[Federal Register Volume 83, Number 200 (Tuesday, October 16, 2018)]
[Notices]
[Pages 52299-52300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22463]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36222]


BNSF Railway Company--Lease Exemption--Union Pacific Railroad 
Company

    On September 6, 2018, BNSF Railway Company (BNSF) filed a petition 
under 49 U.S.C. 10502 seeking exemption from the prior approval 
requirements under 49 U.S.C. 11323-25 for BNSF to lease from Union 
Pacific Railroad Company (UP) an approximately 13.62-mile rail line 
(Line) in Pueblo County, Colo., between milepost 591.66 at NA Junction 
and milepost 605.28 at Avondale (Nyberg).
    BNSF explains that, its predecessor, The Atchison, Topeka and Santa 
Fe Railway Company (ATSF), and UP's predecessor, Missouri Pacific 
Railroad Company (Missouri Pacific), entered into an agreement in 1967 
relating to ownership and operation, maintenance, and joint use of 
ATSF's and Missouri Pacific's railroad tracks and facilities between NA 
Junction and Pueblo, which includes the Line. Pursuant to this 
agreement, BNSF and UP have jointly operated over the Line for the last 
50 years, and UP has been responsible for maintaining the Line. BNSF 
has been the primary user of the Line and currently dispatches it.
    BNSF and UP have recently entered into a lease agreement that would 
modify certain roles and responsibilities set forth in the 1967 
agreement. BNSF would ``non-exclusively lease the Line in order [] to 
maintain, construct, repair and renew the Line's track and appurtenant 
structures and facilities.'' (Pet. 2.) \1\ BNSF states that the lease 
would align track and signal maintenance with BNSF's current 
dispatching responsibilities and is intended to streamline maintenance 
activity and improve planning processes in coordination with BNSF's 
maintenance of contiguous lines on either side of the Line. BNSF states 
that these changes would reduce the number and frequency of maintenance 
windows and outages, resulting in improved operations for customers 
along the route. According to BNSF, beyond this enhancement of 
operational efficiency, no other impacts to commercial or operational 
access to customers, either locally or in through service, would result 
from the transaction.\2\
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    \1\ BNSF's reference to ``construction'' is in connection with 
the planned repair and maintenance of the existing Line. See Pet. 1. 
Therefore, the Board does not construe that reference as involving 
any new line of railroad for which construction authority would be 
needed pursuant to 49 U.S.C. 10901, and this decision does not grant 
any such authority.
    \2\ Pursuant to 49 CFR 1121.3(d), BNSF certifies that the lease 
does not contain a provision or agreement that may limit future 
interchange with a third-party connecting carrier.
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    BNSF asks for expedited consideration of its petition so that the 
exemption can become effective by November 1, 2018. BNSF explains that 
this would allow it to plan for and commence maintenance work necessary 
to remove slow orders and improve track conditions before winter 
weather makes maintenance difficult.

Discussion and Conclusions

    Under 49 U.S.C. 11323(a)(2), prior Board approval is required for a 
rail carrier to lease the property of another rail carrier. Under 49 
U.S.C. 10502, however, the Board must exempt a transaction or service 
from regulation when it finds that: (1) Regulation is not necessary to 
carry out the rail transportation policy of 49 U.S.C. 10101; and (2) 
either (a) the transaction or service is of limited scope, or (b) 
regulation is not needed to protect shippers from the abuse of market 
power.
    Detailed scrutiny of the proposed transaction through an 
application for review and approval under 49 U.S.C. 11323-25 is not 
necessary here to carry out the rail transportation policy. The 
proposed transaction would align track and signal maintenance with 
dispatching and further align maintenance of the Line with BNSF's 
maintenance activities on contiguous lines, which would result in 
improved operations along the route. As such, the proposed transaction 
would, among other things, promote a safe and efficient rail 
transportation system (49 U.S.C. 10101(3)), ensure continuation of a 
sound rail transportation system with effective competition among rail 
carriers (49 U.S.C. 10101(4)), foster sound economic conditions in 
transportation and ensure effective competition (49 U.S.C. 10101(5)), 
and encourage honest

[[Page 52300]]

and efficient management (49 U.S.C. 10101(9)). Further, an exemption 
from the application process would expedite regulatory action (49 
U.S.C. 10101(2)). Other aspects of the rail transportation policy would 
not be adversely affected.
    Regulation of the proposed transaction is also not necessary to 
protect shippers from the abuse of market power.\3\ Nothing in the 
record indicates that any shipper would lose an existing rail service 
option as a result of the proposed lease transaction. According to 
BNSF, the lease will not affect the routings available to customers on 
the Line or customers whose traffic is routed over the Line. The record 
indicates that the transaction would not result in any material change 
in UP's or BNSF's operations or commercial access to customers and that 
no customers would experience any degradation of, or competitive change 
in, rail service. Indeed, the lease transaction should benefit shippers 
by allowing BNSF and UP to move traffic more efficiently following 
improved maintenance. Moreover, no shippers or other parties have filed 
any objections to the proposed transaction.
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    \3\ Because the Board concludes that regulation is not needed to 
protect shippers from the abuse of market power, it is unnecessary 
to determine whether the transaction is limited in scope. See 49 
U.S.C. 10502(a).
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    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a carrier of its statutory obligation to protect 
the interests of employees. Accordingly, as a condition to granting 
this exemption, the Board will impose the standard employee protective 
conditions in Norfolk & Western Railway--Trackage Rights--Burlington 
Northern, Inc., 354 I.C.C. 605 (1978), as modified in Mendocino Coast 
Railway--Lease & Operate--California Western Railroad, 360 I.C.C. 653 
(1980).
    The proposed lease is exempt from both the environmental reporting 
requirements under 49 CFR 1105.6(c) and the historic reporting 
requirements under 49 CFR 1105.8(b).
    As noted above, BNSF seeks an expedited effective date so that it 
can commence maintenance improvements as soon as possible to avoid 
complications from winter weather conditions. For that reason, the 
exemption will be effective October 31, 2018, and petitions to stay, 
petitions for reconsideration, and petitions to reopen will be due by 
October 24, 2018.
    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts from the prior approval 
requirements of 49 U.S.C. 11323-25 BNSF's lease of the Line, subject to 
the employee protective conditions in Norfolk & Western Railway--
Trackage Rights--Burlington Northern, Inc., 354 I.C.C. 605 (1978), as 
modified in Mendocino Coast Railway--Lease & Operate--California 
Western Railroad, 360 I.C.C. 653 (1980).
    2. Notice of the exemption will be published in the Federal 
Register on October 16, 2018.
    3. The exemption will become effective on October 31, 2018.
    4. Petitions to stay, petitions for reconsideration, and petitions 
to reopen must be filed by October 24, 2018.

    Decided: October 10, 2018.

    By the Board, Board Members Begeman and Miller.
Aretha Laws-Byrum,
Clearance Clerk.
[FR Doc. 2018-22463 Filed 10-15-18; 8:45 am]
 BILLING CODE 4915-01-P