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[Code of Federal Regulations]
[Title 49, Volume 7]
[Revised as of October 1, 2003]
[CITE: 49CFR1150]

[Page 180-192]
 

TITLE 49--TRANSPORTATION
CHAPTER X--SURFACE TRANSPORTATION BOARD, DEPARTMENT OF TRANSPORTATION
PART 1150--CERTIFICATE TO CONSTRUCT, ACQUIRE, OR OPERATE RAILROAD LINES



              Subpart A--Applications Under 49 U.S.C. 10901

Sec.
1150.1 Introduction.
1150.2 Overview.
1150.3 Information about applicant(s).
1150.4 Information about the proposal.
1150.5 Operational data.
1150.6 Financial information.
1150.7 Environmental and energy data.
1150.8 Additional support.
1150.9 Notice.
1150.10 Procedures.

                     Subpart B--Designated Operators

1150.11 Introduction.
1150.12 Information about the designated operator.
1150.13 Relevant dates.
1150.14 Proposed service.
1150.15 Information about offeror.
1150.16 Procedures.

   Subpart C--Modified Certificate of Public Convenience and Necessity

1150.21 Scope of rules.
1150.22 Exemptions and common carrier status.
1150.23 Modified certificate of public convenience and necessity.
1150.24 Termination of service.

          Subpart D--Exempt Transactions Under 49 U.S.C. 10901

1150.31 Scope of exemption.

[[Page 181]]

1150.32 Procedures and relevant dates--transactions that involve 
          creation of Class III carriers.
1150.33 Information to be contained in notice--transactions that involve 
          creation of Class III carriers.
1150.34 Caption summary--transactions that involve creation of Class III 
          carriers.
1150.35 Procedures and relevant dates--transactions that involve 
          creation of Class I or Class II carriers.
1150.36 Exempt construction of connecting track.

Subpart E--Exempt Transactions Under 49 U.S.C. 10902 for Class III Rail 
                                Carriers

1150.41 Scope of exemption.
1150.42 Procedures and relevant dates for small line acquisitions.
1150.43 Information to be contained in notice for small line 
          acquisitions.
1150.44 Caption summary.
1150.45 Procedures and relevant dates--transactions under section 10902 
          that involve creation of Class I or Class II rail carriers.

    Authority: 5 U.S.C. 553 and 559, 49 U.S.C. 721(a), 10502, 10901 and 
10902.

    Source: 47 FR 8199, Feb. 25, 1982, unless otherwise noted. 
Redesignated at 47 FR 49581, Nov. 1, 1982.

              Subpart A--Applications Under 49 U.S.C. 10901

Sec.1150.1  Introduction.

    (a) When an application is required. This subpart governs 
applications under 49 U.S.C. 10901 for a certificate of public 
convenience and necessity authorizing the construction, acquisition or 
operation of railroad lines. Noncarriers require Board approval under 
section 10901 to construct, acquire or operate a rail line in interstate 
commerce. Existing carriers require approval under section 10901 only to 
construct a new rail line or operate a line owned by a noncarrier, since 
acquisition by a carrier of an active rail line owned by a carrier is 
covered by 49 U.S.C. 11343. We have exempted from these requirements the 
acquisition by a State entity of a rail line that has been approved for 
abandonment, as well as operations over these lines. See subpart C of 
this part. In addition, where appropriate, we have granted individual 
exemptions from these certification requirements. See 49 U.S.C. 10505.
    (b) Content of the application. Applications filed under this 
subpart shall include the information set forth in Sec.Sec.1150.2 
through 1150.9. The applicant must also comply with the Energy and 
Environmental Regulations at 49 CFR parts 1106 and 1105 (including 
consulting with the Board's Section of Environmental Analysis at least 6 
months prior to filing an application, to begin the scoping process to 
identify environmental issues and outline procedures for analysis of 
this aspect of the proposal).

[47 FR 8199, Feb. 25, 1982, as amended at 64 FR 53268, Oct. 1, 1999]

Sec.1150.2  Overview.

    (a) A brief narrative description of the proposal.
    (b) The full name and address of applicant(s).

Sec.1150.3  Information about applicant(s).

    (a) The name, address, and phone number of the representative to 
receive correspondence concerning this application.
    (b) Facts showing that applicant is either a common carrier by 
railroad or has been organized to implement the proposal for which 
approval is being sought.
    (c) A statement indicating whether the rail line will be operated by 
applicant. If not, the operator which has been selected must join in the 
application, and provide all information required for an applicant. If 
the operator has not yet been selected, state who is being considered.
    (d) A statement indicating whether applicant is affiliated by stock 
ownership or othewise with any industry to be served by the line. If so, 
provide details about the nature and extent of the affiliation.
    (e) Date and place of organization, applicable State statutes, and a 
brief description of the nature and objectives of the organization.
    (f) If a corporation, submit:
    (1) A list of officers, directors, and 10 principal stockholders of 
the corporation and their respective holdings. A statement whether any 
of these officers, directors or major shareholders control other 
regulated carriers. Also a

[[Page 182]]

list of entities, corporation(s) individual(s), or group(s) who control 
applicant, the extent of control, and whether any of them control other 
common carriers.
    (2) As exhibit A, any resolution of the stockholders or directors 
authorizing the proposal.
    (g) If a partnership or individual, submit the name and address of 
all general partners and their respective interests, and whether any of 
them control other carriers.
    (h) If applicant is an entity other than as described in paragraphs 
(e) or (f) of this section, submit name, title, and business address of 
principals or trustee, and whether the entity controls any other common 
carriers.
    (i) If applicant is a trustee, receiver, assignee, or a personal 
representative of the real party in interest, details about the 
appointment (including supporting documents, such as the court order 
authorizing the appointment and the filing) and about the real party in 
interest.
    (j) If applicant is an existing carrier, it may satisfy the 
informational requirements of paragraphs (f) through (i) of this section 
by making appropriate reference to the docket number of prior 
applications that have been filed within the previous three years in 
which the information has been submitted.

Sec.1150.4  Information about the proposal.

    (a) A description of the proposal and the significant terms and 
conditions, including consideration to be paid (monetary or otherwise). 
As exhibit B, copies of all relevant agreements.
    (b) Details about the amount of traffic and a general description of 
commodities.
    (c) The purposes of the proposal and an explanation of why the 
public convenience and necessity require or permit the proposal.
    (d) As exhibit C, a map which clearly delineates the area to be 
served including origins, termini and stations, and cities, counties and 
States. The map should also delineate principal highways, rail routes 
and any possible interchange points with other railroads. If alternative 
routes are proposed for construction, the map should clearly indicate 
each route.
    (e) A list of the counties and cities to be served under the 
proposal, and whether there is other rail service available to them. The 
names of the railroads with which the line would connect, and the 
proposed connecting points; the volume of traffic estimated to be 
interchanged; and a description of the principal terms of agreements 
with carriers covering operation, interchange of traffic, division of 
rates or trackage rights.
    (f) The time schedule for consummation or completion of the 
proposal.
    (g) If a new line is proposed for construction:
    (1) The approximate area to be served by the line.
    (2) The nature or type of existing and prospective industries (e.g., 
agriculture, manufacturing, mining, warehousing, forestry) in the area, 
with general information about the age, size, growth potential and 
projected rail use of these industries.
    (3) Whether the construction will cross another rail line and the 
name of the railroad(s) owning the line(s) to be crossed. If the 
crossing will be accomplished with the permission of the railroad(s), 
include supporting agreements. If a Board determination under 49 U.S.C. 
10901(d)(1) will be sought, include such requests.

Sec.1150.5  Operational data.

    As exhibit D, an operating plan, including traffic projection 
studies; a schedule of the operations; information about the crews to be 
used and where employees will be obtained; the rolling stock 
requirements and where it will be obtained; information about the 
operating experience and record of the proposed operator unless it is an 
operating railroad; any significant change in patterns of service; any 
associated discontinuance or abandonments; and expected operating 
economies.

Sec.1150.6  Financial information.

    (a) The manner in which applicant proposes to finance construction 
or acquisition, the kind and amount of securities to be issued, the 
approximate terms of their sale and total fixed charges, the extent to 
which funds for

[[Page 183]]

financing are now available, and whether any of the securities issued 
would be underwritten by industries to be served by the proposed line. 
Explain how the fixed charges will be met.
    (b) As exhibit E a recent balance sheet. As exhibit F, an income 
statement for the latest available calendar year prior to filing the 
application.
    (c) A present value determination of the full costs of the proposal. 
If construction is proposed, the costs for each year of such 
construction (in a short narrative or by chart).
    (d) A statement of projected net income for 2 years, based upon 
traffic projections. Where construction is contemplated, the statement 
should represent the 2 years following completion of construction.

Sec.1150.7  Environmental and energy data.

    As exhibit H, information and data prepared under 49 CFR Part 1105, 
and the ``Revision of the Nat'l. Guidelines Environmental Policy Act of 
1969,'' 363 I.C.C. 653 (1980), and in accordance with ``Implementation 
of the Energy Policy and Conservation Act of 1975,'' 49 CFR Part 1106.

Sec.1150.8  Additional support.

    Any additional facts or reasons to show that the public convenience 
and necessity require or permit approval of this application. The Board 
may require additional information to be filed where appropriate.

Sec.1150.9  Notice.

    A summary of the proposal which will be used to provide notice under 
Sec.1150.10(f).

Sec.1150.10  Procedures.

    (a) Waivers. Prior to filing an application, prospective applicants 
may seek an advance waiver, either on a permanent or temporary basis, of 
required information which is unavailable or not necessary or useful in 
analysis of the proposal. However, if the information is clearly not 
applicable to the individual proposal, a waiver is not necessary and 
need not be sought. A petition must specify the sections for which 
waiver or clarification is sought and the reasons why it should be 
granted. No replies will be permitted. Parties may, upon an appropriate 
showing, demonstrate their need to examine data which have previously 
been waived. In such circumstances, the Board only requires that it be 
produced under Sec.1150.8 above.
    (b) Filing procedures. The original and 10 copies of the application 
and all documents shall be filed with the Secretary. A filing fee in the 
amount set forth in 49 CFR 1002.2(f)(33) is required to file an 
application. Copies of documents shall be furnished promptly to 
interested parties upon request. The application shall include a stamped 
self-addressed envelope to be used to notify applicant of the docket 
number. Additionally, if possible, telephonic communication of the 
docket number shall be made.
    (c) Signatures. The original of the application shall be signed by 
applicants (if a partnership, all general partners must sign; and if a 
corporation, association, or other similar form of organization, the 
signature should be that of the executive officer having knowledge of 
the matters and designated for that purpose). Applications shall be made 
under oath and shall contain an appropriate certification (if a 
corporation, by its secretary) showing that the affiant is duly 
authorized to verify and file the application. Any persons controlling 
an applicant shall also sign the application.
    (d) Related applications. Applicant shall file concurrently all 
directly related applications (e.g., to issue securities, control motor 
carriers, obtain access to terminal operations, acquire trackage 
rights). All such applications will be considered with the main 
application.
    (e) Service. As soon as the docket number is obtained the applicant 
shall serve a conformed copy of the application by first-class mail upon 
the Governor (or Executive Officer), Public Service Board, and 
Department of Transportation of each State in which any part of the 
properties involved in the proposed transaction is located. Within 2 
weeks of filing, applicant shall submit to the Board a copy of the 
certificate of service indicating that all persons so designated have 
been served a copy of the application.

[[Page 184]]

    (f) Publication. Within 2 weeks of filing, applicant shall have 
published the summary of the application (prepared under Sec.1150.9) in 
a newspaper of general circulation in each county in which the line is 
located. The notice should inform interested parties of the date by 
which they must advise the Board of their interest in the proceeding. 
This date shall be calculated as the 35th day after the filing of the 
application which is neither a Saturday, Sunday, or legal holiday in the 
District of Columbia. Applicant must file an affidavit of publication 
immediately after the publication has been completed. The Board will, as 
soon as practicable, either publish the notice summary in the Federal 
Register or reject the application if it is incomplete.
    (g) Public participation. Written comments (with 10 copies) must be 
filed within 35 days of the filing of the application. Comments must 
contain the basis for the party's position either in support or 
opposition. Applicant must be served with a copy of each comment. On the 
basis of the comments and the assessment by the Section of Environmental 
Analysis, the Board will decide if a hearing is necessary. A hearing may 
be either oral or through receipt of written statements (modified 
procedure). (See 49 CFR 1112.1 et seq.) If there is no opposition to the 
application, additional evidence normally need not be filed, and a 
decision will be reached using the information in the application.
    (h) Replies to written comments. Applicant's replies will be 
considered by the Board provided they are filed and served within 5 days 
of the due date of the pleadings they address.

[47 FR 8199, Feb. 25, 1982. Redesignated at 47 FR 49581, Nov. 1, 1982, 
and amended at 52 FR 46483, Dec. 8, 1987; 53 FR 19302, May 27, 1988; 64 
FR 53268, Oct. 1, 1999]

                     Subpart B--Designated Operators

Sec.1150.11  Introduction.

    A certificate of designated operator will be issued to an operator 
providing service pursuant to a rail service continuation agreement 
under section 304 of the Regional Rail Reorganization Act of 1973, as 
amended by the Railroad Revitalization and Regulatory Reform Act of 
1976. The designated operator (D-OP) may commence and terminate the 
service in accordance with the terms of the agreement. When service is 
terminated the D-OP must notify all shippers on the line. To obtain a D-
OP certificate, the information in this subpart must be filed with the 
Board. A copy of the certificate of designated operator shall be served 
on the Association of American Railroads.

Sec.1150.12  Information about the designated operator.

    (a) The name and address of the D-OP.
    (b) If a new corporation or other new business entity, a copy of the 
certificate of incorporation or, if unincorporated, the facts and 
official organizational documents relating to the business entity.
    (c) The names and addresses of all officers and directors, with a 
statement from each which indicates present affiliation, if any, with a 
railroad.
    (d) Sufficient information to establish its financial responsibility 
for the proposed undertaking, unless the D-OP is a common carrier by 
railroad. The nature and extent of all liability insurance coverage, 
including insurance binder or policy number, and name of insurer.

Sec.1150.13  Relevant dates.

    The exact dates of the period of operation which have been agreed 
upon by the D-OP, the offeror of the rail service continuation payment, 
and the owner of the line to be operated, in their lease and operating 
agreements.

Sec.1150.14  Proposed service.

    (a) A copy of all agreements between the D-OP, the offeror of the 
rail service continuation payment, and the owner of the line to be 
operated.
    (b) Any additional information which is necessary to provide the 
Board with a description of:
    (1) The line over which service is to be provided (e.g., U.S.R.A. 
Line); and
    (2) All interline connections, including the names of the connecting 
railroads.

[[Page 185]]

Sec.1150.15  Information about offeror.

    (a) The name and address of the offeror of the rail service 
continuation payment.
    (b) Sufficient information to establish the financial responsibility 
of the offeror for the proposed undertaking, or if the offeror is a 
State or municipal corporation or authority, a statement that it has 
authority to perform the service or enter into the agreement for 
subsidy.

Sec.1150.16  Procedures.

    Upon receipt of this information, the matter will be docketed by the 
prefix initials ``D-OP.'' Operators may begin operating immediately upon 
the filing of the necessary information (plus three copies). Although 
the designated operator will not be required to seek and obtain 
authority from the Board either to commence or to terminate operations, 
the designated operator is a common carrier by railroad subject to all 
other applicable provisions of 49 U.S.C. Subtitle IV. However, we have 
exempted designated operators from some aspects of regulation. See 
Exemption of Certain Designated Operators from Section 11343, 361 ICC 
379 (1979), as modified by McGinness v. I.C.C., 662 F.2d 853 (D.C. Cir. 
1981).

[47 FR 8199, Feb. 25, 1982. Redesignated at 47 FR 49581, Nov. 1, 1982, 
and amended at 64 FR 53268, Oct. 1, 1999]

   Subpart C--Modified Certificate of Public Convenience and Necessity

Sec.1150.21  Scope of rules.

    These special rules apply to operations over abandoned rail lines, 
which have been acquired (through purchase or lease) by a State. The 
rail line must have fully abandoned, or approved for abandonment by the 
Board or a bankruptcy court. As used in these rules, the term ``State'' 
includes States, political subdivisions of States, and all 
instrumentalities through which the State can act. An operator has the 
option of applying for a modified certificate of public convenience and 
necessity under this subpart or a common carrier certificate under 
Subpart A of this part. A copy of the modified certificate shall be 
served on the Association of American Railroads.

Sec.1150.22  Exemptions and common carrier status.

    The acquisition by a State of a fully abandoned line is not subject 
to the jurisdiction of the Surface Transportation Board. The acquisition 
by a State of a line approved for abandonment and not yet fully 
abandoned is exempted from the Board's jurisdiction. If the State 
intends to operate the line itself, it will be considered a common 
carrier. However, when a State acquires a rail line described under 
Sec.1150.21 and contracts with an operator to provide service over the 
line, only the operator incurs a common carrier obligation. The 
operators of these lines are exempted from 49 U.S.C. 10901 and 10903 
which are the statutory requirements governing the start up and 
termination of operations. Operators exempted from these requirements 
must comply with the requirements of this part and must apply for a 
modified certificate of public convenience and necessity. The operator 
is a common carrier and incurs all benefits and responsibilities under 
49 U.S.C. subtitle IV; however, the State through its operational 
agreement or the operator of the line may determine certain 
preconditions, such as payment of a subsidy, which must be met by 
shippers to obtain service over the line. The operator must notify the 
shippers on the line of any preconditions. The modified certificate will 
authorize service to shippers who meet these preconditions and the 
operator will be required to provide complete common carrier service 
under this certificate only to those shippers. (See 363 ICC 132.)

Sec.1150.23  Modified certificate of public convenience and necessity.

    (a) The operator must file a notice with the Board for a modified 
certificate of public convenience and necessity. Operations may commence 
immediately upon the filing; however, the Board will review the 
information filed, and if complete, will issue a modified certificate 
notice.
    (b) A notice for a modified certificate of public convenience and 
necessity

[[Page 186]]

shall include the following information:
    (1) The name and address of the operator and, unless the operator is 
an existing rail carrier:
    (i) Its articles of incorporation or, if it is unincorporated, the 
facts and organizational documents relating to its formation;
    (ii) The names and addresses of all of its officers and directors 
and a statement indicating any present affiliation each may have with a 
rail carrier; and
    (iii) Sufficient information to establish the financial 
responsibility of the operator.
    (2) Information about the prior abandonment, including docket 
number, status and date of the first decision approving the abandonment.
    (3) The exact dates of the period of operation which have been 
agreed upon by the operator and the State which owns the line (if there 
is any agreement, it should be provided);
    (4) A description of the service to be performed including, where 
applicable, a description of:
    (i) The line over which service is to be performed;
    (ii) All interline connections including the names of the connecting 
railroads;
    (iii) The nature and extent of all liability insurance coverage, 
including binder or policy number and name of insurer; and
    (iv) Any preconditions which shippers must meet to receive service.
    (5) The name and address of any subsidizers, and
    (6) Sufficient information to establish the financial responsibility 
of any subsidizers (if the subsidizer is a State, the information should 
show that it has authority to enter into the agreement for subsidized 
operations).
    (c) The service offered and the applicable rates, charges, and 
conditions must be described in tariffs published by the operator to the 
Board's rules.

Sec.1150.24  Termination of service.

    The duration of the service may be determined in the contract 
between the State and the operator. An operator may not terminate 
service over a line unless it first provides 60 days' notice of its 
intent to terminate the service. The notice of intent must be:
    (a) Filed with the State and the Board, and
    (b) Mailed to all persons that have used the line within the 6 
months preceding the date of the notice.

          Subpart D--Exempt Transactions Under 49 U.S.C. 10901

    Source: 51 FR 2504, Jan. 17, 1986, unless otherwise noted.

Sec.1150.31  Scope of exemption.

    (a) Except as indicated below, this exemption applies to all 
acquisitions and operations under section 10901 (See 1150.1, supra). 
This exemption also includes:
    (1) Acquisition by a noncarrier of rail property that would be 
operated by a third party;
    (2) Operation by a new carrier of rail property acquired by a third 
party;
    (3) A change in operators on the line; and
    (4) Acquisition of incidental trackage rights. Incidental trackage 
rights include the grant of trackage rights by the seller, or the 
assignment of trackage rights to operate over the line of a third party 
that occur at the time of the exempt acquisition or operation. This 
exemption does not apply when a class I railroad abandons a line and 
another class I railroad then acquires the line in a proposal that would 
result in a major market extension as defined at Sec.1180.3(c).
    (b) Other exemptions that may be relevant to a proposal under this 
subpart are the exemption for control at Sec.1180.2(d)(1) and (2), and 
the from securities regulation at 49 CFR part 1175.

Sec.1150.32  Procedures and relevant dates--transactions that involve 
          creation of Class III carriers.

    (a) To qualify for this exemption, applicant must file a verified 
notice providing details about the transaction, and a brief caption 
summary, conforming to the format in Sec.1150.34, for publication in the 
Federal Register.
    (b) The exemption will be effective 7 days after the notice is 
filed. The

[[Page 187]]

Board, through the Director of the Office of Proceedings, will publish a 
notice in the Federal Register within 30 days of the filing. A change in 
operators would follow the provisions at Sec.1150.34, and notice must be 
given to shippers.
    (c) If the notice contains false or misleading information, the 
exemption is void ab initio. A petition to revoke under 49 U.S.C. 
10505(d) does not automatically stay the exemption.
    (d) Applicant must preserve intact all sites and structures more 
than 50 years old until compliance with the requirements of Section 106 
of the National Historic Preservation Act, 16 U.S.C. 470 is achieved.
    (e) If the projected annual revenue of the carrier to be created by 
a transaction under this exemption exceeds $5 million, applicant must, 
at least 60 days before the exemption becomes effective, post a notice 
of intent to undertake the proposed transaction at the workplace of the 
employees on the affected line(s) and serve a copy of the notice on the 
national offices of the labor unions with employees on the affected 
line(s), setting forth the types and numbers of jobs expected to be 
available, the terms of employment and principles of employee selection, 
and the lines that are to be transferred, and certify to the Board that 
it has done so.

[51 FR 2504, Jan. 17, 1986, as amended at 53 FR 4626, Feb. 17, 1988; 53 
FR 5982, Feb. 29, 1988; 62 FR 47584, Sept. 10, 1997]

Sec.1150.33  Information to be contained in notice--transactions that 
          involve creation of Class III carriers.

    (a) The full name and address of the applicant;
    (b) The name, address, and telephone number of the representative of 
the applicant who should receive correspondence;
    (c) A statement that an agreement has been reached or details about 
when an agreement will be reached;
    (d) The operator of the property;
    (e) A brief summary of the proposed transaction, including:
    (1) The name and address of the railroad transferring the subject 
property,
    (2) The proposed time schedule for consummation of the transaction,
    (3) The mile-posts of the subject property, including any branch 
lines, and
    (4) The total route miles being acquired;
    (f) A map that clearly indicates the area to be served, including 
origins, termini, stations, cities, counties, and States; and
    (g) A certificate that applicant's projected revenues do not exceed 
those that would qualify it as a Class III carrier.

[51 FR 2504, Jan. 17, 1986, as amended at 51 FR 25207, July 11, 1986; 53 
FR 4626, Feb. 17, 1988; 53 FR 5982, Feb. 29, 1988; 56 FR 36111, July 31, 
1991]

Sec.1150.34  Caption summary--transactions that involve creation of 
          Class III carriers.

    The caption summary must be in the following form. The information 
symbolized by numbers is identified in the key below:

                      Surface Transportation Board

                           Notice of Exemption

                           Finance Docket No.

                         (1)--Exemption (2)-(3)

    (1) Has filed a notice of exemption to (2) (3)'s line between (4). 
Comments must be filed with the Board and served on (5). (6).

Key to symbols:

    (1) Name of entity acquiring or operating the line, or both.
    (2) The type of transaction, e.g., to acquire, operate, or both.
    (3) The transferor.
    (4) Describe the line.
    (5) Petitioners representative, address, and telephone number.
    (6) Cross reference to other class exemptions being used.
    The notice is filed under Sec.1150.31. If the notice contains false 
or misleading information, the exemption is void ab initio. Petitions to 
revoke the exemption under 49 U.S.C. 10505(d) may be filed at any time. 
The filing of a petition to revoke will not automatically stay the 
transaction.

[47 FR 8199, Feb. 25, 1982. Redesignated at 47 FR 49581, Nov. 1, 1982. 
Amended at 53 FR 5982, Feb. 29, 1988]

[[Page 188]]

Sec.1150.35  Procedures and relevant dates--transactions that involve 
          creation of Class I or Class II carriers.

    (a) To qualify for this exemption, applicant must serve a notice of 
intent to file a notice of exemption no later than 14 days before the 
notice of exemption is filed with the Board, and applicant must comply 
with the notice requirement of Sec.1150.32(e).
    (b) The notice of intent must contain all the information required 
in Sec.1150.33 plus:
    (1) A general statement of service intentions; and
    (2) A general statement of labor impacts.
    (c) The notice of intent must be served on:
    (1) The Governor of each State in which track is to be sold;
    (2) The State(s) Department of Transportation or equivalent agency;
    (3) The national offices of the labor unions with employees on the 
affected line(s); and
    (4) Shippers representing at least 50 percent of the volume of local 
traffic and traffic originating or terminating on the line(s) in the 
most recent 12 months for which data is available (beginning with the 
largest shipper and working down).
    (d) Applicant must also file a verified notice of exemption 
conforming to the requirements of (b) above and of Sec.1150.34, and 
certify compliance with Sec.1150.35 (a), (b), and (c), attaching a copy 
of the notice of intent.
    (e) The exemption will be effective 21 days after the notice is 
filed. The Board, through the Director of the Office of Proceedings, 
will publish a notice in the Federal Register within 30 days of the 
filing.
    (f) If the notice contains false or misleading information, the 
exemption is void ab initio. A petition to revoke under 49 U.S.C. 
10505(d) does not automatically stay the transaction. Stay petitions 
must be filed within 7 days of the filing of the notice of exemption. 
Replies will be due 7 days thereafter. To be considered, stay petitions 
must be timely served on the applicant.
    (g) Applicant must comply with Sec.1150.33(g) regarding section 106 
of the National Historic Preservation Act, 16 U.S.C. 470.

[53 FR 5982, Feb. 29, 1988, as amended at 53 FR 31341, Aug. 18, 1988; 62 
FR 47584, Sept. 10, 1997]

Sec.1150.36  Exempt construction of connecting track.

    (a) Scope. This class exemption applies to proceedings involving the 
construction and operation of connecting lines of railroad within 
existing rail rights-of-way, or on land owned by connecting railroads, 
under 49 U.S.C. 10901 (a), (b), and (c). (See the reference to 
connecting track in 49 CFR 1105.6(b)(1).) This class exemption is 
designed to expedite and facilitate connecting track construction while 
ensuring full and timely environmental review. The Surface 
Transportation Board (Board) has found that its prior review of 
connecting track construction and operation is not necessary to carry 
out the rail transportation policy of 49 U.S.C. 10101; that continued 
regulation is not necessary to protect shippers from abuse of market 
power; and that the construction of connecting track would be of limited 
scope. See 49 U.S.C. 10502. To use this class exemption, a pre-filing 
notice, environmental report, historic report, and notice of exemption 
must be filed that complies with the procedures in Sec.1150.36 (b) and 
(c), and the Board's environmental rules, codified at 49 CFR part 1105.
    (b) Environmental requirements. The environmental regulations at 49 
CFR part 1105 must be complied with fully. An environmental report 
containing the information specified at 49 CFR 1105.7(e), as well as an 
historic report containing the information specified at 49 CFR 
1105.8(d), must be filed either before or at the same time as the notice 
of exemption is filed. See 49 CFR 1105.7(a). The entity seeking the 
exemption authority must also serve copies of the environmental report 
on the agencies listed at 49 CFR 1105.7(b). Because the environmental 
report must include a certification that appropriate agencies have been 
consulted in its preparation (see 49 CFR 1105.7(c)), parties should 
begin environmental and historic consultations well before the notice of 
exemption is filed. Environmental requirements may be waived or

[[Page 189]]

modified where a petitioner demonstrates in writing that such action is 
appropriate. See 49 CFR 1105.10(c). It is to the advantage of parties to 
consult with the Board's Section of Environmental Analysis (SEA) at the 
earliest possible date to begin environmental review.
    (c) Procedures and dates. (1) At least 20 days prior to the filing 
of a notice of exemption with the Board, the party seeking the exemption 
authority must notify in writing: the State Public Service Commission, 
the State Department of Transportation (or equivalent agency), and the 
State Clearinghouse (if there is no clearinghouse, the State 
Environmental Protection Agency), of each State involved. The pre-filing 
notice shall include: the name and address of the railroad (or other 
entity proposing to construct the line) and the proposed operator; a 
complete description of the proposed construction and operation, 
including a map; an indication that the class exemption procedure is 
being used; and the approximate date that construction is proposed to 
begin. This pre-filing notice shall include a certification that the 
petitioner will comply with the Board's environmental regulations, 
codified at 49 CFR part 1105, and a statement that those regulations 
generally require the Board to:
    (i) Prepare an environmental assessment (EA) (or environmental 
impact statement (EIS) if necessary),
    (ii) Make the document (EA or EIS, as appropriate) available to the 
parties (and to the public, upon request to SEA); and
    (iii) Accept for filing and consideration comments on the 
environmental document as well as petitions for stay and 
reconsideration.
    (2) Petitioner must file a verified notice of exemption with the 
Board at least 90 days before the construction is proposed to begin. In 
addition to the information contained in Sec.1150.36(c)(1), the notice 
shall include a statement certifying compliance with the environmental 
rules at 49 CFR part 1105 and the pre-filing notice requirements of 49 
CFR 1150.36(c)(1).
    (3) The Board, through the Director of the Office of Proceedings, 
shall publish a notice in the Federal Register within 20 days after the 
notice of exemption is received that describes the construction project 
and invites comments. SEA will then prepare an EA (or, if necessary, an 
EIS). The EA generally will be made available 15 days after the Federal 
Register notice. It will be served on all parties and appropriate 
agencies. Others may request a copy from SEA. The deadline for 
submission of comments on the EA will generally be within 30 days of its 
availability (see 49 CFR 1105.10(b)). If an EIS is prepared, the time 
frames and procedures set forth in 49 CFR 1105.10(a) generally will 
apply.
    (4) The Board's environmental document (together with any comments 
and SEA's recommendations) shall be used in deciding whether to allow 
the particular construction project to proceed under the class exemption 
and whether to impose appropriate mitigating conditions upon its use 
(including use of an environmentally preferable route). If the Board 
concludes that a particular project will result in serious adverse 
environmental consequences that cannot be adequately mitigated, it may 
deny authority to proceed with the construction under the class 
exemption (the ``no-build'' alternative). Persons believing that they 
can show that the need for a particular line outweighs the adverse 
environmental consequences can file an application for approval of the 
proposed construction under 49 U.S.C. 10901.
    (5) No construction may begin until the Board has completed its 
environmental review and issued a final decision.
    (6) Petitions to stay the effective date of the notice of exemption 
on other than environmental and/or historic preservation grounds must be 
filed within 10 days of the Federal Register publication. Petitions to 
stay the effective date of the notice on environmental and/or historic 
preservation grounds may be filed at any time but must be filed 
sufficiently in advance of the effective date to allow the Board to 
consider and act on the petition before the notice becomes effective. 
Petitions for reconsideration must be filed within 20 days of the 
Federal Register publication.

[[Page 190]]

    (7) The exemption generally will be effective 70 days after 
publication in the Federal Register, unless stayed. If the notice of 
exemption contains false or misleading information, the exemption is 
void ab initio and the Board shall summarily reject the exemption 
notice.
    (8) Where significant environmental issues have been raised or 
discovered during the environmental review process, the Board shall 
issue, on or before the effective date of the exemption, a final 
decision allowing the exemption to become effective and imposing 
appropriate mitigating conditions or taking other appropriate action 
such as selecting the ``no build'' alternative.
    (9) Where there has been full environmental review and no 
significant environmental issues have been raised or discovered, the 
Board, through the Director of the Office of Proceedings, shall issue, 
on or before the effective date of the exemption, a final decision 
consisting of a Finding of No Significant Impact (FONSI) to show that 
the environmental record has been considered (see 49 CFR 1105.10(g)).
    (10) The Board, on its own motion or at the request of a party to 
the case, will stay the effective date of individual notices of 
exemption when an informed decision on environmental issues cannot be 
made prior to the date that the exemption authority would otherwise 
become effective. Stays will be granted initially for a period of 60 
days to permit resolution of environmental issues and issuance of a 
final decision. The Board expects that this 60-day period will usually 
be sufficient for these purposes unless preparation of an EIS is 
required. If, however, environmental issues remain unresolved upon 
expiration of this 60-day period, the Board, upon its own motion, or at 
the request of a party to the case, will extend the stay, as necessary 
to permit completion of environmental review and issuance of a final 
decision. The Board's order will specify the duration of each extension 
of the initial stay period. In cases requiring the preparation of an 
EIS, the Board will extend the stay for a period sufficient to permit 
compliance with the procedural guidelines established by the Board's 
environmental regulations.
    (d) Third-Party Consultants. An environmental and historic report 
required under 49 CFR 1105.7 and 1105.8 will not be required where a 
petitioner engages a third-party consultant who is approved by SEA and 
acts under SEA's direction and supervision in preparing the EA or EIS. 
In such a case, the third-party consultant must act on behalf of the 
Board, working under SEA's direction to collect the environmental 
information that is needed and to compile it into a draft EA or EIS, 
which is prepared under SEA's direction and then submitted to SEA for 
its final review and approval. See 49 CFR 1105.10(d).

[61 FR 29974, June 13, 1996, as amended at 64 FR 53268, Oct. 1, 1999]

Subpart E--Exempt Transactions Under 49 U.S.C. 10902 for Class III Rail 
                                Carriers

    Source: 61 FR 32355, June 24, 1996, unless otherwise noted.

Sec.1150.41  Scope of exemption.

    Except as indicated in paragraphs (a) through (d) of this section, 
this exemption applies to acquisitions or operations by Class III rail 
carriers under section 10902. This exemption also includes:
    (a) Acquisition by a Class III rail carrier of rail property that 
would be operated by a third party;
    (b) Operation by a Class III carrier of rail property acquired by a 
third party;
    (c) A change in operators on such a line; and
    (d) Acquisition of incidental trackage rights. Incidental trackage 
rights include the grant of trackage rights by the seller, or the 
acquisition of trackage rights to operate over the line of a third 
party, that occurs at the time of the purchase.

Sec.1150.42  Procedures and relevant dates for small line acquisitions.

    (a) This exemption applies to the acquisition of rail lines with 
projected annual revenues which, together with the acquiring carrier's 
projected annual revenue, do not exceed the annual revenue of a Class 
III railroad. To qualify for this exemption, the Class III rail

[[Page 191]]

carrier applicant must file a verified notice providing details about 
the transaction, and a brief caption summary, conforming to the format 
in Sec.1150.44, for publication in the Federal Register. In addition to 
the written submission, the notice and summary must be submitted on a 
3.5-inch diskette formatted for WordPerfect 5.1.
    (b) The exemption will be effective 7 days after the notice is 
filed. The Board, through the Director of the Office of Proceedings, 
will publish a notice in the Federal Register within 30 days of the 
filing. A change in operators must follow the provisions at Sec.1150.44, 
and notice must be given to shippers.
    (c) If the notice contains false or misleading information, the 
exemption is void ab initio. A petition to revoke under 49 U.S.C. 
10502(d) does not automatically stay the exemption.
    (d) Applicant must preserve intact all sites and structures more 
than 50 years old until compliance with the requirements of section 106 
of the National Historic Preservation Act, 16 U.S.C. 470f, is achieved.
    (e) If the projected annual revenue of the rail lines to be acquired 
or operated, together with the acquiring carrier's projected annual 
revenue, exceeds $5 million, the applicant must, at least 60 days before 
the exemption becomes effective, post a notice of applicant's intent to 
undertake the proposed transaction at the workplace of the employees on 
the affected line(s) and serve a copy of the notice on the national 
offices of the labor unions with employees on the affected line(s), 
setting forth the types and numbers of jobs expected to be available, 
the terms of employment and principles of employee selection, and the 
lines that are to be transferred, and certify to the Board that it has 
done so.

[61 FR 32355, June 24, 1996, as amended at 62 FR 47584, Sept. 10, 1997]

Sec.1150.43  Information to be contained in notice for small line 
          acquisitions.

    (a) The full name and address of the Class III rail carrier 
applicant;
    (b) The name, address, and telephone number of the representative of 
the applicant who should receive correspondence;
    (c) A statement that an agreement has been reached or details about 
when an agreement will be reached;
    (d) The operator of the property;
    (e) A brief summary of the proposed transaction, including:
    (1) The name and address of the railroad transferring the subject 
property to the Class III rail carrier applicant;
    (2) The proposed time schedule for consummation of the transaction;
    (3) The mileposts of the subject property, including any branch 
lines; and
    (4) The total route miles being acquired;
    (f) A map that clearly indicates the area to be served, including 
origins, termini, stations, cities, counties, and states; and
    (g) A certificate that applicant's projected revenues as a result of 
the transaction will not result in the creation of a Class II or Class I 
rail carrier so as to require processing under Sec.1150.45.

Sec.1150.44  Caption summary.

    The caption summary must be in the following form. The information 
symbolized by numbers is identified in the key as follows:

                      Surface Transportation Board

                           Notice of Exemption

                         STB Finance Docket No.

                         (1)--Exemption (2)-(3)

    (1) Has filed a notice of exemption to (2) (3)'s line between (4). 
Comments must be filed with the Board and served on (5). (6). Key to 
symbols:

(1) Name of carrier acquiring or operating the line.

(2) The type of transaction, e.g., to acquire or operate.

(3) The transferor.

(4) Describe the line.

(5) Petitioner's representative, address, and telephone number.

(6) Cross reference to other class exemptions being used.
    The notice is filed under 49 CFR 1150.41. If the notice contains 
false or misleading information, the exemption is void ab initio. The 
filing of a petition

[[Page 192]]

to revoke will not automatically stay the transaction.

[61 FR 32355, June 24, 1996; 61 FR 36965, July 15, 1996]

Sec.1150.45  Procedures and relevant dates--transactions under section 
          10902 that involve creation of Class I or Class II rail 
          carriers.

    (a) To qualify for this exemption, applicant must serve a notice of 
intent to file a notice of exemption no later than 14 days before the 
notice of exemption is filed with the Board, and applicant must comply 
with the notice requirement of Sec.1150.42(e).
    (b) The notice of intent must contain all the information required 
in Sec.1150.43 plus:
    (1) A general statement of service intentions; and
    (2) A general statement of labor impacts.
    (c) The notice of intent must be served on:
    (1) The Governor of each state in which track is to be sold;
    (2) The state(s) Department of Transportation or equivalent agency;
    (3) The national offices of the labor unions with employees on the 
affected line(s); and
    (4) Shippers representing at least 50 percent of the volume of local 
traffic and traffic originating or terminating on the line(s) in the 
most recent 12 months for which data are available (beginning with the 
largest shipper and working down).
    (d) Applicant must also file a verified notice of exemption 
conforming to the requirements of paragraph (b) of this section and of 
Sec.1150.44, and certify compliance with paragraphs (a), (b), and (c) of 
this section, attaching a copy of the notice of intent. In addition to 
the written submission, the notice must be submitted on a 3.5-inch 
diskette formatted for WordPerfect 5.1.
    (e) The exemption will be effective 21 days after the notice is 
filed. The Board, through the Director of the Office of Proceedings, 
will publish a notice in the Federal Register within 30 days of the 
filing.
    (f) If the notice contains false or misleading information, the 
exemption is void ab initio. A petition to revoke under 49 U.S.C. 
10502(d) does not automatically stay the transaction. Stay petitions 
must be filed within 7 days of the filing of the notice of exemption. 
Replies will be due 7 days thereafter. To be considered, stay petitions 
must be timely served on the applicant.
    (g) Applicant must preserve intact all sites and structures more 
than 50 years old until compliance with the requirements of section 106 
of the National Historic Preservation Act, 16 U.S.C. 470f, is achieved.

[61 FR 32355, June 24, 1996, as amended at 62 FR 47584, Sept. 10, 1997]



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