[Federal Register Volume 79, Number 59 (Thursday, March 27, 2014)]
[Notices]
[Pages 17234-17235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-06820]


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

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35799]


Rapid City, Pierre & Eastern Railroad, Inc.--Acquisition and 
Operation Exemption Including Interchange Commitment--Dakota, Minnesota 
& Eastern Railroad Corporation

    Rapid City, Pierre & Eastern Railroad, Inc. (RCP&E),\1\ a 
noncarrier, has filed a verified notice of exemption under 49 CFR 
1150.35 to acquire from Dakota, Minnesota & Eastern Railroad 
Corporation d/b/a Canadian Pacific (DM&E) \2\ and to operate 
approximately 670 miles of rail lines known as the DM&E West Lines in 
Minnesota, South Dakota, Nebraska, and Wyoming. RCP&E would also 
acquire approximately 219 miles of incidental trackage rights over 
connecting lines of DM&E and other carriers. RCP&E and DM&E entered 
into an agreement regarding this transaction on January 2, 2014.\3\ 
This transaction would result in RCP&E's becoming a Class II rail 
carrier.
---------------------------------------------------------------------------

    \1\ RCP&E is a wholly owned subsidiary of Genesee & Wyoming Inc. 
(GWI).
    \2\ In Canadian Pacific Railway--Control--Dakota, Minnesota & 
Eastern Railroad, FD 35081 (STB served Sept. 30, 2008), the Board 
approved an application allowing Canadian Pacific Railway Company 
(CP) to acquire indirect control of DM&E and DM&E's wholly owned 
rail subsidiary, Iowa, Chicago & Eastern Railroad Corporation 
(IC&E).
    \3\ The Board is waiving the requirement that RCP&E submit an 
additional 10 copies of both the Public and Highly Confidential 
versions of the agreement. As noted by RCP&E, each document is 
hundreds of pages long, and it would be unduly burdensome and 
expensive to meet the requirement here. Moreover, RCP&E has 
submitted an electronic version of each document on a disk.
---------------------------------------------------------------------------

    Acquired Lines.\4\ The specific lines to be acquired by RCP&E 
include: (1) Huron Subdivision between Tracy, Minn., at milepost 231.5 
and Huron, S.D., at milepost 362.7, a distance of 131.2 miles; (2) 
Pierre Subdivision between Huron at milepost 362.7 and Ft. Pierre, 
S.D., at milepost 484.4, a distance of 121.7 miles; (3) PRC Subdivision 
between Ft. Pierre at milepost 484.4 and Pressler Jct., S.D., at 
milepost 649.2, a distance of 164.8 miles; (4) Black Hills Subdivision 
between Dakota Jct., Neb., at milepost 0.4 and Bentonite/Colony, Wyo., 
at milepost 174.7, a distance of 174.3 miles; (5) Crawford Subdivision 
between Dakota Jct. at milepost 411.72 and Crawford, Neb., 
at milepost 432.5, a distance of 20.78 miles; (6) Onida 
Subdivision between Onida, S.D., at milepost 97.5 and Blunt, S.D., at 
milepost 115.1, a distance of 17.6 miles; (7) Mansfield Subdivision 
between Redfield, S.D., at milepost 39.7 and Mansfield, S.D., at 
milepost 66.9, a distance of 27.2 miles; and (8) Yale Spur \5\ between 
Yale, S.D., at milepost 145.0 and Huron, S.D., at milepost 160.3, a distance of 15.3 miles.
---------------------------------------------------------------------------

    \4\ DM&E is the current operator of the DM&E West Lines, with 
the exception of the Crawford Subdivision, which is operated by 
Nebraska Northwestern Railroad, Inc., pursuant to a lease agreement 
with DM&E.
    \5\ The Yale Spur is subleased from the East Central Railroad 
Authority, and the sublease is being assigned by DM&E.
---------------------------------------------------------------------------

    Notwithstanding the sale of the lines described above, DM&E would 
retain the common carrier obligation with respect to the handling of 
coal to, from, and over the DM&E West Lines until December 31, 2030, 
and RCP&E would not assume the common carrier obligation to handle coal 
shipments during that period.\6\
---------------------------------------------------------------------------

    \6\ The acquisition by RCP&E also does not include any of the 
rights of DM&E or its affiliates to build into the Powder River 
Basin. See Wyo. Dakota R.R. Prop.--Acquis. & Oper. Exemption--
Dakota, Minn. & E. R.R., FD 34871 (STB served Aug. 14, 2006).
---------------------------------------------------------------------------

    Incidental Trackage Rights. The specific incidental trackage rights 
that RCP&E will acquire are over lines: (1) owned and operated by DM&E 
between Tracy at milepost 231.5 and Mankato, Minn., at milepost 142.4, 
a distance of 89.1 miles; (2) operated by BNSF Railway Company (BNSF), 
being assigned to RCP&E by DM&E, as successor to Chicago and 
Northwestern Transportation Company between Wolsey, S.D., at milepost 
70.50 and Aberdeen, S.D., at milepost 777.04, a distance of 72.04 
miles; and (3) owned and operated by BNSF, being assigned to RCP&E by 
DM&E between Yale at milepost 148.5 and Watertown, S.D., at milepost 
90.72, and yard trackage at Huron at milepost 160.33 to the end of 
track, a distance of 58.65 miles.\7\
---------------------------------------------------------------------------

    \7\ Additionally, RCP&E would grant DM&E trackage rights between 
Tracy and Wolsey to allow DM&E to continue to handle overhead grain 
trains in conjunction with BNSF that are operating today between 
Florence, Minn., and points on DM&E beyond Tracy, and to handle non-
revenue ballast trains, including the right to interchange such 
trains with BNSF at Wolsey. DM&E is expected to file a separate 
notice of exemption with the Board for trackage rights granted by 
RCP&E to DM&E.
---------------------------------------------------------------------------

    RCP&E certifies that the proposed transaction involves an 
interchange commitment. As part of the transaction, RCP&E will be 
acquiring DM&E's ``Colony Line.'' RCP&E will be assuming certain 
interchange rights and obligations arising under the existing 
agreements that were executed when DM&E acquired the Colony Line from 
Union Pacific Railroad Company in 1996. Among those assumed obligations 
will be certain obligations under the existing Colony Line Car Supply, 
Services, and Divisions Agreement (CSSDA) for the remainder of the term

[[Page 17235]]

of the CSSDA. As required under 49 CFR 1150.33(h)(1), RCP&E provided 
additional information concerning the interchange commitment.\8\
---------------------------------------------------------------------------

    \8\ See Verified Notice of Exemption 7-8.
---------------------------------------------------------------------------

    This transaction is related to a concurrently filed verified notice 
of exemption in Genesee & Wyoming Inc.--Continuance in Control 
Exemption--Rapid City, Pierre & Eastern Railroad, Inc., Docket No. FD 
35800, wherein GWI seeks Board approval under 49 CFR 1180.2(d)(2) to 
continue in control of RCP&E, upon RCP&E's becoming a Class II rail 
carrier.\9\
---------------------------------------------------------------------------

    \9\ The DM&E West Lines also are the subject of an ongoing 
proceeding before the Board. In that proceeding, the State of South 
Dakota, by and through its Department of Transportation (State), 
filed a petition asking the Board to enforce three representations 
allegedly made by CP during the 2008 acquisition-of-control 
proceeding regarding investments that CP would make in DM&E and IC&E 
(collectively in that proceeding, DME). The Board issued decisions 
allowing the State to engage in discovery concerning those claims 
and setting a procedural schedule. See Canadian Pac. Ry.--Control--
Dakota, Minn. & E. R.R., FD 35081 (Sub-No. 2) (STB served Dec. 20, 
2013, and Mar. 10, 2014). Discovery remains ongoing in that 
proceeding.
---------------------------------------------------------------------------

    The earliest the transaction could be consummated is April 25, 
2014, the effective date of the exemption (45 days after the exemption 
was filed).\10\ The parties expect to consummate the transaction 
shortly after the exemption becomes effective, assuming all other 
conditions to closing have been satisfied by that time.
---------------------------------------------------------------------------

    \10\ See 49 CFR 1150.35(e).
---------------------------------------------------------------------------

    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 would not automatically stay the effectiveness of the exemption. 
Petitions for stay must be filed no later than April 11, 2014, which is 
14 days before the exemption could become effective.\11\
---------------------------------------------------------------------------

    \11\ See 49 CFR 1150.35(f).
---------------------------------------------------------------------------

    An original and 10 copies of all pleadings, referring to Docket No. 
FD 35799 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 Eric M. Hocky, Clark Hill PLC, One Commerce 
Square, 2005 Market Street, Suite 1000, Philadelphia, PA 19103.
    Board decisions and notices are available on our Web site at 
www.stb.dot.gov.

    Decided: March 24, 2014.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Raina S. White,
Clerance Clerk.
[FR Doc. 2014-06820 Filed 3-26-14; 8:45 am]
BILLING CODE 4915-01-P