[Federal Register Volume 71, Number 73 (Monday, April 17, 2006)]
[Notices]
[Pages 19784-19786]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-5551]


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

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34849]


Kansas City Southern, The Kansas City Southern Railway Company, 
and The Texas Mexican Railway Company--Exemption for Transactions 
Within a Corporate Family

    Kansas City Southern (KCS), The Kansas City Southern Railway 
Company (KCSR), and The Texas Mexican Railway Company (Tex Mex), have 
filed a verified notice of exemption for a transaction within a 
corporate family. The transaction involves the assignment to, and 
acquisition by, KCSR of all of Tex Mex's trackage and operating rights.
    The trackage rights agreements and mileposts governing Tex Mex's 
trackage rights are as follows: (1) An agreement dated June 16, 1997, 
between Southern Pacific Transportation Company (SP) and Tex Mex, 
granting Tex Mex trackage

[[Page 19785]]

rights over SP's tracks between Houston, TX, in the vicinity of SP's 
milepost 360.42 (Carr Street Connection) and Beaumont, TX, in the 
vicinity of SP's milepost 282.4; (2) an agreement between Missouri 
Pacific Railroad Company (MP), SP, and Tex Mex governing tracks between 
Robstown, TX, and Corpus Christi, TX, and Beaumont, and various tracks 
in and around Houston, including the following: (a) MP's line between 
Robstown in the vicinity of MP milepost 141.48 and Placedo, TX, in the 
vicinity of MP milepost 224.2, (b) MP's line between Corpus Christi in 
the vicinity of MP milepost 145.59 and Odem, TX, in the vicinity of MP 
milepost 132.2, via Savage Lane to MP's Viola Yard; SP's line between 
Placedo in the vicinity of SP milepost 14.2 and West Junction, TX, in 
the vicinity of SP milepost 12.6, via Victoria, TX, and Flatonia, TX, 
(c) SP's line between West Junction in the vicinity of SP milepost 12.6 
and T&NO Junction, TX, in the vicinity of SP milepost 4.6, (d) SP's 
line from West Junction through Bellaire Junction, TX, to Chaney 
Junction, TX, in the vicinity of SP milepost 2.8, (e) SP's line from 
Chaney Junction in the vicinity of SP milepost 2.8 to Tower 26 in the 
vicinity of SP milepost 360.7, via the Houston Passenger station, (f) 
SP's line from Chaney Junction in the vicinity of SP milepost 2.8 to 
Tower 26 in the vicinity of SP milepost 360.7, via the Hardy Street 
yard, (g) MP's line from Settegast Junction, TX, in the vicinity of MP 
milepost 381.61 to the connection with Houston Belt & Terminal Railway 
Company (HB&T) at Interstate Junction, TX, in the vicinity of MP 
milepost 7.60, (h) SP's line from T&NO Junction in the vicinity of SP 
milepost 4.6 to the connection with PTRA in the vicinity of Katy Neck 
(GH&H Junction) in the vicinity of SP milepost 1.3, (i) SP's line from 
SP milepost 360.7 near Tower 26 to the connection with HB&T at Quitman 
Street in the vicinity of SP milepost 1.45, (j) MP's line between Gulf 
Coast Junction, TX, in the vicinity of MP milepost 377.98 and Amelia, 
TX, in the vicinity of MP milepost 451.4, (k) MP's line between Amelia 
in the vicinity of MP milepost 451.4 and the connection with SP at 
Langham Road, TX, in the vicinity of MP milepost 456.7, (l) SP's line 
between Langham Road in the vicinity of MP milepost 456.7 and Tower 74 
in the vicinity of MP milepost 458.8, and (m) MP's line between Tower 
74 in the vicinity of MP milepost 458.8, and (i) the connection with 
the Kansas City Southern Railway Company (KCS) at GLC Junction, TX, in 
the vicinity of MP milepost 460.36 (KCS milepost 766.7), and (ii) the 
connection with KCS at the Neches River Draw Bridge in Beaumont in the 
vicinity of KCS milepost 766.0; and (3) an agreement between Tex Mex 
and HB&T governing tracks in Houston, including, but not limited to 
HB&T's line from Quitman Street in the vicinity of HB&T milepost 4.7 
(West Belt Subdivision) to the HB&T connection with Union Pacific 
Railroad Company (UP) at Gulf Coast Junction in the vicinity of HB&T 
milepost 4.6 (East Belt Subdivision), a distance of 3.6 miles; and 
HB&T's line from its connection with SP at T&NO Junction (Tower 81) in 
the vicinity of HB&T milepost 11.0 (West Belt Subdivision) to HB&T's 
connection with UP at Interstate Junction in the vicinity of HB&T 
milepost 7.5 (East Belt Subdivision), a distance of 8.2 miles.
    Applicants state that Tex Mex acquired its trackage rights as part 
of the UP/SP merger and its various related proceedings.\1\ Applicants 
further state that Tex Mex's rights within Houston were further 
clarified and amended in Houston/Gulf Coast Oversight to provide Tex 
Mex with a ``clear route'' through Houston. The purpose of the ``clear 
route'' provision was to provide dispatchers with the ability to route 
a Tex Mex train over any section of Houston switching track as 
necessary to improve service and alleviate congestion. Further, 
applicants state that, as a result, not all mileposts and switching 
tracks over which Tex Mex can operate are specifically delineated 
within the three agreements.
---------------------------------------------------------------------------

    \1\ See Union Pacific/Southern Pacific Merger, 1 S.T.B. 233 
(1996), aff'd sub nom. Western Coal Traffic League v. STB, 169 F.3d 
775 (D.C. Cir. 1999) (UP-SP Merger); Union Pacific/Southern Pacific 
Merger, STB Finance Docket No. 32760 (Sub-No. 26) (Houston/Gulf 
Coast Oversight), 3 S.T.B. 1030 (1998).
---------------------------------------------------------------------------

    KCS is a publicly traded, noncarrier holding company, with both 
rail and non-rail assets. KCS currently controls 3 rail common 
carriers: (1) KCSR, a Class I carrier that owns and operates 
approximately 3,100 miles of rail line in ten states; (2) Gateway 
Eastern Railway Company, a Class III carrier that owns and operates 
approximately 17 miles of rail line between East Alton and East St. 
Louis, IL, and the rail and related materials on many of KCSR's branch 
lines; and (3) Tex Mex, a Class II carrier.
    This notice is related to a concurrently filed notice of exemption 
in STB Finance Docket No. 34848, The Kansas City Southern Railway 
Company--Trackage Rights Exemption--The Texas Mexican Railway Company, 
wherein Tex Mex has agreed to grant local and overhead trackage rights 
to KCSR to permit KCSR to operate over its entire line of railroad, 
approximately 157 miles, between milepost 0.0 at Laredo, TX, and 
milepost 157.0 at Corpus Christi, TX, including access to all sidings, 
yards and connections thereto.
    The parties stated that the transaction was scheduled to be 
consummated on April 1, 2006. However, on March 29, 2006, the record in 
this proceeding was supplemented, thereby causing the official filing 
date to be March 29, 2006. Therefore, the earliest the transaction 
could have been consummated was April 5, 2006 (the effective date of 
the exemption).\2\
---------------------------------------------------------------------------

    \2\ Under 49 CFR 1180.4(g), a railroad must file a verified 
notice of the transaction with the Board at least one week in 
advance of consummation, in order to qualify for an exemption under 
49 CFR 1180.2(d).
---------------------------------------------------------------------------

    This transaction and the transaction in the related notice of 
exemption are part of an intra-corporate transaction that will allow 
KCSR to provide single-line service from Kansas City to Laredo, and to 
market the route as a KCSR route without having to include Tex Mex in 
the routing or the bill of lading.
    This is a transaction within a corporate family of the type 
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 KCS corporate family.
    As a condition to the use of this exemption, any employees 
adversely affected by this transaction will be protected by the 
conditions set forth in Norfolk and Western Ry. Co.--Trackage Rights--
BN, 354 I.C.C. 605 (1978), as modified in Mendocino Coast Ry., Inc.--
Lease and Operate, 360 I.C.C. 653 (1980).
    If the notice contains false or misleading information, the 
exemption is void ab initio. Petitions to revoke the exemption under 49 
U.S.C. 10502(d) may be filed at any time. The filing of a petition to 
revoke will not automatically stay the transaction.
    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 34849, must be filed with the Surface Transportation 
Board, 1925 K Street, NW., Washington, DC 20423-0001. In addition, a 
copy of each pleading must be served on Robert B. Terry, 427 West 12th 
Street, Kansas City, MO 64105, and William A. Mullins, 2401 
Pennsylvania Ave., NW., Suite 300, Washington, DC 20037.
    Board decisions and notices are available on our Web site at http://www.stb.dot.gov.

[[Page 19786]]


    Decided: April 7, 2006.

    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
 [FR Doc. E6-5551 Filed 4-14-06; 8:45 am]
BILLING CODE 4915-01-P