[Federal Register Volume 87, Number 22 (Wednesday, February 2, 2022)]
[Notices]
[Pages 5930-5931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02144]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36560]


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

    On November 9, 2021, BNSF Railway Company (BNSF) filed a petition 
under 49 U.S.C. 10502 seeking exemption from the prior approval 
requirements of 49 U.S.C. 11323-25 for BNSF to lease from Union Pacific 
Railroad Company (UP) approximately 25 miles of rail line extending 
from Sterling, Colo., near UP milepost 56.71, to Union, Colo., near UP 
milepost 81.1, on UP's Julesburg Subdivision (the Line).\1\
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    \1\ An executed, redacted version of the lease agreement was 
filed with the petition for exemption. An unredacted version was 
submitted to the Board under seal along with a motion for protective 
order, which was granted by decision served on November 24, 2021.
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    The petition explains that BNSF and its predecessors have operated 
over the Line since 1900, and that, concurrently with the petition, 
BNSF filed a verified notice of exemption pursuant to 49 CFR 
1180.2(d)(7) pertaining to a trackage rights agreement to supersede the 
agreement that had been in effect since 1951. (Pet. 2.) \2\ According 
to the petition, BNSF and UP have agreed to enter into a lease that 
would modify certain roles and responsibilities set forth in the new 
trackage rights agreement; in particular, the lease would ``allow BNSF 
to occupy UP's property for the purposes of maintenance, construction, 
repair, and renewal of the track and appurtenant structures and 
facilities on the Line.'' (Pet. 2.) \3\ BNSF states that by permitting 
maintenance responsibilities to shift to BNSF, the sole user of the 
Line, the lease will streamline maintenance activity and produce more 
efficient rail operations. (Pet. 2.) According to BNSF, the lease 
transaction will have no adverse impact on commercial or operational 
access to the Line. (Id. at 5; see also id. at 6-7 (stating that the 
lease ``is simply intended to produce more efficient rail operations by 
streamlining the Line's maintenance activities'' and ``will have no 
adverse impact on the national, regional, or local rail industry'').) 
\4\
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    \2\ Notice of the trackage rights exemption was published in the 
Federal Register on November 24, 2021 (86 FR 67111), and the 
exemption took effect on December 9, 2021. See BNSF Ry.--Trackage 
Rts. Exemption--Union Pac. R.R., FD 36561 (STB served Nov. 24, 
2021).
    \3\ BNSF's reference to ``construction'' is in connection with 
the planned repair and maintenance of the existing Line. (See Pet. 
2.) 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.
    \4\ 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. (Pet. 7-8.)
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    BNSF asserts that the Board has previously exempted similar lease 
agreements from the prior approval requirements of sections 11323-25 
pursuant to section 10502, and that the Board should grant this 
petition and exempt the lease for the same reasons. (Pet. 3.)

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

[[Page 5931]]

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 simply permit maintenance responsibilities 
for the Line to shift to BNSF, the sole user of the Line. As described 
in the petition, the lease is intended to streamline maintenance 
activity and would produce more efficient rail operations over the Line 
with no adverse competitive impacts. Therefore, the proposed 
transaction would promote a safe and efficient rail transportation 
system, (49 U.S.C. 10101(3)), foster sound economic conditions in 
transportation and ensure effective competition, (49 U.S.C. 10101(5)), 
encourage honest and efficient management, (49 U.S.C. 10101(9)), and 
promote energy conservation, (49 U.S.C. 10101(14)). Further, an 
exemption from the application process would expedite regulatory 
action, (49 U.S.C. 10101(2)), and reduce regulatory barriers to entry 
and exit, (49 U.S.C. 10101(7)). 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.\5\ 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 the 
petition, the transaction will have no adverse impact on commercial or 
operational access to the Line. (See Pet. 5 (noting that the lease 
agreement specifically states that nothing contained in the lease would 
``amend, change or supersede the commercial access . . . terms as 
provided for in the Trackage Rights Agreement'').) BNSF states that it 
will continue to provide common carrier service to shippers over the 
Line and that there will be no material change in the service provided 
to shippers, because the lease simply shifts the Line's maintenance 
responsibilities to BNSF, the sole user of the Line. (Id. at 6.) 
Indeed, the lease transaction should benefit shippers by producing more 
efficient rail operations by streamlining the Line's maintenance 
activities. Moreover, no shippers or other parties have filed any 
objections to the proposed transaction.
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    \5\ 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).
    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 February 2, 2022.
    3. The exemption will become effective on March 4, 2022.
    4. Petitions to stay must be filed by February 14, 2022.
    5. Petitions for reconsideration and petitions to reopen must be 
filed by February 22, 2022.

    Decided: January 25, 2022.

    By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and 
Schultz.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2022-02144 Filed 2-1-22; 8:45 am]
BILLING CODE 4915-01-P