FR 2021-00773

The document, published in the Federal Register, is a notice regarding the Dakota Northern Railroad, Inc. (DN), a Class III railroad. DN plans to lease and operate two rail lines from BNSF Railway Company in North Dakota, covering a total distance of 59.84 miles. The transaction is described as a continuation of an existing lease, and DN expects to finalize the new lease terms before the current lease expires on January 31, 2021. This notice is issued by the Surface Transportation Board and allows the transaction to proceed as early as January 29, 2021. Notably, the lease does not include interchange commitments, and DN's annual revenue projections do not exceed $5 million.

General Summary

This notice is primarily concerned with providing information about DN's plan to lease and operate portions of BNSF's rail lines. This is a routine procedure in the railroad industry where smaller lines or segments are often leased to regional or local operators. The Surface Transportation Board is the regulatory authority overseeing this transaction, and they've set specific conditions and timelines for its execution. Importantly, DN has stated that this transaction will not lead to them becoming a larger rail carrier under Class I or II categories.

Significant Issues or Concerns

One notable issue in this document is the lack of specific details on the financial terms of the lease. For stakeholders, such as regional businesses and local governments, understanding the financial aspects could be crucial, especially if it affects local economies. Moreover, while the document states that the lease excludes interchange commitments, it fails to explain the reasoning or potential consequences of this decision, which might leave stakeholders uncertain about future logistical impacts.

The document also references several federal regulations (e.g., 49 CFR 1150.41, 49 U.S.C. 10502(d)) without providing context. This could be challenging for readers who do not have expertise in federal transportation regulations and might lead to misunderstanding of the regulatory framework guiding the lease.

Furthermore, the exemption from environmental and historic preservation reviews is stated without justification. While the transaction might be straightforward, the lack of explanation regarding environmental and preservation concerns might raise questions about potential oversight in these critical areas.

Public Impact

For the general public, the continuation of the lease and operation by DN ensures that the rail lines remain in use, potentially supporting local economies dependent on rail transport. The operation of these lines could facilitate the movement of goods and services more efficiently within the region.

Impact on Specific Stakeholders

Positive Impact: Local businesses reliant on rail transport for their supply chain may benefit from the continued operation of these lines, ensuring uninterrupted logistical support. Additionally, the decision not to include interchange commitments might streamline operations, leading to potential cost savings that could benefit end consumers.

Negative Impact: The absence of detailed information on lease terms and lack of interchange commitments might leave regional planners and business operators in a state of uncertainty regarding long-term operational costs and efficiency. Moreover, stakeholders concerned with environmental and historic preservation may find the exemptions from reviews concerning, fearing potential negative impacts that haven't been transparently assessed.

In conclusion, while the document signifies continued operations and business as usual for Dakota Northern Railroad, several elements lack clarity. This may lead to questions about the long-term strategic planning and environmental foresight of this rail line lease and operation.

In the document related to the lease and operation exemption for the Dakota Northern Railroad, Inc. (DN), there is one primary financial reference provided. Specifically, it is stated that DN certifies its projected annual revenue will not exceed $5 million. This financial projection plays a crucial role in shaping the classification and regulatory obligations of the railroad company.

Summary of Financial Reference

The mention of a projected annual revenue not exceeding $5 million is significant for several reasons:

1. Regulatory Classification: By projecting revenues under this threshold, DN identifies itself as remaining within the bounds of a Class III railroad. This classification is essential as it determines the regulatory requirements and oversight needed for DN, as well as its operational latitude. Class III railroads are typically smaller, with less stringent reporting obligations compared to Class I or II carriers.

2. Legal Compliance: The projection ensures that DN will not transition to a Class I or II rail carrier, which would come with different regulatory expectations under federal law. The financial threshold outlined is a benchmark for legal status in the railroad industry and compliance with related regulations.

3. Implications for Lease Continuation: The financial projection, while not detailing specifics on how this revenue is attained or calculated, aligns with the continuation of the existing lease arrangement with BNSF Railway Company. The document assures stakeholders that the financial and operational scope will remain consistent with prior agreements, avoiding disruptions or escalated regulatory scrutiny.

Identified Issues Related to Financial Reference

1. Lack of Transparency in Financial Terms: Although the document notes the revenue projection, it does not detail the financial terms of the lease agreement between DN and BNSF. This absence of detail could raise questions about transparency regarding the fiscal responsibilities and financial commitments between the entities involved.

2. Context for Financial Projections: The document does not clarify how DN arrived at its revenue projection of not exceeding $5 million. Without understanding the underlying assumptions or factors considered, interested parties may find the statement lacking in context. Such information could provide clarity and assurance regarding the company's financial health and planning.

3. Implications of Revenue on Regulatory Exclusions: While the document states that the action is categorically excluded from environmental review and historic preservation reporting, it does not discuss if or how the revenue projections contributed to these exclusions. Financial health and operational scale might influence regulatory exclusions, but no connection is explicitly made.

Overall, the document uses financial projections to establish DN's continued operation as a Class III railroad, fulfilling legal and regulatory requirements without providing a comprehensive financial picture or transparency on the lease's fiscal terms.