[Federal Register Volume 70, Number 44 (Tuesday, March 8, 2005)]
[Notices]
[Pages 11309-11310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-4417]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34667]


BNSF Railway Company--Acquisition and Operation--State of South 
Dakota

AGENCY: Surface Transportation Board.

ACTION: Notice of filing of application and request for public 
comments.

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SUMMARY: BNSF Railway Company (BNSF) \1\ has filed an application under 
49 U.S.C. 10901 for authority to acquire and operate approximately 368 
miles of railroad lines (referred to as the ``Core Lines'') that are 
owned by the State of South Dakota (the State).\2\ The Core Lines, 
which are described in a July 10, 1986 Operating Agreement between 
Burlington Northern Railroad Company (BN, a BNSF predecessor) and the 
State, extend principally: between milepost (MP) 777.0 near Aberdeen, 
SD, and MP 650.6 near Mitchell, SD; between MP 518.9 near Sioux City, 
IA, and MP 649.7 near Mitchell, SD; between MP 293.1 near Canton, SD, 
and MP 650.6 near Mitchell, SD; \3\ between MPs 74.1 and 68.8 in Sioux 
Falls, SD; between MP 68.8 near Sioux Falls, SD, and MP 49.4 near 
Canton, SD; and between MPs 511.9 and 518.9 in Sioux City, IA.
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    \1\ Effective January 20, 2005, The Burlington Northern and 
Santa Fe Railway Company changed its name to BNSF Railway Company.
    \2\ BNSF previously indicated that the Core Lines consist of 
approximately 369.7 miles of railroad lines. See The Burlington 
Northern and Santa Fe Railway Company C--Acquisition and Operation 
Exemption--State of South Dakota, STB Finance Docket No. 34645 (STB 
served Jan. 19, 2005). The slight discrepancy (the 368 miles now 
indicated vs. the 369.7 miles previously indicated) has not been 
explained.
    \3\ The distance between MP 293.1 near Canton and MP 650.6 near 
Mitchell is approximately 81.50 miles. See BNSF's application, 
Exhibit B, Appendix 1 at 6. BNSF has not explained the discrepancy 
respecting the milepost designations.

DATES: Comments respecting the BNSF application must be filed by March 
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11, 2005. Replies to such comments must be filed by March 25, 2005.

ADDRESSES: Any filing submitted in this proceeding must be submitted 
either via the Board's e-filing format or in the traditional paper 
format. Any person using e-filing should comply with the instructions 
found on the Board's http://www.stb.dot.gov gov Web site, at the ``E-
FILING'' link. Any person submitting a filing in the traditional paper 
format should send an original and 10 paper copies of the filing (and 
also an IBM-compatible floppy disk with any textual submission in any 
version of either Microsoft Word or WordPerfect) to: Surface 
Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In 
addition, one copy of each filing in this proceeding must be sent to 
each of the following (any such copy may be sent by e-mail or fax, but 
only if service by e-mail or fax is acceptable to the recipient): 
Adrian L. Steel, Jr., Mayer, Brown, Rowe & Maw LLP, 1909 K Street, NW., 
Washington, DC 20006-1101 (phone: (202) 263-3237; fax: (202) 263-5237); 
and Sarah W. Bailiff, BNSF Railway Company, 2500 Lou Menk Drive, Fort 
Worth, TX 76131 (phone: (817) 352-2354; fax: (817) 352-2397).

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1609. 
[Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.]

[[Page 11310]]


SUPPLEMENTARY INFORMATION: The Core Lines were once part of the rail 
system operated by the Chicago, Milwaukee, St. Paul and Pacific 
Railroad Company (the Milwaukee Road). The Milwaukee Road entered 
bankruptcy in 1977, and, in 1980, it received, both from the Interstate 
Commerce Commission (ICC) and from the bankruptcy court, approval to 
abandon the Core Lines. In March 1980, the Milwaukee Road terminated 
its Core Lines operations, and thereafter, for more than a year, 
shippers located on the Core Lines had no rail service of any kind. In 
1981, the abandoned Core Lines were acquired by the State, and, since 
on or about July 6, 1981, BN/BNSF has provided common carrier rail 
service over the Core Lines pursuant to various agreements (the most 
recent of which is the 1986 Operating Agreement) with the State,\4\ and 
pursuant to a Modified Certificate of Public Convenience and Necessity 
(the modified certificate) issued by the ICC. See 49 CFR Part 1150, 
Subpart C (Sec.  1150.21 et seq.) (these are the ``modified 
certificate'' regulations that apply to operations over abandoned rail 
lines that have been acquired, through purchase or lease, by a State).
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    \4\ BNSF advises that, under the 1986 Operating Agreement, it 
currently operates over the Core Lines as a lessee (i.e., the 1986 
Operating Agreement provides for a lease of the Core Lines to BNSF).
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    A contractual dispute has arisen respecting the scope of the rights 
retained by or granted to the State and/or BNSF under the 1986 
Operating Agreement. On June 29, 2004, BNSF advised the State that it 
desired to exercise its ``purchase option'' right (said to be provided 
in the 1986 Operating Agreement) to acquire the Core Lines. The State 
apparently contends that the 1986 Operating Agreement gives BNSF no 
right to acquire the Core Lines and/or gives the State a right to allow 
other railroads to operate over the Core Lines. BNSF apparently 
contends that the 1986 Operating Agreement gives BNSF a right to 
acquire the Core Lines and gives the State no right to allow other 
railroads to operate over the Core Lines. The dispute concerning the 
various rights asserted by the State and BNSF is now the subject of 
litigation in The Burlington Northern and Santa Fe Railway Company v. 
State of South Dakota, Civ. No. 04-470 (S.D. 6th Circuit).
    The contractual dispute between BNSF and the State must be resolved 
by the court; that dispute will not be resolved by the Board. However, 
a related matter--BNSF's request that the Board authorize BNSF to 
acquire and operate the Core Lines--must be resolved by the Board. But 
even if the Board authorizes BNSF to acquire the Core Lines, that 
authorization is only permissive. If the South Dakota state court 
decides that BNSF does not have, under the 1986 Operating Agreement, a 
right to acquire the Core Lines, then any Board-granted authority 
cannot be exercised.\5\
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    \5\ BNSF has acknowledged this point. See BNSF's application at 
4: ``BNSF recognizes that it will need to prevail in acquiring the 
Core Lines from the State whether through voluntary conveyance by 
the State or involuntary conveyance as may be ordered by the state 
court before BNSF can acquire title to the Lines.
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    On December 23, 2004, BNSF filed, in STB Finance Docket No. 34645, 
The Burlington Northern and Santa Fe Railway Company--Acquisition and 
Operation Exemption--State of South Dakota, a verified notice of 
exemption under 49 CFR 1150.31 to acquire and operate the Core Lines. 
By decision served January 14, 2005,\6\ the Board rejected BNSF's Sec.  
1150.31 exemption notice on the ground that the transaction 
contemplated by BNSF (the transfer of the Core Lines from modified 
certificate'' status to Sec.  10901 ``railroad line'' status) was not 
appropriate for consideration under the Sec.  1150.31 ``class 
exemption'' procedure. The Board explained that, whereas the Sec.  
1150.31 class exemption typically applies to routine transactions that 
are not subject to substantial controversy and opposition, the 
transaction contemplated by BNSF was neither routine nor 
noncontroversial. Therefore, the Board required BNSF to file either a 
Sec.  10502 exemption petition or a formal Sec.  10901 application, in 
order to compile a record that would allow the Board to resolve the 
issues raised. The Board specified that BNSF should file a petition or 
an application as soon as possible; that BNSF should include, in this 
filing, its entire ``case in chief''; that the State should submit its 
reply to this filing no later than the 21st day after the date on which 
the filing was made; that the State should include, in this submission, 
its entire case; and that BNSF should submit its response to the 
State's reply no later than the 14th day after the date on which the 
reply was filed.
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    \6\ The Burlington Northern and Santa Fe Railway Company C 
Acquisition and Operation Exemption C State of South Dakota, STB 
Finance Docket No. 34645 (STB served Jan. 14, 2005).
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    On February 18, 2005, BNSF filed, in STB Finance Docket No. 34667, 
BNSF Railway Company--Acquisition and Operation--State of South Dakota, 
a formal `` 10901 application. This application seeks authority, under 
49 U.S.C. 10901 and 49 CFR part 1150, subpart A (Sec.  1150.1 et seq.), 
to acquire and operate the Core Lines. The formal application filed in 
STB Finance Docket No. 34667 contemplates the same transaction that was 
contemplated by the class exemption notice previously filed in STB 
Finance Docket No. 34645: the transfer of the Core Lines from 
``modified certificate'' status to Sec.  10901 ``railroad line'' 
status.
    As indicated in the decision served January 14, 2005, in STB 
Finance Docket No. 34645, comments respecting the BNSF application must 
be filed by March 11, 2005 (the 21st day after the date on which the 
application was filed), and replies to such comments must be filed by 
March 25, 2005 (the 14th day after March 11th).
    The application filed by BNSF in STB Finance Docket No. 34667 is 
available for public inspection in the Docket File Reading Room (Room 
755) at the offices of the Surface Transportation Board, 1925 K Street, 
NW., in Washington, DC. The application is also available for 
inspection at BNSF's offices, at 2500 Lou Menk Drive, in Fort Worth, 
TX. The application is also available for viewing and downloading at 
the Board's Web site, at http://www.stb.dot.gov. In addition, copies of 
the application may be obtained from BNSF's representatives (Adrian L. 
Steel, Jr., and Sarah W. Bailiff) at the addresses indicated above.
    Board decisions and notices are available on the Board's Web site 
at http://www.stb.dot.gov.
    This decision will not significantly affect either the quality of 
the human environment or the conservation of energy resources.

    Decided: March 2, 2005.

    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 05-4417 Filed 3-7-05; 8:45 am]
BILLING CODE 4915-01-P