[Federal Register Volume 85, Number 234 (Friday, December 4, 2020)]
[Notices]
[Pages 78402-78404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26659]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36328]


Ken Tenn Regional Rail Partners, Inc.--Construction & Operation 
Exemption--In Fulton County, Ky. and Obion County, Tenn.

    On September 2, 2020, Ken Tenn Regional Rail Partners, Inc. 
(KTRRP), a noncarrier, filed a petition for exemption under 49 U.S.C. 
10502 from the prior approval requirements of 49 U.S.C. 10901 for 
authorization to construct and operate approximately 12.17 miles of 
rail line (Line) between milepost TennKen 51.69 at the Hickman-Fulton 
County River Port (Port) in Fulton County, Ky., and milepost UCT 450 
near Union City, in Obion County, Tenn.
    KTRRP asks that the Board issue a preliminary decision addressing 
the transportation merits of the construction project while the 
environmental review is ongoing. As discussed below, the Board 
concludes that such an approach is appropriate here and preliminarily 
concludes, subject to completion of the ongoing environmental review, 
that the proposed construction meets the statutory standards for 
exemption under section 10502. This decision only addresses the 
transportation merits, however, and does not grant the exemption or 
allow construction to begin. After the Board has considered the 
potential environmental impacts associated with this proposal, it will 
issue a final decision either granting the exemption, with conditions 
if appropriate, or denying it.

Background

    KTRRP states that it is a non-profit corporation created to 
construct and operate the Line by the Fulton County Industrial 
Development Authority of Kentucky, which provides assistance with 
economic development in Fulton County, and the Industrial Development 
Board of the City of Union City, which is an economic development 
agency and sub-entity of Union City. (Pet. 3.) \1\
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    \1\ KTRRP states that it intends to contract with a Class III 
rail carrier to operate over the proposed Line. (Pet. 5.)
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    The petition states that the Port is a public entity that provides 
bulk and break-bulk cargo transfer operations for a variety of 
commodities and transloading transfer service, storage, and rail 
service. (Id. at 3-4.) Rail service at the Port is provided by the 
TennKen Railroad Company (TennKen), which connects with Canadian 
National Railway Company (CN) at Dyersburg, Tenn. (Id. at 4.)
    As noted above, the proposed Line would begin at the Port at 
milepost TennKen 51.69, near the Mississippi River, and extend to 
milepost UCT 450 in Obion County. (Id. at 2.) According to KTRRP, two 
separate segments of the Line, totaling 3.47 miles, would be built over 
existing rights-of-way that are not currently in use: One would run 
from Union City to the north, on the west side of Tennessee Highway 21 
to the Tennessee/Kentucky state line and then along the west side of 
Kentucky State Route 239 to Kentucky State Route 166; the other would 
parallel the east side of Kentucky Highway 125 just north of Kentucky 
Highway 166 for approximately 0.75 miles. The remainder of the Line 
would be newly constructed right-of-way running east to west until 
connecting to TennKen in Fulton County, Ky. (Id. at 6, Ex. B, Joint 
V.S. Billingsley & Curlin 3.) KTRRP notes that the proposed Line 
ultimately would join TennKen with the Union City Terminal Railroad to 
create a 46.1-mile loop connecting with CN at both Dyersburg and Rives, 
Tenn. (Pet., Ex. B, Joint V.S. Billingsley & Curlin 4.)
    KTRRP states that the proposed Line is located in an area that is a 
``lightly

[[Page 78403]]

settled, economically depressed, agricultural region.'' (Pet. 6.) KTRRP 
asserts that the proposed Line would support economic development by 
providing the Port and local industrial facilities with easier and more 
cost-effective access to the interstate rail network. Specifically, a 
connection through Union City would allow the Port to utilize grain 
elevators in Union City and to transport outbound dried distillers' 
grain from local ethanol production. (Id. at 7, Ex. B, Joint V.S. 
Billingsley & Curlin 4.) KTRRP states that the current transportation 
option for most shippers to the east of the Port is via truck along 
Tennessee Highway 5/Kentucky State Highway 125. (Pet. 7)
    KTRRP argues that regulation of the construction and operation of 
the proposed Line is not needed to carry out the rail transportation 
policy (RTP) at 49 U.S.C. 10101, and the transaction is of limited 
scope. (Id. at 9-10.) Alternatively, it argues that application of 
section 10101 is not necessary to protect shippers from an abuse of 
market power. (Id. at 11.) KTRRP argues that an exemption is consistent 
with sections 10101(2) and 10101(7), as it would minimize the need for 
federal regulatory control over the rail transportation system and 
reduce regulatory barriers to entry. (Id. at 10.) Additionally, KTRRP 
asserts that the exemption would satisfy sections 10101(4) and 
10101(5), because it would provide an alternative means of 
transportation and/or enhance competition and the proposed Line meets a 
public need. (Id.)
    KTRRP asserts that a preliminary determination on the 
transportation merits is appropriate here because its proposed 
construction is a transportation and economic development project that 
has already received funding and other support from the state 
governments of Kentucky and Tennessee, as well as local governments in 
the region. (Id. at 12.) It further explains that a preliminary 
approval on the transportation merits will support fundraising and 
planning efforts, demonstrate that additional investment of state and 
local resources is warranted, and remove any uncertainty concerning the 
transportation benefits of the proposed Line. (Id.)
    On October 8, 2020, U.S. Representative James Comer filed a letter 
in support of KTRRP's petition. No party has filed in opposition to the 
petition.

Discussion and Conclusions

    The construction of new railroad lines that are to be part of the 
interstate rail network requires prior Board authorization, either 
through issuance of a certificate under 49 U.S.C. 10901 or, as 
requested here, through an exemption under 49 U.S.C. 10502 from the 
formal application procedures of section 10901. Section 10901(c) 
directs the Board to grant rail construction proposals unless it finds 
the proposal ``inconsistent with the public convenience and 
necessity.'' See Alaska R.R.--Constr. & Operation Exemption--A Rail 
Line Extension to Port MacKenzie, Alaska, FD 35095, slip op. at 5 (STB 
served Nov. 21, 2011), aff'd sub nom. Alaska Survival v. STB, 705 F.3d 
1073 (9th Cir. 2013) (addressing the Board's construction exemption 
process).
    Under 49 U.S.C. 10502(a), however, ``the Board, to the maximum 
extent consistent with [Part A], shall exempt'' a transaction 
(including a construction proposal) from the prior approval 
requirements of section 10901 when it finds that: (1) Regulation is not 
necessary to carry out the RTP of 49 U.S.C. 10101; and (2) either (a) 
the transaction is of limited scope or (b) application of the statutory 
provision is not needed to protect shippers from the abuse of market 
power.

Issuance of Preliminary Decision on the Transportation Merits

    As noted above, KTRRP requests that the Board issue a preliminary 
decision addressing the transportation merits of the project in advance 
of a decision on the environmental issues. KTRRP asserts that a 
preliminary decision addressing the transportation issues would support 
continued fundraising and planning, demonstrate that additional 
investment of state and local resources is warranted, and remove any 
uncertainty concerning the transportation benefits of the proposed 
Line. (Pet. 11-12.)
    The Board has considered requests for preliminary decisions 
addressing the transportation merits of a project over the years.\2\ 
Here, KTRRP has received support for the project from state and local 
entities and is seeking further investment assistance; the 
transportation merits of the project, which would support regional 
economic development, are apparent, as discussed in this decision; and 
there is no opposition to either the request for preliminary decision 
or the exemption itself. In these circumstances, the Board finds it 
appropriate to issue a preliminary decision while the Board continues 
the environmental review of the proposed construction.
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    \2\ See Six Cnty. Ass'n of Gov'ts--Constr. & Operation 
Exemption--A Rail Line Between Levan & Salina, Utah, FD 34075 (STB 
served Sept. 3, 2015); Alaska R.R.--Constr. & Op. Exemption--Rail 
Line Between Eielson Air Force Base and Fort Greely, Alaska, FD 
34658 (STB served Oct. 4, 2007); Burlington N. & Santa Fe Ry.--
Constr. & Op. Exemption--Merced Cnty., Cal., FD 34305 (STB served 
Mar. 28, 2003).
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Rail Transportation Analysis

    Based on the record, the Board preliminarily concludes that the 
proposed construction, which is unopposed on the transportation merits, 
qualifies for an exemption under section 10502 from the formal 
application procedures of section 10901. First, regulation under 
section 10901 is not necessary to carry out the RTP. The record here 
shows that the proposed Line would provide enhanced rail service to and 
from the Port and surrounding area. Currently, the primary 
transportation option for shippers east of the Port is via trucks. The 
connection through Union City would provide local industrial facilities 
access to the interstate rail network and allow traffic to utilize 
grain elevators and to transport outbound dried distillers' grain. The 
proposed Line would enhance competition by providing shippers in the 
area with an additional and more cost-effective freight option and 
foster sound economic conditions, consistent with 49 U.S.C. 10101(4) 
and (5). Exempting the proposed construction from the requirements of 
section 10901 would also minimize unnecessary expense associated with 
the preparation and filing of a formal construction application, 
expedite regulatory decisions, and reduce regulatory barriers to entry 
for the Line in furtherance of 49 U.S.C. 10101(2), (7) & (15). Other 
aspects of the RTP would not be adversely affected.
    In addition, application of section 10901 is not necessary to 
protect shippers from an abuse of market power.\3\ Because shippers 
would be gaining additional and improved transportation options (with 
no reduction in service options), the proposed Line would enhance 
competition.
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    \3\ Because regulation of the proposed construction and 
operation is not needed to protect shippers from the abuse of market 
power, the Board need not determine whether the transaction is 
limited in scope. 49 U.S.C. 10502(a)(2).
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Environmental Review

    As discussed above, the Board has preliminarily concluded that the 
proposed construction meets the statutory standards for exemption, 
subject to completion of the ongoing environmental review. KTRRP has 
consulted with the Board's Office of

[[Page 78404]]

Environmental Analysis (OEA) regarding the environmental review 
process. By letter dated May 29, 2020, KTRRP requested a waiver of the 
requirements of 49 CFR 1105.6(a), which generally requires the 
preparation of an Environmental Impact Statement for rail construction 
and operation proposals. OEA granted the request on June 9, 2020, 
finding that preparation of an Environmental Assessment (EA) is the 
appropriate level of environmental documentation for this proceeding. 
OEA currently is preparing a Draft EA and any associated historic or 
cultural review that will be made available for public comment. 
Following the conclusion of the environmental review process, the Board 
will issue a further decision assessing the potential environmental 
impacts of the construction proposal and determining whether the 
exemption will become finally effective (subject to appropriate 
mitigation conditions, if necessary). See Mo. Mining, Inc. v. ICC, 33 
F.3d 980 (8th Cir. 1994).
    The decision issued today does not prejudge the Board's final 
decision, nor diminish the agency's environmental review process 
concerning the proposed Line's construction. See Ill. Com. Comm'n v. 
ICC, 848 F.2d 1246, 1259 (DC Cir. 1988). Construction may not begin 
until the Board's final decision in this proceeding has been issued and 
has become effective.
    It is ordered:
    1. Under 49 U.S.C. 10502(b), a proceeding is instituted.
    2. Under 49 U.S.C. 10502, the Board preliminarily exempts the 
construction of the above-described Line from the prior approval 
requirements of 49 U.S.C. 10901, subject to further consideration of 
the potential environmental impacts of the proposal.
    3. On completion of the environmental review, the Board will issue 
a further, final decision addressing any potential environmental 
impacts and determining whether the exemption should become effective 
(subject to any appropriate mitigation conditions). Construction may 
not begin until the Board's final decision has been issued and has 
become effective.
    4. Notice of this decision will be published in the Federal 
Register.
    5. Petitions to reconsider must be filed by December 21, 2020.

    6. This decision is effective 30 days from the date of service.

    Decided: November 30, 2020.
    By the Board, Board Members Begeman, Fuchs, and Oberman.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2020-26659 Filed 12-3-20; 8:45 am]
BILLING CODE 4915-01-P