This is the determination of the Railroad Retirement Board concerning the status
of Moscow Camden and San Augustine Railroad LLC (MC and SA RR LLC), 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.). The status of the
MC and SA RR LLC has not previously been considered. This is also the
determination of the Board concerning the continued status of the Moscow Camden
& San Augustine Railroad (Moscow Camden & San Augustine) as a covered employer
under the Acts. Moscow Camden & San Augustine (employer number BA 3829) has been
determined to be a covered rail carrier employer, with service creditable from
May 28, 1898. In Surface Transportation Board (STB) Finance Docket No. 34990,
MC and SA RR LLC, filed a notice of exemption to acquire and operate the assets
of Moscow Camden & San Augustine, which include a 6.9 mile line of track in
Texas connecting a plywood and lumber plant in Camden to an interchange with the
Union Pacific Railroad at Moscow. See: 72 Fed. Reg. 7711, (February 16, 2007).
The notice recites that MC and SA RR LLC was formed as a Delaware limited
liability company wholly owned by Georgia-Pacific Wood Products South LLC
(Georgia-Pacific South). Georgia-Pacific South is the wholly owned subsidiary of
Georgia Pacific LLC, formerly Georgia Pacific Corporation. Georgia Pacific LLC
in turn is owned by Koch Industries, Inc.
Georgia Pacific Corporation has previously been determined not to be a covered
employer under the Acts. See Legal Opinion L-91-91, Georgia Pacific Corporation.
On December 21, 2006, Georgia-Pacific South entered into an agreement with
International Paper Company, an unrelated firm, to purchase International
Paper’s Camden lumber plant and the rail line of the Moscow Camden & San
Augustine. Prior to closing the transaction, Georgia-Pacific South assigned its
right to the rail line and assets of the Moscow Camden & San Augustine to
Georgia-Pacific South’s new subsidiary, MC and SA RR LLC. In a letter dated
April 26, 2007, Mr. David H. Coburn, attorney for the MC and SA RR LLC, advised
the railroad first compensated employees and began operations on March 31, 2007.
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;
Section 1 of the RUIA contains essentially the same definition, as does
section 3231 of the Railroad Retirement Tax Act. See also, regulations of the
Board at 20 CFR 202.2, which define covered employer to include any company
principally engaged in carrier business. Finally, it should be noted that
regulations of the Board at 20 CFR 202.11 provide that the employer status of
any company shall terminate whenever such company loses any of the
characteristics essential to the existence of an employer status.
The evidence of record establishes that MC and SA RR LLC is a rail carrier
operating in interstate commerce. Accordingly, it is determined that MC and SA
RR LLC became an employer within the meaning of section 1(a)(1)(i) of the
Railroad Retirement Act and its corresponding provision of the Railroad
Unemployment Insurance Act effective March 31, 2007, the date as of which its
first employee was first compensated. Cf. Rev. Rule. 82-100, 1982-1 Cum.Bul.
155, wherein the IRS held that a company became an employer under the Railroad
Retirement Tax Act on the date it hired employees to perform functions directly
related to its carrier operations.
The evidence further establishes that Moscow Camden & San Augustine ceased
operations and transferred its assets and common carrier obligations to MC and
SA RR LLC at close of business March 30, 2007. Accordingly, it is determined
that Moscow Camden & San Augustine lost the characteristics essential to rail
carrier status on March 30, 2007, and ceased to be a covered rail carrier
employer under the Railroad Retirement Act and the Railroad Unemployment
Insurance Act effective with the close of business March 30, 2007.
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Original signed by: |
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Michael S. Schwartz |
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V.M. Speakman, Jr. |
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Jerome F. Kever |
Koch Industries also owns
through subsidiaries the Gloster Southern Railroad Company LLC (BA 2583),
operating in Mississippi and Louisiana, and Old Augusta Railroad Company LLC (BA
5590), operating in Mississippi. Both have been determined to be rail carrier
employers under the Acts. See Legal Opinion L-86-136, and B.C.D. 04-41,
respectively. In addition, Koch Industries owns Blue Rapids Railway Company,
located in Kansas. Blue Rapids has been determined not to be a rail carrier
employer. See B.C.D. 07-04.
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