Brownstein Hyatt

I Farber Schreck

Wayne F. Forman
September 25, 2018 Attorney at Law
303.223.1120 tel
303.223.1111 fax
wforman@bhfs.com

VIA EMAIL@ mfreeman@weldgov.com; sconway@weldgov.com; smoreno@weldgov.com;

jcozad@weldgov.com; bkirkmeyer@weldgov.com

Mike Freeman, County Commissioner

Sean Conway, County Commissioner
Steve Moreno, County Commissioner
Julie Cozad, County Commissioner
Barbara Kirkmeyer, County Commissioner
P.O. Box 758
Greeley, CO 80632

Re: Notice of Rail Operations Pursuant to 49 U.S.C. §10101 by Rock & Rail, LLC

Dear Commissioners Freeman, Conway, Moreno, Cozad and Kirkmeyer:

The purpose of this letter is to advise Weld County of the commencement of operations by Rock & Rail,
LLC at its Weld County intermodal facility previously owned by Martin Marietta Materials, Inc. ("MMM").
Rock & Rail is a railroad subject to the jurisdiction of the Surface Transportation Board ("STB") pursuant to
the Interstate Commerce Commission Termination Act of 1995, 49 U.S.C. §10101 ("ICCTA"). Beginning
the first week of October, 2018, Rock & Rail may begin receiving, handling and distributing interstate
shipments of construction aggregate and related material at the facility.

ln December, 2015, Rock & Rail joined the MMM family of companies to provide rail transportation within
Colorado. Rock & Rail has acquired from MMM the leasehold for, and ownership of the structures and
facilities at, the rail and transloading site located on two parcels at 6433 WCR 56, and 27 486 WCR 13, in
unincorporated Weld County (referred to as the "Hwy. 34 facility"). I've attached a copy of the lease
assignment for your information. This acquisition is part of an overall plan under which Rock & Rail will
acquire MMM's existing rail transportation and related facilities throughout Colorado where rail
transportation of aggregate and other products is or can be made available. This will allow Rock & Rail to
expand its presence within Colorado and to provide rail transportation and transloading services for
aggregate and other products and materials, thereby removing thousands of heavy trucks from state and
local roads.

With particular regard to the Hwy. 34 facility, Rock & Rail has voluntarily assumed responsibility for MM M's
obligations under the Improvements and Road Maintenance Agreement and Emergency Action and Safety
Plan prepared for the site. lt will notify the Front Range Fire Rescue Authority of this change of ownership
and of the new contact person for the site. Rock & Rail also has accepted assignment of the access
permits for the site.

As you know, the Weld County Board of Commissioners ("BOCC") issued a USR permit to MMM for the
Hwy. 34 facility in August, 2015. Certain parties appealed that permit and in November of 2017, the
Colorado Court of Appeals reversed issuance of the permit. Subsequently, the Weld County District Court
remanded that matter to the BOCC, but those certain parties appealed the remand. Though MMM moved

410 Seventeenth Street, Suite 2200

Denver, CO 80202-4432
main 303.223.1100

bhfs.com Brownstein Hyatt Farber Schreck, LLP

Weld County Board of County Commissioners
September 25, 2018
Page 2

to dismiss the appeal, the Colorado Court of Appeals elected to defer ruling on its jurisdiction to hear that
appeal, delaying resolution of the matter.

As matters now stand, Rock & Rail's predecessor MMM has been seeking a County permit for the Hwy. 34
facility for more than three years. No end to that process, or the litigation spawned by it, is in sight. Rock &
Rail has therefore elected to exercise its right to commence operations at the Hwy. 34 facility, as it is
authorized to do under ICCT A.

Rock & Rail became an STB regulated railroad in 1998 when it acquired STB authority to operate and
lease the Royal Gorge line. Since then it has obtained STB approval of the 1999 acquisition of a BNSF
freight rail easement and on September 19, 2018, of the acquisition of the Hwy. 34 Facility. I've enclosed
with this letter the STB Acquisition and Operation Exemption for the Hwy. 34 Facility.

ICCT A vests exclusive jurisdiction in the STB over "transportation by rail carriers" and the "construction,
acquisition, operation, abandonment or discontinuance of spur, industrial, team, switching, or side tracks,
or facilities." 49 U.S.C. § 10501 (b ). "Transportation" is broadly defined to include a "yard, property, facility,
instrumentality, or equipment of any kind related to the movement of passengers or property, or both, by
rail. ... " 49 U.S.C. § 10102(9). The definition of railroad under ICCTA expressly includes "intermodal
equipment used by or in connection with a railroad." 49 U.S.C. § 10102(6)(C).

The Surface Transportation Board has described the scope of ICCTA preemption of local regulation as
follows:

Thus, state and local permitting or preclearance requirements, including building permits
and zoning ordinances, are categorically, or per se, preempted. City of Auburn v. STB,
154 F.3d 1025, 1029-31 (9th Cir. 1998). Otherwise, state and local authorities could
deny a railroad the right to construct or maintain its facilities or to conduct its operations,
which would irreconcilably conflict with the Board's authorization of those facilities and
operations . .!-º.:. at 1031; CSX Transp.-Pet. for Declaratory Order, FD 34662, slip op. at
8-10 (STB served Mar. 14, 2005). State and local actions also may be preempted "as
applied"-that is, if they would have the effect of unreasonably burdening or interfering
with rail transportation. See Franks Inv. Co. v. Union Pac. R.R. (Franks), 593 F.3d 404,
414 (5th Cir. 2010) (en banc).

Norfolk Southern Railway Co.-Petition for Declaratory Order, Docket No. FD 3950, 2016 WL 787579, p. 3
(S.T.B. 2016). The STB has routinely found that ICCTA preempts state and local permitting of rail facilities,
including terminals, rail yards and associated structures. See Borough of Riverdale - Petition for
Declaratory Order- The New York Susquehanna and Western Railway Corporation, Finance Docket No.
33466 (STB 1999)(city zoning ordinances and land use restrictions on railroad's construction of truck
terminal and corn processing plant held preempted by ICCTA); Joint Petition for Declaratory Order-
Boston and Maine Corporation and Town of Ayer, MA, Finance Docket No. 33971 (STB served May 1,
2001 )(city permit and construction process linked to railroad operations preempted under ICCTA).

Courts have likewise given ICCTA preemption a broad scope: "lt is difficult to imagine a broader
statement of Congress's intent to preempt state regulatory authority over railroad operations." City of
Auburn, 154 at 1030 (quoting CSX Transp., Inc. v. Georgia Public Service Comm'n, 944 F. Supp. 1573,
1581 (N.D. Ga. 1996)).

A long line of cases establishes that state and local zoning or land use provisions may not be used to
require a railroad to obtain prior permission before undertaking an action that involves the construction,
permitting, or operation of a rail yard and related facilities, including an intermodal facility. See Del Grosso
Weld County Board of County Commissioners
September 25, 2018
Page 3

v. Surface Transportation Board, -- F. 3d - (1st Cir. 2018) 2018 WL 3725493 (intermodal transloading is
integral to and thus part of transportation); Texas Central Business Lines Corp. v. City of Midlothian, 669 F.
3d 525 (5th Cir. 2012) (the definition of "transportation" under ICCT A includes transloading); Norfolk S. Ry.
th
Co. v. City of Alexandria, 608 F. 3d 150 (4 Cir. 201 0J(local ordinance prohibiting the transloading and
truck hauling of certain waste and other material without a city permit preempted by ICCTA); Green Mt.
nd
R.R. Corp. v. Vermont, 404 F.3d 638 (2 Cir. 2005)(State of Vermont's environmental regulation statute
applied to a railroad's plans as a preclearance permitting process preempted by ICCTA); City of Auburn,
154 F.3d 1025 (ICCTA preempted actions of two municipalities that sought to impose local environmental
review upon transfer of a rail line); Norfolk S. Ry. Co. v. City of Maple Heights, 2003 U.S. Dist. LEXIS
28282, * 9 - *15 (N.D. Ohio, May 14, 2003) (ICCTA preempts application of local noise ordinance to
intermodal rail facility).

Numerous cases hold that local zoning laws are preempted by ICCT A. One of the more interesting cases
is Norfolk So. Rwy. Co. v. City of Austell, 1997 WL 1113647 (N.D. Ga. 1997). This case is of particular
importance because it upheld preemption, not just over some limited track acreage, but over 110 acres the
railroad was developing as an intermodal facility that was not allowed under Austell's zoning ordinance.
Further, preemption was upheld even after Norfolk Southern had applied for and been denied a zoning
change. The Court there found an "unambiguous and clear intent" on the part of Congress to "preempt the
City of Austell's authority to regulate and govern the construction, development, and operation of the
Plaintiff's intermodal facility via the instant zoning ordinance .... " Id. at *6.

Recently, the United States Court of Appeals for the First Circuit held that ICCTA vests exclusive
jurisdiction in the STB not only over the movement of goods by rail, but also over activities related to that
st
movement. Del Grosso v. Surface Transportation Board, -- F. 3d - (1 Cir. 2018) 2018 WL 3725493. Del
Grosso had claimed before the STB that the process of converting broken wood pellets into new pellets
("repelletizing") was a manufacturing process typically done by non-rail companies. Likewise, Del Grosso
claimed the process of bagging, palletizing, and shrink wrapping the pellets was not transportation related.
The STB rejected his claims and the First Circuit affirmed. lt began its discussion of ICCTA preemption by
pointing out that "intermodal transloading operations and activities involving loading and unloading
materials from railcars and temporary storage of materials' are a part of transportation." Thus, what Del
Grosso claimed was "manufacturing" and not covered by ICCT A was instead simply another step in the
"handling" of material moved by rail and thus expressly included within the scope of ICCT A. Further, the
court held that ICCT A covers not only "the movement of ... property ... by rail. . . but also "services related
to that movement." (Emphasis in original.) See 49 U.S.C. 10102(9)(A).

We understand that Weld County has a long-standing practice of recognizing that railroads operating within
the County, such as Union Pacific, need not obtain special review or other land use permits for their rail
yards and other transportation-related facilities. As with Union Pacific, under ICCT A Rock & Rail, a
licensed STB rail carrier, cannot be required to obtain local land use permits for its Hwy. 34 facility.

The Hwy. 34 facility comprises a rail loop, aggregate unloading and conveyor system and ready mix
concrete plant, together with associated fuel and material storage, offices and other structures. Rock &
Rail intends to operate these interrelated facilities as components of an overall transloading operation
under the authority of ICCTA. If Rock & Rail intends to alter or add to these facilities, such as by adding
the previously approved asphalt plant, it will notify the County in advance.

As you know, the USR permit issued to Martin Marietta imposed extensive design requirements on the
Hwy. 34 facility to address off-site impacts, including reducing site grades, incorporating architectural and
landscaping features requested by the community, adding visual screening and constructing noise
reducing berms and walls, among others. All of these improvements have been installed and in some
cases, improved and extended beyond County requirements. Although those requirements may not be
Weld County Board of County Commissioners
September 25, 2018
Page4

applied to Rock & Rail under ICCTA, Rock & Rail will preserve these improvements and maintain its facility
to mitigate impacts on surrounding residents.

Rock & Rock is committed to ensuring that the Hwy. 34 facility benefits the County and surrounding
communities as an employment base and source of needed construction material and other goods and
materials, while minimizing impacts to County roads, the traveling public and neighboring
landowners. Rock & Rail is willing at any time to discuss its plans for the Hwy. 34 facility with
representatives of Weld County and to respond to any questions or provide any necessary clarification.

Sincerely,

WFF:tw

cc: Bruce Barker, Esq., Weld County Attorney (via email - bbarker@weldgov.com)
Tom Parka, Dir. of Dept. of Planning Svcs. (via email - tparko@weldgov.com)
AJ Arjanen, General Mgr. Rock & Rail, LLC (via email - AJ.Arjanen@rockandrail.com

17197781.6