20247 This decision will be included in the bound volumes of the STB printed reports at a later date. SURFACE TRANSPORTATION BOARD Finance Docket No. 32760 UNION PACIFIC CORPORATION, UNION PACIFIC RAILROAD COMPANY, AND MISSOURI PACIFIC RAILROAD COMPANY--CONTROL AND MERGER--SOUTHERN PACIFIC RAIL CORPORATION, SOUTHERN PACIFIC TRANSPORTATION COMPANY, ST. LOUIS SOUTHWESTERN RAILWAY COMPANY, SPCSL CORP., AND THE DENVER AND RIO GRANDE WESTERN RAILROAD COMPANY Decision No. 441 ---------- Decided: August 6, 1996 ---------- The Board approves, with certain conditions, the common control and merger of the rail carriers controlled by Union Pacific Corporation (Union Pacific Railroad Company and Missouri Pacific Railroad Company) and the rail carriers controlled by Southern Pacific Rail Corporation (Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, SPCSL Corp., and The Denver and Rio Grande Western Railroad Company).2 1 This decision covers the Finance Docket No. 32760 lead proceeding and the embraced proceedings listed in Appendix A. 2 The ICC Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803 (the Act), enacted December 29, 1995, and effective January 1, 1996, abolished the Interstate Commerce Commission (ICC) and transferred certain functions and proceedings to the Surface Transportation Board (Board). Section 204(b)(1) of the Act provides, in general, that proceedings pending before the ICC at the time of its termination that involve functions transferred to the Board pursuant to the Act shall be decided (1) by the Board, and (2) under the law in effect prior to January 1, 1996. The Finance Docket No. 32760 lead proceeding, the Finance Docket No. 32760 (Sub-Nos. 1 to 9) embraced proceedings, and the 17 embraced abandonment and 4 embraced discontinuance proceedings were pending with the ICC at the time of its termination. The Finance Docket No. 32760 (Sub-Nos. 10, 11, 12, 13, 14, 16, and 17) embraced proceedings were not then pending but will be considered as if they had been because responsive applications that seek to invoke the conditioning power of old 49 U.S.C. 11344(c) have never been regarded as independent applications. See Burlington Northern Inc. and Burlington Northern Railroad Company--Control and Merger--Santa Fe Pacific Corporation and The Atchison, Topeka and Santa Fe Railway Company, Finance Docket No. 32549, Decision No. 38 (ICC served Aug. 23, 1995) (BN/SF) (slip op. at 55 n.76). Except as noted in the next two paragraphs, all of the proceedings addressed in this decision involve functions that are subject to our jurisdiction pursuant to new 49 U.S.C. 11323-27 (control/merger transactions), new 49 U.S.C. 11102 (terminal facilities), and new 49 U.S.C. 10903-05 (abandonments), and we will therefore decide these proceedings under the law in effect prior to January 1, 1996. The Finance Docket No. 32760 (Sub-No. 8) proceeding, wherein applicants seek an exemption from the trucking company acquisition requirements of old 49 U.S.C. 11343-44, involves a function that is not subject to our jurisdiction under the law in effect on and after January 1, 1996. We will nevertheless decide (continued...) Finance Docket No. 32760 TABLE OF CONTENTS INTRODUCTION .......................... 7 THE RECORD ........................... 14 APPLICANTS .......................... 14 Public Interest Justifications .............. 15 Labor Impact ....................... 16 BNSF Agreement ...................... 16 CMA Agreement ....................... 18 URC Agreement ....................... 18 Terminal/Switching Railroads ............... 19 Motor Carriers ...................... 19 Terminal Trackage Rights ................. 19 Abandonments And Discontinuances ............. 20 BNSF ............................. 22 RAILROAD PROTESTANTS ..................... 23 Consolidated Rail Corporation ............... 23 Kansas City Southern Railway Company ........... 26 Montana Rail Link ..................... 29 Texas Mexican Railway Company ............... 30 Capital Metropolitan Transportation Authority ....... 33 Magma Copper Company's Rail Affiliates .......... 35 Yolo Shortline Railroad Company. ............. 36 2(...continued) this proceeding, and decide it under the law in effect prior to January 1, 1996, in accordance with the special transition rule provided by section 204(b)(3)(C) of the Act (any proceeding involving the "merger" of a motor carrier of property, that was pending before the ICC at the time of its termination, shall be decided by the Board under the law in effect prior to January 1, 1996). The transactions at issue in Finance Docket No. 32760 (Sub-No. 8) are not, in the technical sense, mergers, but prior practice suggests that the word "merger," as used in section 204(b)(3)(C), should be read broadly. See, e.g., Union Pacific Corporation, Union Pacific Railroad Company and Missouri Pacific Railroad Company--Control--Chicago and North Western Transportation Company and Chicago and North Western Railway Company, Finance Docket No. 32133, Decision No. 25 (ICC served Mar. 7, 1995) (UP/CNW) (slip op. at 56 n.52) (in the context of old 49 U.S.C. 11343-44, the words "merger" and "transaction" have been used almost interchangeably). Section 204(b)(3)(A) of the Act provides, in general, that in the case of a proceeding under a provision of law repealed and not reenacted by the Act, such proceeding shall be terminated. The Finance Docket No. 32760 lead proceeding includes, among other things, a request that certain securities matters be approved under or exempted from the requirements of old 49 U.S.C. 11301. Because the referenced securities requirements were repealed and not reenacted, the described portion of the Finance Docket No. 32760 lead proceeding was terminated, by force of law, effective January 1, 1996. As used in this decision, the term "new law" refers to the law in effect on and after January 1, 1996, and the term "old law" refers to the law in effect prior to January 1, 1996. All further references in this decision, except as otherwise specifically indicated, will be to the applicable provisions of the old law. - 2 - Finance Docket No. 32760 Keokuk Junction Railway and Pioneer Railcorp ....... 36 Toledo, Peoria, & Western Railway Corporation ....... 37 Southern California Regional Rail Authority ........ 38 SHIPPER ORGANIZATIONS ..................... 38 National Industrial Transportation League ......... 38 Society Of The Plastics Industry. ............. 40 Western Coal Traffic League ................ 42 Western Shippers' Coalition ................ 44 Mountain-Plains Communities & Shippers Coalition ..... 45 WSC/MPCSC Joint Shippers' Statement ............ 45 Coalition For Competitive Rail Transportation ....... 46 Corn Refiners Association ................. 47 National Corn Growers Association ............. 47 Institute of Scrap Recycling Industries .......... 47 Montana Wheat and Barley Committee ............ 47 Montana Farmers Union ................... 48 Save The Rock Island Committee .............. 49 Colorado Wheat Administrative Committee .......... 50 Hoisington Chamber of Commerce .............. 51 Enid Board of Trade .................... 51 Kansas-Colorado-Oklahoma Shippers Association ....... 52 Farmers Elevator Association of Minnesota ......... 52 South San Antonio Chamber of Commerce ........... 52 SHIPPERS: COAL ........................ 52 Wisconsin Power & Light/Wisconsin Public Service Corp ... 53 Wisconsin Power & Light Company ........... 53 Wisconsin Public Service Corporation ........ 54 Entergy/Arkansas P&L/Gulf States Utilities ........ 54 The City Public Service Board of San Antonio ....... 56 Texas Utilities Electric Company ............. 58 Sierra Pacific Power/Idaho Power Company ......... 58 Arizona Electric Power Cooperative ............ 59 Wisconsin Electric Power Company ............. 60 Public Service Company of Colorado ............ 61 Illinois Power Company .................. 62 Central Power & Light Company ............... 63 Intermountain Power Agency ................ 63 Lower Colorado River Authority/City of Austin ....... 63 Rio Bravo Poso/Rio Bravo Jasmin .............. 64 IES Utilities ....................... 64 SHIPPERS: PLASTICS AND CHEMICALS ............... 64 Dow Chemical Company ................... 64 Montell USA Inc./Olin Corporation ............. 66 Quantum Chemical Corporation ............... 67 Union Carbide Corporation ................. 68 Enterprise Products Company ................ 68 Formosa Plastics Corporation, USA ............. 68 The Geon Company ..................... 69 PPG Industries Inc .................... 69 Huntsman Corporation ................... 70 Arizona Chemical Company ................. 70 Monsanto Company ..................... 70 Shell Chemical Company .................. 71 Springfield Plastics/Brandt Consolidated ......... 71 SHIPPERS: OTHER ....................... 71 International Paper Company ................ 71 United States Gypsum Company ............... 73 North American Logistic Services ............. 75 ASARCO Incorporated .................... 75 CIC International Corporation ............... 76 Weyerhaeuser Company ................... 76 Cargill .......................... 77 - 3 - Finance Docket No. 32760 IBP, Inc ......................... 77 Oregon Steel Mills, Inc .................. 77 Stimson Lumber Company .................. 77 STATE & LOCAL GOVERNMENTS AND RELATED INTERESTS ........ 77 Texas ........................... 77 California ........................ 79 Oregon .......................... 81 Montana