is the decision of the Railroad Retirement
Board regarding the continued status of the
SierraPine LLP, doing business as Amador Foothills
Railroad 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).
SierraPine was held to be an employer1 under
the Acts effective December 15, 1998, (B.A.
Number 3797). Sierra Pine ceased operations
as of June 30, 2004. The assets of the railroad
were leased from Sierra Pacific Industries,
Inc.,2 and will be returned to that company.
Sierra Pine last compensated employees on June
30, 2004. On July 7, 2004, SierraPine issued
a formal embargo of the entire rail line due
to track conditions and its attorney3 reported
that it intends to seek authorization from
the Surface Transportation Board to abandon
the rail line.
Section 202.11 of the Board’s regulations
The employer status of any company or person
shall terminate whenever such company or person
loses any of the characteristics essential
to the existence of an employer status.
Through the termination of its rail operations
and return of its leased rail assets, SierraPine
has lost the characteristics essential to the
existence of an employer status. Accordingly,
the Board holds that SierraPine ceased to be
an employer under the Railroad Retirement and
Railroad Unemployment Insurance Acts effective
with the close of business on June 30, 2004.
Cf. Rev Ruling 82-99, 1982-2 C.B. 154, wherein
the Internal Revenue Service ruled that a railroad
ceases to be an employer subject to taxes under
the Railroad Retirement Tax Act when the railroad’s
employees stop performing services in connection
with the railroad’s carrier activities.
1 Only as to its operation
of the former Amador Central line.
2 Sierra Pacific Industries was held not to
be an employer under the Acts (B.C.D. 04-11).
3 Attorney Pamela Giovannetti of the law firm
of Dun & Martinek LLP, in a letter dated
July 30, 2004, addressed to the Chief of the
Board’s Audit and Compliance Section.