[Federal Register Volume 65, Number 196 (Tuesday, October 10, 2000)]
[Notices]
[Pages 60245-60246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25954]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 33941]


Pioneer Railcorp and Michigan Southern Railroad Company-Corporate 
Family Transaction Exemption

    Pioneer Railcorp (Pioneer) and Michigan Southern Railroad Company 
(MSO) have filed a verified notice of exemption.\1\ MSO owns 100% of 
the stock of Michigan Southern Railroad Co., Inc. (MSRR), a 
nonoperating Class III shortline railroad, which owns a property 
interest in three segments of railroad currently leased and operated by 
MSO. The three segments of railroad are described as follows: (1) 
between milepost 0.0, at Elkhart, IN, and milepost 9.8, at Mishiwaka, 
IN (Elkhart Segment); (2) between milepost 119.0 and milepost 120.1, at 
Kendallville, IN (Kendallville Segment); and (3) between milepost 
382.5, at or near Coldwater, MI, and milepost 421.2, at or near White 
Pigeon, MI (Michigan Segment).\2\
---------------------------------------------------------------------------

    \1\ Pioneer is a publicly traded shortline railroad holding 
company and noncarrier that controls 13 Class III shortline 
railroads, including MSO.
    \2\ Pioneer and MSO state that MSRR owns part of the Michigan 
Segment and that MSRR (despite its description as a ``nonoperating'' 
railroad) ``operates'' the balance of the Michigan Segment under an 
agreement with a shipper association. According to the verified 
notice of exemption, the ownership of part or all of the Michigan 
segment is presently in dispute.
---------------------------------------------------------------------------

    The exempt transaction involves the reorganization of the MSO 
railroad holdings and the creation of two new subsidiaries of MSO: 
Elkhart & Western Railroad, Co. (E&WR) and Kendallville Terminal 
Railway Co. (KTR). MSO will assign its operating leases of the Elkhart 
Segment to E&WR \3\ and of the Kendallville Segment to KTR. MSO will 
continue to operate the Michigan Segment.\4\ MSRR will continue to own 
the three segments of railroad.
---------------------------------------------------------------------------

    \3\ MSO has a haulage agreement with Norfolk Southern Railway 
Company (NS) from Elkhart to Fort Wayne, IN, which permits MSO to 
market Fort Wayne as a station on MSO's line. Upon consummation of 
this transaction, Fort Wayne will become a station of E&WR.
    \4\ MSO also has a haulage agreement with NS from White Pigeon 
to Fort Wayne, which permits MSO to market Fort Wayne as a station 
on MSO's line. Upon consummation of this transaction, Fort Wayne 
will continue to be a station of MSO.
---------------------------------------------------------------------------

    The transaction is expected to be consummated on September 29, 
2000.
    This is a transaction within a corporate family of the type 
specifically exempted from prior review and approval under 49 CFR 
1180.2(d)(3). The parties state that the transaction will not result in 
adverse changes in service levels, significant operational changes, or 
changes in the competitive balance with carriers outside the corporate 
family.
    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 verified notice contains false or misleading information, 
the exemption is void ab initio. Petitions to reopen the proceeding to 
revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. 
The filing of a petition to reopen will not automatically stay the 
transaction.
    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 33941, must be filed with the Surface Transportation 
Board, Office of the Secretary, Case Control Unit, 1925 K Street, NW., 
Washington, DC 20423-0001. In addition, a copy of each pleading must be 
served on John D. Heffner, Esq., REA, CROSS & AUCHINCLOSS, 1707 L 
Street, N.W., Suite 570, Washington, DC 20036.
    Board decisions and notices are available on our website at 
``WWW.STB.DOT.GOV.''

    Decided: September 29, 2000.


[[Page 60246]]


    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 00-25954 Filed 10-6-00; 8:45 am]
BILLING CODE 4915-00-P