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any time by the Secretary to enforce the crude oil and petroleum product pricing and allocation regulations issued under the Emergency Petroleum Allocation Act of 1973 or the Economic Stabilization Act of 1970; or (2) section 155 of Public Law 97-377. (b) REPORT ON COLLECTION OF CERTAIN DEFICIENCY FUNDS.—The

Secretary shall transmit a report each fiscal year, beginning in fiscal year 1987, to such committees on the status of collections by the Secretary of deficiency funds to be deposited into the M.D.L. No. 378 escrow account established by the United States District Court for the District of Kansas until all such deficiency funds have been paid. The Secretary shall, in a manner substantially similar to that required by section 155 of Public Law 97-377 with respect to amounts disbursed under such section, monitor the disposition by the States of any funds disbursed to the States by the court pursuant to the opinion and order of such District Court, dated July 7, 1986, with respect to In Re: the Department of Energy Stripper Well Exemption Litigation, M.D.L. No. 378, including the use of such funds for administrative costs and attorneys fees.

15 USC 751 note. 12 USC 1904 note. 96 Stat. 1919. State and local governments.

(c) REPORT ON AMOUNT ESTIMATED TO BE AVAILABLE FOR INDIRECT

RESTITUTION.—The Secretary shall transmit, on March 1 of each year beginning with 1987 and continuing until all the restitutionary amounts to which section 3002(a) applies have been collected and disbursed as provided in this subtitle, a report to such committees containing an estimate of the amount that will be determined under section 3003(c) to be the excess amount for purposes of section 3003(d)(1)(B) for the fiscal year beginning the next October 1. (d) RECEIPT BY COMMITTEES.—The reports required by this subtitle shall be transmitted to the Committee on Energy and Commerce of the House of Representatives and the Committee on Energy and Natural Resources of the Senate. SEC. 3007. TERMINATION.

(a) IN GENERAL.—(1) Except as provided in subsection (b), the provisions of this subtitle (other than section 3005) shall terminate 90 days after the Secretary— (A) determines that all of the restitutionary amounts to which section 3002(a) applies have been collected and disbursed as provided in this subtitle; and (B) submits to Congress the final report required by section 3006. (2) Such final report shall include the determination (and the justification thereof) described in paragraph (1)(A). Such report shall also be published in the Federal Register. (b) EXCEPTION.—The requirements of section 3003(d) shall continue to be applicable to the use of restitutionary amounts received under this subtitle as long as such funds remain available. SEC. 3008. DEFINITIONS.

For purposes of this subtitle: (1) The term "Secretary" means the Secretary of Energy. (2) The term "subpart V regulations" means the provisions of Subpart V—Special Procedures for Distribution of Refunds (10 CFR 205.280-205.288) and any amendment made after the date of the enactment of this Act, and all precedents and decisions under such regulations, but only to the extent that such provi-

15 USC 4506.

Reports. Federal Register, publication.

15 USC 4507.

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PUBLIC LAW 99-509—OCT. 21, 1986 sions, precedents, decisions, and amendments are consistent with the provisions of this subtitle. (3) The term "energy conservation programs" means— (A) the program under part A of the Energy Conservation and Existing Buildings Act of 1976 (42 U.S.C. 6861 and following); (B) the programs under part D of title III of the Energy Policy and Conservation Act (relating to primary and supplemental State energy conservation programs; 42 U.S.C. 6321 and following); (C) the program under part G of title III of the Energy Policy and Conservation Act (relating to energy conservation for schools and hospitals; 42 U.S.C. 6371 and following); and (D) the program under the National Energy Extension Service Act (42 U.S.C. 7001 and following). (4) The term "person" includes refiners, retailers, resellers, farmer cooperatives, transportation entities, public and private utilities, school districts. Federal, State, and local governmental entities, farmers, and other individuals and their successors. (5) The term "State" means each of the several States, the District of Columbia, the commonwealth of Puerto Rico, and any territory or possession of the United States.

Subtitle B—Information and Study Requirements SEC. 3101. MANUFACTURERS ENERGY CONSUMPTION SURVEY.

Classified information.

(a) IN GENERAL,—Section 205 of the Department of Energy Organization Act (42 U.S.C. 7135) is amended by adding at the end the following new subsection: "(i)(l) The Administrator shall conduct and publish the results of a survey of energy consumption in the manufacturing industries in the United States on at least a triennial basis and in a manner designed to protect the confidentiality of individual responses. In conducting the survey, the Administrator shall collect information, including— "(A) quantity of fuels consumed; r « "(B) energy expenditures; "(C) fuel switching capabilities; and "(D) use of nonpurchased sources of energy, such as cogeneration and waste by-products. "(2) This subsection does not affect the authority of the Administrator to collect data under section 52 of the Federal Energy Administration Act of 1974 (15 U.S.C. 790a).". (b) REPEAL.—Part E of title III of the Energy Policy and Conservation Act (42 U.S.C. 6341-6346) is hereby repealed. SEC. 3102. CRUDE OIL PRODUCTION AND REFINING CAPACITY IN THE UNITED STATES.

Imports.

(a) IN GENERAL.—(1) The Secretary of Energy, acting with the Energy Information Administration, shall conduct a study of domestic crude oil production and petroleum refining capacity and the effects of imports thereon in order to assist the Congress and the

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President in determining whether such production and capacity are adequate to protect the national security. (2) The study provided for by this section shall be carried out within available appropriations. (b) PUBLIC COMMENT.—The Secretary shall provide notice and reasonable opportunity for public comment with respect to conducting the study carried out under this section. (c) REPORTING DATE.—The Secretary shall, within 120 days of the date of the enactment of this Act, transmit to the Congress and the President a copy of the findings and conclusions of the study carried out under this section. Such findings and conclusions shall be referred to the Committee on Energy and Natural Resources of the Senate and appropriate authorization committees of the House of Representatives. (d) ACTION BY THE PRESIDENT.—The President shall, within 45

days after the date on which such report is transmitted to him, report his views concerning the levels at which imports of crude oil and refined petroleum products become a threat to the national security and advise the Congress concerning his views of the legislative or administrative action, or both, that will be required to prevent imports of crude oil and refined petroleum products from exceeding those import levels that threaten our national security.

President of U.S. Defense and national security.

Subtitle C—Strategic Petroleum Reserve SEC. 3201. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEARS 1987, 1988, A N D 1989.

(a) IN GENERAL.—The following amounts are hereby authorized to be appropriated in accordance with section 660 of the Department of Energy Organization Act for operating expenses for the Strategic Petroleum Reserve to carry out part B of title I of the Energy Policy and Conservation Act for the acquisition, transportation, and injection of petroleum products, as defined for purposes of such part B, for the Reserve and for any drawdown and distribution of the Reserve* (1) For fiscal year 1987, $200,000,000. (2) For fiscal year 1988, $291,000,000. (3) For fiscal year 1989, $479,000,000. (b) EFFECT ON OTHER AUTHORIZATIONS.—The authorization made by subsection (a) is in lieu of any other authorization of appropriation for fiscal years 1987, 1988, and 1989 for the expenses described in such subsection.

42 USC 7270. 42 USC 6231.

SEC. 3202. FILL RATE OF THE RESERVE; LIMITATION ON UNITED STATES SHARE OF THE NAVAL PETROLEUM RESERVE. (a) FILL RATE OF THE RESERVE.—Section 160(c)(3) of the Energy

Policy and Conservation Act (42 U.S.C. 6240(c)(3)) is amended— (1) by striking out "fiscal year 1986 and continuing through fiscal years 1987 and 1988" and inserting in lieu thereof "fiscal fi year 1987 and continuing through fiscal years 1988 and 1989"; (2) by striking out "527,000,000 barrels and inserting in lieu thereof "750,000,000 barrels"; and (3) by striking out "at a level" and all that follows through the period and inserting in lieu thereof "at the highest practicable fill rate achievable, subject to the availability of appropriated funds."

Ante, p. 141. <

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PUBLIC LAW 99-509—OCT. 21, 1986 (b) LIMITATION ON UNITED STATES SHARE OF THE NAVAL PETRO-

Ante. p. 142.

LEUM RESERVE.—Section 160(d)(1) of such Act (42 U.S.C. 6240(d)(1)) is amended— (1) in subparagraph (A), by striking out "527,000,000 barrels" , and inserting in Heu thereof "750,000,000 barrels"; ,v^ (2) in subparagraph (B)— (A) by striking out "100,000 barrels" and inserting in lieu t^ thereof "75,000 barrels"; and (B) by striking out "; or" and inserting in lieu thereof a period; and (3) by striking out subparagraph (C). SEC. 3203. INFORMATION TO BE CONTAINED IN ANNUAL REPORT ON SPR.

Section 165(a) of the Energy Policy and Conservation Act (42 ,i • i U.S.C. 6245(a)) is amended by striking out paragraph (1) and insertk ing in lieu thereof the following: "(1) a detailed statement of the status of the Strategic Petro* '^ ' J leum Reserve, including— "(A) an estimate of the final capacity of the Reserve and j^ the scheduled annual fill rate for achieving such capacity; ,,.i;, "(B) the scheduled quarterly fill rate for the 12-month /]-». period beginning on the date on which such report is transmitted; "(C) the type and quality of crude oil to be acquired for the Reserve pursuant to the schedule described in subparagraph (A); "(D) the schedule of construction of any facilities needed to achieve the final capacity of the Reserve, including a ,,,,.j description of the type and location of such facilities and of enhancements and improvements to existing facilities; f;Ts •. "(E) ^^ estimate of the cost of acquiring crude oil and constructing facilities necessary to complete the Reserve; •f?5; n-Bu Se f '(^) ^ description of the current distribution plan for using the Reserve, including the method of drawdown and -. Idistribution to be utilized; and "(G) an explanation of any changes made in the matters described in subparagraphs (A) through (F) since the transmittal of the previous report under this subsection;".
 * V

Subtitle D—Federal Energy Management SEC. 3301. FEDERAL ENERGY MANAGEMENT.

'

'

"

Section 545(a)(2) of the National Energy Conservation Policy Act (42 U.S.C. 8255(a)(2)) is amended by striking out "marginal" and inserting in lieu thereof "average". iii

42 USC 7178.

Subtitle E—Fees and Charges SEC. 340L FEDERAL ENERGY REGULATORY COMMISSION FEES AND ANNUAL CHARGES. (a) IN GENERAL.—(1) Except as provided in paragraph (2) and beginning in fiscal year 1987 and in each fiscal year thereafter, "^he Federal Energy Regulatory Commission shall, using the provisions of this subtitle and authority provided by other laws, assess and

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collect fees and annual charges in any fiscal year in amounts equal to all of the costs incurred by the Commission in that fiscal year. (2) The provisions of this subtitle shall not affect the authority, requirements, exceptions, or limitations in sections 10(e) and 30(e) of the Federal Power Act. (b) BASIS FOR ASSESSMENTS.—The fees or annual charges assessed shall be computed on the basis of methods that the Commission determines, by rule, to be fair and equitable. (c) ESTIMATES.—The Commission may assess fees and charges under this section by making estimates based on data available to the Commission at the time of assessment. (d) TIME OF PAYMENT.—The Commission shall provide that the fees and charges assessed under this section shall be paid by the end of the fiscal year for which they were assessed. (e) ADJUSTMENTS.—The Commission shall, after the completion of a fiscal year, make such adjustments in the assessments for such fiscal year as may be necessary to eliminate any overrecovery or underrecovery of its total costs, and any overcharging or undercharging of any person. (f) USE OF FUNDS.—All moneys received under this section shall be credited to the general fund of the Treasury. (g) WAIVER.—The Commission may waive all or part of any fee or annual charge assessed under this section for good cause shown.

16 USC 803, 791.

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Subtitle F—Environmental Programs SEC. 3501. ABANDONED MINE RECLAMATION RESEARCH AND DEVELOPMENT.

After the enactment of this Act, the research and demonstration authorities of the Department of the Interior under the provisions of section 401(c)(6) of the Surface Mining Control and Reclamation Act of 1977 (Public Law 95-87) shall be transferred to, and carried out by, the Director of the Bureau of Mines. Research and demonstration projects under such provision shall be selected by a panel appointed by the Director of the Bureau of Mines to be comprised of 9 persons, including 4 representatives of State abandoned mine reclamation programs, 4 representatives of the Bureau of Mines, and one representative of the Office of Surface Mining Reclamation and Enforcement.

30 USC 1231 note-

30 USC 1231.

SEC. 3502. GREAT SWAMP NATIONAL WILDLIFE REFUGE.

(a) No later than 60 days after the enactment of this section, the Reports. United States Environmental Protection Agency shall provide the House Committee on Merchant Marine and Fisheries and the Senate Committees on Environment and Public Works and Energy and Natural Resources with an interim status report on the implementation of agency responsibilities for conducting or approving preliminary assessments, site investigations and, if necessary. Remedial Investigation/Feasibility Studies for contaminant problems on the Great Swamp National Wildlife Refuge, as set forth in the July 9, 1985, Interagency Memorandum of Agreement between the United States Environmental Protection Agency, the United States Fish and Wildlife Service, and the National Park Service. This report shall describe in a systematic and comprehensive way the clean-up plan developed to date and the progress made thereunder, including the identification of responsible parties where possible, for

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Reports.

Reports.

the Rolling Knoll landfill, the Harding landfill, and all asbestos dumpsites identified within the Great Swamp National Wildlife Refuge. The report shall also discuss the appointment of appropriate field personnel to direct the clean-up effort; an assessment and ranking of the contaminant threats to the Refuge based upon information available to date; and a detailed work plan and schedule for completing site investigation work, including the analysis of samples collected during site investigations, and initiating Remedial Investigation/Feasibility Studies where necessary. (b) Not later than 240 days after the enactment of this section, the United States Environmental Protection Agency shall provide the committees of Congress set forth in subsection (a) of this section with an update of its interim status report. This update shall address the same factors included in the original interim report and shall identify what progress has been made in implementing the site investigation, data analysis, and remedial clean-up responsibilities set forth in the interim report. (c) The development of the interim and updated reports required in subsections (a) and (b) of this section shall be carried out with unobligated funds available to the United States Environmental Protection Agency.

TITLE IV—TRANSPORTATION AND RELATED PROGRAMS.. Subtitle A—Rail Related Issues

Conrail Privatization Act.

PART 1—GENERAL PROVISIONS SEC, 4001. SHORT TITLE; TABLE OF CONTENTS OF SUBTITLE.

(a) SHORT TITLE.—This subtitle may be cited as the "Conrail Privatization Act". (b) TABLE OF CONTENTS OF SUBTITLE.— PART 1—GENERAL PROVISIONS

Sec. Sec. Sec. Sec.

4001. Short title; table of contents of subtitle. 4002. Findings. .,,,^,, ~ 4003. Purposes. ' ' ' ' 4004. Definitions.

,.

., .,,

"

,,.

PART 2—CONRAIL SUBPART A — S A L E OF CONRAIL

Sec. 4011. Preparation for public offering. Sec. 4012. Public offering. Sec. 4013. Fees.

'

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'• '

SUBPART B—OTHER MATTERS RELATING TO THE SALE

Sec. Sec. Sec. Sec. Sec.

4021. Rail service obligations. 4022. Ownership limitations. 4023. Board of Directors. 4024. Provisions for employees. 4025. Certain enforcement relief.

.^^ "

'

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••

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SUBPART C—MISCELLANEOUS TECHNICAL AND CONFORMING AMENDMENTS AND REPEALS

Sec. 4031. Abolition of United States Railway Association. Sec. 4032. Applicability of Regional Rail Reorganization Act of 1973 to Conrail after sale. Sec. 4033. Miscellaneous amendments and repeals. , ' s ,_ Sec. 4034. Exemption from liability. '""' '

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4035. Charter amendment. 4036. Status of Conrail after sale. 4037. Effect on contracts. 4038. Resolution of certain issues. PART 3—PROMOTION OF RAIL COMPETITION

Sec. 4051. Agriculture contract disclosure. Sec. 4052. Boxcar provision. SEC. 4002. FINDINGS.

The Congress finds that— (1) the bankruptcy of the Penn Central and other railroads in the Northeast and Midwest resulted in a transportation emergency which required the intervention of the Federal Government; (2) the United States Government created the Consolidated Rail Corporation, which provides essential rail service to the Northeast and Midwest; (3) the future of rail service in the Northeast and Midwest is essential and must be protected through rail service obligations, consistent with the transfer of the Corporation to the private sector; (4) the Northeast Rail Service Act of 1981 has achieved its purpose in allowing the Corporation to become financially selfsustaining; (5) the Federal Government has invested over $7,000,000,000 in providing rail service to the Northeast and Midwest; (6) the Government, as a result of its ownership and invest ment of taxpayer dollars in the Corporation, controls substan tial assets, including cash of approximately $1,000,000,000; (7) the Corporation's viability and sound performance allow it to be sold to the American public for a substantial sum through a public offering; (8) a public offering of the Corporation's stock will preserve competitive rail service in the region, provide a reasonable return to the Government, and protect employment; (9) the Corporation's employees contributed significantly to the turnaround in the Corporation's financial performance and they should share in the Corporation's success through a settlement of their claims for reimbursement for wages below industry standard, and a share in the common equity of the Corporation; (10) the requirements of section 401(e) of the Regional Rail Reorganization Act of 1973 are met by this subtitle; and (11) the Secretary of Transportation has discharged the responsibilities of the Department of Transportation under the Northeast Rail Service Act of 1981 with respect to the sale of the Corporation as a single entity. SEC. 4003. PURPOSES.

The purposes of this subtitle are to transfer the interest of the United States in the common stock of the Corporation to the private sector in a manner that provides for the long-term viability of the Corporation, provides for the continuation by the Corporation of its rail service in the Northeast and Midwest, provides for the protection of the public interest in a sound rail transportation system, and, to the extent not inconsistent with such purposes, secures the maximum proceeds to the United States.

45 USC 1801.

45 USC 1101 note,

45 USC 761.

45 USC 1302.

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PUBLIC LAW 99-509—OCT. 21, 1986

SEC. 4004. DEFINITIONS.

For the purposes of this subtitle— (1) the term "capital expenditures" means amounts expended by the Corporation and its subsidiaries for replacement or rehabilitation of, or enhancements to, the railroad plant, property, trackage, and equipment of the Corporation and its subsidiaries, as determined in accordance with generally accepted accounting principles, and in interpreting generally accepted accounting principles, no amount spent on normal repair, maintenance, and upkeep of such railroad plant, prop, erty, trackage, and equipment in the ordinary course of busi,, ness shall constitute capital expenditures;

(2) the term "Commission" means the Interstate Commerce Commission; f„ (3) the term "consolidated funded debt" means the aggregate, after eliminating intercompany items, of all funded debt of the Corporation and its consolidated subsidiaries, consolidated in accordance with generally accepted accounting principles; (4) the term "consolidated tangible net worth" means the market value of the common equity of the Corporation as of the sale date, plus or minus the change from the sale date to the F,. date of measurement in the excess, after making appropriate > deductions for any minority interest in the net worth of subsidiaries, of— (A) the assets of the Corporation and its subsidiaries (excluding intercompany items) which, in accordance with assets, after deducting adequate reserves in each case where, in accordance with generally accepted accounting I principles, a reserve is proper, over (B) all liabilities of the Corporation and its subsidiaries (excluding intercompany items), taking into account inventory and securities on the basis of the cost or current market value, whichever is lower, and not taking into account patents, trademarks, trade names, copyrights, licenses, goodwill, treasury stock, or any write-up in the book value of any assets; (5) the term "Corporation" means the Consolidated Rail Corporation; ' (6) the term "cumulative net income" means, for any period, the net income of the Corporation and its consolidated subsidi; aries as determined in accordance with generally accepted accounting principles, before provision for expenses (net of income tax effect) related to— (A) amounts paid by the Corporation under section 4024(e), and comparable payments made to present and former employees of the Corporation not covered by such section; and (B) the aggregate value of any shares and cash distributed by the Corporation under section 4024(f); (7) the term "debt" means (A) indebtedness, whether or not ' represented by bonds, debentures, notes, or other securities, for the repayment of money borrowed, (B) deferred indebtedness for the payment of the purchase price of property or assets purchased, (C) guarantees, endorsements, assumptions, and other contingent obligations in respect of, or to purchase or to other-
 * . generally accepted accounting principles, are tangible

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'*'

' '

100 STAT. 1895

wise acquire, indebtedness of others, and (D) indebtedness secured by any mortgage, pledge, or lien existing on property owned, subject to such mortgage, pledge, or lien, whether or not indebtedness secured thereby shall have been assumed; (8) the term "funded debt" means all debt created, assumed, or guaranteed, directly or indirectly, by the Corporation and its subsidiaries which matures by its terms, or is renewable at the option of the Corporation or any such subsidiary to a date, more than 1 year after the date of the original creation, assumption, or guarantee of such debt by the Corporation or such subsidiary; (9) the term "liabilities" means all items of indebtedness or liability which, in accordance with generally accepted accounting principles, would be included in determining total liabilities as shown on the liabilities side of a balance sheet as at the date as of which liabilities are to be determined; (10) the term "person" means an individual, corporation, partnership, association, trust, or other entity or organization, including a government or political subdivision thereof or a governmental body; (11) the term "preferred stock" means any class or series of preferred stock, and any class or series of common stock having liquidation and dividend rights and preferences superior to the common stock of the Corporation offered for sale under section 4012; (12) the term "public offering" means an underwritten offering to the public of such common stock of the Corporation as the Secretary of Transportation determines to sell under section 4012; (13) the term "sale date" means the date on which the initial public offering is closed; (14) the term "subsidiary" means any corporation more than 50 percent of whose outstanding voting securities are directly or indirectly owned by the Corporation; and (15) the term "United States share" means a share of common stock of the Corporation held by the United States Government on the date of the enactment of this Act or as a result of any split required pursuant to section 4012(d).

..:*i.n.< "i&' Lv- .-.

PART 2—CONRAIL Subpart A—Sale of Conrail SEC. 4011. PREPARATION FOR PUBLIC OFFERING.

Securities.

(a) PUBLIC OFFERING MANAGERS.—(1) Not later than 30 days after banking, the date of the enactment of this Act, the Secretary of Transpor- 45 USC 1311. tation, in consultation with the Secretary of the Treasury and the Chairman of the Board of Directors of the Corporation, shall retain the services of investment banking firms to serve jointly and be compensated equally as co-lead managers of the public offering (hereafter in this subpart referred to as the "co-lead managers") and to establish a syndicate to underwrite the public offering. The total number of co-lead managers shall be no fewer than 4 nor greater than 6. The Secretary shall designate one co-lead manager to coordinate and administer the public offering. (2) In selecting the investment banking firms to serve as co-lead managers of the public offering under paragraph (1), consideration

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shall be given to the firm's institutional and retail distribution capabilities, financial strength, knowledge of the railroad industry, experience in large scale public offerings, research capability, and reputation. In addition, recognition shall also be given to contributions made by particular investment banking firms before the date of the enactment of this Act in demonstrating and promoting the long-term financial viability of the Corporation. (b) PAYMENT TO THE UNITED STATES.—(1) Not later than 30 days after the date of the enactment of this Act, the Corporation shall transfer to the Secretary of the Treasury $200,000,000. (2) On or before February 1, 1987, or 30 days before the sale date, whichever occurs first, the Secretary of Transportation shall determine whether to require the Corporation to transfer to the Secretary of the Treasury, in addition to amounts transferred under paragraph (1), not to exceed $100,000,000, taking into account the viability of the Corporation. The Corporation shall transfer such funds as are required to be transferred under this paragraph. (c) REGISTRATION STATEMENT.—The Corporation shall prepare and cause to be filed with the Securities and Exchange Commission a registration statement with respect to the securities to be offered and sold in accordance with the securities laws and the rules and regulations thereunder in connection with the initial and any subsequent public offering. (d) LIMIT ON AUTHORITY TO PURCHASE STOCK.—Section 21603) of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 7260))) is amended by adding at the end thereof the following new paragraph: "(5) The authority of the Association to purchase debentures or series A preferred stock of the Corporation shall terminate upon the date of the enactment of the Conrail Privatization Act.". Securities.

use 312.

•^

SEC. 4012. PUBLIC OFFERING.

^^^ STRUCTURE OF PUBLIC OFFERING.—(1) After the registration statement referred to in section 4011(c) is declared effective by the Securities and Exchange Commission, the Secretary of Transportation, in consultation with the Secretary of the Treasury, the Chairman of the Board of Directors of the Corporation, and the colead managers, shall offer the United States shares for sale in a public offering, except as provided in paragraphs (2) and (3). (2) The Secretary of Transportation, after such consultation, may elect to offer less than all of the United States shares for sale at the time of the initial sale. (3) Under no circumstances shall the Secretary of Transportation offer any of the United States shares for sale unless, before the sale date, the Secretary determines, after such consultation, that the estimated sum of the gross proceeds from the sale of all the United States shares will be an adequate amount. A determination by the Secretary under this paragraph shall not be reviewable. (4) In making a determination under paragraph (3), the Secretary shall have the goal of obtaining at least $2,000,000,000 in aggregate gross proceeds for the United States from the public offering and any payments made under section 4011(b). (b) SUBSEQUENT SALES.—If the Secretary of Transportation elects to offer for sale less than all the United States shares, the Secretary shall sell the remaining United States shares in subsequent public offerings.

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(c) CONSENT OF THE CORPORATION NOT REQUIRED.—Any public offering under this section may be made without the consent of the Corporation. (d) AUTHORITY TO REQUIRE STOCK SPLITS.—(1) The Secretary of Transportation, in consultation with the co-lead m a n a g e r s and the C h a i r m a n of the Board of Directors of the Corporation, may, in connection with the initial public offering described in subsection (a), before the filing of the registration statement referred to in section 4011(c), require the Corporation to declare a stock split or reverse stock split. (2) The Corporation shall t a k e such action a s may be necessary to comply with the Secretary's requirements under this subsection. (e) CANCELLATION OF OTHER SECURITIES HELD BY THE UNITED

MI j "u^

STATES.—(1) In consideration for amounts transferred to the United States under section 4011(b), the Secretary of Transportation shall, concurrent with the initial public offering described in subsection (a), deliver to the Corporation all preferred stock, 7.5 percent debentures, and contingent interest notes of the Corporation. The Corporation shall immediately cancel such debentures, preferred stock, and contingent interest notes, and any interest of the United States in such debentures, preferred stock, and contingent interest notes shall be thereby extinguished. (2) For purposes of regulation by the Commission and State public utility regulation, the actions authorized by this subsection, the public offering, and the value of the consideration received therefor shall not change the value of the Corporation's assets net of depreciation and shall not be used to alter the calculation of the Corporation's stock or asset values, rate base, expenses, costs, returns, profits, or revenues, or otherwise affect or be the basis for a change in the regulation of any railroad service, rate, or practice provided or established by the Corporation, or any change in the financial reporting practice of the Corporation. (f) MINORITY INVESTMENT BANKING FIRMS.—The Secretary of

Transportation shall ensure that minority owned or controlled investment banking firms shall have an opportunity to participate to a significant degree in any public offering under this part. (g) INVESTMENT BANKING FIRM REQUIREMENTS.—(1) The level of any investment banking firm's participation in the public offering shall be consistent with that firm's financial capabilities. (2) No investment banking firm which was not in existence on September 1, 1986, shall participate in the public offering. (h) GENERAL ACCOUNTING OFFICE AUTHORITY TO CONDUCT Records. AUDITS.—The General Accounting Office may make such audits as Reports, may be deemed appropriate by the Comptroller General of the United States of all accounts, books, records, memoranda, correspondence, and other documents and transactions of the Corporation and the co-lead managers associated with the public offering. The co-lead managers shall agree, in writing, to allow the General Accounting Office to make such audits. The General Accounting Office shall report the results of all such audits to the Congress. SEC. 4013. FEES. (a) INVESTMENT BANKING FIRM FEES.—The Secretary of Transpor-

tation, in consultation with the Secretary of the Treasury, shall agree to pay to investment banking firms and other persons participating with such firms in the public offering the absolute minimum amount in fees necessary to carry out the public offering.

45 USC 1313.

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(b) COSTS OF THE PUBLIC OFFERING.—All costs of the public offering payable by the Secretary of Transportation shall be paid from the proceeds of the public offering.

45 USC 1321.

Subpart B—Other Matters Relating to the Sale

^

SEC. 4021. RAIL SERVICE OBLIGATIONS.

(a) OBLIGATIONS OF THE CORPORATION.—During a period of 5 years beginning on the date of the enactment of this Act, the following obligations shall apply to the Corporation: (1) The Corporation shall spend in each fiscal year the greater of (A) an amount equal to the Corporation's depreciation for [ financial reporting purposes for such year or (B) $500,000,000, in capital expenditures. With respect to any fiscal year, the Corporation's Board of Directors may reduce the required capital expenditures for such year to an amount which the Board , determines is justified by prudent business and engineering practices, except that the Corporation's capital expenditures shall not be less than $350,000,000 for its first fiscal year beginning after the sale date, a total of $700,000,000 for its first two fiscal years beginning after the sale date, a total of $1,050,000,000 for its first three fiscal years beginning after the ) sale date, a total of $1,400,000,000 for its first four fiscal years first five fiscal years beginning after the sale date. (2)(A) Unless the Corporation is in compliance with the « requirements of subparagraph (B), no common stock dividend or preferred stock dividend may be declared or paid by the Corporation. (B)(i) The Corporation shall have been in compliance with the requirements of paragraph (1) as of the end of the fiscal year ^ immediately preceding the fiscal year in which such dividend ^ payment is made. (ii) After payment of any common stock dividend, the Corporation shall have on hand cash or cash equivalents of $400,000,000. Such amount may include amounts borrowed by the Corporation only to the extent that the consolidated funded debt of the Corporation does not exceed 175 percent of the consolidated tangible net worth of the Corporation. . (iii) After payment of any common stock dividend, the cumu7^l\^^J^. lative amount of all common stock dividends paid between the sale date and the date of payment of such dividend shall not exceed 45 percent of— (I) the cumulative net income of the Corporation as reflected in the quarterly financial statements of the Corporation, for the period beginning after the end of the last fiscal o, quarter of the Corporation ending before the sale date, and ending at the end of the last fiscal quarter of the Corporation ending before the date of the declaration of such i; J; • Jii/5idividend, less Ati-^oi (II) the cumulative amount of any preferred stock diviI;. dends declared and paid between the sale date and the date . of payment of such common stock dividend. f ! (C) For purposes of this paragraph— (i) the term "common stock dividend" means— ^-^
 * beginning after the sale date, and a total of $1,750,000,000 for its

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100 STAT. 1899

(I) the declaration or payment by the Corporation of any dividends in cash, property, or other assets with respect to any shares of the common stock of the Corporation (other than dividends payable solely in shares of the common stock of the Corporation); (II) the application of any of the property or assets of the Corporation to the purchase, redemption, or other acquisition or retirement of any shares of the common stock of the Corporation; (III) the setting apart of any sum for the purchase, redemption, or other acquisition or retirement of any shares of the common stock of the Corporation; and (IV) the making of any other distribution, by reduction of capital or otherwise, with respect to any shares of the common stock of the Corporation, except that the merger of ConRail Equity Corporation into the Corporation shall not constitute a common stock dividend; and (ii) the term "preferred stock dividend" means— (I) the declaration or payment by the Corporation of any dividends in cash, property, or other assets with respect to any shares of the preferred stock of the i Corporation; (II) the application of any of the property or assets of the Corporation to the purchase, redemption, or other acquisition or retirement of any shares of the preferred stock of the Corporation; (III) the setting apart of any sum for the purchase, redemption, or other acquisition or retirement of any shares of the preferred stock of the Corporation; and (IV) the making of any other distribution, by reduction of capital or otherwise, with respect to any shares of the preferred stock of the Corporation. (3) The Corporation shall continue its affirmative action pro- Minorities, gram and its minority vendor program, substantially as such programs were being conducted by the Corporation as of February 8, 1985, subject to any provisions of applicable law. (4) The Corporation shall not permit to occur any transaction or series of transactions (other than in the ordinary course of business of the Corporation and its subsidiaries) whereby all or any substantial part of the railroad assets and business of the Corporation and its subsidiaries taken as a whole are sold, leased, transferred, or otherwise disposed of to any corporation or entity other than to a wholly owned subsidiary of the Corporation. (5) The Corporation shall offer any line for which an abandonment certificate is issued by the Commission to a purchaser who agrees to provide interconnecting rail service. Such offer shall last for the 120-day period following the date of issuance of the abandonment certificate and the price for such abandoned line shall be equal to 75 percent of net liquidation value as determined by the Commission, pursuant to regulations that had been issued under section 308 of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 748). (6) The Corporation and its subsidiaries shall maintain, preserve, protect, and keep their respective properties in good repair, working order, and condition, and shall not permit

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Page:United States Statutes at Large Volume 100 Part 3.djvu/92

 100 STAT. 1900

deferral of normal and prudent maintenance necessary to provide and maintain rail service. (b) COMPLIANCE CERTIFICATES.—(1) Within 90 days after the close of each of its fiscal years, or at the time its financial statements have been audited, whichever occurs later, the Corporation shall deliver to the Secretary of Transportation a certificate executed by an executive officer of the Corporation. Such certificate shall certify that, as of such date, the Corporation is in compliance with all requirements (other than the requirement regarding a common stock dividend or a preferred stock dividend) set forth in this section. Such certificate shall include audited consolidated financial statements. (2) Within 5 days after the declaration of any common stock dividend or preferred stock dividend, the Corporation shall deliver to the Secretary of Transportation a certificate executed by an executive officer of the Corporation. Such certificate shall certify that, after giving effect to any such dividend, the Corporation shall be in compliance with any requirement regarding a common stock dividend or a preferred stock dividend set forth in this section. Such certificate shall include— (A) quarterly financial statements; and (B) a report of the Corporation's total capital expenditures, for the period with respect to which the dividend has been declared, and the fiscal year to date, and shall compare such capital expenditures to the budgeted capital expenditures and to the capital expenditures during the comparable periods of the previous fiscal year.

Reports.

Securities. 45 USC 1322.

'('

Banks and banking.

PUBLIC LAW 99-509—OCT. 21, 1986

SEC. 4022. OWNERSHIP LIMITATIONS.

(a) GENERAL.—(1) During a period of 3 years beginning on the sale date, no person, directly or indirectly, may acquire or hold securities representing more than 10 percent of the total votes of all outstanding voting securities of the Corporation. (2) This subsection shall not apply— ' (A) to the employee stock ownership plan (or successor plans) of the Corporation, (B) to the Secretary of Transportation, (C) to a railroad as described under subsection (b), (D) to underwriting syndicates holding shares for resale, or (E) in the case of shares beneficially held for others, to commercial banks, broker-dealers, clearing corporations, or other nominees. (b) RAILROADS.—(1) During a period of 1 year beginning on the sale date, no railroad may purchase or hold, directly or indirectly, more than 10 percent of any class of stock of the Corporation. During such period, no railroad may file an application with the Commission for a merger or consolidation with the Corporation or the acquisition of control of the Corporation under section 11344 of title 49, United States Code. (2) During a period of 3 years beginning on the sale date, any railroad which purchases or holds any stock of the Corporation shall vote such stock in the same proportion as all other common stock of the Corporation is voted. After the expiration of 1 year after the sale date, the preceding sentence shall not apply to any railroad with respect to which the Commission has approved an application for a merger or consolidation with the Corporation or the acquisition of

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Page:United States Statutes at Large Volume 100 Part 3.djvu/93

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1901

control of the Corporation under section 11344 of title 49, United States Code. (3) As used in this subsection, the term "railroad" means a class I railroad as determined by the Commission under the definition in effect on the date of the enactment of this Act, and includes any entity controlling, controlled by, or under common control with any railroad (other than the Corporation or its subsidiaries). SEC. 4023. BOARD OF DIRECTORS.

The Board of Directors of the Corporation shall be comprised as follows: (1) Except as provided in paragraph (3), with respect to the period ending June 30, 1987, the board shall remain as it exists on the date of the enactment of this Act, with any vacancies being filled by directors nominated and elected by the remainder of the members of the board. (2)(A) Except as provided in paragraph (3), with respect to the period beginning July 1, 1987, the board shall consist of— f (i) 3 directors appointed by the Secretary of Transportation; (ii) the Chief Executive Officer and the Chief Operating Officer of the Corporation; and (iii) 8 directors appointed from among persons knowledgeable in business affairs by the special court trustees named under subparagraph (C), in consultation with the Secretary of Transportation and the Chairman of the Board of Directors of the Corporation, and recognizing the need for and importance of— (I) continuity in the direction of the Corporation's business and affairs; (II) preserving the value of the investment of the United States in the Corporation; (III) preserving essential rail service provided by the Corporation; and (IV) providing for the sale of the United States f shares. (B) The Secretary of Transportation and the special court trustees may appoint directors under subparagraph (A) from (C)(i) If more than 50 percent of the interest of the United States in the Corporation has not been sold before June 1, 1987, the special court established under section 209 of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 719) shall, on that date, name 3 trustees from among persons knowledgeable in business affairs to make the appointments required by subparagraph (A)(iii). The Corporation shall compensate the special court trustees in an amount to be specified by the special court, not to exceed the amount paid by the Corporation to its directors for comparable services. (ii) No person shall be eligible to be appointed as a special court trustee under this subparagraph who, at any time during the 30 months immediately preceding such appointment, was an officer, employee, or director of the United States Railway Association, the Corporation, or the Department of Transportation. (3)(A) After the sale date, one director shall be elected by the public shareholders of the Corporation for each increment of
 * among existing directors of the Corporation.

45 USC 1323.

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Page:United States Statutes at Large Volume 100 Part 3.djvu/94

 100 STAT. 1902

PUBLIC LAW 99-509—OCT. 21, 1986

12.5 percent of the interest of the United States in the Corporation that has been sold through public offering. (B) With respect to the period ending June 30, 1987— (i) the first director elected under this paragraph shall replace the member of the board who became a director most recently from among— (I) directors appointed by the United States Railway ..-;'.:';>T such a director, and (II) directors appointed by the Secretary of Transportation, or elected under paragraph (1) to replace such a director; (ii) the second director elected under this paragraph shall ., -.. replace the member of the Board who became a director most recently from among directors described in clause (i)(I) or (II), whichever group the first director replaced under -* this subparagraph was not a member of; and (iii) subsequent directors elected under this paragraph shall replace members alternately from the groups denscribed in clause (i)(I) and (II). (C) With respect to the period beginning July 1, 1987, direc' tors elected under this paragraph shall replace directors appointed by the special court trustees under paragraph (2)(A)(iii), in the order designated by the special court trustees in a list to be issued at the time of such original appointments. (D) With respect to the period beginning on the first date more than 50 percent of the interest of the United States in the Corporation has been sold through public offering and ending when 100 percent of such interest has been sold— (i) all remaining members of the board referred to in paragraph (2)(A)(iii), and ^' "' (ii) with respect to the period ending June 30, 1987, all remaining members of the board, except 3 members ap" '' pointed by the Secretary of Transportation and the Chief Executive Officer and the Chief Operating Officer of the Corporation, shall be replaced by directors elected by the public shareholders of the Corporation. (E) After 100 percent of the interest of the United States in the Corporation has been sold, any remaining directors appointed by the Secretary of Transportation, the United States Railway Association, or the special court trustees referred to under paragraph (2)(A)(iii), shall be replaced by directors elected by the public shareholders of the Corporation. (F) Nothing in this paragraph shall be construed to prohibit any director referred to in this section from being elected as a director by the public shareholders of the Corporation. 5' (4)(A) No director appointed or elected under this section shall be a special court trustee or an employee of the United States, except as elected by the public shareholders of the Corporation. (B) No director appointed or elected under this section shall be an employee of the Corporation, except as provided in para,, graph (2)(A)(ii) or as elected by the public shareholders of the arii Corporation.

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100 STAT. 1903

SEC. 4024. PROVISIONS FOR EMPLOYEES. (a) TRANSITIONAL EMPLOYEE PROTECTION.—Section 701(d)(2) of the

Regional Rail Reorganization Act of 1973 (45 U.S.C. 797(d)(2)) is amended to read as follows: "(2) Notwithstanding any other provision of law— ^ "(A) upon exhaustion of appropriated funds available for '' ' • " * ^ payment of benefits or expenses of administration of the Railroad Retirement Board (hereafter in this section referred to as the 'Board') under this section, or on the expiration of 60 days after the date of enactment of the Conrail Privatization Act, whichever first occurs, the United States shall have no further liability under this section, but the Corporation shall— "(i) as agent for the Board, pay benefits under this sec.. 'S'.' ^ *' . tion, without reimbursement, in such amounts and to such eligible employees as the Board shall designate, subject to the limitations prescribed in the benefit schedules issued under subsection (a); and "(ii) on a periodic basis determined by the Board, advance to the Board its necessary expenses of administration, including expenses reasonably required for close-out of the program of labor protection under this section and for f technical transition to the program of labor protection required by the Conrail Privatization Act, which advances shall be made without reimbursement. "(B) The Corporation shall promptly honor the Board's requests for advances under this paragraph as due and payable .sbiossll liquidated debts, subject to later adjustment after audit by the Inspector General of the Board. The Board is authorized to receive and apply Corporation funds advanced under this paragraph for administration of this section and to refund to the Corporation any excess administrative funds advanced by the Corporation. "(C) The Corporation shall be deemed subrogated to the right of the Board to recover any benefit paid by the Corporation as  -*S^I Si agent for the Board that was improvidently paid under this paragraph, and the Board shall cooperate with the Corporation in its effort to recover any such payment; but the Corporation shall have no claim against the Board for such payment, and the Board shall not be made a real party in interest to any i^.' lawsuit or to any proceeding with respect to recovery of such payment. "(D) Benefits provided by the Corporation, as agent for the Board, shall, for purposes of this title, be deemed to have been made available under section 713 of this title.". 45 USC 797/. (b) DISPUTE RESOLUTION.—Section 701 of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 797) is further amended by adding at the end thereof a new subsection as follows: "(e) DISPUTE RESOLUTION.—Any dispute or controversy regarding eligibility for benefits under this section shall be determined under such procedures as the Board may by regulation prescribe. Subject to administrative reconsideration by the Board under its own procedures, findings of fact and conclusions of law of the Board in determination of any claim for such benefits shall, in the absence of fraud or an action exceeding the Board's jurisdiction, be binding and conclusive for all purposes and shall not be subject to review in any manner. For purposes of administration of this section, the adminis-

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Page:United States Statutes at Large Volume 100 Part 3.djvu/96

 100 STAT. 1904

PUBLIC LAW 99-509—OCT. 21, 1986

trative powers and penalties set forth in sections 9 and 12 of the 45 USC 359, 362. Railroad Unemployment Insurance Act shall apply as if incorporated herein.". Effective date. (c) REPEAL OF SECTION 701.—Section 701 of the Regional Rail 45 USC 797 and Reorganization Act of 1973 is repealed effective on the sale date. note. Notwithstanding this repeal— Ante, p. 1903. (1) any dispute or controversy regarding benefits under section 701 shall be determined under the terms of the law in effect prior to such repeal; and (2) the Railroad Retirement Board shall take such actions as may be necessary to complete administration and closeout of the section 701 program and the Board is authorized to receive and apply Corporation funds for this purpose. (d) CONTINUING RESPONSIBILITIES.—(1) On and after the sale date, 45 USC 797 note. the Corporation shall provide the protection for its employees described in "Part III, Article III, Employee Protection", of the "Definitive Agreement of September 17, 1985, By and Between Conrail and the Undersigned Representatives of Conrail's Agreement Employees" and Appendix 3 thereto, together with any amendments thereto, or under any other terms and conditions as shall be agreed between the Corporation and the representatives of its employees. (2) The Corporation shall pay, as designated by the Railroad Retirement Board, any remaining benefits under section 701 of the Regional Rail Reorganization Act of 1973 that accrued, but were not disbursed, prior to the sale date. (3) The Railroad Retirement Board shall transfer to the CorporaRecords. tion such information regarding administration of the labor protection program under such section 701 as may be reasonably necessary for the Corporation to discharge its responsibilities under this subsection, including copies of the individual claim records of employees of the Corporation. (4) The United States shall have no liability for benefits under this subsection. 45 USC 797 note.

(e) COMPENSATION FOR WAGES BELOW INDUSTRY STANDARD.—The

Corporation shall pay $200,000,000 to present and former employees subject to collective bargaining agreements, in accordance with the terms and conditions in the Definitive Agreement referred to in subsection (d)(1), or as otherwise agreed between the parties. (f) ESOP TRANSACTIONS.—(1) As soon as practicable after the date Securities. 45 USC 797 note. of the enactment of this Act, the employee stock ownership plan of the Corporation (hereafter in this subsection referred to as the "ESOP") shall be amended to provide that— (A) the shares of the ConRail Equity Corporation preferred stock held by the ESOP shall be surrendered by the ESOP in exchange for an equal number of shares of the common stock of the Corporation, and such common stock of the Corporation shall be allocated by the ESOP to the same persons in the same amounts as the shares of ConRail Equity Corporation preferred stock had been allocated; and (B) the remaining shares of the ConRail Equity Corporation preferred stock held by the Corporation shall be cancelled, and an equal number of shares of the common stock of the Corporation shall be contributed by the Corporation to the ESOP, which shares shall be allocated by the ESOP to persons who are or were ESOP participants in accordance with the formula set forth in section 2 of Article II of Part III of the Definitive

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Page:United States Statutes at Large Volume 100 Part 3.djvu/97

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1905

Agreement referred to in subsection (d)(1), and in accordance with a comparable formula for present and former employees of the Corporation not covered by such section of the Definitive Agreement, except that no contribution by the Corporation to the ESOP shall be made which would affect the tax-qualified status of the ESOP, or of any of the employee benefit plans maintained by the Corporation or any affiliate of the Corporation, under the Internal Revenue Code of 1954. (2)(A)(i) As soon as practicable after the expiration of 180 days after 100 percent of the United States shares are sold, the ESOP shall distribute all of the stock in the accounts of its participants and beneficiaries, except as provided in clause (ii). (ii) Fractional shares shall not be distributed under clause (i). Shares equal to the aggregate amount of fractional shares shall be surrendered by the ESOP and redeemed by the Corporation for cash at the average closing price for the common stock of the Corporation on a national securities exchange for the 10 business days immediately preceding the date of distribution under clause (i), or, if the common stock of the Corporation is not listed on a national securities exchange, at the average closing price for such stock for such 10 business days as appearing in any regularly published reporting or quotation service, and the proceeds of such redemption shall be distributed by the ESOP to the same participants and beneficiaries and in the same amounts as the fractional shares had been allocated. (B) After completing the distribution under subparagraph (A), the ESOP shall terminate. (3) The Corporation shall distribute any full shares of its common stock which, because of the exception under paragraph (1)(B), could not be contributed to the ESOP to those persons to whom the ESOP would have allocated such shares pursuant to paragraph (1)(B) had such shares been contributed to the ESOP. The Corporation shall pay cash pursuant to the formula set forth in paragraph (2)(A)(ii) in lieu of fractional shares. (4) For purposes of Rule 144 promulgated under the Securities Act of 1933, each share of the common stock of the Corporation distributed under this subsection shall be deemed to have been beneficially owned by the recipient, as of the date of such distribution, for a period of 3 years. SEC. 4025. CERTAIN ENFORCEMENT RELIEF.

, Post, p. 2095.

15 USC 77a.

Claims. 45 USC 1324

(a) ENFORCEMENT ACTIONS.—The Secretary of Transportation,

with respect to any provision of section 4021 or 4022, and any person who suffers direct and substantial economic injury as a result of an alleged violation by the Corporation, with respect to the provisions of section 4021(a)(1) and (2), and section 4022, may bring an action to require compliance with such provision. (b) SPECIAL COURT.—Any action brought under this part shall be brought before the special court established under section 209 of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 719). Such special court may limit the enforcement of a restriction under section 4021, if the effect of such restriction would be to substantially impair the continued viability of the Corporation.

a

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PUBLIC LAW 99-509—OCT. 21, 1986

Subpart C—Miscellaneous Technical and Conforming Amendments and Repeals 45 USC 1341. Effective date. ,,.(.,

Securities.

Effective date.

''«3iJ

53; Post, p. 1908. 45 USC 711. 45 USC 713. 45 USC 719. 45 USC 726.

SEC. 4031. ABOLITION OF UNITED STATES RAILWAY ASSOCIATION. (a) ABOLITION AND TERMINATION.—(1) Effective April 1, 1987, the United States Railway Association is abolished. (2) On January 1, 1987, all powers, duties, rights, and obligations of such association relating to the Corporation under the Regional Rail Reorganization Act of 1973 (45 U.S.C. 701 et seq.) shall be transferred to the Secretary of Transportation. (3) The sole function of the United States Railway Association after January 1, 1987, shall be the termination of its affairs and the liquidation of its assets. (b) TRANSFER OF SECURITIES AND RESPONSIBILITIES.—(1) Any securities of the Corporation held by the United States Railway Association shall, upon the date of the enactment of this Act, be transferred to the Secretary of Transportation. (2) If, on the date the United States Railway Association is abolished under subsection (a), such association shall not have completed the termination of its affairs and the liquidation of its assets, the duty of completing such winding up of its affairs and liquidation shall be transferred to the Secretary of Transportation, who for such purposes shall succeed to all remaining powers, duties, rights, and obligations of such association. (c) FINANCING AGREEMENT.—(1) On January 1, 1987, the Amended and Restated Financing Agreement, dated May 10, 1979, between the United States Railway Association and the Corporation, together with any and all rights and obligations of or on behalf of any person with respect to such agreement, shall terminate and be of no further force or effect, except for those provisions specifying terms and conditions for payments made to the United States with respect to debentures, preferred stock, and contingent interest notes. (2) Effective as of the sale date, those provisions of the Financing Agreement referred to in paragraph (1) shall terminate. SEC. 4032. APPLICABILITY OF REGIONAL RAIL REORGANIZATION ACT OF 1973 TO CONRAIL AFTER SALE. Section 301 of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 741) is amended by adding at the end thereof the following new subsection: "(k) GOVERNING PROVISIONS AFTER SALE.—The provisions of this Act shall not apply to the Corporation and to activities and other actions and responsibilities of the Corporation and its directors and employees after the sale date, other than with regard to— "(1) section 102; "(2) section 201(d); "(3) section 203, but only with respect to information relating to proceedings before the special court established under section 209(b); "(4) section 209, other than subsection (f) thereof; "(5) section 216(f)(8), but only as such authority applies to activities related to the ESOP and related trust before the sale date; "(6) section 216(f)(9), but only as such indemnification applies to activities relating to the ESOP and related trust before the sale date;

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1907

"(7) section 216(f)(10) with respect to all securities of the Corporation issued or transferred in connection with the public offering under the Conrail Privatization Act and all securities of ConRail Equity Corporation and all interests in the ESOP; "(8) section 217(c) and (e); "(9) subsection (b) of this section, but only with respect to matters covered by the last sentence of such subsection; "(10) subsection (i) of this section, but only as such authority applies to service as a director of the Corporation before the sale of the interest of the United States in the common stock of the Corporation; "(11) section 302, but only to the extent of (A) the creation and maintenance of the power and authority of the Corporation to operate rail service and to rehabilitate, improve, and modernize rail properties, and (B) the creation and maintenance of the powers of the Corporation as a railroad in any State in which it operates as of the sale date; "(12) section 303(b)(1) and (2), but only to the extent of establishing the legal effect of the conveyance of property ordered and of the deeds and other instruments executed, acknowledged, delivered, or recorded in connection therewith and the quality of title acquired in such property; "(13) section 303(b)(3)(B) with respect to the effect of an assignment, conveyance, or assumption as set forth in the last sentence of such subparagraph (B); "(14) section 30303)(5); "(15) section 303(b)(6), but only with respect to establishing and maintaining the rights of the Corporation with respect to, limiting its obligations with respect to, and establishing the status of, the employee pension and welfare benefit plans transferred to the Corporation thereunder and with respect to the exclusivity of the jurisdiction of the special court and the limitation of jurisdiction of other courts; "(16) section 303(e); "(17) section 304, but only with respect to the finality of abandonments completed before the sale date pursuant to the authority thereof; "(18) section 305, but only as to the effect, and continuing administration, of supplemental transactions consummated before the sale date; "(19) section 308, but only (A) as to the finality of abandonments completed before the sale date and (B) as to abandonments of lines where a notice or notices of insufficient revenues with respect to such lines have been filed before November 1, 1985; "(20) section 601(a)(2), but only with respect to activities "(21) section 601(b)(2) and (b)(3), but only with respect to issuance of and transactions in any security of the Corporation before the sale date; "(22) section 702(e); "(23) section 703; "(24) section 704; "(25) sections 706(a), 707, and 708(a), but only insofar as they establish part of the prevailing status quo for the Corporation's employees' rates of pay, rules, and working conditions, such

Securities. 45 USC 726.

Post, p. 1908. Securities.

State and local governments. 45 USC 742.

45 USC 743.

45 USC 744. 45 USC 745. 45 USC 748.

45 USC 791.

45 USC 797a. 45 USC 797b. 45 USC 797c.

45 USC 797e-797g.

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 100 STAT. 1908 ?: 45 USC 797h. 45 USC 797i. 45 USC 797J. " 45 USC 797m. =.-.t:.-/:

PUBLIC LAW 99-509—OCT. 21, 1986

s

provisions to continue to apply unless changed pursuant to section 6 of the Railway Labor Act (45 U.S.C. 156); "(26) section 709; fi "(27) section 710(b)(1); n t.. ,-lo^ .^. "(28) section 711; and ' "(29) section 714, but only with regard to disputes or controversies specified in such section that arose before the sale -* date.".

SEC. 4033. MISCELLANEOUS AMENDMENTS AND REPEALS. 45 USC 701 note.

(a) REGIONAL R A I L REORGANIZATION ACT OF 1973 REPEALS.—The

following provisions of the Regional Rail Reorganization Act of 1973 (together with any items relating to such provisions contained in the table of contents of such Act) are repealed: (1) Title IV (45 U.S.C. 761 through 769c). ,? (2) Section 713 (45 U.S.C. 7971). (b) REGIONAL RAIL REORGANIZATION ACT OF 1973 AMENDMENTS.—

r

". "' f:

(1) Section 102 of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 702) is amended by inserting after paragraph (17) a new paragraph as follows: "(17A) 'sale date' means the date on which the initial public offering of the securities of the Corporation is closed under the Conrail Privatization Act;". (2) Section 217(c) of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 727(c)) is amended by striking ", until the property" and all that follows, and inserting in lieu thereof "applicable to any taxable period commencing before January 1, 1987.". (3) Section 217(e) of such Act (45 U.S.C. 727(e)) is amended by striking "and shall collect". (c) AMENDMENTS AND REPEALS OF OTHER RAIL LAWS.—(1)(A) Section 1152 of the Northeast Rail Service Act of 1981 (45 U.S.C. 1105) is amended— (i) by inserting "or part 2 of the Conrail Privatization Act" after "subtitle" each place it appears; and (ii) in the second sentence of subsection (c), by inserting ", as the case may be," after the insertion made by clause (i) of this subparagraph. (B) Section 1168(a) of the Northeast Rail Service Act of 1981 (45 U.S.C. 1116(a)) is amended by inserting before the period at the end the following: "and to the implementation of the sale of the interest of the United States in Conrail under the Conrail Privatization Act". (C)(i) The following provisions of the Northeast Rail Service Act of 1981 are repealed: (I) Section 1154 (45 U.S.C. 1107). (II) Section 1161 (45 U.S.C. 1110). (III) Section 1166 (45 U.S.C. 1114). (IV) Subsection (c) of section 1167 (45 U.S.C. 1115). (ii) The items relating to such sections 1154, 1161, and 1166 in the table of contents of such Act are repealed. (2) Section 501(8) of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 821(8)) is amended by striking out "(A)" and by striking out all that follows "improved asset utilization;". (3) Section 505 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 825) is amended—

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100 STAT. 1909

(A) in subsection (a)(1), by striking out all after "railroad" through "1981)"; and (B) in subsection (b)(2)(C), by striking out all after "costs" the second time it appears through "subsidy". (4) Subsection (b)(1) of section 509 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 829) is repealed. (5) Section 511(e) of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 831(e)) is amended— (A) by striking out "(1)" in the first paragraph; (B) by striking all that follows "time" in the first paragraph and inserting in lieu thereof a period; and (C) by striking out paragraph (2). (6) Section 402 of the Rail Safety and Service Improvement Act of 1982 (45 U.S.C. 825a) is repealed. (7) Section 10362(b)(7)(A) of title 49, United States Code, is amended by striking out "by the Consolidated Rail Corporation or". SEC. 4034. EXEMPTION FROM LIABILITY.

"•

. /r

45 USC 1342.

(a) IN GENERAL.—No person referred to in section 216(f)(8)(C)(i), (ii), or (iii) of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 726(f)(8)(C)(i), (ii), or (iii)) shall be liable, for money damages or otherwise, to any party if, with respect to the subject matter of the action, suit, or proceeding, such person was fulfilling a duty, in connection with any action taken under this part, which such person in good faith reasonably believed to be required by law or vested in such person. (b) EXCEPTION.—This section shall not apply to claims arising out of the Securities Act of 1933, the Securities Exchange Act of 1934, or the Constitution or laws of any State, territory, or possession of the United States relating to transactions in securities, which claims are in connection with a public offering under section 4012 of this Act.

Claims. Securities. State and local governments. 15 USC 77a. 15 USC 78a.

SEC. 4035. CHARTER AMENDMENT.

45 USC 1343.

,.,

Within 60 days after the date of the enactment of this Act, the Corporation shall amend its Articles of Incorporation to contain the following provision, which provision shall not be subject to amendment or repeal: "It shall be a fundamental purpose of the Corporation to maintain continued rail service in its service area.". SEC. 4036. STATUS OF CONRAIL AFTER SALE.

45 USC 1344.

The Corporation shall be a rail carrier as defined in section 10102(19) of title 49, United States Code, notwithstanding this part. SEC. 4037. EFFECT ON CONTRACTS.

45 USC 1345.

Nothing in this part shall affect any obligation of the Corporation to carry out its transportation contracts and equipment leases, equipment trusts, and conditional sales agreements, in accordance with their terms. SEC. 4038. RESOLUTION OF CERTAIN ISSUES.

(a) EMPLOYEE ISSUES.—Section 4024 completely and finally— (1) extinguishes all employee rights, and any obligatioji of the United States, under section 401(e) of the Regional Rail Reorganization Act of 1973 (45 U.S.C. 761(e)) as in effect immediately before the date of the enactment of this Act; ^ (2) resolves any and all claims against the Corporation or any other person arising under the Definitive Agreement referred to

45 USC 1346.

Claims,

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 100 STAT. 1910

Claims.

45 USC 156. Claims.

Claims.

PUBLIC LAW 99-509—OCT. 21, 1986

"DR in section 4024(d)(1) or any other agreement containing similar terms and conditions; sdj (3) resolves all claims to pay entitlements arising out of the pay increase deferrals by present and former employees of the • Corporation under the Agreement of May 5, 1981, between Conrail and Certain Labor Organizations for Labor Contributions to Self-Sufficiency for Conrail; (4) resolves all issues raised by notices served by representatives of such employees under section 6 of the Railway Labor Aqi Act proposing repayment of or compensation for such deferrals; and (5) resolves all claims against the Railway Labor Executives' 1c 2 Association or the Corporation by any adviser, consultant, or other person who has provided services to such association in connection with any matter referred to in this part. (b) CORPORATION ACTIONS.—The Corporation shall not be considered to be in breach, default, or violation of any agreement to which it is a party, notwithstanding any provision of such agreement, because of any provision of this part or any action the Corporation is required to take under this part. (c) RIGHT To SUE WITHDRAWN.—The United States hereby withdraws any stated or implied consent for the United States, or any agent or officer of the United States, to be sued by any person for any legal, equitable, or other relief with respect to any claim arising out of, or resulting from, acts or omissions under this part, except actions brought to require the Secretary of Transportation to perform duties or acts required under subpart A.

PART 3—PROMOTION OF RAIL COMPETITION SEC. 4051. AGRICULTURE CONTRACT DISCLOSURE.

Section 10713(b) of title 49, United States Code, is amended by inserting "(D" after "(b)"; and by adding at the end a new paragraph as follows: "(2)(A) The essential terms of any contract for the transportation of agricultural commodities to be made available to the general public in tariff format under this subsection shall include, but shall not be limited to (i) the identity of the shipper party to the contract;
 * -'•<'i 08^,1 oi- (ii) the specific origins, transit points and other shipper facilities

subject to the contract, and destinations served under such contract; (iii) the duration of the contract, including provisions for optional extension; (iv) the actual volume requirements, if any; (v) whether any transportation service has begun under a contract before the 'M.: ';:W date such contract is filed with or approved by the Commission, and (vi) the date on which the contract became applicable to the transportation services provided under the contract. The Commission shall interpret this subsection to provide for liberal discovery to shippers seeking remedies under subsection (d)(2)(B) of this section. .ali<i Dfi' "(B) Any amendment, supplement, or change to any term or provision of any contract described in subparagraph (A), including extensions of such contract, changes of origin, transit points, affected shipper facilities, destination points, or negotiated economic terms, shall be deemed to be a separate and new contract for the purposes of this subsection. Such amendments, supplements, or changes shall be filed separately with the Commission as provided in paragraph (1). /

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100 STAT. 1911

"(C) Within 60 days after the date of the enactment of the Conrail Privatization Act, the Commission shall issue regulations which require that essential terms of contracts described in subparagraph (A) shall be made available to the general public in tariff format as provided in this paragraph. "(D) The railroad contract rate advisory service established pursuant to subsection (m) of this section shall assess the impact on competition among agricultural shippers of variations between contract rates for various shipments and the published single car rates, and shall submit a report to the Congress not later than 120 days after the date of the enactment of the Conrail Privatization Act.".

Regulations.

Reports.

SEC. 4052. BOXCAR PROVISION.

The authority of the Commission to promulgate that portion of the rule adopted by the Commission in Ex Parte No. 346 (Sub. No. 19) served September 12, 1986, consisting of small railroad protections, is hereby confirmed.

i>»ti 1' Subtitle B—Economic Development oseiMiD^ Administration SEC. 4101. SALE OF NOTES.

Notwithstanding any other provision of law, the Secretary of Commerce shall, under such terms as the Secretary may provide, sell defaulted notes held by the Economic Development Administration in such amounts as to realize net proceeds of not less than $50,000,000 from such sales during fiscal year 1987.

A

\9 jy^n c»%u

TITLE V—MARITIME PROGRAMS Subtitle A—Maritime Loan Guarantees

SEC. 5001. LOAN GUARANTEES.

(a) Section 362(b) of title 11, United States Code, is amended— ,c (1) by striking the period in paragraph (11) and inserting in a lieu thereof a semicolon; and ,V (2) by adding at the end thereof the following: fi "(12) under subsection (a) of this section, after the date which hi is 90 days after the filing of such petition, of the commencement or continuation, and conclusion to the entry of final judgment, of an action which involves a debtor subject to reorganization pursuant to chapter 11 of this title and which was brought by g the Secretary of Transportation under the Ship Mortgage Act, i 1920 (46 App. U.S.C. 911 et seq.) (including distribution of any proceeds of sale) to foreclose a preferred ship or fleet mortgage, or a security interest in or relating to a vessel or vessel under construction, held by the Secretary of Transportation under a- section 207 or title XI of the Merchant Marine Act, 1936 (46 X: App. U.S.C. 1117 and 1271 et seq., respectively), or under £ applicable State law; or "(13) under subsection (a) of this section, after the date which is 90 days after the filing of such petition, of the commencement or continuation, and conclusion to the entry of final judgment, iii of an action which involves a debtor subject to reorganization

State and local governments.

11 USC 1101 et seq.

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 100 STAT. 1912 11 USC 1101 et

 * hfH]«»H

Reports. 11 USC 362 note.

11 USC 362 note.

46 USC 1271 et seq.

PUBLIC LAW 99-509—OCT. 21, 1986

pursuant to chapter 11 of this title and which was brought by the Secretary of Commerce under the Ship Mortgage Act, 1920 (46 App. U.S.C. 911 et seq.) (including distribution of any proc ceeds of sale) to foreclose a preferred ship or fleet mortgage in a vessel or a mortgage, deed of trust, or other security interest in -;rt a fishing facility held by the Secretary of Commerce under section 207 or title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1117 and 1271 et seq., respectively). The provisions of paragraphs (12) and (13) of this subsection shall apply with respect to any such petition filed on or before December 31, 1989.". Before July 1, 1989, the Secretary of Transportation and the Secretary of Commerce each shall submit a report to the Committees on Merchant Marine and Fisheries, and the Judiciary of the House of Representatives and the Committees on Commerce, Science, and Transportation, and the Judiciary of the Senate on the effects of this subsection together with any recommendations for legislation. (b) The amendments made by subsection (a) of this section shall apply only to petitions filed under section 362 of title 11, United States Code, which are made after August 1, 1986. (c) Subsection L of section 30 of the Merchant Marine Act of 1920 (46 App. U.S.C. 952) is amended by adding at the end the following: "When the Secretary of Commerce or Transportation is a mortgagee under this Act, the Secretary may foreclose on liens arising from rights attendant to the creation of mortgages under title XI of the Merchant Marine Act, 1936, subject to section 362(b) of title 11, United States Code.". SEC. 5002. AMOUNT OF GUARANTEE FOR OBLIGATIONS.

Section 1103(a) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1273(a)) is amended by adding at the end thereof the following: "A guarantee, or commitment to guarantee, made by the Secretary under this title shall cover 100 percent of the amount of the principal and interest of the obligation.". SEC. 5003. AMOUNT OF GUARANTEE FOR OBLIGATIONS RELATING TO FISHING VESSELS OR FISHERY FACILITIES.

Section 110403)(2) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1274(b)(2)) is amended by striking "Provided, further. That in the case of any vessel to be used in the fishing trade or industry, such obligations may be in an aggregate principal amount which does not exceed 87 ¥2 per centum of the actual cost or depreciated actual cost of the vessel:" and inserting in lieu thereof "Provided further, That in the case of a fishing vessel or fishery facility, the obligation shall be in an aggregate principal amount equal to 80 percent of the actual cost or depreciated actual cost of the fishing vessel or fishery facility, except that no debt may be placed under this proviso through the Federal Financing Bank:'. Aleiska. 16 USC 1856 note.

SEC. 5004. FOREIGN FISH PROCESSING IN NORTON SOUND.

For purposes of processing pink salmon within the internal waters of the State of Alaska, the geographic area bounded on the north by a parallel of latitude of 64 degrees, 23 minutes, on the south by a parallel of latitude of 63 degrees, 51 minutes, on the east by the baseline from which the territorial sea is measured, and on the west by the outer limit of the territorial sea, shall be considered to be internal waters of the State of Alaska for the purposes of section

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100 STAT. 1913

306(c)(4)(B) of the Fishery Conservation and Management Act (16 U.S.C. 1856(c)(4)(B)) until September 30, 1993.

Subtitle B—Load Line and Tonnage Measurement User Fees SEC. 5101. AMENDMENTS TO TITLE 46.

Subtitle II of title 46, United States Code, is amended as follows: (1) The table of chapters at the beginning of the subtitle is amended by—

(A) striking "[PART C—RESERVED FOR LOAD LINES OF VESSELS]" and inserting—

'

"PART C—LOAD LINES OF VESSELS

"51. Load lines

5101";

and (B) striking "[PART J—RESERVED FOR MEASUREMENT OF VESSELS]" and inserting—

- <i "PART J—MEASUREMENT OF VESSELS "141. General "143. Convention measurement "145. Regulatory measurement "147. Penalties

14101 14301 14501 14701"

(2) Immediately after part B, strike "[PART C—RESERVED FOR LOAD LINES OF VESSELS] and insert the following new part C:

"PART C—LOAD LINES OF VESSELS "CHAPTER 51—LOAD LINES Sec. "5101. Definitions., "5102. Application. "5103. Load line requirements. "5104. Assignment of load lines. "5105. Load line surveys. "5106. Load line certificate. "5107. Delegation of authority. "5108. Special exemptions. "5109. Reciprocity for foreign vessels. "5110. Submersible vessels. "5111. Providing loading information. "5112. Loading restrictions. "5113. Detention of vessels. "5114. Use of Customs Service officers and employees for enforcement. "5115. Regulations. "5116. Penalties. --,..: J

^ ' ''•*"

"§ 5101. Definitions '^ 46 USC 5101. "In this chapter— "(1) 'domestic voyage' means movement of a vessel between places in, or subject to the jurisdiction of, the United States, except movement between—

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PUBLIC LAW 99-509—OCT. 21, 1986

81) taA ^ "(A) a place in a territory or possession of the United States or the Trust Territory of the Pacific Islands; and "(B) a place outside that territory, possession, or Trust Territory. "(2) 'economic benefit of the overloading' means the amount obtained by multiplying the weight of the overload (in tons) by the lesser of— '(A) the average freight rate value of a ton of the vessel's cargo for the voyage; or "(B) $50. si sflr:; "(3) 'existing vessel' means.^,,^ '(A) a vessel on a domestic voyage, the keel of which was laid, or that was at a similar stage of construction, before January 1, 1986; and "(B) a vessel on a foreign voyage, the keel of which was laid, or that was at a similar stage of construction, before July 21, 1968. "(4) 'freeboard' means the distance from the mark of the load line assigned under this chapter to the freeboard deck. 'Eio "(5) 'freeboard deck' means the deck or other structure the Secretary prescribes by regulation. "(6) 'minimum safe freeboard' means the freeboard that the Secretary decides cannot be reduced safely without limiting the operation of the vessel. "(7) 'weight of the overload' means the amount obtained by rl multiplying the number of inches that the vessel is submerged i« below the applicable assigned freeboard by the tons-an-inch "^'' immersion factor for the vessel at the assigned minimum safe freeboard. •,.;.««,.....««........-.,-....,,...•:...•...... 46 USC 5102.
 * i

State and local governments,

.lOKOaiTdP

"§ 5102. Application "(a) Except as provided in subsection (b) of this section, this chapter applies to the following: "(1) a vessel of the United States. '™ ' "(2) a vessel on the navigable waters of the United States. "(3) a v e s s e l "(A) owned by a citizen of the United States or a corporation established by or under the laws of the United States or a State; and "(B) not registered in a foreign country. "(4) a public vessel of the United States. "(5) a vessel otherwise subject to the jurisdiction of the United States. "(b) This chapter does not apply to the following: "(1) a vessel of war. "(2) a recreational vessel when operated only for pleasure. "(3) a fishing vessel. "(4) a fish processing vessel of not more than 5,000 gross tons that— "(A)(i) was constructed as a fish processing vessel before August 16, 1974; or "(ii) was converted for use as a fish processing vessel nmwit. before January 1, 1983; and ,8S3*».t8.

"(B) is not on a foreign voyage. "(5) a fish t e n d e r vessel of not more than 500 gross tons that —

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100 STAT. 1915

"(A)(i) was constructed, under construction, or under con^ tract to be constructed as a fish tender vessel before Janu5 ^ ary 1, 1980; or "(ii) was converted for use as a fish tender vessel before January 1, 1983; and "(B) is not on a foreign voyage. "(6) a vessel of the United States on a domestic voyage that & does not cross the Boundary Line, except a voyage on the Great Lakes. "(7) a vessel of less than 24 meters (79 feet) overall in length. "(8) a public vessel of the United States on a domestic voyage. "(9) a vessel excluded from the application of this chapter by li an international agreement to which the United States Government is a party. "(10) an existing vessel of not more than 150 gross tons that is p on a domestic voyage. "(11) a small passenger vessel on a domestic voyage. •g: "(12) a vessel of the working fleet of the Panama Canal Commission not on a foreign voyage. "(c) On application by the owner and after a survey under section 5105 of this title, the Secretary may assign load lines for a vessel excluded from the application of this chapter under subsection (b) of this section. A vessel assigned load lines under this subsection is subject to this chapter until the surrender of its load line certificate and the removal of its load line marks. "(d) This chapter does not affect an international agreement to which the Government is a party that is not in conflict with the International Convention on Load Lines currently in force for the United States.

.dOlft -J',<j ili

International agreements.

International agreements.

"§ 5103. Load line requirements "(a) A vessel may be operated only if the vessel has been assigned load lines. "(b) The owner, charterer, managing operator, agent, master, and individual in charge of a vessel shall mark and maintain the load lines permanently and conspicuously in the way prescribed by the Secretary.

46 USC 5103.

"§ 5104. Assignment of load lines "(a) The Secretary shall assign load lines for a vessel so that they indicate the minimum safe freeboard to which the vessel may be loaded. However, if the owner requests, the Secretary may assign load lines that result in greater freeboard than the minimum safe freeboard. "(b) In assigning load lines for a vessel, the Secretary shall consider— ""\ "(1) the service, type, and character of the vessel; ® "(2) the geographic area in which the vessel will operate; and ^. "(3) applicable international agreements to which the United States Government is a party. "(c) An existing vessel may retain its load lines assigned before January 1, 1986, unless the Secretary decides that a substantial change in the vessel after those load lines were assigned requires that new load lines be assigned under this chapter, "(d) The minimum freeboard of an existing vessel may be reduced only if the vessel complies with every applicable provision of this chapter.

46 USC 5104.

International agreements.

Mt:: OB:

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 100 STAT. 1916

PUBLIC LAW 99-509—OCT. 21, 1986

"(e) The Secretary may designate by regulation specific geographic areas that have less severe weather or sea conditions and from which there is adequate time to return to available safe harbors. The Secretary may reduce the minimum freeboard of a vessel operating in these areas. 46 USC 5105.

- '.. "

46 USC 5106. c.)

,.

• ^

"§ 5105. Load line surveys "(a) The Secretary may provide for annual, renewal, and other load line surveys. "(b) In conducting a load line survey, the Secretary shall consider whether— "(1) the hull and fittings of the vessel— "(A) are adequate to protect the vessel from the sea; and "(B) meet other requirements the Secretary may prescribe by regulation; "(2) the strength of the hull is adequate for all loading conditions; iAi "(3) the stability of the vessel is adequate for all loading conditions; r -^ «(4) ^jig topsides of the vessel are arranged and constructed to ^ allow rapid overboard drainage of deck water in heavy weather; ^ and ' "(5) the topsides of the vessel are adequate in design, arrange11 ment, and equipment to protect crewmembers performing outside tasks necessary for safe operation of the vessel. "§ 5106. Load line certificate r, ra TIH "(a) On finding that a load line survey of a vessel under this chapter is satisfactory and that the vessel's load lines are marked correctly, the Secretary shall issue the vessel a load line certificate and deliver it to the owner, master, or individual in charge of the vessel. "(b) The certificate shall be maintained as required by the Secretary.

46 USC 5107.

"§ 5107. Delegation of authority "(a) The Secretary shall delegate to the American Bureau of Shipping or other similarly qualified organizations the authority to assign load lines, survey vessels, determine that load lines are marked correctly, and issue load line certificates under this chapter. "(b) Under regulations prescribed by the Secretary, a decision of an organization delegated authority under subsection (a) of this section related to the assignment of a load line may be appealed to the Secretary. "(c) For a vessel intended to be engaged on a foreign voyage, the Secretary may delegate to another country that is a party to the International Convention on Load Lines, 1966, the authority to assign load lines, survey vessels, determine that the load lines are marked correctly, and issue an International Load Line Certificate (1966). "(d) The Secretary may terminate a delegation made under this section after giving written notice to the organization.

46 USC 5108.

"§ 5108. Special exemptions "(a) The Secretary may exempt a vessel from any part of this chapter when—

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100 STAT. 1917

"(1) the vessel is entitled to an exemption under an international agreement to which the United States Government is a party; or "(2) under regulations (including regulations on special oper' ations conditions) prescribed by the Secretary, the Secretary finds that good cause exists for granting an exemption. "(b) When the Secretary grants an exemption under this section, the Secretary may issue a certificate of exemption stating the extent of the exemption. "(c) A certificate of exemption issued under subsection (b) of this section shall be maintained as required by the Secretary.

International agreements,

International "§ 5109. Reciprocity for foreign vessels agreements. "(a) When the Secretary finds that the laws and regulations of a 46 USC 5109. foreign country related to load lines are similar to those of this chapter and the regulations prescribed under this chapter, or when a foreign country is a party to an international load line agreement to which the United States Government is a party, the Secretary shall accept the load line marks and certificate of a vessel of that foreign country as complying with this chapter and the regulations prescribed under this chapter. The Secretary may control the vessel as provided for in the applicable international agreement. "(b) Subsection (a) of this section does not apply to a vessel of a foreign country that does not recognize load lines assigned under this chapter. ~.

"§ 5110. Submersible vessels "Notwithstanding sections 5103-5105 of this title, the Secretary may prescribe regulations for submersible vessels to provide a minimum level of safety. In developing the regulations, the Secretary shall consider factors relevant to submersible vessels, including the structure, stability, and watertight integrity of those vessels.

46 USC 5110.

"§ 5111. Providing loading information "The Secretary may prescribe regulations requiring the owner, charterer, managing operator, and agent of a vessel to provide loading information (including information on loading distribution, stability, and margin of strength) to the master or individual in charge of the vessel in a language the master or individual understands.

46 USC 5111.

"§ 5112. Loading restrictions "(a) A vessel may not be loaded in a way that submerges the assigned load line or the place at which the load line is required to be marked on the vessel. "(b) If the loading or stability conditions of a vessel change, the master or individual in charge of the vessel, before moving the vessel, shall record in the official logbook or other permanent record of the vessel— "(1) the position of the assigned load line relative to the water j surface; and "(2) the draft of the vessel fore and aft. "(c) A vessel may be operated only if the loading distribution, stability, and margin of strength are adequate for the voyage or movement intended. "(d) Subsections (a) and (b) of this section do not apply to a submersible vessel.

46 USC 5112.

^fuirftLi

Records,

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PUBLIC LAW 99-509—OCT. 21, 1986

46 USC 5113.

"§ 5113. Detention of vessels "(a) When the Secretary believes that a vessel is about to leave a place in the United States in violation of this chapter or a regulation prescribed under this chapter, the Secretary may detain the vessel by giving notice to the owner, charterer, managing operator, agent, master, or individual in charge of the vessel. "(b) A detained vessel may be cleared under section 4197 of the Revised Statutes (46 App. U.S.C. 91) only after the violation has been corrected. If the vessel was cleared before being detained, the clearance shall be withdrawn. "(c) Under regulations prescribed by the Secretary, the owner, charterer, managing operator, agent, master, or individual in charge of a detained vessel may petition the Secretary to review the detention order. "(d) After reviewing a petition, the Secretary may affirm, withdraw, or change the detention order. Before acting on the petition, the Secretary may require any independent survey that may be necessary to determine the condition of the vessel. "(e) The owner of a vessel is liable for the cost incident to a petition for review and any required survey if the vessel is found to be in violation of this chapter or a regulation prescribed under this chapter.

46 USC 5114.

"§ 5114. Use of Customs Service officers employees for enforcement "(a) With the approval of the Secretary of the Treasury, the Secretary may use an officer or employee of the United States Customs Service to enforce this chapter and the regulations prescribed under this chapter. "(b) The Secretary shall consult with the Secretary of the Treasury before prescribing a regulation that affects the enforcement responsibilities of an officer or employee of the Customs Service.

'

i'-. J''>

46 USC 5115.

"§ 5115. Regulations "(a) The Secretary may prescribe regulations to carry out this part.

46USe5116.

"§ 5116. Penalties r r *' ?' .• "(a) Except as otherwise provided in this section, the owner, charterer, managing operator, agent, master, and individual in charge of a vessel violating this chapter or a regulation prescribed under this chapter are each liable to the United States Government for a civil penalty of not more than $5,000. Each day of a continuing violation is a separate violation. The vessel also is liable in rem for the penalty. "(b) The owner, charterer, managing operator, agent, master, and individual in charge of a vessel allowing, causing, attempting to cause, or failing to take reasonable care to prevent a violation of section 5112(a) of this title are each liable to the Government for a civil penalty of not more than $10,000 plus an additional amount equal to twice the economic benefit of the overloading. The vessel also is liable in rem for the penalty. "(c) The master or individual in charge of a vessel violating section 5112(b) of this title is liable to the Government for a civil penalty of not more than $5,000. The vessel also is liable in rem for the penalty. ..^

Slits:)an ai

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