[Federal Register Volume 78, Number 51 (Friday, March 15, 2013)]
[Notices]
[Pages 16569-16570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05961]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35721]


Iowa Pacific Holdings, LLC, Permian Basin Railways, and San Luis 
& Rio Grande Railroad--Corporate Family Transaction Exemption--
Massachusetts Coastal Railroad, LLC

    Iowa Pacific Holdings, LLC (IPH), its wholly owned subsidiaries 
Permian Basin Railways (PBR) and San Luis & Rio Grande Railroad (SLRG), 
and Massachusetts Coastal Railroad, LLC (Mass Coastal) (collectively, 
applicants), have jointly filed a verified notice of exemption under 49 
CFR 1180.2(d)(3) for a corporate family transaction pursuant to which 
the applicants would reorganize their corporate structure.
    According to the applicants, IPH is a noncarrier that wholly owns 
PBR, which directly controls seven Class III railroads.\1\ PBR 
controls, indirectly through SLRG, an eighth Class III railroad, the 
Saratoga & North Creek Railway, LLC (Saratoga). In addition, PBR 
controls 80% of Cape Rail, Inc. (Cape Rail), a noncarrier railroad 
holding company. Cape Rail owns two railroad subsidiaries, Mass 
Coastal, a Class III railroad, and Cape Cod Central, a noncarrier 
intrastate excursion passenger railroad outside the Board's 
jurisdiction. Thus, PBR controls Mass

[[Page 16570]]

Coastal, its ninth Class III carrier, indirectly through Cape Rail.\2\
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    \1\ These railroads are: (1) SLRG; (2) Austin & Northwestern 
Railroad operating as the Texas-New Mexico Railroad; (3) Chicago 
Terminal Railroad; (4) Mount Hood Railroad; (5) Rusk, Palestine & 
Pacific Railroad, LLC; (6) Santa Cruz and Monterey Bay Railway 
Company; and (7) West Texas & Lubbock Railway.
    \2\ See Iowa Pac. Holdings, LLC & Permian Basin Rys.--Control 
Exemption--Cape Rail, Inc. & Mass. Coastal R.R., FD 35684 (STB 
served October 26, 2012).
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    The applicants propose to reorganize their corporate structure by 
transferring 100% control of Mass Coastal from its current direct 
owner, Cape Rail, to SLRG. Thus, according to the applicants, IPH, 
through PBR, will control 100% of Mass Coastal through SLRG rather than 
through Cape Rail.\3\ In addition, the applicants state that Cape Rail 
will no longer be subject to Board jurisdiction because its only 
remaining subsidiary (Cape Cod Central) would be an intrastate 
excursion passenger railroad outside Board jurisdiction.
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    \3\ As a result of this transaction, SLRG would control two 
common carrier railroads, Saratoga & North Creek Railway and Mass 
Coastal.
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    Unless stayed, the exemption will be effective on March 29, 2013 
(30 days after the verified notice was filed). Applicants state that 
they intend to consummate the proposed transaction on or about April 1, 
2013.
    According to the applicants, the purpose of this transaction is to 
transfer direct control over Mass Coastal from Cape Rail to SLRG for 
various tax and commercial reasons. This transfer will also allow Cape 
Rail to concentrate its energies on Cape Cod Central, the intrastate 
excursion passenger railroad it will continue to own.
    Applicants state that the transaction qualifies for the class 
exemption for corporate family transactions under 49 CFR 1180.2(d)(3) 
and have not indicated that the transaction would result in adverse 
changes in service levels, significant operational changes, or any 
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 11324 and 11325 
that involve only Class III rail carriers. Accordingly, the Board may 
not impose labor protective conditions here, because all of the 
carriers involved are Class III rail carriers.
    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 effectiveness of the exemption. 
Petitions for stay must be filed no later than March 22, 2013 (at least 
seven days before the exemption becomes effective).
    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35721, must be filed with the Surface Transportation Board, 395 E 
Street SW., Washington, DC 20423-0001. In addition, one copy of each 
pleading must be served on John D. Heffner, Strasburger & Price, LLP, 
1700 K Street NW., Suite 640, Washington, DC 20006.
    Board decisions and notices are available on our Web site at 
``www.stb.dot.gov.''

    Decided: March 11, 2013.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Derrick A. Gardner,
Clearance Clerk.
[FR Doc. 2013-05961 Filed 3-14-13; 8:45 am]
BILLING CODE 4915-01-P