This
is the determination of the Railroad Retirement
Board concerning the status of Southern
Gulf Railway Company as an employer under
the Railroad Retirement Act (45 U.S.C. §
231 et seq.) and the Railroad Unemployment
Insurance Act (45 U.S.C. § 351 et seq.).
Information regarding Southern Gulf was
provided by Jeffrey G. Herndon, Manager,
Coal Supply, for Entergy Services, Inc.
According to Mr. Herndon, Southern Gulf
is a wholly-owned subsidiary of Entergy
Gulf States, Inc., which in turn is a wholly-owned
subsidiary of Entergy Corporation, an investor-owned
public utility holding company.
Southern Gulf owns a rail line of approximately
4.28 miles which connects with a line jointly
owned by Burlington Northern and Santa Fe
Railway Company (BNSF) (B.A. No. 1621) and
Union Pacific Railroad Company (UP) (B.A.
No. 1713). Southern Gulf reports that it
has no employees and serves as connector
track between the Roy S. Nelson Generating
Station and the connection with the BNSF
and UP.
Rail operations over the track began in
February 2000 after the signing of a contract
between Entergy Gulf States and BNSF for
the transportation of coal to the Generating
Station. Maintenance and rail operations
over the track are performed by TimberRock
Railroad, Inc., a covered employer under
the Acts (B.A. No. 2877).
In Interstate Commerce Commission Finance
Docket No. 32321, Southern Gulf filed a
notice of exemption to construct and operate1
the rail line described above (August 27,
1993). In Surface Transportation Board Finance
Docket No. 34184, Southern Gulf filed a
notice of exemption to grant trackage rights
over the line to BNSF.
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:
(i) any carrier by railroad subject to
the jurisdiction of the Surface Transportation
Board under Part A of subtitle IV of title
49, United States Code.
Sections 1(a) and 1(b) of the Railroad
Unemployment Insurance Act (45 U.S.C.
§§ 351(a) and (b)) contain substantially
the same definition, as does section 3231
of the Railroad Retirement Tax Act (26 U.S.C.
§ 3231).
The Board notes that in its decision regarding
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. A majority of the Board finds
that in this case, the purpose of Southern
Gulf is to enable its affiliate to market
coal, a primary business purpose being therefore
to enable that company to profit from the
operation of the Southern Gulf rail line.
Accordingly, a majority of the Board finds
that Southern Gulf does not meet all three
factors listed above, and that the evidence
of record establishes that Southern Gulf
is a carrier operating in interstate commerce.
Therefore, it is determined by a majority
of the Board that Southern Gulf is an employer
within the meaning of section 1(a)(1)(i)
of the
Railroad Retirement Act (45 U.S.C. §
231(a)(1)(i)) and the corresponding provision
of the Railroad Unemployment Insurance Act
as of February 1, 2000, the date as of which
it commenced operations.
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