primary application filed on June 23, 1997, in the 
CSX/NS/CR proceeding. See CSX/NS-22 (Volume 5) at 104. CSXT and CRC 
concurrently filed a slightly modified version of the petition for 
exemption for construction of a connection track in Willow Creek 
(CSX-6). We will consider both filings together here. As we stated 
in CSX/NS/CR, Decision No. 9, at 6-7:
    * * * in reviewing these projects separately, we will consider 
the regulatory and environmental aspects of these proposed 
constructions and applicants' proposed operations over these lines 
together in the context of whether to approve each individual 
physical construction project. The operational implications of the 
merger as a whole, including operations over * * * the seven 
construction projects, will be examined in the context of the 
[Environmental Impact Statement] EIS that we are preparing for the 
overall merger. * * * No rail operations can begin over these seven 
segments until completion of the EIS process and issuance of a 
further decision.
    \7\ CSXT should reconsider the MP 248.8 designation, see CSX/NS-
22, at 106 (line 1); our review of CRC's timetable for its Porter 
Branch suggests that the correct designation may be MP 246.8.
    \8\ The parties indicate that they do not propose to operate 
over the connection at this time, and acknowledge that operation 
over this connection is related to, and contingent upon, the 
proposed control of Conrail by CSX and NS, approval of which is 
being sought in STB Finance Docket No. 33388.
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    Under 49 U.S.C. 10901, a railroad may: (1) Construct an extension 
to any of its railroad lines; (2) construct an additional railroad 
line; or (3) provide transportation over an extended or additional 
railroad line, only if the Board issues a certificate authorizing such 
activity. However, under 49 U.S.C. 10502, the Board shall exempt a rail 
transaction from regulation when it finds that: (1) Application of the 
pertinent statutory provisions is not necessary to carry out the rail 
transportation policy of 49 U.S.C. 10101; and (2) either the 
transaction is of limited scope, or regulation is not needed to protect 
shippers from the abuse of market power.
    CSXT and CRC contend that exemption of its proposed construction 
and operation at Willow Creek meets all of the elements of the rail 
transportation policy. Petitioners maintain that, by minimizing the 
regulatory expense and time inherent in a full application under the 
provisions of section 10901, exemption will expedite regulatory 
decisions and reduce regulatory barriers to entry into the industry. 
They state that exemption will also foster efficient management and 
promote a safe and efficient rail system. They also indicate that, if 
the Board approves the primary application, one of CSXT's most 
important service lanes will be its Northeastern Gateway route 
extending from Chicago to Albany, NY, with branches eastward to Boston 
and southward to Newark, NJ. This service lane will combine CSXT's 
current main line route from Chicago to Greenwich, OH, and CRC's line 
between Greenwich and Albany. The lines comprising this service lane 
currently contain some of the most heavily traveled track on the 
proposed CSXT combined system. CSXT anticipates that traffic on this 
corridor will be as high as 50 trains per day within the next 3 years.
    CSXT and CRC state that the proposed connection at Willow Creek 
will facilitate the substantial traffic volume CSXT expects to move via 
the Northeastern Gateway route to and from Chicago. Petitioners 
indicate that the proposed connection at Willow Creek will provide a 
direct link between CRC and CSXT tracks and the parallel line of 
Indiana Harbor Belt Railroad (IHB) at Willow Creek.9 The 
connection will allow the CRC and CSXT lines to be used interchangeably 
as traffic conditions warrant. Petitioners maintain that the option to 
switch to IHB at Willow Creek will provide a third main track into 
Chicago in the 20-mile segment between Porter and the Chicago Terminal 
at Hammond, IN. CSXT expects that an average of 11 trains per day will 
operate over this connection.
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    \9\ Petitioners may want to reconsider this assertion; our 
review of CRC's timetable for its Porter Branch suggests that the 
link with IHB may be at Ivanhoe, not at Willow Creek.
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    Petitioners state that the exemption will promote effective 
competition among rail carriers and with other modes, and meet the 
needs of the shipping public. According to petitioners, the creation of 
two competitive rail routes between the Northeast and Chicago is one of 
the most important public benefits of the proposed division of 
Conrail's assets. CSXT states that, by improving its operation in the 
Chicago area, the connection at Willow Creek will assist CSXT in its 
competition with NSR and other modes of transportation.
    The environmental report covering the proposed construction and 
operation of the connection track at Willow Creek is contained in the 
Environmental Report filed with the Board in STB Finance Docket No. 
33388. In addition, as we required in CSX/NS/CR, Decision No. 9, CSX 
must submit, no later than September 5, 1997 (Day F+75), a preliminary 
draft environmental assessment (PDEA) for each individual construction 
project covered by our waiver decision. Each PDEA must comply with all 
of the requirements for environmental reports contained in our 
environmental rules at 49 CFR 1105.7. Also, the PDEA must be based on 
consultations with our Section of Environmental Analysis (SEA) and the 
federal, state, and local agencies set forth in 49 CFR 1105.7(b), as 
well as other appropriate parties. If a PDEA is insufficient, we may 
require additional environmental information or reject the document. 
See CSX/NS/CR, Decision No. 9, at 8.
    As part of the environmental review process, SEA will independently 
verify the information contained in each PDEA, conduct further 
independent analysis, as necessary, and develop appropriate 
environmental mitigation measures. For each project, SEA plans to 
prepare an EA, which will be served

[[Page 39595]]

on the public for review and comment. The public will have 20 days to 
comment on the EA, including the proposed environmental mitigation 
measures. After the close of the public comment period, SEA will 
prepare Post Environmental Assessments (Post EAs) containing SEA's 
final recommendations, including appropriate environmental mitigation. 
Therefore, in deciding whether to grant petitioners' exemption request, 
we will consider the entire environmental record, including all public 
comments, the EA, and the Post EA. Id. at 8.
    Should we determine that the Willow Creek construction project 
could potentially cause, or contribute to, significant environmental 
impacts, then the project will be incorporated into the EIS for the 
proposed control transaction in STB Finance Docket No. 33388. Id. at 8. 
As we have previously emphasized, our consideration of the seven 
construction projects does not, and will not, in any way, constitute 
approval of, or even indicate any consideration on our part respecting 
approval of, the primary application in STB Finance Docket No. 33388. 
See CSX/NS/CR, Decision No. 9, at 6; and Decision No. 5, served and 
published in the Federal Register on May 13, 1997, 62 FR 26352, slip 
op. at 3. If we grant any exemptions for these seven construction 
projects, applicants will not be allowed to argue that, because we have 
granted an exemption and applicants may have expended resources to 
construct a connection track, we should approve the primary 
application. Applicants have willingly assumed the risk that we may 
deny the primary application, or approve it subject to conditions 
unacceptable to applicants, or approve the primary application but deny 
an applicant's request to operate over any or all of the seven 
connections. Id.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. Comments on whether the proposed transaction meets the exemption 
criteria of 49 U.S.C. 10502 and on any other non-environmental concerns 
regarding the construction and operation of the connection track in 
Willow Creek are due August 22, 1997.
    2. Replies are due September 11, 1997.
    3. This decision is effective on the date of service.

    Decided: July 16, 1997.

    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 97-19377 Filed 7-22-97; 8:45 am]
BILLING CODE 4915-00-P