[Federal Register Volume 89, Number 120 (Friday, June 21, 2024)]
[Notices]
[Pages 52193-52194]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13645]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36786]


Koch, Inc.--Intra-Corporate Family Exemption--Old Augusta 
Railroad, LLC; Blue Rapids Railway Company LLC; Moscow Camden and San 
Augustine Railroad LLC; and KM Railways, LLC

    Koch, Inc. (Koch),\1\ has filed a verified notice of exemption for 
an intra-corporate family transaction under 49 CFR 1180.2(d)(3), which 
exempts from the prior approval requirements of 49 U.S.C. 11323 
``[t]ransactions within a corporate family that do not result in 
adverse changes in service levels, significant operational changes, or 
a change in the competitive balance with carriers outside the corporate 
family.'' 49 CFR 1180.2(d)(3).
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    \1\ The verified notice states that Koch is a newly formed 
Kansas corporation and noncarrier.
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    According to the verified notice, Koch Industries, Inc. (KII), a 
Kansas corporation, indirectly owns controlling interests in four 
common carrier railroads: Old Augusta Railroad, LLC (OAR); Blue Rapids 
Railway Company LLC (BRR); Moscow Camden and San Augustine Railroad LLC 
(MCSA); and KM Railways, LLC (KMR). The verified notice states that 
each of these railroads are Class III rail carriers.\2\ Under the 
proposed transaction, KII will engage in an intra-corporate 
reorganization that will result in Koch's indirect control of OAR, BRR, 
MCSA, and KMR.\3\ According to the verified notice, the reorganization 
will be implemented pursuant to a merger agreement \4\ by and among 
KII, Koch, Koch Cos., and Sunflower Subsidiary Corp. (Sunflower).\5\ 
Koch states that the purpose of the transaction is to create a new 
corporate holding structure and to promote the investment objectives of 
Koch and its stockholders.\6\ The verified notice states that the 
proposed transaction does not impose or involve any interchange 
commitment by or affecting any of the subject railroads.
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    \2\ According to the verified notice, OAR owns approximately 2.5 
miles of rail line in Mississippi, BRR owns and operates an 
approximately 10-mile rail line in Kansas, MCSA owns and operates a 
6.9-mile rail line in Texas, and KMR owns and operates 9,350 feet of 
rail line in Illinois.
    \3\ Koch states that it will indirectly control such railroads 
through Koch Companies, LLC (Koch Cos.), a newly formed Delaware 
entity and direct subsidiary of Koch.
    \4\ Koch submitted under seal a confidential version of its 
verified notice containing the agreement. Koch also filed a motion 
for protective order, which is addressed in a separate decision.
    \5\ According to the verified notice, Sunflower, a newly formed 
Kansas corporation and direct subsidiary of Koch Cos., will merge 
with and into KII, with KII being the surviving entity.
    \6\ The verified notice states that the existing stockholders of 
KII will continue as the stockholders of Koch in the same proportion 
as such stockholders held KII immediately prior to the 
reorganization.
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    The verified notice states that the transaction will not result in 
adverse changes in service levels, operational changes, or a change in 
the competitive balance with carriers outside the corporate family. 
Therefore, the transaction is exempt from the prior approval 
requirements of 49 U.S.C. 11323. See 49 CFR 1180.2(d)(3).
    Unless stayed, the exemption will be effective on July 6, 2024 (30 
days after the verified notice was filed). Koch states that it intends 
to consummate the proposed transaction following that date.
    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. However, 49 U.S.C. 11326(c) 
does not provide for labor protection for transactions under 49 U.S.C. 
11324 and 11325 that involve only Class III rail carriers. Accordingly, 
the Board may not impose labor protective conditions here because all 
the carriers involved are Class III rail carriers.
    If the verified 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 will not automatically stay the effectiveness of

[[Page 52194]]

the exemption. Petitions for stay must be filed no later than June 28, 
2024 (at least seven days before the exemption becomes effective).
    All pleadings, referring to Docket No. FD 36786, must be filed with 
the Surface Transportation Board via e-filing on the Board's website or 
in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In 
addition, one copy of each pleading must be served on Koch's 
representative, Peter W. Denton, Steptoe LLP, 1330 Connecticut Avenue 
NW, Washington, DC 20036.
    According to Koch, this action is categorically excluded from 
environmental review under 49 CFR 1105.6(c) and historic reporting 
under 49 CFR 1105.8(b).
    Board decisions and notices are available at www.stb.gov.

    Decided: June 17, 2024.

    By the Board, Mai T. Dinh, Director, Office of Proceedings.
Raina White,
Clearance Clerk.
[FR Doc. 2024-13645 Filed 6-20-24; 8:45 am]
BILLING CODE 4915-01-P