|SURFACE TRANSPORTATION BOARD DECISION DOCUMENT|
|STATE OF MAINE--PETITION FOR DECLARATORY ORDER|
|DECISION GRANTED THE STATE OF MAINE'S (MAINE DOT) PETITION FOR DECLARATORY ORDER. IN ADDITION, THIS DECISION DETERMINED THAT BOARD REGULATORY APPROVAL IS NOT REQUIRED: (1) FOR MAINE DOT TO ACQUIRE THE PHYSICAL ASSETS AND THE ASSOCIATED RIGHTS-OF-WAY ALONG 13.807 MILES OF RAIL LINE IN CUMBERLAND AND ANDROSCOGGIN COUNTIES, ME.; AND FOR MAINE DOT TO ACQUIRE OPERATING RIGHTS TO PROVIDE PASSENGER RAIL SERVICE OVER A 3.59-MILE SEGMENT IN ANDROSCOGGIN COUNTY, ME.|
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|Full Text of Decision|
41338 SERVICE DATE – LATE RELEASE DECEMBER 29, 2010
SURFACE TRANSPORTATION BOARD
Docket No. FD 35440
Decided: December 29, 2010
Digest: Maine DOT does not need Board authorization to acquire the real estate and tracks on a portion of a rail line currently owned by the St. Lawrence & Atlantic Railroad Company. Although Maine DOT may acquire physical assets, it will not acquire the legal obligation to provide freight service, which will remain with the seller or its successor freight operator, nor will Maine DOT be in a position to interfere unreasonably with freight operations. Maine DOT’s prospective passenger operating rights over another portion of the line also will not interfere with freight operations and do not require Board authorization at this time.
On October 26, 2010, the State of Maine, acting by and through its Department of Transportation (Maine DOT), filed a petition for declaratory order, requesting a determination that the transactions described therein between Maine DOT and the St. Lawrence & Atlantic Railroad Company (SLR) are not subject to the Board’s regulatory authority, and that the State will not be subject to the Board’s regulatory authority as a carrier, under State of Maine—Acquisition and Operation Exemption—Maine Central Railroad, 8 I.C.C.2d 835 (1991) (State of Maine). Under the proposed transaction, Maine DOT would acquire from SLR: (1) the physical assets and the associated rights-of-way along 13.807 miles of rail line between milepost 12.163, at Yarmouth, Cumberland County, Me., and milepost 25.97 at the line between New Gloucester, Cumberland County, Me., and Auburn, Androscoggin County, Me. (the Middle Segment); and (2) passenger operating rights for an operator to be designated by Maine DOT, over a 3.59-mile segment in Auburn, between milepost 25.97 and milepost 29.56 (the Northern Segment).
Under the proposed transaction, SLR would retain a permanent, exclusive easement for providing freight rail service over the Middle Segment and would retain ownership of the Northern Segment. In support of its position that it would not become a common carrier as a result of these transactions, Maine DOT cites State of Maine—Acquisition Exemption—Certain Assets of St. Lawrence & Atlantic Railroad, FD 35018 (STB served Sept. 13, 2007) (2007 Decision) and State of Maine.
On December 10, 2010, the Board directed Maine DOT and SLR to file additional information on the proposed passenger operating rights over the Northern Segment. State of Maine—Petition for Declaratory Order, FD 35440 (STB served Dec. 10, 2010). Maine DOT filed supplemental information and comments on December 20, 2010. SLR did not submit a responsive filing. Exercising our discretionary authority under 49 U.S.C. § 721 and 5 U.S.C. § 554(e), we will issue a declaratory order to remove uncertainty in this matter.
This transaction is an extension of a 2007 transaction under which
Maine DOT purchased from SLR 11 miles of right-of-way
and tracks in
At the time of the
2007 transaction, SLR granted to Maine DOT an option
to acquire additional trackage and passenger rail
operating rights, so that future passenger service could be
extended an additional 17 miles north. The 2007
transaction and the option were structured so that Maine DOT could acquire
passenger rail operating rights between
Under the terms of the Option Agreement, and the draft quitclaim deed appended to the Option Agreement, Maine DOT would acquire the Middle Segment, subject to SLR’s retention of an exclusive and perpetual freight rail easement. The 2007 Operating Agreement would apply to the Middle Segment. Under the 2007 Operating Agreement: (1) SLR will retain the exclusive right and obligation to provide freight rail service over the Middle Segment, without restriction or interference of any kind by Maine DOT; (2) Maine DOT will have no right to assume any obligation to provide common carrier freight rail service on the Middle Segment; (3) Maine DOT will have the ability to upgrade the Middle Segment at its expense, in a manner that coordinates with the ability of SLR to provide freight rail service and minimizes interference with such service; and (4) SLR may make changes or improvements required for its freight rail operations.
The 2007 Operating Agreement also
provides that Maine DOT must give SLR 1 year’s notice
before initiating passenger rail service over the Middle Segment. After passenger service begins, freight rail
operations will take place only between 11 p.m. and 4:30 a.m. on such days as SLR designates in its schedule. Maine DOT states that this freight window
will allow SLR to meet its common carrier obligations
to handle overhead traffic to and from the segment acquired in the
2007 transaction and will allow for the handling of additional on-line and
overhead traffic, if and when such traffic develops. Currently, Maine DOT states that there are no
customers on the Middle Segment, and that the only freight traffic handled over
the segment is overhead traffic to and from one customer in
Under the Option Agreement and the draft Passenger Operating Agreement appended to the Option Agreement, for the Northern Segment, SLR would retain ownership of the segment, along with the right and obligation to provide freight rail service. SLR would grant Maine DOT assignable passenger rail operating rights over the Northern Segment. Under the draft Passenger Operating Agreement, passenger rail service would be subject to the exclusive control and management of SLR. SLR would also be responsible for dispatching all trains on the Northern Segment and for maintenance of the line. In the Passenger Operating Agreement, Maine DOT and SLR define the “Passenger Rail Service” that Maine DOT would be permitted to operate over the Northern Segment as “the operation of passenger trains of any kind, including without limitation trains providing regularly-scheduled service for the transportation of commuters or intercity passengers and trains as to which tourism, entertainment or recreation, rather than transportation between origins and destinations, is the primary purpose; provided that such passenger trains comply with any FRA safety requirements applicable to the Line.”
its supplemental information and comments, Maine DOT describes the existing and
currently planned passenger rail services occurring in
The State is in the
process of completing a Statewide Rail Plan that will evaluate the freight and
passenger rail system in
Maine DOT explains that SLR will play no role in planning, marketing, or providing passenger rail service over the Middle and Northern Segments, other than its control over all rail operations on the Northern Segment.
DISCUSSION AND CONCLUSION
The question presented by Maine DOT’s petition is whether the Board’s regulatory approval is required for Maine DOT to acquire the physical assets of the Middle Segment and to acquire operating rights to provide passenger rail service over the Northern Segment.
The Middle Segment. The acquisition of an active rail line and the common carrier
obligation that goes with it ordinarily requires Board approval under 49 U.S.C. § 10901, even if the acquiring entity is a noncarrier, including a state. See Common Carrier Status of
States, State Agencies, 363 I.C.C. 132, 133
(1980), aff’d sub nom. Simmons v.
ICC, 697 F.2d 326 (D.C. Cir. 1982).
However, Board authority is not required where no common carrier rights or
obligations are transferred with the physical assets on the line. See State of
We find that the transaction
involving the Middle Segment is consistent with State of
The Northern Segment. Unlike the transaction covering the Middle Segment, Maine DOT seeks to acquire assignable passenger rail operating rights over the Northern Segment, which SLR will continue to own. SLR will continue to control all rail operations over the Northern Segment: under the draft Passenger Operating Agreement, all operations on the line will be subject to SLR’s operating rules; Maine DOT staff (or that of a passenger service operator) must be qualified by SLR; SLR will dispatch all trains on the line; SLR will maintain and repair the line at its own expense; and SLR must approve scheduling of passenger rail service provided by Maine DOT. Therefore, Maine DOT will not be in a position to unreasonably interfere with common carrier freight rail service on the Northern Segment.
In their agreements, Maine DOT and SLR define broadly the passenger rail service that Maine DOT would acquire the rights to provide. But there is no evidence in the record at this time that exercise of these passenger rail operating rights would fall within the Board’s jurisdiction over transportation. Maine DOT’s current passenger rail service plans do not contemplate, for example, the provision of service beyond state lines, either on its own or by through ticketing arrangements with another carrier. However, Maine DOT is studying its options at this time, and its plans are undefined. We emphasize that, as concrete plans for passenger rail service materialize, it will be incumbent upon the appropriate party or parties to determine whether Board authority is required and seek that authority as needed.
This decision will not significantly affect either the quality of the human environment or the conservation of energy resources.
It is ordered:
1. Maine DOT’s petition for declaratory order is granted as discussed in this decision.
2. This decision will be effective on its service date.
By the Board, Chairman Elliott, Vice Chairman Mulvey, and Commissioner Nottingham.
 The digest constitutes no part of the decision of the Board but has been prepared for the convenience of the reader. It may not be cited to or relied upon as precedent. Policy Statement on Plain Language Digests in Decisions, EP 696 (STB served Sept. 2, 2010).
 Maine DOT states that a copy of its petition, and supplemental information and comments, has been served on this 1 active shipper, B&M Beans.
 Additionally, SLR has reserved the right to operate, or authorize a third party to operate, passenger rail service over the line, as long as such service can be accommodated with that provided by Maine DOT.
 See, e.g.,49 U.S.C. § 10501(a) (Board has jurisdiction between a place in a state and a place in the same or another state as part of the interstate rail network); DesertXpress Enters., LLC—Petition for Declaratory Order, FD 34914 (STB served May 7, 2010) (DesertXpress).
 See, e.g., DesertXpress, slip op. at 3 (Board found that DesertXpress would need to seek Board authorization under 49 U.S.C. § 10901 to construct and operate); Mass. Dep’t of Transp.—Acquis. Exemption—Certain Assets of CSX Transp., Inc., FD 35312, slip op. at 15 (STB served May 3, 2010) (future arrangements hampering freight rail common carrier obligation require state to obtain Board acquisition authority).