[Federal Register Volume 64, Number 220 (Tuesday, November 16, 1999)]
[Notices]
[Pages 62245-62246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29874]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Finance Docket No. 33813]


RailAmerica, Inc.--Control Exemption--RailTex, Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice of filing of petition for exemption and request for 
public comments.

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SUMMARY: RailAmerica, Inc., a railroad holding company that controls 12 
Class III rail carriers, seeks an exemption under 49 U.S.C. 10502 from 
the prior approval requirements of 49 U.S.C. 11323-25 for its 
acquisition of control of RailTex, Inc., a railroad holding company 
that controls 17 Class III rail carriers. We seek comments on the 
requested exemption of control of RailTex by RailAmerica.

DATES: Comments are due by December 6, 1999. Petitioners' reply is due 
by December 15, 1999. Decision on the merits of the proposed exemption 
is due to be issued on January 14, 2000.

ADDRESSES: Send comments (an original and 25 copies) referring to STB 
Finance Docket No. 33813 to: Surface Transportation Board, Office of 
the Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC 
20423-0001. In addition, send one copy of comments to RailAmerica's 
representative: Louis E. Gitomer, Of Counsel, Ball Janik LLP, 1455 F 
Street, N.W., Suite 225, Washington, DC 20005.

FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 565-1613. [TDD 
for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: On November 8, 1999, RailAmerica, Inc. 
(RailAmerica), and RailTex, Inc. (RailTex), filed a petition for 
exemption under 49 U.S.C. 10502 from the prior approval requirements of 
49 U.S.C. 11323-25 for RailAmerica's acquisition of direct control of 
RailTex and indirect control of RailTex's 17 rail carrier subsidiaries 
in common with the rail carriers RailAmerica already 
controls.1 Under 49 U.S.C. 11323(a)(5), the acquisition of 
control of a rail carrier by a person that is not a rail carrier but 
that controls any number of rail carriers requires the approval of the 
Board. Because RailAmerica controls Class III rail carriers and is 
seeking to acquire control of RailTex, which also controls Class III 
rail carriers, the proposed transaction is within the jurisdiction of 
the Board.2 To minimize the period of uncertainty for 
employees and to permit the petitioners and their customers to realize 
the projected benefits of the transaction as soon as possible, 
petitioners have asked the Board to establish an expedited schedule 
under which comments would be due by December 6, 1999, petitioners' 
reply would be due by December 15, 1999, and a decision by the Board on 
the merits of the proposed exemption would be due on January 14, 2000.
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    \1\ Petitioners designated their filing as RAAM-2, which 
includes the Petition for Exemption (Volume 1), Public Exhibits 
(Volume 2), Confidential Exhibits (Volume 2A), and Highly 
Confidential Exhibits (Volume 3).
    \2\ If, however, the acquisition of control does not involve a 
Class I railroad and is not part of a series of anticipated 
transactions that would connect the railroads with each other or any 
railroad in the corporate family, the transaction is exempt as a 
class. See 49 CFR 1180.2(d)(2). Petitioners state that, given the 
indirect connection between two of the involved carriers and the 
possible future connection between two other carriers, discussed in 
further detail below, the class exemption at 49 CFR 1180.2(d)(2) may 
not apply to their proposal. Accordingly, petitioners have filed a 
petition for exemption rather than a notice of exemption.
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    RailAmerica controls 12 Class III rail carriers in the United 
States. Petitioners describe RailAmerica's rail subsidiaries as 
follows: (1) The Cascade and Columbia River Railroad Company operates 
137 miles of rail line in the State of Washington; (2) Dakota Rail, 
Inc., operates 43.66 miles of rail line in the State of Minnesota; (3) 
Delaware Valley Railway Company, Inc., formerly operated over 
approximately 50 miles of rail line in the States of Delaware and 
Pennsylvania; (4) The Huron & Eastern Railway Company, Inc. (Huron & 
Eastern), operates approximately 171 miles of rail line in the State of 
Michigan; (5) the Minnesota Northern Railroad, Inc., operates 
approximately 241 miles of rail line in Northwestern Minnesota; (6) the 
Otter Tail Valley Railroad Company operates approximately 72 miles of 
rail line in Western Minnesota; (7) the Saginaw Valley Railroad 
Company, Inc. (Saginaw Valley), operates approximately 65 miles of rail 
line in the State of Michigan; (8) the St. Croix Valley Railroad 
Company operates over 44.4 miles of rail line in Eastern Minnesota; (9) 
the South Central Tennessee Railroad Corporation operates 52 miles of 
rail line in the State of Tennessee; (10) the Ventura County Railroad 
Company operates approximately 12.09 miles of rail line in the Port of 
Hueneme, in the State of California; (11) the West Texas & Lubbock 
Railroad Company, Inc., operates approximately 104 miles of rail line 
in the State of Texas; and (12) Toledo, Peoria & Western Railway 
Corporation (TP&W) operates approximately 369 miles of rail line in the 
States of Indiana, Illinois, and Iowa.
    RailTex controls 17 Class III rail carriers in the United States. 
Petitioners describe RailTex's rail subsidiaries as follows: (1) The 
Austin & Northwestern Railroad Company, Inc. (AUNW), owns a 107-mile 
rail line in the States of Texas and New Mexico, which is operated by 
AUNW's division, the Texas New Mexico Railroad; (2) the Central Oregon 
& Pacific Railroad, Inc., operates over approximately 449 miles of rail 
line in the States of Oregon and California; (3) the Central Railroad 
Company of Indiana operates approximately 157 miles of rail line in the 
States of Indiana and Ohio; (4) the Central Railroad Company of 
Indianapolis (CERA) operates approximately 45.6 miles of rail line in 
the State of Indiana, and operates as agent for, and in the name of, 
Winamac Southern Railroad Company (WSRY) over approximately 44 miles of 
rail line in the State of Indiana; (5) the Connecticut Southern 
Railroad, Inc., operates approximately 78 miles of rail line in the 
States of Connecticut and Massachusetts; (6) the Dallas, Garland & 
Northeastern Railroad, Inc., operates approximately 187 miles of rail 
line and trackage rights over various railroads in the State of Texas; 
(7) the Georgia Southwestern Railroad, Inc., operates 357 miles of rail 
line in the States of Georgia and Alabama; (8) the Indiana & Ohio 
Central Railroad, Inc., operates approximately 154.6 miles of rail line 
in the State of Ohio; (9) the Indiana & Ohio Railway Company operates 
approximately 471.1 miles of rail line in the States of Michigan, Ohio 
and Indiana; (10) the Indiana Southern Railroad, Inc., operates 176 
miles of rail

[[Page 62246]]

line in the State of Indiana; (11) the Mid-Michigan Railroad, Inc. 
(MMRR), and its three subsidiaries (the Grand Rapids Eastern Railroad, 
the Michigan Shore Railroad, and the Texas Northeastern Railroad), 
operate approximately 217 miles of rail line in the States of Michigan 
and Texas; (12) the Missouri & Northern Arkansas Railroad Company, 
Inc., operates approximately 530 miles of rail line in the States of 
Missouri, Kansas and Arkansas; (13) the New England Central Railroad, 
Inc., operates approximately 343 miles of rail line in the States of 
Vermont, New Hampshire, Massachusetts, and Connecticut; (14) the North 
Carolina & Virginia Railroad Company, Inc., and its two divisions (the 
Chesapeake and Albemarle Railroad, and the Virginia Southern Railroad), 
operate approximately 210 miles of rail line in the States of Virginia 
and North Carolina; (15) the Pittsburgh Industrial Railroad, Inc., 
operates 42 miles of rail line in the State of Pennsylvania; (16) the 
San Diego & Imperial Valley Railroad Company, Inc., operates 
approximately 153 miles of rail line in Mexico and the State of 
California; and (17) the South Carolina Central Railroad Company, Inc., 
and its division (the Carolina Piedmont Railroad), operate 
approximately 95 miles of rail line in the State of South Carolina.
    RailAmerica states that its rail carrier subsidiaries do not 
connect with any of the RailTex rail carrier subsidiaries except for an 
indirect connection between the TP&W and CERA via the WSRY line, which 
CERA operates as an agent for WSRY between Kokomo and Logansport, IN. 
RailAmerica also states that MMRR may interchange traffic with Huron & 
Eastern and Saginaw Valley in or near Saginaw, MI, in the future. 
RailAmerica estimates that the transaction will generate approximately 
$10 million in annual cost savings. RailAmerica estimates that 21 jobs 
will be abolished, 10 at RailTex's headquarters in San Antonio, TX, and 
11 on various lines. Petitioners state that no unionized employee will 
be affected by the proposed transaction and that they will not abrogate 
any collective bargaining agreements.
    The Board invites comments on the proposed acquisition. Because the 
procedural schedule proposed by the petitioners appears to be adequate 
for full and fair development of the record in this proceeding, the 
proposed schedule will be adopted. Comments may address such issues as 
the rail transportation policy of 49 U.S.C. 10101, the potential for 
market abuse, whether as a result of the proposed transaction there is 
likely to be substantial lessening of competition, creation of a 
monopoly, or restraint of trade in freight surface transportation in 
any region of the United States, and whether any anticompetitive 
effects of the transaction outweigh the public interest in meeting 
significant transportation needs.
    Comments (an original and 25 copies) must be in writing, and are 
due by December 6, 1999. Additional information may be obtained from 
RailAmerica's representative. In addition to submitting an original and 
25 copies of all paper documents filed with the Board, parties also 
must submit, on 3.5-inch IBM-compatible floppy diskettes (disks) or 
compact discs (CDs), copies of all pleadings and attachments (e.g., 
textual materials, electronic workpapers, data bases and spreadsheets 
used to develop quantitative evidence) and clearly label pleadings and 
attachments and corresponding computer diskettes with an identification 
acronym and pleading number. Textual materials must be in, or 
convertible by and into, WordPerfect 7.0. Electronic spreadsheets must 
be in, or convertible by and into, Lotus 1-2-3 97 Edition, Excel 
Version 7.0, or Quattro Pro Version 7.0. A copy of each disk or CD 
submitted to the Board should be provided to any other party upon 
request.3 The computer data contained on the computer 
diskettes submitted will be subject to the protective order 
4 granted by decision served on November 3, 1999, in this 
proceeding.
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    \3\ Parties may individually seek a waiver from the disk-CD 
requirement.
    \4\ Petitioners filed a motion for protective order (designated 
RAAM-1) on October 28, 1999.
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    This action will not significantly affect the quality of the human 
environment or the conservation of energy resources.

    Decided: November 10, 1999.

    By the Board, Chairman Morgan, Vice Chairman Clyburn and 
Commissioner Burkes.
Vernon A. Williams,
Secretary .
[FR Doc. 99-29874 Filed 11-15-99; 8:45 am]
BILLING CODE 4915-00-P