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This is a determination of the
Railroad Retirement Board concerning the status of Bulkmatic Railroad
Corporation (BRC) as an employer under the Railroad Retirement Act (45
U.S.C. § 231 et seq.) (RRA) and the Railroad Unemployment Insurance Act
(45 U.S.C. § 351 et seq.) (RUIA).
In Surface Transportation Board (STB) Finance Docket No. 34145 decided
January 4, 2002, BRC filed a notice of exemption to acquire by sublease
from Bulkmatic Transport Company approximately 3.9 miles of railroad
right-of-way and trackage known as Bulkmatic Distribution Center, at
Chicago Heights, Illinois. In a separate STB decision decided January 4,
2002 (STB Finance Docket No. 34146), Chicago Heights Switching Company (CHSC),1
filed a verified notice of exemption to operate, pursuant to an agreement
with BRC, over that same 3.9 miles of railroad right-of-way and trackage
known as the Bulkmatic Distribution Center, at Chicago Heights, Illinois.
Information regarding BRC was provided by Mr. David C. Dillon with the law
firm of Dillon & Nash, LTD. According to Mr. Dillon, Mr. Doug Harmison is
BRC’s Chief Executive Officer. Mr. Dillon stated that BRC is a subsidiary
of Bulkmatic Transport Company. BRC was incorporated on November 16, 2001.
It began operations and first compensated its one part-time employee on
January 1, 2002. Mr. Dillon stated that Mr. Harmison performs duties of
Chief Executive Officer on a part-time basis and that it is anticipated
that two additional employees of BRC will work on an intermittent
allocated basis. Mr. Dillon also stated that principal operation of the
railroad is to be conducted by railroad contractor, Chicago Heights
Switching Company. Mr. Dillon advised that BRC’s purpose is to conduct
necessary freight car switching operations on the railroad tracks
contained within the limits of the Chicago Heights facility. BRC renders
services for Union Pacific Railroad (BA1713) and Elgin Joliet Eastern
Railroad (BA 1309). Mr. Dillon described Chicago Heights Switching Company
as an independent contractor with whom BRC contracts to provide
maintenance of the track located on the Chicago Heights facility and also
to provide personnel to conduct switching operations using an SW1200
locomotive owned by BRC and leased to Chicago Heights Switching Company.
Section 1(a)(1) of the Railroad Retirement Act (45 U.S.C. § 231(a)(1)),
insofar as relevant here, defines a covered employer as: |
Sections 1(a) and 1(b) of the
Railroad Unemployment Insurance Act (45 U.S.C. §§ 351(a)and (b)) contain a
substantially similar definition, as does section 3231 of the Railroad
Retirement Tax Act.
In its decision regarding the employer status of Railroad Ventures, Inc. (B.C.D.
00-47), the Board held that an entity that has STB authority to operate a
rail line, but leases or contracts with another to operate the line in
question, is covered under the Acts administered by the Board unless the
Board determines that the entity is not a carrier. The Board enunciated a
three-part test in B.C.D. No. 00-47 to be applied in making this
determination. An entity that leases a line to another company or
contracts with another company to operate the line is a carrier under the
Railroad Retirement Act unless the Board finds that all three of the
following factors exist: 1) the entity does not have as a primary business
purpose to profit from railroad activities; 2) the entity does not operate
or retain the capacity to operate the rail line; and 3) the operator of
the rail line is already covered or would be found to be covered under the
Acts administered by the Board.
There is no information in this case that would indicate that BRC ‘s
intent in subleasing the line is primarily designed to preserve rail
service rather than profit from railroading activities. In fact, Mr.
Dillon indicated that 95 percent of BRC’s revenue was received from rail
carriers. The Board therefore finds that BRC is an enterprise which is
intended to profit from railroad activities. The Board thus finds that
Bulkmatic Railroad Company became a rail carrier employer within the
meaning of section 1(a)(1)(i) of the Railroad Retirement Act and the
corresponding provision of the Railroad Unemployment Insurance Act
effective January 1, 2002, the date it began operations. |
