81_FR_45729 81 FR 45594 - Omnitrax Holdings Combined, Inc.-Acquisition of Control Exemption-Alabama & Tennessee River Railway, LLC, et al.

81 FR 45594 - Omnitrax Holdings Combined, Inc.-Acquisition of Control Exemption-Alabama & Tennessee River Railway, LLC, et al.

SURFACE TRANSPORTATION BOARD

Federal Register Volume 81, Issue 135 (July 14, 2016)

Page Range45594-45596
FR Document2016-16671

Federal Register, Volume 81 Issue 135 (Thursday, July 14, 2016)
[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Notices]
[Pages 45594-45596]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16671]


=======================================================================
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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36032]


Omnitrax Holdings Combined, Inc.--Acquisition of Control 
Exemption--Alabama & Tennessee River Railway, LLC, et al.

    On May 5, 2016, OmniTRAX Holdings Combined, Inc. (OmniTRAX) filed a 
petition for exemption from the requirements of 49 U.S.C. 11323-25.\1\ 
OmniTRAX seeks after-the-fact Board authority for transactions that 
occurred on December 31, 2015, where OmniTRAX acquired direct and 
exclusive control over 18 Class III railroads.\2\ (Pet. 2-5.) OmniTRAX 
states

[[Page 45595]]

that its failure to obtain proper Board authority prior to the 
transactions was due to inadvertent oversight. (Pet. 2.)
---------------------------------------------------------------------------

    \1\ Although the petition initially states that it is seeking an 
exemption from the requirements of only 11324 and 11325 (Pet. 2), it 
later specifically references 11323 as well (Pet. 6, 9).
    \2\ The railroads and the state(s) they operate in are as 
follows:
    * Alabama & Tennessee River Railway, LLC: Alabama
    * Alliance Terminal Railroad, LLC: Texas (not currently in 
operation)
    * Brownsville & Rio Grande International Railway, LLC: Texas
    * Chicago Rail Link, LLC: Illinois
    * Fulton County Railway, LLC: Georgia
    \+\ Georgia & Florida Railway, LLC: Georgia, Florida
    * Georgia Woodlands Railroad, LLC: Georgia
    * Great Western Railway of Colorado, LLC: Colorado
    \+\ Illinois Railway, LLC: Illinois
    * Kettle Falls International Railway, LLC: Washington (and 
British Columbia, Canada)
    * Manufacturers' Junction Railway, LLC: Illinois
    \+\ Nebraska, Kansas & Colorado Railway, LLC: Nebraska, Kansas, 
Colorado
    * Newburgh & South Shore Railroad, LLC: Ohio
    * Northern Ohio & Western Railway, LLC: Ohio
    * Panhandle Northern Railroad, LLC: Texas Peru Industrial 
Railroad, LLC: Illinois
    \+\ Sand Springs Railway Company: Oklahoma
    \+\ Stockton Terminal and Eastern Railroad: California (Pet. 3.)
---------------------------------------------------------------------------

    This proceeding is related to two pending class exemption 
proceedings: Docket No. FD 36018, in which Central Texas & Colorado 
River Railway, LLC (CTCR), a noncarrier subsidiary of OmniTRAX, seeks 
to acquire and operate a line of railroad, and Docket No. FD 36019, in 
which OmniTRAX seeks to continue in control of CTCR upon its becoming a 
Class III rail carrier. On May 24, 2016, OmniTRAX filed a supplement to 
its petition for exemption, providing additional information and a 
request for expedited action so as not to delay capital improvement 
plans for the CTCR. By decision served on May 26, 2016, the Board held 
the related proceedings in Docket Nos. FD 36018 and FD 36019 in 
abeyance pending action on OmniTRAX's petition for exemption in this 
proceeding. Cent. Tex. & Colo. River Ry.--Acquis. & Operation 
Exemption--Line of Heart of Tex. R.R., FD 36018, et al. (STB served May 
26, 2016).
    OmniTRAX's petition for exemption will be granted. Because we are 
granting the petition for exemption in this proceeding, we are also 
reactivating the proceedings in Docket Nos. FD 36018 and FD 36019 by 
serving and publishing those notices in the Federal Register.

Background

    OmniTRAX is a non-carrier holding company established to control 
short line railroads. (Pet. 2.) OmniTRAX states that it is owned by 
three separate and independent corporations, none of which possess a 
controlling interest in OmniTRAX.\3\ (Id. at 5.)
---------------------------------------------------------------------------

    \3\ OmniTRAX states that ``no individual or corporate entity 
possesses a direct or indirect controlling interest in OmniTRAX at 
this time.'' (Pet. 5.) Control is a fact-intensive determination, 
and this decision makes no finding based on this statement by 
OmniTRAX. If, as one example, an individual directly or indirectly 
controlled two of the three parent corporations of OmniTRAX, that 
individual would also need Board authority.
---------------------------------------------------------------------------

    Prior to the December 31, 2015 transactions in which OmniTRAX 
acquired direct and exclusive control of 18 Class III rail carriers, 
Patrick D. Broe (Broe) indirectly controlled 17 of the 18 Class III 
railroads. Twelve of the railroads \4\ were directly controlled by 
OmniTRAX Holdings, LLC (OTH), which was controlled by OmniTRAX, Inc. 
(OTI), which was in turn controlled by Broe. In addition, Broe also 
indirectly controlled 5 other railroads,\5\ but through other 
``corporate arrangements not involving OTI or OTH.'' (Pet. 4.)
---------------------------------------------------------------------------

    \4\ These twelve carriers are denoted with an asterisk in 
footnote 3.
    \5\ These five carriers are denoted with a plus symbol in 
footnote 3. Although the petition did not provide details of the 
relationship between Broe and these carriers, in Patrick D. Broe--
Acquisition of Control Exemption--Stockton Terminal & Eastern 
Railroad, FD 35525 (STB served July 15, 2011), Broe obtained 
authority to acquire indirect control via ST&E Holdings, Inc., of 
one of the five carriers, the Stockton Terminal & Eastern Railroad 
Company. Later, in Patrick D. Broe--Acquisition of Control 
Exemption--Sand Springs Railway, FD 35829 (STB served June 12, 
2014), Broe obtained authority to acquire indirect control via Sand 
Springs Holdings, LLC, of another of the five carriers, the Sand 
Springs Railway Company. In Broe's 2014 filings with the Board in 
the latter docket, he noted that he controls BNS Holdings, Inc., a 
noncarrier that indirectly controlled the three remaining carriers. 
Broe Notice of Exemption 4, Patrick D. Broe--Acquis. of Control 
Exemption--Sand Springs Ry., FD 35829.
---------------------------------------------------------------------------

    Additionally, Broe held a non-controlling interest in the 18th 
railroad, Peru Industrial Railroad, LLC (PIR), an independent short 
line operating in Illinois. PIR connects with one of the other Class 
III railroads--Illinois Railway, LLC (IR)--that was acquired in the 
OmniTRAX transactions. These two railroads connect at Peru, Ill., but 
OmniTRAX asserts that the respective railroad lines do not access or 
serve any common industry or customer(s). OmniTRAX states that IR 
previously obtained exemption authority to lease and operate over PIR's 
lines in Illinois Railway--Lease & Operation Exemption--Rail Line of 
Peru Land Acquisition 2, LLC, FD 35886 (STB served Dec. 24, 2014). 
(Suppl. 6.)
    As mentioned above, OmniTRAX requests expedited action because this 
proceeding is the limiting factor to obtaining regulatory authority in 
the two related proceedings in Docket Nos. FD 36018 and FD 36019. 
OmniTRAX states that holding those dockets in abeyance could result in 
delays to critical railroad physical plant improvements. (Suppl. 7.)

Discussion and Conclusions

    The acquisition of control of a rail carrier (or carriers) by a 
person that is not a rail carrier but that controls any number of rail 
carriers requires approval by the Board pursuant to 49 U.S.C. 
11323(a)(5). Under 10502(a), however, we must exempt a transaction or 
service from regulation if we find that: (1) Regulation is not 
necessary to carry out the rail transportation policy (RTP) of 10101; 
and (2) either the transaction or service is limited in scope, or 
regulation is not needed to protect shippers from the abuse of market 
power.
    In this case, an exemption from the prior approval requirements of 
49 U.S.C. 11323-25 is consistent with the standards of 10502. Detailed 
scrutiny of the proposed transactions through an application for review 
and approval under 11323-25 is not necessary here to carry out the RTP. 
Approval of the transactions at issue will result in a change in 
ownership of the 18 aforementioned rail carriers with no lessening of 
competition and will bring those railroads under the oversight of 
established short-line management. An exemption will promote the RTP by 
minimizing the need for federal regulatory control over the 
transactions, 10101(2); ensuring the development and continuation of a 
sound rail transportation system that will continue to meet the needs 
of the public, 10101(4); reducing the barriers to entry and exit from 
the rail transportation industry, 10101(7); encouraging efficient 
management, 10101(9); and providing for the expeditious resolution of 
this and the related proceedings, 10101(15). Other aspects of the RTP 
will not be adversely affected.
    Nor is detailed scrutiny of the proposed transactions necessary to 
protect shippers from an abuse of market power. According to OmniTRAX, 
no shipper will lose access to rail service as a result of the 
transactions, and operations will continue as they did before OmniTRAX 
assumed control. (Pet. 9.) Further, OmniTRAX states that the relevant 
agreements related to the acquisitions contain no provision that would 
limit any of the 18 railroads' future interchange of traffic to or from 
third-party connecting carriers. (Id.) Although PIR connects with IR, 
OmniTRAX states that their lines do not access or serve any common 
industry or customers. In addition, OmniTRAX states that ``PIR's only 
outlet to the balance of the interstate railroad network is via its 
connection to IR,'' that PIR and its customers would continue to rely 
upon intermediate IR service to reach line-haul carriers. (Suppl. 6.) 
Accordingly, based on the record, these transactions do not appear to 
shift or consolidate market power; therefore, we do not find that 
regulation is necessary to protect shippers from the abuse of market 
power.\6\
---------------------------------------------------------------------------

    \6\ As there is no evidence that regulation is needed to protect 
shippers from the abuse of market power, we do not need to determine 
whether the transaction is limited in scope. See 49 U.S.C. 10502(a).

---------------------------------------------------------------------------

[[Page 45596]]

    Under 49 U.S.C. 10502(g), we may not use our exemption authority to 
relieve a rail carrier of its statutory obligation to protect the 
interests of its employees. The Board, however, is not required to 
impose labor protective conditions when only Class III rail carriers 
are involved in a transaction that falls under 49 U.S.C. 11324-25, as 
is the case here. 49 U.S.C. 11326(c).
    These transactions are categorically excluded from environmental 
review under 49 CFR. 1105.6(c)(2)(i) because they will not result in 
any significant change in carrier operations. Similarly, the 
transactions are exempt from the historic reporting requirements under 
49 CFR. 1105.8(b)(3) because they will not substantially change the 
level of maintenance of railroad properties.
    As indicated, OmniTRAX has requested expedited action to avoid 
delays to critical railroad physical plant improvements. We find 
OmniTRAX's request to be reasonable. We will grant the exemption and 
the exemption will be effective immediately.
    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts the above-described 
transactions from the prior approval requirements of 11323-25.
    2. Notice will be published in the Federal Register.
    3. This exemption will be effective on July 14, 2016.

    Decided: July 11, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Brendetta S. Jones,
Clearance Clerk.
[FR Doc. 2016-16671 Filed 7-13-16; 8:45 am]
 BILLING CODE 4915-01-P



                                                    45594                          Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Notices

                                                          Notice of solicitation of
                                                    ACTION:                                                  Department requests that any part                     Bulgarsky, also known as Salman
                                                    comments.                                                soliciting or aggregating comments                    Bulgarskiy, committed, or poses a
                                                                                                             received from other persons for                       significant risk of committing, acts of
                                                    SUMMARY:     NuStar Logistics, LP                        submission to the State Department                    terrorism that threaten the security of
                                                    (‘‘NuStar’’) applied for an amended                      inform those persons that the State                   U.S. nationals or the national security,
                                                    Presidential Permit from the Department                  Department will not edit their                        foreign policy, or economy of the United
                                                    of State (‘‘State Department’’) to                       comments to remove identifying or                     States.
                                                    authorize the operation and                              contact information, and that they                       Consistent with the determination in
                                                    maintenance of existing pipeline                         should not include any information in                 section 10 of Executive Order 13224 that
                                                    facilities (the ‘‘Existing Burgos                        their comments that they do not want                  prior notice to persons determined to be
                                                    Pipeline’’) at the United States-Mexico                  publicly disclosed.                                   subject to the Order who might have a
                                                    border. Specifically, NuStar requested                                                                         constitutional presence in the United
                                                                                                             DATES: Comments must be submitted no
                                                    that the Department amend the 2006                                                                             States would render ineffectual the
                                                    Presidential Permit to: (1) Reflect                      later than August 15, 2016 at 11:59 p.m.
                                                                                                             ADDRESSES: For reasons of efficiency,
                                                                                                                                                                   blocking and other measures authorized
                                                    NuStar’s name change from Valero                                                                               in the Order because of the ability to
                                                    Logistics Operations, LP to NuStar                       the State Department encourages the
                                                                                                                                                                   transfer funds instantaneously, I
                                                    Logistics, LP as the owner and operator                  electronic submission of comments
                                                                                                                                                                   determine that no prior notice needs to
                                                    of the Existing Burgos Pipeline and (2)                  through the federal government’s
                                                                                                                                                                   be provided to any person subject to this
                                                    authorize the Existing Burgos Pipeline                   eRulemaking Portal (http://
                                                                                                                                                                   determination who might have a
                                                    border facilities to transport a broader                 www.regulations.gov), enter the Docket
                                                                                                                                                                   constitutional presence in the United
                                                    range of petroleum products than                         No. DOS–2016–0050 and follow the
                                                                                                                                                                   States, because to do so would render
                                                    allowed by the 2006 Presidential Permit,                 prompts to submit a comment.
                                                                                                                The State Department also will accept              ineffectual the measures authorized in
                                                    including diesel, gasoline, jet fuel,                                                                          the Order.
                                                    liquefied petroleum gas, and natural gas                 comments submitted in hard copy by
                                                                                                                                                                      This notice shall be published in the
                                                    liquids. The 2006 Presidential Permit                    mail and postmarked no later than
                                                                                                                                                                   Federal Register.
                                                    only allows transportation of light                      August 15, 2016. Please note that
                                                                                                             standard mail delivery to the State                     Dated: June 29, 2016.
                                                    naphtha.
                                                                                                             Department can be delayed due to                      John F. Kerry,
                                                       After consulting with the public and
                                                    interested agencies, on June 10, 2016,                   security screening. To submit comments                Secretary of State.
                                                    the State Department approved a Final                    by mail, use the following address:                   [FR Doc. 2016–16569 Filed 7–13–16; 8:45 am]
                                                    Environmental Assessment (‘‘EA’’) for                    Office of Energy Diplomacy, Energy                    BILLING CODE 4710–AD–P
                                                    the Existing Burgos Pipeline and New                     Resources Bureau (ENR/EDP/EWA)
                                                    Burgos Pipeline and a Finding of No                      Department of State 2201 C St. NW., Ste.
                                                    Significant Impact (‘‘FONSI’’).                          4428, Attn: Sydney Kaufman,                           SURFACE TRANSPORTATION BOARD
                                                    Background information related to the                    Washington, DC 20520.
                                                                                                                                                                   [Docket No. FD 36032]
                                                    application, including the EA and                          Dated: July 7, 2016.
                                                    FONSI may be found at: http://                           R. Chris Davy,                                        Omnitrax Holdings Combined, Inc.—
                                                    www.state.gov/e/enr/applicant/                           Deputy Director, Office of Europe, Western            Acquisition of Control Exemption—
                                                    applicants/index.htm.                                    Hemisphere and Africa, Bureau of Energy               Alabama & Tennessee River Railway,
                                                       Executive Order 13337 (69 FR 25299)                   Resource, Department of State.                        LLC, et al.
                                                    calls on the Secretary of State, or his                  [FR Doc. 2016–16677 Filed 7–13–16; 8:45 am]
                                                    designee, to determine if issuance of a                                                                           On May 5, 2016, OmniTRAX
                                                                                                             BILLING CODE 4710–AE–P
                                                    Presidential Permit would serve the                                                                            Holdings Combined, Inc. (OmniTRAX)
                                                    national interest. This decision will take                                                                     filed a petition for exemption from the
                                                    into account a wide range of factors,                    DEPARTMENT OF STATE                                   requirements of 49 U.S.C. 11323–25.1
                                                    including energy security;                                                                                     OmniTRAX seeks after-the-fact Board
                                                                                                             [Public Notice: 9633]                                 authority for transactions that occurred
                                                    environmental, cultural, and economic
                                                    impacts; foreign policy; and compliance                                                                        on December 31, 2015, where
                                                                                                             Executive Order 13224 Designation of                  OmniTRAX acquired direct and
                                                    with relevant federal regulations and                    Ayrat Nasimovich Vakhitov, aka Aiat
                                                    issues.                                                                                                        exclusive control over 18 Class III
                                                                                                             Nasimovich Vahitov, aka Airat                         railroads.2 (Pet. 2–5.) OmniTRAX states
                                                       The State Department invites                          Vakhitov, aka Aryat Vakhitov, aka Airat
                                                    members of the public to comment on                      Wakhitov, aka Taub Ayrat Vakhitov,                      1 Although the petition initially states that it is
                                                    any factor they deem relevant to the                     aka Salman Bulgarsky, aka Salman                      seeking an exemption from the requirements of only
                                                    national interest determination that will                Bulgarskiy, as a Specially Designated                 11324 and 11325 (Pet. 2), it later specifically
                                                    be made for this permit application.                     Global Terrorist                                      references 11323 as well (Pet. 6, 9).
                                                    Along with other factors such as those                                                                           2 The railroads and the state(s) they operate in are

                                                    listed above, these comments will be                       Acting under the authority of and in                as follows:
                                                    considered in the final national interest                accordance with section 1(b) of                         * Alabama & Tennessee River Railway, LLC:
                                                                                                                                                                   Alabama
                                                    determination. The public comment                        Executive Order 13224 of September 23,
                                                                                                                                                                     * Alliance Terminal Railroad, LLC: Texas (not
                                                    period will end 30 days from the                         2001, as amended by Executive Order                   currently in operation)
                                                    publication of this notice.                              13268 of July 2, 2002, and Executive
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                                                                                     * Brownsville & Rio Grande International
                                                       Comments are not private. They will                   Order 13284 of January 23, 2003, I                    Railway, LLC: Texas
                                                    be posted on the site http://                            hereby determine that the individual                    * Chicago Rail Link, LLC: Illinois
                                                    www.regulations.gov. The comments                        known as Ayrat Nasimovich Vakhitov,                     * Fulton County Railway, LLC: Georgia
                                                                                                                                                                     + Georgia & Florida Railway, LLC: Georgia,
                                                    will not be edited to remove identifying                 also known as Aiat Nasimovich Vahitov,
                                                                                                                                                                   Florida
                                                    or contact information, and the State                    also known as Airat Vakhitov, also                      * Georgia Woodlands Railroad, LLC: Georgia
                                                    Department cautions against including                    known as Aryat Vakhitov, also known                     * Great Western Railway of Colorado, LLC:
                                                    any information that one does not want                   as Airat Wakhitov, also known as Taub                 Colorado
                                                    publicly disclosed. The State                            Ayrat Vakhitov, also known as Salman                    + Illinois Railway, LLC: Illinois




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                                                                                   Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Notices                                                        45595

                                                    that its failure to obtain proper Board                  railroads 4 were directly controlled by                   the rail transportation policy (RTP) of
                                                    authority prior to the transactions was                  OmniTRAX Holdings, LLC (OTH),                             10101; and (2) either the transaction or
                                                    due to inadvertent oversight. (Pet. 2.)                  which was controlled by OmniTRAX,                         service is limited in scope, or regulation
                                                       This proceeding is related to two                     Inc. (OTI), which was in turn controlled                  is not needed to protect shippers from
                                                    pending class exemption proceedings:                     by Broe. In addition, Broe also                           the abuse of market power.
                                                    Docket No. FD 36018, in which Central                    indirectly controlled 5 other railroads,5                    In this case, an exemption from the
                                                    Texas & Colorado River Railway, LLC                      but through other ‘‘corporate                             prior approval requirements of 49 U.S.C.
                                                    (CTCR), a noncarrier subsidiary of                       arrangements not involving OTI or                         11323–25 is consistent with the
                                                    OmniTRAX, seeks to acquire and                           OTH.’’ (Pet. 4.)                                          standards of 10502. Detailed scrutiny of
                                                    operate a line of railroad, and Docket                      Additionally, Broe held a non-                         the proposed transactions through an
                                                    No. FD 36019, in which OmniTRAX                          controlling interest in the 18th railroad,                application for review and approval
                                                    seeks to continue in control of CTCR                     Peru Industrial Railroad, LLC (PIR), an                   under 11323–25 is not necessary here to
                                                    upon its becoming a Class III rail carrier.              independent short line operating in                       carry out the RTP. Approval of the
                                                    On May 24, 2016, OmniTRAX filed a                        Illinois. PIR connects with one of the                    transactions at issue will result in a
                                                    supplement to its petition for                           other Class III railroads—Illinois                        change in ownership of the 18
                                                    exemption, providing additional                          Railway, LLC (IR)—that was acquired in                    aforementioned rail carriers with no
                                                    information and a request for expedited                  the OmniTRAX transactions. These two                      lessening of competition and will bring
                                                    action so as not to delay capital                        railroads connect at Peru, Ill., but                      those railroads under the oversight of
                                                    improvement plans for the CTCR. By                       OmniTRAX asserts that the respective                      established short-line management. An
                                                    decision served on May 26, 2016, the                     railroad lines do not access or serve any                 exemption will promote the RTP by
                                                    Board held the related proceedings in                    common industry or customer(s).                           minimizing the need for federal
                                                    Docket Nos. FD 36018 and FD 36019 in                     OmniTRAX states that IR previously                        regulatory control over the transactions,
                                                    abeyance pending action on                               obtained exemption authority to lease                     10101(2); ensuring the development and
                                                    OmniTRAX’s petition for exemption in                     and operate over PIR’s lines in Illinois                  continuation of a sound rail
                                                    this proceeding. Cent. Tex. & Colo. River                Railway—Lease & Operation                                 transportation system that will continue
                                                    Ry.—Acquis. & Operation Exemption—                       Exemption—Rail Line of Peru Land                          to meet the needs of the public,
                                                    Line of Heart of Tex. R.R., FD 36018, et                 Acquisition 2, LLC, FD 35886 (STB                         10101(4); reducing the barriers to entry
                                                    al. (STB served May 26, 2016).                           served Dec. 24, 2014). (Suppl. 6.)                        and exit from the rail transportation
                                                       OmniTRAX’s petition for exemption                        As mentioned above, OmniTRAX                           industry, 10101(7); encouraging efficient
                                                    will be granted. Because we are granting                 requests expedited action because this                    management, 10101(9); and providing
                                                    the petition for exemption in this                       proceeding is the limiting factor to                      for the expeditious resolution of this
                                                    proceeding, we are also reactivating the                 obtaining regulatory authority in the                     and the related proceedings, 10101(15).
                                                    proceedings in Docket Nos. FD 36018                      two related proceedings in Docket Nos.                    Other aspects of the RTP will not be
                                                    and FD 36019 by serving and publishing                   FD 36018 and FD 36019. OmniTRAX                           adversely affected.
                                                    those notices in the Federal Register.                   states that holding those dockets in                         Nor is detailed scrutiny of the
                                                                                                             abeyance could result in delays to                        proposed transactions necessary to
                                                    Background
                                                                                                             critical railroad physical plant                          protect shippers from an abuse of
                                                       OmniTRAX is a non-carrier holding                     improvements. (Suppl. 7.)                                 market power. According to
                                                    company established to control short                                                                               OmniTRAX, no shipper will lose access
                                                    line railroads. (Pet. 2.) OmniTRAX                       Discussion and Conclusions
                                                                                                                                                                       to rail service as a result of the
                                                    states that it is owned by three separate                  The acquisition of control of a rail                    transactions, and operations will
                                                    and independent corporations, none of                    carrier (or carriers) by a person that is                 continue as they did before OmniTRAX
                                                    which possess a controlling interest in                  not a rail carrier but that controls any                  assumed control. (Pet. 9.) Further,
                                                    OmniTRAX.3 (Id. at 5.)                                   number of rail carriers requires approval                 OmniTRAX states that the relevant
                                                       Prior to the December 31, 2015                        by the Board pursuant to 49 U.S.C.                        agreements related to the acquisitions
                                                    transactions in which OmniTRAX                           11323(a)(5). Under 10502(a), however,                     contain no provision that would limit
                                                    acquired direct and exclusive control of                 we must exempt a transaction or service                   any of the 18 railroads’ future
                                                    18 Class III rail carriers, Patrick D. Broe              from regulation if we find that: (1)                      interchange of traffic to or from third-
                                                    (Broe) indirectly controlled 17 of the 18                Regulation is not necessary to carry out                  party connecting carriers. (Id.) Although
                                                    Class III railroads. Twelve of the                                                                                 PIR connects with IR, OmniTRAX states
                                                                                                               4 These twelve carriers are denoted with an
                                                                                                                                                                       that their lines do not access or serve
                                                      * Kettle Falls International Railway, LLC:             asterisk in footnote 3.
                                                                                                                                                                       any common industry or customers. In
                                                    Washington (and British Columbia, Canada)                  5 These five carriers are denoted with a plus

                                                      * Manufacturers’ Junction Railway, LLC: Illinois       symbol in footnote 3. Although the petition did not       addition, OmniTRAX states that ‘‘PIR’s
                                                      + Nebraska, Kansas & Colorado Railway, LLC:            provide details of the relationship between Broe          only outlet to the balance of the
                                                    Nebraska, Kansas, Colorado                               and these carriers, in Patrick D. Broe—Acquisition        interstate railroad network is via its
                                                      * Newburgh & South Shore Railroad, LLC: Ohio           of Control Exemption—Stockton Terminal &                  connection to IR,’’ that PIR and its
                                                                                                             Eastern Railroad, FD 35525 (STB served July 15,
                                                      * Northern Ohio & Western Railway, LLC: Ohio
                                                                                                             2011), Broe obtained authority to acquire indirect        customers would continue to rely upon
                                                      * Panhandle Northern Railroad, LLC: Texas Peru         control via ST&E Holdings, Inc., of one of the five       intermediate IR service to reach line-
                                                    Industrial Railroad, LLC: Illinois
                                                      + Sand Springs Railway Company: Oklahoma
                                                                                                             carriers, the Stockton Terminal & Eastern Railroad        haul carriers. (Suppl. 6.) Accordingly,
                                                                                                             Company. Later, in Patrick D. Broe—Acquisition of         based on the record, these transactions
                                                      + Stockton Terminal and Eastern Railroad:
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                             Control Exemption—Sand Springs Railway, FD
                                                    California (Pet. 3.)                                     35829 (STB served June 12, 2014), Broe obtained           do not appear to shift or consolidate
                                                      3 OmniTRAX states that ‘‘no individual or              authority to acquire indirect control via Sand            market power; therefore, we do not find
                                                    corporate entity possesses a direct or indirect          Springs Holdings, LLC, of another of the five             that regulation is necessary to protect
                                                    controlling interest in OmniTRAX at this time.’’         carriers, the Sand Springs Railway Company. In            shippers from the abuse of market
                                                    (Pet. 5.) Control is a fact-intensive determination,     Broe’s 2014 filings with the Board in the latter
                                                    and this decision makes no finding based on this         docket, he noted that he controls BNS Holdings,           power.6
                                                    statement by OmniTRAX. If, as one example, an            Inc., a noncarrier that indirectly controlled the three
                                                    individual directly or indirectly controlled two of      remaining carriers. Broe Notice of Exemption 4,             6 As there is no evidence that regulation is needed

                                                    the three parent corporations of OmniTRAX, that          Patrick D. Broe—Acquis. of Control Exemption—             to protect shippers from the abuse of market power,
                                                    individual would also need Board authority.              Sand Springs Ry., FD 35829.                                                                          Continued




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                                                    45596                          Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Notices

                                                       Under 49 U.S.C. 10502(g), we may not                  the end of the track in Brady, pursuant                 Transportation Board, 395 E Street SW.,
                                                    use our exemption authority to relieve                   to a purchase and sale agreement.                       Washington, DC 20423–0001. In
                                                    a rail carrier of its statutory obligation                  CTCR states that HTR has operated                    addition, a copy of each pleading must
                                                    to protect the interests of its employees.               the Brady Line since 2013 when HTR                      be served on William C. Sippel, Fletcher
                                                    The Board, however, is not required to                   acquired the Brady Line from the                        & Sippel LLC, 29 North Wacker Drive,
                                                    impose labor protective conditions                       bankruptcy estate of the prior owner.1                  Suite 920, Chicago, IL 60606.
                                                    when only Class III rail carriers are                       CTCR is a subsidiary of OmniTRAX                       According to CTCR, this action is
                                                    involved in a transaction that falls                     Holdings Combined, Inc. (OmniTRAX).                     categorically excluded from
                                                    under 49 U.S.C. 11324–25, as is the case                 This transaction is related to a                        environmental review under 49 CFR
                                                    here. 49 U.S.C. 11326(c).                                concurrently filed verified notice of                   1105.6(c).
                                                       These transactions are categorically                  exemption in OmniTRAX Holdings                            Board decisions and notices are
                                                    excluded from environmental review                       Combined, Inc.—Continuance in                           available on our Web site at
                                                    under 49 CFR. 1105.6(c)(2)(i) because                    Control Exemption—Central Texas &                       ‘‘WWW.STB.DOT.GOV.’’
                                                    they will not result in any significant                  Colorado River Railway, Docket No. FD                     Decided: July 11, 2016.
                                                    change in carrier operations. Similarly,                 36019, in which OmniTRAX seeks                            By the Board, Rachel D. Campbell,
                                                    the transactions are exempt from the                     Board approval under 49 CFR                             Director, Office of Proceedings.
                                                    historic reporting requirements under                    1180.2(d)(2) to continue in control of                  Tia Delano,
                                                    49 CFR. 1105.8(b)(3) because they will                   CTCR upon CTCR’s becoming a Class III
                                                                                                                                                                     Clearance Clerk.
                                                    not substantially change the level of                    rail carrier. OmniTRAX currently
                                                                                                                                                                     [FR Doc. 2016–16673 Filed 7–13–16; 8:45 am]
                                                    maintenance of railroad properties.                      controls 18 Class III rail carriers
                                                       As indicated, OmniTRAX has                            (OmniTRAX Railroads) in the United                      BILLING CODE 4915–01–P

                                                    requested expedited action to avoid                      States.2
                                                    delays to critical railroad physical plant                  This exemption is effective July 28,
                                                    improvements. We find OmniTRAX’s                         2016.                                                   SURFACE TRANSPORTATION BOARD
                                                    request to be reasonable. We will grant                     CTCR certifies that its projected                    [Docket No. FD 36019]
                                                    the exemption and the exemption will                     annual revenues as a result of this
                                                    be effective immediately.                                transaction will not result in the                      OmniTRAX Holdings Combined, Inc.—
                                                       It is ordered:                                        creation of a Class II or Class I rail                  Continuance in Control Exemption—
                                                       1. Under 49 U.S.C. 10502, the Board                   carrier and does not exceed $5 million.                 Central Texas & Colorado River
                                                    exempts the above-described                              CTCR also certifies that the purchase                   Railway, LLC
                                                    transactions from the prior approval                     and sale agreement between HTR and
                                                                                                                                                                        OmniTRAX Holdings Combined, Inc.
                                                    requirements of 11323–25.                                CTCR does not involve any provision
                                                       2. Notice will be published in the                                                                            (OmniTRAX) has filed a verified notice
                                                                                                             limiting CTCR’s future interchange of
                                                    Federal Register.                                                                                                of exemption pursuant to 49 CFR
                                                                                                             traffic with a third-party connecting
                                                       3. This exemption will be effective on                                                                        1180.2(d)(2) to continue in control of
                                                                                                             carrier.
                                                    July 14, 2016.                                              If the verified notice contains false or             Central Texas & Colorado River Railway,
                                                                                                             misleading information, the exemption                   LLC (CTCR), a noncarrier, upon CTCR’s
                                                      Decided: July 11, 2016.                                                                                        becoming a Class III rail carrier. CTCR
                                                      By the Board, Chairman Elliott, Vice                   is void ab initio. Petitions to revoke the
                                                                                                             exemption under 49 U.S.C. 10502(d)                      is a wholly owned subsidiary of
                                                    Chairman Miller, and Commissioner
                                                                                                             may be filed at any time. The filing of                 OmniTRAX.
                                                    Begeman.
                                                                                                                                                                        This transaction is related to a
                                                    Brendetta S. Jones,                                      a petition to revoke will not
                                                                                                                                                                     concurrently filed verified notice of
                                                    Clearance Clerk.                                         automatically stay the effectiveness of
                                                                                                                                                                     exemption in Central Texas & Colorado
                                                    [FR Doc. 2016–16671 Filed 7–13–16; 8:45 am]              the exemption. Petitions to stay must be
                                                                                                                                                                     River Railway—Acquisition & Operation
                                                                                                             filed no later than July 21, 2016 (at least
                                                    BILLING CODE 4915–01–P                                                                                           Exemption—Line of Heart of Texas
                                                                                                             seven days before the exemption
                                                                                                                                                                     Railroad, Docket No. FD 36018, in
                                                                                                             becomes effective).
                                                                                                                An original and 10 copies of all                     which CTCR seeks Board approval
                                                    SURFACE TRANSPORTATION BOARD                                                                                     under 49 CFR 1150.31 to acquire and
                                                                                                             pleadings, referring to Docket No. FD
                                                    [Docket No. FD 36018]                                    36018, must be filed with the Surface                   operate a line of railroad extending 67.5
                                                                                                                                                                     miles from Lometa, Tex., to the end of
                                                    Central Texas & Colorado River                              1 See Heart of Tex. R.R.—Acquis. & Operation         the track at Brady, Tex. (the Brady Line).
                                                    Railway, LLC—Acquisition and                             Exemption—Gulf Colo. & San Saba Ry., FD 35710              OmniTRAX is a noncarrier holding
                                                    Operation Exemption—Line of Heart of                     (STB served Jan. 4, 2013).                              company that controls 18 Class III rail
                                                    Texas Railroad, L.P.                                        2 In its verified notice filed in Docket No FD.
                                                                                                                                                                     carrier subsidiaries (the OmniTRAX
                                                                                                             36019, OmniTRAX explains that in preparing the          Railroads) subject to the Board’s
                                                       Central Texas & Colorado River                        two related class exemption filings, it was
                                                                                                                                                                     jurisdiction.1 This transaction will
                                                    Railway, LLC (CTCR), a noncarrier, has                   discovered that OmniTRAX had acquired direct and
                                                                                                             exclusive control of the 18 OmniTRAX Railroads on
                                                    filed a verified notice of exemption                     December 31, 2015. It states that it inadvertently         1 In its verified notice, OmniTRAX explains that
                                                    under 49 CFR 1150.31 to acquire from                     did not seek advanced authority to engage in the        in preparing the two related class exemption filings,
                                                    Heart of Texas Railroad, L.P. (HTR), and                 acquisition of control, ‘‘in part because of the        it was discovered that OmniTRAX had acquired
                                                    to operate a line of railroad extending                  preexisting close association among all of the          direct and exclusive control of the 18 OmniTRAX
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                             involved carriers and their largely common short        Railroads on December 31, 2015. It states that it
                                                    between Lometa, Tex., and Brady, Tex.                    line heritage.’’ On May 5, 2016, OmniTRAX filed         inadvertently did not seek advanced authority to
                                                    (the Brady Line). CTCR will acquire the                  a petition for exemption in Docket No. FD 36032         engage in the acquisition of control, ‘‘in part
                                                    67.5-mile Brady Line, which connects                     to seek the requisite authority to acquire control of   because of the preexisting close association among
                                                    with a BNSF Railway Company line at                      the OmniTRAX Railroads, and by decision served          all of the involved carriers and their largely
                                                                                                             on May 26, 2016, the Board held the notice of           common short line heritage.’’ On May 5, 2016,
                                                    milepost 0.0 in Lometa and continues to                  exemption proceedings in abeyance pending a             OmniTRAX filed a petition for exemption in Docket
                                                                                                             ruling on the petition. The Board granted the           No. FD 36032 to seek the requisite authority to
                                                    we do not need to determine whether the                  petition in a decision served July 14, 2016, and        acquire control of the OmniTRAX Railroads, and by
                                                    transaction is limited in scope. See 49 U.S.C.           therefore is removing this proceeding from              decision served on May 26, 2016, the Board held
                                                    10502(a).                                                abeyance and publishing this notice.                    the notice of exemption proceedings in abeyance



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Document Created: 2016-07-14 01:55:04
Document Modified: 2016-07-14 01:55:04
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 45594 

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