[Federal Register Volume 89, Number 109 (Wednesday, June 5, 2024)]
[Notices]
[Pages 48208-48209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12259]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36759]


Tarantula Corporation--Acquisition of Control Exemption--Texas 
Central Railroad Company

    By petition filed on March 22, 2024, Tarantula Corporation 
(Tarantula), seeks an exemption under 49 U.S.C. 10502 from the prior 
approval requirements of 49 U.S.C. 11323 to acquire control of Texas 
Central Railroad Company (Texas Central), a Class III carrier, through 
the purchase of all outstanding Texas Central capital stock from 
Birdsong Corporation (Birdsong).\1\ As discussed below, the Board will 
grant the exemption.
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    \1\ Texas Central Railroad Company is a separate and distinct 
entity from Texas Central Partners, LLC, which is proposing to 
construct high-speed passenger rail between Dallas-Fort Worth and 
Houston, Tex.
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Background

    Tarantula is a noncarrier holding company that controls Fort Worth 
& Western Railroad Company (FWWR), Fort Worth & Dallas Railroad 
Company, and Fort Worth & Dallas Belt Railroad Company, all of which 
are Class III rail carriers. (Pet. 1 & n.1); see also Tarantula Corp.--
Continuance in Control Exemption--Fort Worth & Dall. Belt R.R., FD 
32515 (ICC served July 25, 1994).
    Pursuant to a stock purchase agreement dated March 21, 2024, 
Tarantula has reached an agreement to acquire from Birdsong all of the 
outstanding capital stock of Texas Central. (See Pet., Ex. B at 1.) 
Upon consummation of this transaction, Tarantula would indirectly 
control Texas Central. (Id.) According to the petition, Texas Central 
owns--but does not operate--24.9 miles of rail line running from 
Dublin, Tex., to Gorman, Tex. (the Line). (Pet. 2.) FWWR, a Tarantula 
subsidiary, has leased and operated the Line since 1998. (Id.); see 
also Fort Worth & W. R.R.--Acquis. Exemption--S. Orient R.R., FD 33681 
(STB served Nov. 30, 1998).\2\
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    \2\ Texas Central's Line connects with FWWR's rail line at 
Dublin. Tarantula explains that, for that reason, the transaction 
does not qualify for the class exemption under 49 CFR 1180.2(d)(2). 
(Pet. 1.)
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    In support of the petition, Tarantula asserts that the transaction 
will allow it to make capital improvements to infrastructure on the 
Line. (Pet. 3, 7.) Tarantula states that, as FWWR already operates over 
the Line, the transaction will not affect the level of operations or 
maintenance of the Line or any of the other lines operated by the other 
railroads in the Tarantula corporate family. (Id. at 6-7.) Tarantula 
has attached to the petition letters supporting the transaction from 
both shippers located on the Line, Birdsong and Gorman Milling Company, 
Inc. (See Pet., Ex. C.) Tarantula has also asked the Board for 
expedited consideration of its petition and a decision issued and 
effective by June 15, 2024. (Pet. 7.) Tarantula states that it would 
like an earlier effective date to commence infrastructure improvements 
on a faster schedule in support of increased safety, improved 
reliability, enhanced efficiency, and improved connectivity which can 
lead to greater marketability

[[Page 48209]]

and competitiveness for communities and businesses in the rural area 
served by FWWR. (Id.) Tarantula further states that an earlier 
effective date would support an expansion project and make a stronger 
application for a CRISI grant. (Id.)

Discussion and Conclusions

    The acquisition of control of a rail carrier by a person that is 
not a rail carrier but that controls any number of rail carriers 
requires prior approval from the Board under 49 U.S.C. 11323(a)(5). 
Under 49 U.S.C. 10502(a), however, the Board shall, to the maximum 
extent consistent with title 49, subtitle IV, part A, exempt a 
transaction or service from regulation upon finding that (1) the 
regulation is not necessary to carry out the rail transportation policy 
(RTP) under 49 U.S.C. 10101 and (2) either the transaction or service 
is of limited scope, or regulation is not needed to protect shippers 
from the abuse of market power.
    Here, an exemption from the prior approval requirements of 49 
U.S.C. 11323-25 is consistent with the standards of 49 U.S.C. 10502. 
Detailed scrutiny of the proposed transaction through an application 
for review and approval under sections 11323-25 is not necessary to 
carry out the RTP. An exemption would promote the RTP by minimizing the 
need for federal regulatory control over the transaction, 49 U.S.C. 
10101(2), reducing regulatory barriers to entry, 49 U.S.C. 10101(7), 
encouraging efficient management of railroads, 49 U.S.C. 10101(9), and 
providing for the expeditious resolution of this proceeding, 49 U.S.C. 
10101(15). Further, Tarantula asserts that the acquisition will allow 
it to make capital improvements to infrastructure on the Line. (Pet. 3, 
7.) Therefore, an exemption would promote the RTP by ensuring the 
development and continuation of a sound rail transportation system that 
would continue to meet the needs of the public, 49 U.S.C. 10101(4), and 
fostering sound economic conditions in transportation, 49 U.S.C. 
10101(5). Other aspects of the RTP would not be adversely affected.
    Regulation of the transaction is not needed to protect shippers 
from abuse of market power.\3\ The record indicates that Texas Central 
does not conduct freight rail operations over the Line; rather, FWWR 
has leased and operated the Line since 1998. (Pet. 2.) Tarantula states 
that the transaction will have no adverse effect on rail operations 
over the Line because FWWR will continue operations over it. (Id. at 1, 
5.) Thus, the proposed transaction will not result in any material 
changes to the services available to shippers along the Line. Moreover, 
there have been no objections to the proposed transaction, and the 
shippers along the Line have filed letters supporting the transaction. 
(Pet., Ex. C.)
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    \3\ Given this finding, the Board need not 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 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 sections 11324 
and 11325 that involve only Class III carriers. Therefore, because all 
carriers involved in the transaction are Class III carriers, the Board 
may not impose labor protective conditions.
    The acquisition of control is exempt from environmental reporting 
requirements under 49 CFR 1105.6(c)(1) because it will not result in 
significant changes in carrier operations. Similarly, under 49 CFR 
1105.8(b)(3), no historic report is required because the proposed 
transaction will not substantially change the level of operations or 
maintenance of railroad properties.
    As noted, Tarantula has requested expedited consideration of its 
petition for exemption. The Board finds that Tarantula's request is 
reasonable under the circumstances. Accordingly, the effective date of 
the exemption will be June 15, 2024. See 49 CFR 1121.4(e) (``Unless 
otherwise specified in the decision, an exemption generally will be 
effective 30 days from the service date of the decision.''). Petitions 
for stay must be filed by June 7, 2024. Petitions to reopen will be due 
by June 20, 2024.
    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts the above transaction 
from the prior approval requirements of 49 U.S.C. 11323-25.
    2. Notice of this exemption will be published in the Federal 
Register.
    3. This decision will be effective on June 15, 2024. Petitions for 
stay must be filed by June 7, 2024. Petitions to reopen must be filed 
by June 20, 2024.

    Decided: May 30, 2024.

    By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Kenyatta Clay,
Clearance Clerk.
[FR Doc. 2024-12259 Filed 6-4-24; 8:45 am]
BILLING CODE 4915-01-P