Board Coverage Decision 01-61

This is a determination of the Railroad Retirement Board concerning the status of the Ventura County Railway Company (VCRC) (BA No. 3742) as an employer under the Railroad Retirement Act (45 U.S.C. �1 et seq.) (RRA) and the Railroad Unemployment Insurance Act (45 U.S.C. �1 et seq.) (RUIA). VCRC has been an employer under the RRA and the RUIA, with service creditable from May 15, 1911.

On September 1, 1998, Ventura County Railroad Company (VCRR)(BA No. 2786) entered into an agreement with VCRC to lease from VCRC its rail line and all improvements thereon. In Surface Transportation Board (STB) Finance Docket No. 33649 decided December 16, 1998, VCRR filed a verified notice of exemption to lease from VCRC approximately 12.09 miles of rail line.

According to information obtained from Randall A. Cohen, attorney for VCRC, VCRC ceased railroad operations on August 31, 1998 and has had no involvement in railroad operations since that time. The corporation continues to exist and collects monthly rent from VCRR. VCRC employees were last compensated for work performed through August 31, 1998. They were all offered the opportunity to interview for employment positions with VCRR, and Mr. Cohen believes that at least a couple of former VCRC employees were hired by VCRR. VCRC has sold all movable assets to VCRR, including all vehicles, locomotives, office equipment, equipment inventories and maintenance materials. Though title to the real property is still held by VCRC, VCRR is entirely obligated for the maintenance and upkeep of the property and has all rights to use the property.

The Railroad Retirement Board's regulations provide that 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. (20 CFR �2.11). VCRC ceased railroad operations on August 31, 1998 and last compensated employees for services performed that date. In addition, VCRC has sold all movable assets and leased to VCRR all real property assets. VCRC has no responsibilities for railroad operations and does not own any moveable equipment with which to operate a railroad.

A majority of the Board, Labor Member dissenting, finds that the evidence of record establishes that, effective with the close of business on August 31, 1998, VCRC was no longer a rail carrier operating in interstate commerce. Accordingly, a majority of the Board determines that VCRC's status as an employer under section 1(a)(1)(i) of the Railroad Retirement Act (45 U.S.C. �1(a)(1)(i)) and the corresponding provision of the Railroad Unemployment Insurance Act terminated effective with the close of business on August 31, 1998, the day that VCRC last performed railroad operations.