You're asked a good question. Why did an earlier post refer to DSNGRR employee pensions - and how is that relevant?
As background, it's necessary to understand that employees of common carrier railroads are excluded from Social Security. Instead, pension and other benefits are provided by the Railroad Retirement Board. The RRA predates Social Security - and its benefits are generally better. The downside is that payroll contributions are higher than the payroll taxes paid by non-railroad employers under FICA.
Some companies try to opt out of Railroad Retirement to save money. For example, the operators of the American Orient Express tour train tried to contend their staff aren't really working for a railroad and therefore, should be covered under Social Security. They lost that one.
It's possible that the DSNGRR took a similar tack. I don't know.
But thread is really about the matter of whether or not potential regulatory moves by the City of Durango could be preempted by the Surface Transportation Board which has exclusive authority when it comes to the economic regulation of the railroad industry.
The premption issue can be approached as follows:
1. The Durango-Silverton line segment was clearly a common carrier when the DRGW owned it.
2. I've seen nothing to indicate the DRGW
got ICC authority to abandon the line. In fact, I recall that the DRGW sought and received the Commission's OK when the branch was conveyed to the DSNGRR.
3. Since only the ICC or its sucessor, the STB, can authorize abandonments, the DSNGRR is likely to retain its common carrier status. As such, attempts by state and local authorities to regulate it may be federally prempted.
With that said, Durango could petition the STB for an "adverse abandonment". The city could assert that since the DSNGRR isn't connected to the national railroad network, its common carrier status is archaic. If the STB held that the DSNGRR is no longer a railroad, that would be it. The adverse abandonment could take place without the consent of the DSNGRR.
Incidentally, there are some other federal
laws that come into play if, indeed, the DSNGRR continues as a "real" railroad. For example, if it were involved in a union organizational effort, the provisions of the Railway Labor Act could and probably would be, invoked. The line may also be subject to provisions of the Federal Employers Liability Act(FELA). FELA mandates an exclusion from state Workmen's Compensation Insurance laws. Instead of the no-fault Workmen's Comp system coming into play with on-the-job injuries, FELA sets up an adversarial proceding. Suits under FELA, can subject railroads to substantial liability exposure.
On the other hand, common carrier status provides some distinct behefits when it comes to infrastructure financing. Under the FRA RRIF Loan program, railroads have access to 25-year term, fixed-interest loans at T-bill rates. At least one common carrier tourist-hauler (Mt. Hood RR) has taken advantage of a RRIF Loan. There is also the recently-enacted federal tax credit for track maintenance. Starting in 2005, shortlines get a credit of 50 cents for every dollar of annualized maintenance expenditure to a cap of $7000 per track mile. Assuming the DSNGRR has 50 track miles (including siding and yard tracks), and assuming it spends a minimum of $350,000 on its track and bridges, the credit earned comes to $175,000. If a railroad can't use the credits, the law provides for assignment to qualified vendors such as a track contractor or a firm that sells ties.
I hope I haven't bored everyone with the discussion of advantages (and disadvantages)of common carrier status. The matter of the DSNGRR's standing has implications that go far beyond Durango's possible effort to regulate locomotive smoke
