[Federal Register Volume 62, Number 141 (Wednesday, July 23, 1997)]
[Notices]
[Pages 39595-39597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19378]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Finance Docket No. 33388 (Sub-No. 4)]


CSX Transportation, Inc.--Construction and Operation Exemption--
Connection Track at Sidney Junction, OH

AGENCY: Surface Transportation Board (Board), DOT.

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 Sidney 
Junction, OH.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 Sidney Junction 
construction project sought in STB Finance Docket No. 33388 (Sub-No. 
4).
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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 Sidney Junction, 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.
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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, 
1997.

ADDRESSES: An original and 25 copies of all documents must refer to STB 
Finance Docket No. 33388 (Sub-No. 4) and must be sent to the Office of 
the Secretary, Case Control Unit, ATTN: STB Finance Docket No. 33388 
(Sub-No. 4), Surface Transportation Board, 1925 K Street, N.W., 
Washington, DC 20423-0001.3 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 (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 Sidney Junction, OH, concerns one of 
the seven construction projects. By this notice, we are inviting 
comments on whether the proposed

[[Page 39596]]

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 Sidney Junction, 
OH.6 CSXT and CRC cross each other at Sidney Junction. 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 3,263 feet between approximately milepost BE-
96.5 on CSXT's main line between Cincinnati and Toledo, OH, and 
approximately milepost 163.5 on CRC's main line between Cleveland, OH, 
and Indianapolis, IN. CSXT anticipates that it must acquire 
approximately 2.6 acres of right-of-way to construct this connection. A 
map showing the proposed connection track at Sidney Junction is 
attached as Exhibit A to CSXT's petition.7
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    \6\ CSXT filed a petition for exemption to construct and operate 
a connection track in Sidney Junction, OH, 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 126. CSXT and CRC 
concurrently filed a slightly modified version of the petition for 
exemption for construction of a connection track in Sidney Junction 
(CSX-8). 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\ 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 the proposed construction 
and operation at Sidney Junction 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 extremely 
important service lanes will be its Memphis Gateway route combining 
CRC's routes in and to the Northeast with CSXT's present route between 
Cincinnati and Memphis, TN. According to petitioners, this service lane 
will provide efficient single line service between CSXT's Memphis 
Gateway and important markets in the eastern United States.
    Petitioners indicate that the Memphis Gateway service lane will use 
CSXT's existing route between Memphis and Sidney, OH, via Cincinnati, 
and CRC's existing St. Louis line between Sidney and Cleveland, where 
CSXT will connect with its other service lanes going to the eastern 
United States. By taking advantage of increased volumes and developing 
reciprocal overhead blocking strategies with western roads, CSXT 
maintains that it can avoid classifying traffic to the Northeast at its 
Cincinnati and Nashville terminals. Westbound CSXT traffic originating 
in the East and South will be classified in blocks for movement to 
western points beyond Memphis.
    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 connection 
at Sidney Junction is crucial to the Memphis Gateway service lane. This 
connection will connect CSXT's Cincinnati-Toledo line with CRC's 
Cleveland-Indianapolis line, thus allowing single line service from the 
Northeast to Memphis. CSXT anticipates that an average of 9.6 trains 
per day will be operated over this new connection at Sidney Junction.
    The environmental report covering the proposed construction and 
operation of the connection track at Sidney Junction 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 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 Sidney Junction 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

[[Page 39597]]

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 
Sidney Junction 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. 97-19378 Filed 7-22-97; 8:45 am]
BILLING CODE 4915-00-P