[Federal Register Volume 76, Number 137 (Monday, July 18, 2011)]
[Notices]
[Pages 42163-42164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17872]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35533]


East Penn Railroad, L.L.C.; Lease and Operation Exemption; 
Norfolk Southern Railway Company

    Under 49 CFR 1011.7(a)(2)(x)(A), the Director of the Office of 
Proceedings (Director) is delegated the authority to determine whether 
to issue notices of exemption for lease transactions under 49 U.S.C. 
10902. However, the Board reserves to itself the consideration and

[[Page 42164]]

disposition of all matters involving issues of general transportation 
importance. See 49 CFR 1011.2(a)(6). Accordingly, the Board is revoking 
the delegation to the Director with respect to the issuance of this 
notice of exemption. The Board has determined that this lease and 
operation notice of exemption should be issued, and does so here.
    East Penn Railroad, L.L.C. (ESPN), a Class III rail carrier, has 
filed a verified notice of exemption under 49 CFR 1150.41 to lease from 
Norfolk Southern Railway Company (NSR) and to operate approximately 5.2 
miles of rail line in York, Penn.\1\ Pursuant to the lease agreement, 
ESPN will lease: (1) The York Industrial Track between milepost YR 7.50 
and YR 12.31 (4.81 miles in length); and (2) the Wye Track between 
milepost YR 12.31 and milepost 12.70 (0.39 miles in length), which 
connects the York Industrial Track to NSR's line.\2\
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    \1\ ESPN's has filed a lease agreement and an interchange 
agreement under seal pursuant to 49 CFR 1150.43(h)(1)(ii).
    \2\ ESPN states that it will also be leasing from NSR certain 
real property located under the Wye Track and a service road 
extending from Windsor Street.
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    As required under 49 CFR 1150.43(h), ESPN has disclosed that the 
lease agreement between it and NSR contains an interchange commitment 
provision that enables ESPN to reduce its lease payments by receiving a 
credit for each car interchanged with NSR. ESPN states that NSR 
initially proposed a fixed rental payment with no option to reduce the 
rent, but ESPN requested a lease credit option to give it an 
opportunity to earn a lower rental payment, which would enable it to 
invest in improvements on the leased lines and thereby increase traffic 
levels. According to ESPN, the interchange point with NSR is York.
    ESPN certifies that the projected annual revenues resulting from 
the proposed transaction will not result in ESPN becoming a Class II or 
Class I rail carrier and will not exceed $5 million annually.
    The transaction is expected to be consummated on or after July 31, 
2011, the effective date of the exemption (30 days after the verified 
notice of exemption was filed).
    If the verified 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 effectiveness of the 
exemption. Petitions for stay must be filed no later than July 22, 2011 
(at least 7 days before the exemption becomes effective).
    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35533 must be filed with the Surface Transportation Board, 395 E 
Street, SW., Washington, DC 20423-0001. In addition, a copy of each 
pleading must be served on Karl Morell, Ball Janik LLP, Suite 225, 655 
Fifteenth Street, NW., Washington, DC 20005.
    Board decisions and notices are available at our Web site at 
``http://www.stb.dot.gov.''
    It is ordered:
    1. The delegation of authority to the Director of the Office of 
Proceedings, under 49 CFR 1011.7(a)(2(x)(A), to determine whether to 
issue a notice of exemption in this proceeding is revoked.
    2. This decision is effective on the date of service.
    Decided: July 12, 2011.
    By the Board, Chairman Elliott, Vice Chairman Begeman, and 
Commissioner Mulvey. Commissioner Mulvey dissented with a separate 
expression.

    Commissioner Mulvey, dissenting:
    I disagree with the Board's decision to allow this transaction 
to be processed under the class exemption procedures. I would like 
to have more information about the likely impact of the proposed 
interchange commitment before deciding whether to permit the 
transaction to go forward. In support of the interchange commitment 
provision, ESPN asserts only that it requested a ``lease credit'' 
option from NSR so that ESPN would better be able to invest in line 
improvements. This generic refrain, which has been used in a number 
of recent Board proceedings, sheds no light on whether a provision 
discouraging interchange with other carriers is inconsistent with 
the public interest in this case.

Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2011-17872 Filed 7-15-11; 8:45 am]
BILLING CODE 4915-01-P