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St. Paul & Pacific Northwest Railroad Company, LLC--Change in
Operators Exemption--Kettle Falls International Railway

St. Paul & Pacific Northwest Railroad Company, LLC (SPN), a
noncarrier, has filed a verified notice of exemption under 49 CFR
1150.31 to assume operations over approximately 83 miles of rail lines
owned by BNSF Railway Company. The lines originate at milepost 60.5 in
Chewelah, Wash., extending to milepost 0.0 at Kettle Falls, Wash.,
where the line diverges into two branches (the Lines). The West Branch
continues northwest from Kettle Falls to milepost 4.7 at West Kettle
Falls, Wash. The East Branch continues northeast to the United States-
Canada border at milepost 139.7 and across the border at milepost 139.7
to Columbia Gardens,B.C., Canada.\1\

The verified notice indicates that the Lines are
currently operated by Kettle Falls International Railway LLC (KFR), and
that as a result of this transaction, SPN will become a Class III
carrier and replace KFR as the Line's exclusive lessee and operator.
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\1\ SPN clarifies, for Board jurisdictional purposes, that the
relevant distance of the East Branch from Chewelah to the
international border is approximately 79 miles. It further states
that the additional four miles of West Branch track it will lease
makes the total to be leased by SPN approximately 83 miles of track.
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This transaction is related to a concurrently filed verified notice
of exemption in Progressive Rail Incorporated--Continuance in Control
Exemption--St. Paul & Pacific Northwest Railroad Company, Docket No. FD
36254, in which Progressive Rail Incorporated seeks to continue in
control of SPN upon SPN's becoming a Class III rail carrier.
SPN certifies that the underlying lease and operation agreement
does not contain an interchange commitment. SPN also certifies that its
projected revenues as a result of this proposed transaction will not
exceed those that would result in the creation of a Class II or Class I
rail carrier but notes that they will exceed $5 million. PGR filed the
certification of notice to employees required under 49 CFR 1150.42(e)
on November 1, 2018. Further, under 49 CFR 1150.32(b), a change in
operator requires that notice be given to shippers. SPN certifies that
notice of the change in operator was served on all known shippers on
the Lines.
The earliest this transaction may be consummated is December 31,
2018, the effective date of the exemption (60 days after the Section
1150.42(e) certification was filed). SPN states that it expects to
consummate the underlying transaction on receipt of all regulatory
approvals, anticipated to be no later than January 1, 2019.

 

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Progressive Rail Incorporated--Continuance in Control Exemption--
St. Paul & Pacific Northwest Railroad Company, LLC


Progressive Rail Incorporated (PGR), a Class III rail carrier, has
filed a verified notice of exemption under 49 CFR 1180.2(d)(2) to
continue in control of St. Paul & Pacific Northwest Railroad Company,
LLC (SPN), upon SPN's becoming a Class III rail carrier.


This transaction is related to a concurrently filed verified notice
of exemption in St. Paul & Pacific Northwest Railroad Company, LLC--
Change in Operators Exemption--Kettle Falls International Railway LLC,
Docket No. FD 36246. In that proceeding, SPN seeks to assume operations
over approximately 83 miles of rail line owned by BNSF Railway Company,
that extends north from Chewelah, Wash., to Kettle Falls, Wash., where
the line branches; the West Branch continues northwest to West Kettle
Falls, Wash., and the East Branch continues northeast across the United
States-Canada border at milepost 139.7 and on to Columbia Gardens,
B.C., Canada. PGR states that SPN is a new entity established by PGR to
lease and operate those lines.


The earliest this transaction may be consummated is December 20,
2018, the effective date of the exemption (30 days after the verified
notice was filed). PGR states that it intends to consummate the
transaction concurrently with SPN's commencement of operations pursuant
to Docket No. FD 36246, on or about January 1, 2019.
PGR will continue in control of SPN upon SPN's becoming a Class III
rail carrier, while remaining in control of eight other Class III
carriers: Airlake Terminal Railway Company, LLC; Central Midland
Railway Company; Iowa Traction Railway Company; Iowa Southern Railway
Company; Piedmont & Northern Railroad, LLC; Chicago Junction Railway
Company; St. Paul & Pacific Railroad Company, LLC; and Clackamas Valley
Railway Company, LLC.


PGR verifies that: (1) The rail lines do not connect with the lines
of PGR or of the lines of any of the other eight Class III rail
carriers controlled by PGR; (2) this continuance in control transaction
is not part of a series of anticipated transactions that would result
in such a connection; and (3) the transaction does not involve a Class
I rail carrier. Therefore, the transaction is exempt from the prior
approval requirements of 49 U.S.C. 11323. See 49 CFR 1180.2(d)(2).
Under 49 U.S.C. 10502(g), the Board may not use its exemption
authority to relieve a rail carrier of its statutory obligation to
protect the interests of its employees. Section 11326(c), however, does
not provide for labor protection for transactions under sections 11324
and 11325 that involve only Class III rail carriers. Accordingly, the
Board may not impose labor protective conditions here because all the
carriers involved are Class III carriers.


If the notice contains false or misleading information, the
exemption is void ab initio. Petitions to revoke the exemption under 49
U.S.C. 10502(d) may be filed at any time. The filing of a petition to
revoke will not automatically stay the effectiveness of the exemption.
Petitions for stay must be filed no later than December 13, 2018 (at
least seven days before the exemption becomes effective).