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Page:United States Statutes at Large Volume 90 Part 1.djvu/134

 90 STAT. 84

PUBLIC LAW 94-210—FEB. 5, 1976 "TITLE III—CONSOLIDATED RAIL CORPORATION "Sec. 301, "Sec. 302. "Sec. 303. "Sec. 304. "Sec. 305. "Sec. 306. "Sec. 307.

Formation and structure. Powers and duties of the Corporation. Valuation and conveyances of rail properties. Termination and continuation of rail services. Continuing reorganization; supplemental transactions. Certificates of value. Protection of Federal funds. "TITLE IV—LOCAL RAIL SERVICES

"Sec. 401. Findings and purposes. "Sec. 402. Rail service continuation assistance. "Sec. 403. Acquisition and modernization loans. "TITLE V—EMPLOYEE PROTECTION

f>;it;^j^;

"Sec. 501. "Sec. 502. "Sec. 503. "Sec. 504. "Sec. 505. "Sec. 506. "Sec. 507. "Sec. 508. "Sec. 509.

Definitions. Employment offers. V Assignment of work. Collective-bargaining agreements. Employee protection. Contracting out. Arbitration. Duties of acquiring and selling railroads. Payment of benefits.

,

•;

"TITLE VI—MISCELLANEOUS PROVISIONS

45 USC 720. 45 USC 721. Post, p. 89.

pose, p. 100.

"Sec. 601. "Sec. 602. "Sec. 603. "Sec. 604. "Sec. 605.

Relationship to other laws. Annual evaluation by the Secretary. Freight rates for recyclables. Separability. Duty of transferee.".

'.-::{

T; >

(c) Section 202(a)(2) of such Act (45 U.S.C. 712(a)(2)) is amended to read as follows: " (2) issue obligations under section 210 of this title; make loans under section 211 of this title; purchase or otherwise acquire or receive and hold and dispose of securities (whether debt or equity) of the Corporation under section 216 of this title and exercise all of the rights, privileges, and powers of a holder of any such securities; and issue certificates of value under section 306 of this Act;". (d) Section 303 of such Act (45 U.S.C. 743) is amended by adding at the end thereof the following new subsection: " (e) TRANSFER AND OTHER TAXES AND RECORDING FEES.—All transfers or conveyances of rail properties (whether real, personal, or mixed) which are made under this Act (including transfers and conveyances which are made in accordance with a supplemental transaction pursuant to section 305 of this title) shall be exempt from any taxes, imposts, or levies now or hereafter imposed, by the United States or by any State or any political subdivision of a State, on or in connection with such transfers or conveyances or on the recording of deeds, bills of sale, liens, encumbrances, or other instruments evidencing, effectuating, or incident to any such transfers or conveyances, whether imposed on the transferor or on the transferee. Such transferors and transferees shall be entitled to record any such deeds, bills of sale, liens, encumbrances, or other instruments and, consistent with the designations and applicable principles in the final system plan, to record the release or removal of any pre-existing liens or encumbrances of record with respect to properties so transferred or conveyed, upon payment of any appropriate and generally applicable charges to compensate for the cost of the service performed.". (e) Section 208 of such Act (45 U.S.C. 718) is amended by adding at the end thereof the following new subsection:

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 PUBLIC LAW 94-210—FEB. 5, 1976 "(d) ADDITIONS.—(1) The supplemental report, dated September 18, 1975, to the final system plan, and the provisions of the Association's official errata supplement to the final system plan, dated December 1, 1975, including all designations made therein, shall be treated for all purposes as if they had been part of and included in the final system plan adopted by the Association and reviewed by the Congress. The final system plan shall, for all purposes, be deemed to be approved as modified and amended by such supplemental report and such supplement. "(2) The Association may, upon petition of any State, modify the final system plan to make further designations with respect to rail properties of railroads in reorganization in the region designated for transfer to the Corporation under such plan, if such designations (A) are likely to result m improved rail service on sudi rail properties and connecting rail properties, and (B) would not materially impair the profitability of the Corporation. Such designations, including designations of such rail properties to a State, a profitable railroad, or a responsible person, may be made at any time prior to delivery of the final system plan to the special court under section 209(c) of this title. Such further designations shall be treated for all purposes as if they had been included in the final system plan adopted by the Association and reviewed by the Congress, and the final system plan shall for all purposes be deemed to be approved as modified by such designations. Any action of the Association with respect to any such petition shall not be subject to review by any court. "(3)(A) Within 20 days after the date of enactment of the Railroad Revitalization and Regulatory Reform Act of 1976, the Association may, by notice to the Congress and by publication in the Federal Register, modify, supplement, or add to the designations of rail properties in the final system plan if the Association finds such actions are necessary to— "(i) achieve the efficient implementation of the final system plan,or "(ii) provide for the offer to profitable railroads of rail properties designated in the final system plan to the Corporation, if such properties are not essential in the operation of other rail properties of the Corporation but are or would be integrally related to the operation of rail properties of (or which are offered pursuant to the final system plan to) such profitable railroad, or "(iii) provide for the designation of additional rail properties to the Corporation or to a subsidiary thereof to enable the Corporation to serve efficiently a line of railroad designated to the Corporation in the final system plan if such line does not connect with any other line of railroad so designated to the Corporation or if such line would be served more efficiently as a consequence of such designation. Any designation to a profitable railroad pursuant to this paragraph shall comply with the second sentence of section 206(d)(4) of this title, and shall only be made upon a finding by the Association that such designation is integrally related to an offer of rail properties to a profitable railroad in the final system plan, that the goals of the final system plan require that the rail properties be operated as a part of the rail properties included in such offer, and that the implementation of such designation will not materially and adversely affect the impact of such offer on the profitability of the Corporation or any profitable railroad operating in the region. Any designation to a profitable railroad pursuant to this subsection, which amends any prior offer, shall terminate 30 days after the date of enactment of this paragraph

90 STAT. 85

Notice to Congress; publication in Federal Register. Ante, p. 31.

Post, p. 97

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112, the Holy House, and the place to have been a sacred spot during the Saracen occupation of the land. If so, then they bequeathed their veneration for the locality to the Christians, who drove them from it, for Betharam has been esteemed a holy house for centuries, owing to the possession by it of a miraculous statue of the Virgin, about which one of the usual childish tales is told that have such a family likeness, and show such lack of variety. A shepherd saw a blaze of light at the foot of a rock, and discovered that it proceeded from an image. When the figure was removed to the farther side of the Gave, with a leap into the air like a field cricket it recrossed the river and returned to its station under the rock. Then it was transferred to the high altar of the parish church of Lestelle and locked in. But bolts and bars could not restrain it; out it came through the keyhole and made for its rock shelter again. A church and convent were erected under the rock. In 1569, by order of Jeanne d'Albret, both were burnt; but were rebuilt in 1614. The church is a barbaric structure, immediately below a hill, surmounted by a Calvary. Here formerly dwelt a hermit, who maintained himself by selling tooth-combs of boxwood that he had made. But he is gone, and has left no successor. The bridge at Betharam is greatly admired, wreathed as it is with ivy, which falls in long tresses and almost touches the Gave. I have spoken of the view from the park at Pau. Finer views may be had from the heights on the farther side of the Gave, from Guindalos and Gelos; and in early spring, when strolling among these hills, one may gather handfulls of cyclamen, anemones, violets, and the white spires of the asphodel. On market-days at Pau may be purchased clumps of the

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 90 STAT. 86

Post, p. 117.

"Secretary."

"Local or regional transportation authority."

PUBLIC LAW 94-210—FEB. 5, 1976 unless, prior to such date, such profitable railroad has notified the Association in writing of its acceptance of such amendment to the prior offer. "(B) If a line of railroad or any segment thereof is designated for rail service in the final system plan, no designation may be made by the Association pursuant to this paragraph which would result in such line or segment not being so designated. Any designations made pursuant to this paragraph shall be treated for all purposes as if they had been included in the final system plan adopted by the Association and reviewed by the Congress. The final system plan shall for all purposes be deemed to be approved as amended by such designations. "(C) Any designations made pursuant to this paragraph shall not be subject to review by any court. "(D) Any labor agreements entered into under section 508 of this Act shall be subject to further negotiations for any modifications which may be necessary to implement designations made pursuant to this paragraph.". (f) Section 102(14) of such Act (45 U.S.C. 702(14)) is amended to read as follows: "(14) 'Secretary' means the Secretary of Transportation or the person at the time performing the duties of the Office of the Secretary of Transportation in accordance with law, or the duly authorized representative of either of them;". (g) Section 102 of such Act (45 U.S.C. 702) is amended (1) by redesignating paragraphs (8) through (15) thereof as paragraphs (10) through (17) thereof, respectfully; and (2) by inserting therein a new paragraph (9) as follows: "(9) 'local or regional transportation authority' includes a political subdivision of a State.". SPECIAL COURT

SEC. 602. (a) Section 209(b) of such Act (45 U.S.C. 719) is amended by striking out the sixth sentence thereof and inserting in lieu thereof the following new sentence: "The special court may issue rules for the conduct of any proceedings under this section and under section 305 of this Act, including rules with respect to the time within which motions may be filed, and with respect to appropriate representation of interests not otherwise represented (including the Secretary with respect to a petition by the Association in the case of a proposal Post, p. 100. developed by the Secretary, under such section 305).". (b) Section 209 of such Act (45 U.S.C. 719) is amended by adding at the end thereof the following three new subsections: "(e) ORIGINAL AND EXCLUSIVE JURISDICTION.— (1) Notwithstanding any other provision of law, any civil action— "(A) for injunctive or other relief against the Association from the enforcement, operation, or execution of this Act or any provision thereof, or from any action taken by the Association ,;,; V.* - pursuant to authority conferred or purportedly conferred under this Act; "(B) challenging the constitutionality of this Act or any provision thereof; ^ "(C) challenging the legality of any action of the Association, or any failure of the Association to take any action, pursuant to authority conferred or purportedly conferred under this Act; "(D) to obtain, inspect, copy, or review any document in the ', possession or control of the Association that would be discoverable 45 USC 743. -_ ' jjj litigation pursuant to section 303(c) of this Act;

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Page:United States Statutes at Large Volume 90 Part 1.djvu/137

 PUBLIC LAW 9 4 - 2 1 0 — F E B. 5, 1976

90 STAT. 87

" (E) brought after a conveyance, pursuant to section 303(b) 45 USC 743. of this Act, to set aside or annul such conveyance or to secure in any way the reconveyance of any rail properties so conveyed; or " (F) with respect to continuing reorganization and supplemental transactions, in accordance with section 305 of this Act; shall be within the original and exclusive jurisdiction of the special court. The special court shall not hear or determine any such action prior to the date of conveyance, pursuant to section 303(b)(1) of this Act, except as the Constitution may require. Belief shall not be granted USC prec. title 1. in any action referred to in subparagraph (A), (C), or (E) unless the person seeking such relief establishes that the Association acted in reckless or deliberate disregard of applicable law. " (2) The original and exclusive jurisdiction of the special court shall include any action, whether filed by any interested person or initiated by the special court itself, to interpret, alter, amend, modify, or implement any of the orders entered by such court pursuant to section 303(b) of this Act in order to effect the purposes of this Act or the goals of the final system plan. During the pendency of any proceeding described in this paragraph, the special court may enter such orders as it determines to be appropriate, including orders enjoining, restraining, conditioning, or limiting any conveyance, transfer, or use of any asset or r i g h t which is subject to such an order or which is at issue in such a proceeding, or which involves the enforcement of any liens or encumbrances upon such assets or rights. Any orders pursuant to t h i s paragraph which interpret, alter, amend, modify, or implement orders entered by the special court shall be final and shall not be restrained or enjoined by any court. " (3) A final order or judgment of the special court in any action referred to in this section shall be reviewable only upon petition for a, writ of certiorari to the Supreme Court of the United States, except that any order or judgment enjoining the enforcement, or declaring or determining the unconstitutionality or invalidity, of this Act, in whole or in part, or of any action taken under this Act, shall be reviewable by direct appeal to the Supreme Court of the United States in the same manner that an injunctive order may be appealed under section 1253 of title 28, United States Code. Such review is exclusive and any petition or appeal shall be filed not more than 20 days after entry of such order or judgment. " (f) DisposrnoN OF CASH DEPOSITS.—Whenever the compensation which is deposited with the special court under section 303(a) of this Act is in the form of cash, such cash shall be invested and reinvested upon such terms and conditions as the special court shall determine, pending the making of the findings referred to in paragraph s (1), (2), and (3) of section 303(c) of this Act. Notwithstanding section 303 (c)(4) of this Act, the special court may order (1) the income from such investments, (2) the dividends or interest, if any, received on any securities or obligations deposited with the special court under such section 3 0 3 (a), and (3) the income, if any, received with respect to any other form of compensation so deposited, to be distributed to the trustee of each railroad in reorganization and to any person leased, operated or controlled by such a railroad which conveyed the right, title, and interest in the rail properties with respect to which such cash, securities, obligations, or other compensation have been so deposited w i t h the special court. Notwithstanding section 303(c)(4) of this Act, the special court may, within 90 days after the date of conveyance of rail properties pursuant to section 303(b) of this Act, order u p to 25 percent of any cash (including investments made with cash) and other compensation deposited with the special court to be distributed

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 90 STAT. 8 8

PUBLIC LAW 9 4 - 2 1 0 — F E B. 5, 1976 to such trustee or person. On petition of the applicable trustee or person, the special court may order such additional distributions as it finds reasonable and appropriate, prior to the making of the findings referred to in paragraph s (1), (2), and (3) of such section 303(c).

45 USC 743.

"(g)

'

'

STAY o r COURT PROCEEDINGS.-—The special court may stay or

enjoin any action or proceeding in any State court or in any court of the United States other than the Supreme Court if such action or proceeding is contrary to any provision of this Act, impairs the effective implementation of this Act, or interferes with the execution of any order of the special court pursuant to this Act.".

'

FINANCE COMMITTEE

SEC. 603. (a) Section 201 of such Act (45 U.S.C. 711) is amended by redesignating subsections (i) and (j) thereof as subsections (j) and (k) thereof, respectively, and by inserting therein a new subsection " (i) " as follows: " (i) F I N A N C E COMMITTEE.—The Board of Directors of the Association shall have a Finance Committee which shall consist of the Chairman of such Board, the Secretary, and the Secretary of the Treasury (acting directly or, at any time, through their respective duly authorized representatives). The Finance Committee is authorized to exercise only such powders as are vested in it pursuant to any provision of this Act. The vesting of such powers in the Finance Committee shall not be deemed to relieve the Board of Directors of its authority to exercise any other powers of the Association, none of which may be delegated to the Finance Committee, or of its general authority to study, analyze, and make advisory findings with respect to any m a t t e r relevant to the role of the Association as an investor in securities of the Corporation. Notwithstanding any provision of State law, (1) the Finance Committee, without any requirement of review or approval by the Board of Directors of the Association, is authorized to establish, revise, and maintain its own rules and procedures, by majority vote of the members thereof, and (2) the Board of Directors of the Association shall not have power to take, and shall not take, any action affecting the membership of the Finance Committee or limiting the exercise by the Finance Committee of the powers vested in it pursuant to any provision of this Act.". (b)(1) Section 201(h) of such Act (45 U.S.C. 711 (h)) is amended by adding a t the end thereof the following new sentence: " The Secretary and the Chairman of the Commission may act in such capacity directly or a t any time through their duly authorized representatives.". (2) Section 201(d)(2) of such Act (45 U.S.C. 7 1 1 (d)(2)) is amended by striking "or" and inserting in lieu thereof the following: "acting directly or at any time through". (c) Section 102 of such Act (45 U.S.C. 702), as amended by this Act, is amended by redesignating paragraph (7) thereof as paragraph (8) thereof, and by inserting therein a new paragraph (7) as follows: " (7) 'Finance Committee'means the Finance Committee of the B o a r d of Directors of the Association established under section 201 (i) of this Act; ". OBLIGATIONS OF THE ASSOCIATION

SEC. 604. Section 210(b) of such Act (45 U.S.C. 720 (b)) is amended to read as follows:

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Page:United States Statutes at Large Volume 90 Part 1.djvu/139

 PUBLIC LAW 94-210—FEB. 5, 1976

90 STAT. 89

" (b) MAXIMUM OBLIGATIONAL AUTHORITY.—The aggregate amount of obligations of the Association issued under this section which may be outstanding at any one time shall not exceed $275,000,000. No obligations or proceeds thereof shall be issued or made available after the date of enactment of the Railroad Revitalization and Regulatory Reform Act of 1976 except— ^«'e, p. 31. " (1) to meet existing or potential commitments for loans under section 211 of this title made or applied for prior to January 1, Post, p. 92. 1976; and "(2) for the purpose of providing loans pursuant to subsections (g) and (h) of section 211 of this title.". DEBENTURES AND SERIES A PREFERRED STOCK

SEC. 605. Title II of such Act is amended by adding at the end thereof the following new section: " D E B E N T U R E S AND SERIES A PREFERRED STOCK

"SEC. 216. (a) GENERAL.—The Association is authorized, in accordance with the provisions of this section, and such rules and regulations as it may prescribe, to invest from time to time in the securities of the Corporation by purchasing (1) up to $1,000,000,000 of debentures issued by the Corporation, and (2) after the acquisition of such debentures, up to $1,100,000,000 of the series A preferred stock of the Corporation. "(b) PURPOSES AND PROCEDURE FOR INVESTMENT.— (1) The Association is authorized to purchase debentures and, thereafter, series A preferred stock of the Corporation at such times and in such amounts as may be required and requested by the Corporation in accordance with the terms and conditions governing such purchases (which shall beprescribedby the Association), to pro vide— "(A) for the modernization, rehabilitation and maintenance of rail properties of the Corporation; "(B) for the acquisition of equipment and other capital needs; "(C) for the refinancing of indebtedness which was incurred by the Corporation under section 211 of this title or which was incurred under section 215 of this title and assumed by the Corporation; or "(D) working capital as contemplated by the final system plan. " (2) Purchases of up to $1,000,000,000 of debentures and, thereafter, of up to $1,100,000,000 of series A preferred stock shall be made by the Association as required and requested by the Corporation, unless the Finance Committee makes an alRrmative finding that— "(A) the Corporation has failed in any material respect to comply with any covenants or undertakings made to the Association and such failure remains uncorrected; " (B) the Corporation has failed substantially (as determined by performance within the margins prescribed by the Board of I)irectors) to attain the overall operating (including rehabilitation) and financial results projected for the Corporation in the final system plan (including any modifications of such projected results and of the performance margins applicable to such projected results which are jointly approved by the Finance Committee and the Board of Directors and which would improve the possibility that the Corporation will attain such projected results and perform within such margins, as modified); or

Rules and regulations, ^^ USC 726.

45 USC 725.

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Page:United States Statutes at Large Volume 90 Part 1.djvu/140

 90 STAT. 90 "

PUBLIC LAW 94-210—FEB. 5, 1976 "(C) it is not reasonably likely, taking into consideration all relevant factors including the overall operating (including rehabilitation) and financial results achieved by the Corporation, that the Corporation will be able to become financially self-sustaining without requiring Federal financial assistance substantially in excess of the amounts authorized in this section. "(c)

-

,

FINDING, DIRECTION, AND REVIEW BY CONGRESS.—(1) If

the

Finance Committee makes an affirmative finding pursuant to subsection (b)(2) of this section, it may direct the Association— "(A) not to purchase any debentures or series A preferred stock of the Corporation after the date of such affirmative finding; or '(B) to purchase debentures or series A preferred stock of the Corporation, after the date of such affirmative finding, only in such amounts, at such times, and on such terms and conditions (notwithstanding subsection (e)(1) of this section) as the Finance Committee determines to be appropriate to the role of the Association as an investor in such debentures and series A preferred stock. "(2) A copy of each affirmative finding, the reasons therefor, and each direction made by the Finance Committee under paragraph (1) of this subsection, together with the comments and recommendations thereon of the Board of Directors of the Association, shall be transmitted to the Congress by the Association within 10 days after the date on which the Finance Committee makes such finding and direction, or if not so transmitted, shall be transmitted by the Finance Committee. Each such direction so transmitted shall become finally effective and is required to be implemented by the Association, unless within the first period of 30 calendar days of continuous session of Congress after the date of its transmittal to Congress either House of Congress disapproves such direction (except that such direction shall become finally effective immediately upon approval of such direction by both Houses of Congress) in accordance with the procedures specified in section 1017 of the Congressional Budget and Impoundment Control Act of 1974 (31 U.S.C. 1407). For purposes of this paragraph, continuity of session of Congress is broken only in the circumstances described in section 1011(5) of that Act (31 U.S.C. 1401 (5)). During review by the Association and Congress, the Association shall take no action inconsistent with the direction of the Finance Committee pursuant to paragraph (c)(1) of this section, except to the extent the Association finds necessary, in its discretion, to assure continuous orderly operation of the Corporation. "(3) If the Congress, pursuant to paragraph (2) of this subsection, disapproves a direction submitted to the Association pursuant to paragraph (1) of this subsection, the Association shall continue to purchase the debentures or series A preferred stock of the Corporation as otherwise provided in this title until such time as a direction is submitted under this section which is not so disapproved (or affirmatively approved). The powers of the Association and of the Board of Directors of the Association shall remain in effect except to the extent modified by any such direction. If any such direction is disapproved by either House of Congress, the Finance Committee may, not earlier than 30 days after the date of such disapproval, make (and the Board of Directors of the Association shall transmit) any additional affirmative finding and direction with respect to the same matter, which direction shall become effective in accordance with paragraph (2) of this subsection. An affirmative finding and direction under this subsection, or action by the Association during a

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Page:United States Statutes at Large Volume 90 Part 1.djvu/141

 PUBLIC LAW 94-210—FEB. 5, 1976

90 STAT. 91

review thereof by the Congress, may not be held unlawful or set aside by any reviewing court on the ground that such finding and direction or action were not adequate to meet the requirements of subparagraph (A), (E), or (F) of section 706(2) of title 5, United States Code. "(4) Notwithstanding any other provision of this section, or any terms and conditions governing its purchase of securities of the Corporation, the Association shall, upon written application by the Corporation at least 30 days prior to such investment, make an initial investment in debentures of the Corporation within 60 days after the date of conveyance of rail properties pursuant to section 303(b)(1) of this Act. Such initial investment shall be limited to such amounts 45 USC 743. as the Association and Finance Committee, acting jointly, determine are necessary for the continued and orderly operations of the Corporation prior to any additional investment. "(5) Not later than 60 days after the date of conveyance pursuant to section 303(b)(1) of this Act, the Association shall select 6 individuals to serve as members of the Board of Directors of the Corporation, subject to the provisions of section 301(d) of this Act. 45 USC 741. "(d) TERMS AND CONDITIONS.—Notwithstanding any other provision of State law, the debentures and the series A preferred stock of the Corporation shall have such terms and conditions, not inconsistent with the final system plan or this title, as may be prescribed by the Association, except as follows: "(1) The Corporation shall not be required to issue to the Association additional shares of series A preferred stock of the Corporation as a dividend on any such stock. "(2) The dividends payable on series A preferred stock of the Corporation shall not be cumulative and shall be paid in cash when and to the extent that there is 'cash available for restricted cash payments', as that term is defined in the final system plan. "(3) After the Association calls for redemption of the certificates of value, no shares of series A preferred stock of the Corporation shall be issued in lieu of interest on the debentures of the Corporation and, to the extent such interest is not payable in cash by reason of the absence of sufficient 'cash available for restricted cash payment', the Corporation shall deliver to the holders of the debentures contingent interest notes in a face amount equal to such unpaid interest. "(4) If the Board of Directors of the Association and the Finance Committee, acting jointly, modify the terms or con•?. " ditions governing the purchase of debentures or series A preferred stock of the Corporation pursuant to subsection (e)(1) of this section, or if the Finance Committee waives compliance with any term, condition, provision, or covenant of such securities pursuant to subsection (e)(2) of this section, the Finance Committee may require the Corporation to issue contingent interest notes in such amount as, in the determination of the Finance Committee, will provide protection for the United States, in the event of bankruptcy, reorganization, or receivership of the Corporation, equal to the protection the United States would have had in the absence of such modification or waiver. "(5) The contingent interest notes issued pursuant to this section shall bear interest compounded annually at the rate of 8 percent per annum and such notes and the accumulated interest thereon shall be payable only in the event of bankruptcy, reorganization, or receivership of the Corporation occurring prior to the repayment and redemption of all outstanding debentures and accumulated series A preferred stock of the Corporation. The
 * 5

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 90 STAT. 92

PUBLIC LAW 9 4 - 2 1 0 — F E B. 5, 1976 .;

contingent interest notes and the accumulated interest thereon shall have the same priority in bankruptcy, reorganization, or receivership as the debentures of the Corporation. The other terms and conditions of the contingent interest notes shall be as set forth in an agreement to be entered into between the Association and the Corporation prior to issuance of any debentures. "(e)

\ J

T ^

,;^

'

MODIFICATIONS, WAIVERS, AND CONVERSIONS.—(1)

The

Board

of Directors of the Association and the Finance Committee, acting jointly, may agree with the Corporation to modify any of the terms and conditions governing the purchase by the Association of securities of the Corporation, upon a finding that such action is necessary or a p p r o p r i a t e to achieve the purposes of this Act or the goals of the final system plan. " (2) The Finance Committee may, in its discretion and upon a finding that such action is necessary or appropriate to achieve the purposes of this Act or the goals of the final system plan, waive compliance with any term, condition, provision, or covenant of the securities of the Corporation held by the Association, including any provision of such securities with respect to redemption of principal or issuance price, payment of interest or dividends, or any term or condition governing the purchase of such securities. " (3) Notwithstanding any provision of State law, there shall be no conversion of the debentures of the Corporation into series A preferred stock of the Corporation, as provided in the terms and conditions of the debentures and pursuant to the final system plan, unless the Board of Directors of the Association and the Finance Committee jointly determine to effect such conversion. " (f) APPROPRIATION.—There is authorized to be appropriated to the Association $2,100,000,000 to be used for the purchase of securities of the Corporation in accordance with this section. All sums received by the Association on account of the holding or disposition of any such securities shall be deposited in the general fund of the Treasury.". LOANS

45 USC 721.

SEC. 606. Section 211 of such Act (45 U.S.C. 741) is amended by adding at the end thereof the following new subsections: "(g)

45 USC 743.

Ante, p. 89. ^

PRE-CONVEYANCE LOANS TO THE CORPORATION.—During

the

period between the effective date of the final system plan and the date of the conveyance of rail properties pursuant to section 303(b) of this Act, the Association may make such loans in such amounts to the Corporation as the Association deems essential to provide for the purchase by the Corporation of material, supplies, equipment, and services necessary to permit the orderly and efficient implementation of the final system plan. Notwithstanding any inability of the Association during such period to make the finding required by subsection (e)(3) of this section because of any existing contingencies, the Association may make any such loans to the Corporation, subject to— " (1) the most favorable terms and conditions for assuring timely repayment and security as may then be reasonably available, and " (2) the requirement that any loan to the Corporation under this subsection be refinanced immediately out of the proceeds of the first sale by the issuance of debentures under section 216 of this title. I n order to assure that necessary funds are available to the Corporation for implementation of the final system plan, the Corporation is authorized to accept such loans as may he approved by the Association

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 PUBLIC LAW 9 4 - 2 1 0 — F E B. 5, 1976

90 STAT. 9 3

tinder this subsection, and any such acceptance shall be deemed for all purposes to constitute a reasonable and prudent business judgment in compliance with any fiduciary obligations imposed on the Corporation or its directors. For purposes of this subsection, the term 'Corporation' includes a subsidiary of the Corporation. " (h) LOANS FOR P A Y M E N To r OBLIGATIONS.— (1) The Association is

authorized, subject to the limitations set forth in section 210(b) of this title, to enter into loan agreements, in amounts not to exceed Ante, p. 88. $230,000,000 in the aggregate, with the Corporation, the National Railroad Passenger Corporation, and any profitable railroad to which rail properties are transferred or conveyed pursuant to section 303(b)(1) of this Act, under which the Corporation, the National Railroad 45 USC 743. Passenger Corporation, and any profitable railroad entering into such agreement will agree to meet existing or prospective obligations of the railroads in reorganization in the region which the Association, in accordance with procedures established by the Association, determines should be paid by the Corporation, the National Railroad Passenger Corporation, or a profitable railroad, on behalf of the transferors, in order to avoid disruptions in ordinary business relationships. Such obligations shall be limited to amounts claimed by suppliers (including private c a r lines) of materials or services utilized in current rail operations, claims by shippers arising from current rail services, payments to railroads for settlement of current interline accounts, claims of employees arising under the collective bargaining agreements of the railroads in reorganization in the region and subject to section 3 of the Railw'ay Labor Act, claims of all employees or their personal 45 USC 153. representatives for personal injuries or death and subject to the provisions of Employers' Liability Acts (45 U.S.C. 51-60), and amounts 45 USC 51 note, required for adequate funding of accrued pension benefits existing at the time of a conveyance o r discontinuance of service under employee pension benefit plans described in section 505(a) of this Act. The Asso- 45 USC 775. ciation shall not make such a loan unless it first finds that the loan is for the purpose of paving obligations with respect to accrued pension plans referred to in the preceding sentence or that the Corporation, the National Railroad Passenger Corporation, or a profitable railroad is entitled to a loan pursuant to subsections (e) and (g) of section 504 of this Act, or unless it first finds that— Post, p. 113. " (A) provision for the payment of such obligations was not included in the financial projections of the final system p l a n; " (B) such obligations arose from rail operations prior to the date of conveyance of rail properties pursuant to section 303(b) (1) of this Act and are, under other applicable law, the responsibility of a railroad in reorganization in the region; " (C) the Corporation, the National Railroad Passenger Corporation, or a profitable railroad has advised the Association that the direct payment of such obli.q:ations by the Corporation, the National Railroad Passenger Corporation or profitable railroad is necessary to avoid disruptions in ordinary business relationships; " (D) the transferor is unable to pay such obligations within a reasonable period of t i m e; and " (E) with respect to loans made to the Corporation, the procedures to be followed by the Corporation, in seeking reimbursement from the railroa(is in reorganization in the region for obligations paid on their behalf under this subsection, have been jointly agreed to by the Finance Committee and the Corporation. " (2) The trustees of each railroad in reorganization in the region shall attempt to negotiate agency agreements with the Corporation,

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 90 STAT. 94

45 USC 743.

PUBLIC LAW 94-210—FEB. 5, 1976 the National Railroad Passenger Corporation, or a profitable railroad for the processing of all accounts receivable and accounts payable attributable to operations prior to the conveyance of property pursuant to section 303(b)(1) of this Act, If any railroad in reorganization in the region fails to conclude such an agreement within a reasonable time prior to such conveyance, the applicable reorganization courts, after giving all parties an opportunity to be heard, shall prescribe the terms of such an agency arrangement by order, giving due consideration to the need, wherever possible, to make such agreements uniform among the various estates. " (3) The Association may, not less than 30 days prior to the date of conveyance pursuant to section 303(b)(1) of this Act, petition each district court of the United States having jurisdiction over the reorganization of a railroad in reorganization in the region for an order, which shall be entered prior to such conveyance, and which— "(A) identifies that cash and other current assets of the estate of such railroad which shall be utilized to satisfy obligations of the estates identified in paragraph (1) of this subsection; and "(B) provides for the application by the trustees of such railroads and their agents, consistent with the principles of reorganization under section 77 of the Bankruptcy Act (11 U.S.C. 205) and with the agency agreement specified in paragraph (2) of this subsection, of all such current assets, including cash available as of or subsequent to such date of conveyance, to the payment in the postconveyance period of the obligations of the estates identified in paragraph (1) of this subsection. "(4)(A) Each obligation of a railroad in reorganization in the region which is paid with financial assistance under paragraph (1) of this subsection shall be processed, on behalf of such railroad, by the Corporation, the National Railroad Passenger Corporation, or a profitable railroad, whichever is appropriate. An obligation of a railroad in reorganization in the region shall be paid, on behalf of such railroad, by the Corporation, the National Railroad Passenger Corporation, or a profitable railroad, whichever is appropriate, if— " (i) such obligation is deemed by the Corporation, the National Railroad Passenger Corporation, or a profitable railroad, whichever is appropriate, to have been, on the date of conveyance of rail properties pursuant to section 303(b)(1) of this Act, the obligation of a railroad in reorganization in the region; "(ii) such obligation accrues after such date of conveyance but as a result of rail operations conducted prior to such date, and the trustees of such railroad in reorganization acknowledge that it is an obligation of such railroad; or " (iii) the district court of the United States having jurisdiction over such railroad in reorganization in the region approves such obligation as a valid administrative claim against such railroad; to the extent that payment is required under a loan agreement with the Association under such paragraph (1). "(B) The Association shall resolve any disputes among the Corporation, the National Railroad Passenger Corporation, and a profitable railroad concerning which of them shall process and pay any particular obligation on behalf of a particular railroad in reorganization. "(C) The Corporation, the National Railroad Passenger Corporation, or a profitable railroad shall have a direct claim, as a current expense of administration, for reimbursement from the estate of a railroad in reorganization in the region for all obligations of such estate (plus interest thereon) which are paid by the Corporation, the National Railroad Passenger Corporation, or a profitable railroad, as the case

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90 STAT. 95

may be. The right of the Corporation or the National Raih-oad Passenger Corporation to receive reimbursement under this subparagraph from the estate of a railroad in reorganization in the region shall be reduced by the amount, if any, of loans, plus interest forgiven under paragraph (5) of this subsection. "(5)(A) If, at any time, the Finance Committee of the Association determines that the failure of the Corporation to receive full reimbursement with interest from the estate of a railroad in reorganization in the region for any obligation of such estate paid pursuant to this subsection could adversely affect the fairness and equity of the transfers and conveyances pursuant to section 303(b)(1) of this Act, or 45 USC 743. that the failure of the National Railroad Passenger Corporation to receive such full reimbursement plus interest for any such obligation would be contrary to the public interest, the Association shall forgive the indebtedness, plus accrued interest, of the Corporation or of the National Railroad Passenger Corporation incurred pursuant to paragraph (1) of this subsection in the amount recommended by the Finance Committee. The Association shall have a direct claim, as a current expense of administration of the estate of such railroad in reorganization, equal to the amount by which loans of the Corporation or of the National Railroad Passenger Corporation, plus interest, have been forgiven. Such direct claim shall not be subject to any reduction by way of setoff, cross-claim, or counter-claim which the estate of such railroad in reorganization may be entitled to assert against the Corporation, the National Railroad Passenger Corporation, the Association, or the United States. "(B) The direct claim of the Association under this paragraph, and any direct claim authorized under paragraph (4) of this subsection, shall be prior to all other administrative claims of the estate of a railroad in reorganization, except claims arising under trustee's certificates or from default on the payment of such certificates. "(6) Notwithstanding any other provision of this subsection, the Association shall forgive any loan made to the Corporation or the National Railroad Passenger Corporation pursuant to this subsection, plus accrued interest thereon, on the 3r(i anniversary date of any such loan, except that the Association shall not forgive any loan or portion thereof, in accordance with this paragraph, if— "(A) the Finance Committee makes an affirmative finding, with respect to such loan or portion thereof, that— "(i) the Corporation has not exercised due diligence in executing the procedures adopted pursuant to paragraph (1)(E) of this subsection, and "(ii) the failure of the Association to forgive such loan or portion thereof will not adversely affect the ability of the Corporation to become financially self-sustaining; "(B) the Finance Committee so directs the Association; and > "(C) neither House of the Congress disapproves such affirmative finding and direction, in accordance with the following provisions of this paragraph. A copy of each such finding, the reasons therefor, and such direction made by the Finance Committee, together with the comments and recommendations thereon of the Board of Directors of the Association, shall be transmitted to the Congress by the Association within 10 days after the date on which the Finance Committee makes such finding and direction, or if not so transmitted, shall be transmitted by the Finance Committee. Each such finding and direction so transmitted shall become effective immediately, and shall remain in effect, unless, within

89-194 O—78—pt. 1

10

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90 STAT. 96

the first period of 30 calendar days of continuous session of Congress after the date of transmittal of such finding and direction to Congress, either House of Congress disapproves such finding and direction in accordance with the procedures specified in section 1017 of the Congressional Budget and Impoundment Control Act of 1974 (31 U.S.C. 1407). For purposes of this paragraph, continuity of session of Congress is broken only in the circumstances described in section 1011(5) of that Act (31 U.S.C. 1401 (5)). "Corporation." " (7) For purposes of this subsection, the term 'Corporation' includes a subsidiary of the Corporation. ^ "(i) ELECTRIFICATION.—Upon application by the Corporation, the Secretary shall, pursuant to the provisions of and within the obligational limitations contained in sections 511 through 513 of the RailAnte, pp. 76-80. road Revitalization and Regulatory Reform Act of 1976, guarantee obligations of the Corporation for the purpose of electrifying highdensity mainline routes if the Secretary finds that such electrification will return operating and financial benefits to the Corporation and will facilitate compatibility with existing or renewed electrification systems. The aggregate unpaid principal amount of obligations which may be guaranteed by the Secretary under this paragraph shall not exceed $200,000,000 at any one time.". MISCELLANEOUS AMENDMENTS TO TITLE II

SEC. 607. (a) Section 201(j) of such Act (45 U.S.C. 711 (j)), as redesignated by section 603(a) of this Act, is amended by adding at the end thereof the following new paragraph: "(4) Any reference in this Act to the Secretary of the Treasury is to the Secretary of the Treasury or the person at the time performing the duties of the Office of the Secretary of the Treasury in accordance with law, or the duly authorized representative of either of them. Any reference in this Act to the Chairman of the Commission is to the Chairman of the Commission or the person at the time performing the duties of the Chairman of the Commission in accordance with law, or the duly authorized representative of either of them.". (b) Section 202(e) of such Act (45 U.S.C. 712(e)) is amended by inserting after "obligations issued" and before "and loans" in clause (4) thereof the following: ", certificates of value issued, securities T)ll 1*0 II 3ySPO

Ante, p. 89; Post, p. 104.

(c) Section 202(f) of such Act (45 U.S.C. 712(f)) is amended by inserting after "section" and before ") " in the first sentence thereof the following: "and receipts and disbursements under section 216 of this title and section 306 of this Act.". (d) Section 203(a) of such Act (45 U.S.C. 713(a)) is amended by striking out the last sentence thereof. (e) Section 206(d)(3) of such Act (45 U.S.C. 716(d)(3)) is amended by inserting after the first sentence thereof the following three new sentences: "All determinations made by the Association in the correction to the preliminary system plan published on April 11, 1975 (40 Fed. Reg. 16377), shall be treated for all purposes as if they had been made upon adoption and release by the Association of the preliminary system plan. All determinations made by the Commission with respect to such correction shall be treated for all purposes as if they had been made within 90 days after adoption and release by the Association of the preliminary system plan. All determinations made by the Commission with respect to acquisitions by profitable railroads referred to in any supplement to the preliminary system plan pub-

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 PUBLIC LAW 94-210—FEB. 5, 1976 lished under section 207(b)(2) of this title shall be deemed to be timely if made prior to the adoption of the final system plan under section 207(c) of this title.". (f) Section 206(c)(1)(B) of such Act (45 U.S.C. 716(c)(1)(B)) is amended by inserting immediately after "paragraph" the following: "and what alternative designations shall be made under this paragraph". (g) Section 206(c)(1)(A) of such Act (45_U.S.C. 716(c)(1)(A)) is amended by striking out the semicolon and inserting in lieu thereof the following: ": Provided, That the Corporation shall, within 95 days after the effective date of the final system plan, give notice to the Association of which such rail properties, if any, are to be transferred to a subsidiary of the Corporation in the event that the Board of Directors of the Association finds that such transfer would be consistent with the final system plan;". (h) Section 206(c)(2) of such Act (45 U.S.C. 716(c)(2)) is amended by adding at the end thereof the following new sentence: "Any rail properties designated to be offered for sale to the Corporation may be sold instead to a subsidiary of the Corporation.". (i) Sections 206(d)(1), 209 (c) and (d), 215(d), 304(e), and 501 (1) and (2) of such Act (45 U.S.C. 716(d)(1), 719(c) and (d), 744 (e), and 771 (1) and (2)) are amended by inserting after "Corporation" each time it appears the following: "or any subsidiary thereof". (]•) Section 206(c)(1)(D) of such Act (45 U.S.C. 716(c)(1)(D)) is amended by— (1) inserting immediately after "by" the following " (i) "; and (2) striking out "; and" at the end thereof and adding the following: ", or (ii) the National Railroad Passenger Corporation to meet the needs of improved rail passenger service over intercity routes, other than properties designated pursuant to subparagraph (C) of this paragraph; and". (k) Section 210(c) of such Act (45 U.S.C. 720(c)) is amended by adding at the end thereof the following new sentence: "All guarantees entered into by the Secretary under this section shall constitute general obligations of the United States for the payment of which its full faith and credit are pledged.". (1) Section 209(c) of such Act (45 U.S.C. 719(c)) is amended by striking out "obligations of the Association" each time it appears and inserting in lieu thereof "certificates of value of the Association". (m)(1) Subsection (b) of section 214 of such Act (45 U.S.C. 724(b)) is amended by striking out "$5,000,000" and inserting in lieu thereof "$7,000,000". (2) Section 214(c) of such Act is amended by striking out the period and inserting in lieu thereof ", and not to exceed $14,000,000 for the fiscal period which includes the period ending September 30, 1977.". (n) Section 214(a) of such Act (45 U.S.C. 724(a)) is amended by adding at the end thereof the following: "There are authorized to be appropriated to the Secretary such sums as may be necessary to discharge the obligations of the United States arising under section 303 (c)(5) of this Act.". (o) Paragraph (4) of section 206(d) of such Act (45 U.S.C. 716 (d)(4)) is amended— (1) in the first sentence thereof, by striking out "30 days after the effective date of the final system plan" and inserting in lieu thereof "7 days after the date of the enactment of the Railroad Revitalization and Regulatory Reform Act of 1976"; and in the

90 STAT. 97 45 USC 717.

45 USC 716, 719, 725, 744, 771.

Guarantees.

Appropriation authorization.

Appropriation authorization.

Post, p. 109.

Ante, p. 3 1.

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PUBLIC LAW 94-210—FEB. 5, 1976

second sentence thereof, by striking out "60" and inserting in lieu thereof "95"; and (2) by inserting immediately after the first sentence thereof the following new sentence: "Any such offer may be modified until the date of acceptance thereof, unless such modification results in an offer for the sale of rail properties at less than the net liquidation value thereof.", (p) Section 206(d) of such Act (45 U.S.C. 716(d)) is amended by adding at the end thereof the following new paragraph: "(6) Notwithstanding any statement to the contrary in the final system plan, a State (or a local or regional transportation authority) shall not be required to deliver to the Corporation a firm commitment to acquire rail properties designated to such State or authority prior to 7 days after the date of enactment of this paragraph.". 45 USC 716. (q) Section 206 of such Act (45 U.S.C. 717(c)) is amended by adding at the end thereof the following new subsection: " (j) Any rail properties over which rail service was being provided ^ as of the date of enactment of this Act, and which were recommended in the preliminary system plan for transfer to the Corporation, shall be deemed to be designated in the final system plan for transfer to the Corporation under subsection (c)(1)(A) of this section. Any designation in the final system plan, pursuant to subsection (c)(1) (B) of this section, of overhead trackage rights to be acquired by a profitable railroad operating in the region over specified rail properties to be acquired by the Corporation, where such designation does not (1) authorize such profitable railroad to interchange traffic with at least one railroad, or (2) provide for the connection of portions of such profitable railroad's rail properties, and where the transfer of ownership of such rail properties (including trackage rights) to such profitable railroad was recommended in the preliminary system plan, ,,. •. and the Commission has made a determination with respect thereto, in accordance with subsection (d)(B) of this section, shall be deemed to authorize such profitable railroad to interchange traffic with the Corporation and any other profitable railroad connecting with such specified rail properties.". Final system (r) Section 209(c) of such Act (45 U.S.C. 719(c)) is amended by plan, certified adding at the end thereof, without paragraph indentation, the followcopy, delivery j ^ ^ ^^^ sentences: "Notwithstanding any other provisions of this ^® subsection and subsection (d) of this section, the time for the delivery of a certified copy of the final system plan shall be March 12, 1976, and may be extended to a date not more than 80 days thereafter, prescribed in a notice filed by the Association not later than February 10, 1976, with the special court, the Congress, and each court referred to in such subsection (d). Such notice shall contain the certification of the Association that an orderly conveyance of rail properties cannot reasonably be effected before the date for conveyance determined with respect to 45 USC 743. such notice. The time prescribed in section 303(a) of this Act shall be determined with respect to the date prescribed in such notice.". (s) Section 209(c)(1) and (2) of such Act (45 U.S.C. 719(c) (1) and (2)) is amended by striking out "railroad leased" each time it appears therein and inserting in lieu thereof "person leased". (t) Section 102(12) of such Act (45 U.S.C. 702(12)), as redesigAnte, p. 86. nated by this Act, is amended (1) by inserting immediately before "which are used or useful" the following: " (or a person owned, leased, "phase" and inserting in lieu thereof "phrase".
 * 5;. or otherwise controlled by a railroad)"; and (2) by striking out

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90 STAT. 99

CAPITALIZATION OF THE CX)RP0RATlON

SEC. 608. Section 301(e) of such Act (45 U.S.C. 741 (e)) is amended to read as follows: "(e) INITIAL CAPITALIZATION.— (1) In order to carry out the final system plan, the Corporation is authorized to issue debentures, series A preferred stock, series B preferred stock, common stock, contingent interest notes, and other securities. "(2) Debentures and series A preferred stock shall be issued initially to the Association. Series B preferred stock and common stock shall be issued initially to the estates of railroads in reorganization in the region, to railroads leased, operated, and controlled by railroads in reorganization in the region, and to other persons leased, operated or controlled by a railroad in reorganization who are transferors of rail properties in exchange for rail properties transferred to the Corporation pursuant to the final system plan. Notwithstanding any other provisions of State or Federal law, the series B preferred stock and common stock shall have terms and conditions not inconsistent with the final system plan. As a condition of its investment in the Corporation, the Association may require that the Corporation adopt limitations consistent with the final system plan on the circumstances under which dividends on the series B preferred stock and common stock are payable so long as any of the debentures or series A preferred stock are outstanding.". PROTECTION or FEDERAL FUNDS

SEC. 609. Title III of such Act, as amended by this Act, is further amended by inserting the following new section: "PROTECTION OF FEDERAL FUNDS

"SEC. 307. (a) AUDIT.—(1) The Comptroller General of the United 45 USC 747. States is authorized to audit the programs, activities, and financial operations of the Corporation for any period during which (A) Federal funds provided pursuant to this Act are being used to finance any portion of its operations, or (B) Federal funds have been invested therein pursuant to this Act. Any such audit may be conducted under such rules and regulations as the Comptroller General may prescribe. The Comptroller General shall report to the Congress at such times and to such extent as he considers necessary to keep the Congress informed on the security of such Federal funds and guarantees and, to the extent appropriate, make recommendations for achieving greater economy, efficiency, and effectiveness in such programs, activities, and operations. " (2) For the purpose of any audit conducted pursuant to subsection (a) of this section, the Comptroller General, or a designated representative of the Comptroller General, shall have access to and the right to examine all books, accounts, records, reports, files, and other papers, items, or property belonging to or in use by the Corporation. "(b) REPORT.—The Association shall prepare and submit an annual Report to report to Congress on the performance of the Corporation in order to Congress, keep the Congress informed as to matters which may affect the quality of rail services in the region and which may affect the security of Federal funds referred to in subsection (a) of this section. Each such report shall be submitted within 150 days after the end of the fiscal year of the Corporation. Each such report shall include an evaluation of—

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 90 STAT. 100 45 USC 716.

Ante, p. 89.

PUBLIC LAW 9 4 - 2 1 0 — F E B. 5, 1976 " (1) the degree to which the goals of section 206(a) of this Act are being m e t; " (2) the amounts and causes of deviations, if any, from the financial projections of the final system p l a n; " (3) the amount of Federal funds made available to the Corporation and a clear description of the uses of such funds; " (4) the projected financial needs of the Corporation; " (5) the projected sources from which such financial needs are likely to be m e t; and " (6) the ability of the Corporation to become financially selfsustaining without requiring Federal funds in excess of those authorized by section 216(f) of this Act.". CONTINUING R E ORGANIZATION;

'Subsidiary." "Supplemental transaction." Infra.

45 USC 743. ';:)H

SEC. 610. (a) Section 102 of such Act (45 U.S.C. 702), as amended by this Act, is amended— (1) in paragraph (16) thereof, by striking out " and "; (2) in paragraph (17) thereof, by striking out the period and inserting in lieu thereof a semicolon; and (3) by adding at the end thereof the following two new paragraphs: "(18) 'subsidiary' means any corporation 100 percent of whose total combined voting shares are, directly or indirectly, owned or controlled by the Corporation; and "(19) 'supplemental transaction' means any transaction set forth in a proposal under section 305 of this Act, within 6 years after the date on which the special court orders conveyances of rail properties to the Corporation under section 303(b) of this Act, under which the Corporation or a subsidiary thereof would (A) acquire rail properties not designated for transfer or conveyance to it under the final system plan, (B) convey rail properties to a profitable railroad, a subsidiary of the Corporation or, other than as designated in the final system plan, to the National Railroad Passenger Corporation or to a State or a local or regional transportation authority, or to any other responsible person for use in providing rail service, or (C) enter into contractual or other arrangements with any person for the joint use of rail properties or the coordination or separation of rail operations or services.". (b) Title III of such Act is amended by adding at the end thereof the following new sections: ''CONTINUING R E ORGANIZATION;

45 USC 745.

' '. •' •

45 USC 716.

SUPPLEMENTAL TRANSACTIONS

SUPPLEMENTAL TRANSACTIONS

" SEC. 305. (a) PROPOSALS.—If the Secretary or the Association determines that, as part of continuing reorganization, further restructuring of rail properties in the region through transactions supplemental to the final system plan would promote the establishment and retention of a financially self-sustaining rail service system in the region adequate to meet the needs of the region, the Secretary or the Association, as the case may be, may develop proposals for such supplemental transactions as are necessary or a p p r o p r i a t e to implement the needed restructuring. Transfers of rail properties included in proposals developed by the Association shall be limited to (1) rail properties which would have qualified for designation under section 206(c)(1) (A) of this Act but which were not transferred or conveyed under the final system plan, and which the Association finds to be essential to the efficient operations of the Corporation, and (2) transfers, con-

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90 STAT. 101

sistent with the final system plan, of rail properties from the Corporation to a subsidiary thereof. E a c h proposal (other than a proposal developed by the Association) shall be submitted in writing to the Association and shall state and describe any transactions proposed, the rail properties involved, the parties to such transactions, the financial and other terms of such transactions, the purposes of the Act or the goals of the final system plan intended to be effectuated by such transactions, and such other information incidental thereto as the Association may prescribe. W i t h i n 10 days after receipt of'a proposal Publication in developed by the Secretary, and upon the development of a proposal Federal Register. developed by the Association, the Association shall publish a summary of such proposal in the Federal Register, and shall afford interested persons (including the Corporation when property is to be transferred to or from the Corporation) an opportunity to comment thereon. " (b) EVALUATION BY ASSOCIATION.—The Association shall analyze

each proposal containing one or more supplemental transactions, taking into account the comments of interested persons and statements and exhibits submitted at any public hearings which may have been held. The Association shall, within 120 days after the publication of a summary thereof under subsection (a) of this section, publish in the Federal Register a report evaluating such proposal. Such evaluation shall state whether the supplemental transactions contained in such proposal, considered in their entirety, are (1) in the public interest and consistent with the purposes of this Act and the goals of the final system plan, and (2) fair and equitable. I f the Corporation opposes, or seeks modification of, any such proposed transfer, its written comments shall be given due consideration by the Association and shall be published as part of the evaluation. W i t h i n 30 days after the Association publishes its report, each proposed transferor or transferee shall notify the Association in writing as to whether any proposed supplemental transaction requiring the transfer of any property from or to such transferor or transferee is acceptable to such proposed transferor or transferee. I f any such proposed transferor (other than the Corporation) or transferee fails to notifv the Association that any proposed supplemental transaction requiring the transfer of any property from such transferor or to such transferee is acceptable to it, no further administrative or judicial proceedings shall be conducted with respect to such proposed supplemental transaction. " (c) REVIEW BY THE COMMISSION.—Within 90 days after the publi-

cation in the Federal Register of each report referred to in subsection (b) of this section, the Commission shall determine whether the supplemental transactions referred to in the report, considered in their entirety, would be in the public interest and consistent with the purposes of this Act and the goals of the final system plan. I n making such determination, the Commission shall give d u e consideration to the views received by it, within 30 days after the publication of the applicable report, from the Corporation and the Secretary. The Commission may condition its approval of such supplemental transactions on such reasonable terms and conditions as it may deem necessary in the public interest. The approval by the Commission of such supplemental transactions shall not be a prerequisite to the consummation of such transactions, b u t any determination of the Commission modifying, approving, or disapproving any proposed supplemental transactions shall be ^ v e n due weight and consideration by the special court in the proceedings prescribed in subsection (d) of this section. I f the Commission fails to act within the time period provided in this sub-

Publication in Federal Register.

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';

PUBLIC LAW 94-210—FEB. 5, 1976 section, the supplemental transactions involved shall be deemed to have been approved by the Commission. The Commission may prescribe such regulations as may be necessary for the administration of this section. "(d) SPECIAL COUKT PROCEKDINGS.—(1) If the Association has made the determination pursuant to subsection (b) of this section that a proposal for supplemental transactions is in the public interest and consistent with the purposes of this Act and the goals of the final system plan, and is fair and equitable, the Association shall, within 40 days after the date of the Commission's determination under subsection (c) of this section, or after the expiration of the 90-day period referred to in such subsection (c), whichever is applicable, petition the special court for an order of such court finding that such proposal for supplemental transactions is in the public interest and consistent with the purposes of this Act and the goals of the final system plan, and is fair and equitable, and directing the Corporation to carry out the supplemental transactions specified in such proposal. If the Association has determined, pursuant to subsection (b) of this section that a proposal made by the Secretary is not in the public interest or is not consistent with the purposes of this Act and the goals of the final system plan or is not fair and equitable, the Secretary may, if he determines that such proposal is in the public interest and consistent with the purposes of this Act and the goals of the final system plan and is fair and equitable, petition the special court for an order of such court finding that such proposal for supplemental transactions is in the public interest and consistent with the purposes of this Act and the goals of the final system plan and is fair and equitable, and directing the Corporation to carry out any supplemental transactions specified in such proposal. Such a petition shall be submitted to the special court within 90 days after the date of the Commission's determination under such subsection (c), or after the expiration of the 90-day period referred to in such subsection (c), whichever is applicable. " (2) Within 180 days after the filing of a petition under paragraph (1) of this subsection, the special court shall decide, after a hearing, whether the proposed supplemental transactions contained in such petition, considered in their entirety, are in the public interest and consistent with the purposes of this Act and the goals of the final system plan and are fair and equitable. If the special court determines that such proposed supplemental transactions, considered in their entirety, are in the public interest and consistent with the purposes of this Act and the goals of the final system plan and are fair and equitable, it shall, upon making such determination, issue such orders as may be necessary to direct the Corporation to consummate the transactions. If the special court determines that such proposed supplemental transactions, considered in their entirety, are not in the public interest or not consistent with the purposes of this Act and the goals of the final system plan, or are not fair and equitable, it shall file an opinion stating its conclusion and the reasons therefor. In such event the Association (in the case of a proposal developed by the Association) or the Secretary (in the case of a proposal developed by the Secretary) may, within 120 days after the filing of such opinion, certify to the special court that the terms and conditions of the proposal have been modified consistent with the opinion of the court and are acceptable to each proposed transferor (other than the Corporation) or transferee, and may petition the special court for recon-

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 PUBLIC LAW 94-210—FEB. 5, 1976

90 STAT. 103

sideration of the proposal as so modified. Within 90 days after the filing of such petition, the special court shall decide, after a hearing, whether the proposal as modified by the certification is in the public interest and consistent with the purposes of this Act and the goals of the final system plan and is fair and equitable, and shall enter such further orders as are consistent with its determination. "(3) The Corporation is authorized to petition the special court and to be represented regarding any proposed supplemental transaction, contained in a proposal developed by either the Association or the Secretary, which involves the properties of the Corporation. "(4) In proceedings under this subsection, the special court is authorized to exercise the powers of a judge of a United States district court with respect to such proceedings and such powers shall include those of a reorganization court. "(5) Any evaluation by the Association, the Secretary, or the Commission shall not be reviewable in any court except the special court in accordance with the provisions of this section. The supplemental transactions shall not be restrained or enjoined by any court nor shall they be otherwise reviewable by any court other than by the special court to the extent provided in this section. "(6) Notwithstanding any other provision of this Act, no findings, determinations, or proceedings shall be required with respect to any proposal for supplemental transactions other than as expressly set forth in this section. "(7) Any supplemental transaction under this section shall subject the transferor and transferee, in each such supplemental transaction, to the requirements and other provisions of title V of this Act, except 45 USC 771. that the term 'effective date of this Act' contained in such title V shall be applied to such supplemental transaction as if it read 'effective date of the supplemental transaction'. ''(8) A final order or judgment of the special court entering or denying an order pursuant to this subsection shall be reviewable in the same manner as provided in section 209(e)(3) of this Act. -Ante, p. 86. "(e) DEFINITION.—As used in this section, the term 'fair and equitable' means fair and equitable, in accordance with the standards applicable to the approval of a plan of reorganization (or a step in such plan) under section 77 of the Bankruptcy Act (11 XJ.S.C. 205) to— "(1) the estates of railroads in reorganization in the region and persons leased, operated, or controlled by such railroads who have conveyed rail properties, under section 303(b)(1) of this title, in 45 USC 743. exchange for securities of the Corporation, the Association, or profitable railroads and other benefits provided as a consequence of this Act and to any subsequent holders of such securities at the time of the supplemental transaction involved; and "(2) the holders of other securities of the Corporation. Whenever any property or securities of the Corporation are required to be valued in order to determine whether the terms of a supplemental transaction are fair and equitable, the special court shall give proper recognition to the contributions to the Corporation by all classes of security holders, except that such court shall not assign to the series B preferred stock or the common stock of the Corporation any values added to those securities, by reason of investment by the Association in debentures and series A preferred stock of the Corporation, in excess of any value required by constitutional principles applicable to a reorganization process.

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Page:United States Statutes at Large Volume 90 Part 1.djvu/154

 9 0 STAT. 104

PUBLIC LAW 9 4 - 2 1 0 — F E B. 5, 1976 "CERTIFICATES o r VALUE

45 USC 746. 45 USC 743. Guaranteed payment.

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" SEC. 306. (a) GENERAL.—On the date when the Corporation is required to deposit securities with the special court pursuant to section 303(a)(1) of this title, the Association shall deposit with the special court the certificates of value of the Association required by this section. The Secretary shall guarantee the payment of all certificates of value delivered in accordance with this title. All guarantees entered by the Secretary under this section shall constitute general obligations of the United States of America for the payment or redemption of which its full faith and credit are pledged. Such guarantees shall be valid and incontestable except as to mutual mistake of fact or as to fraud or material misrepresentation by the holder of such certificates or the transferor of rail properties to which certificates of value of any series so guaranteed are issued. " (b) NUMBER AND DISTRIBUTION.—A separate series of certificates of value shall be issued to each railroad in reorganization in the region and each person leased, operated, or controlled by such a railroad that transfers rail properties to the Corporation or a subsidiary thereof. The number of certificates of value of each series to be deposited pursuant to subsection (a) shall be equal to the number of shares of series B preferred stock of the Corporation which are required to be deposited by the Corporation with the special court, pursuant to section 303(a)(1) of this title in exchange for the rail properties transferred to the Corporation or a subsidiary thereof by such transferor. Certificates of value of the appropriate series shall be distributed by the special court, pursuant to section 303(c)(4) of this title, at the same time to the same transferors, and in the same numbers of units as shares of such series B preferred stock are distributed to such transferor. " (c) REDEMPTION.— (1) Certificates of value, of any series, shall be redeemed by the Association on December 31, 1987, or on such earlier date as the Board of Directors of the Association and the Finance Committee jointly may determine and specify. " (2) E a c h certificate of value of each series shall be redeemable for an amount, payable in cash, equal to its base value on the redemption date, minus— " (A) the sum of the fair market value of the series B preferred stock applicable to such certificate, the fair market value of the common stock applicable to such certificate, and all cash dividends theretofore paid on any such series B preferred stock and on any such common stock; and " (B) any sums paid to a transferor of rail properties to whom such series of certificates of value was issued resulting from sales or leases by the Corporation of properties transferred to it by such transferor divided by the number of certificates of value distributed to such transferor. " (3) The number of shares of series B preferred stock and common stock applicable to each certificate of value of any series, pursuant to paragraph (2) of this subsection, shall be— " (A) one share of series B preferred stock (without regard to any stock splits, stock combinations, reclassifications or similar transactions affecting the number of shares of outstanding series B preferred stock following the date of distribution pursuant to section 303(c)(4) of this title); and " (B) the number of shares of common stock determined by dividing the total number of shares of common stock distributed pursuant to section 303(c)(4) of this Act to the transferor receiv-

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Page:United States Statutes at Large Volume 90 Part 1.djvu/155

 PUBLIC LAW 94-210--FEB. 5, 1976 ing such series of certificate of value by the total number of certificates of value in the series so distributed to such transferor. " (4) The base value of each certificate of value of any series shall be the value obtained by (A) taking the net liquidation value, as determined by the special court, to which the transferor to whom such series of certificates of value is issued is entitled by virtue of transfers of rail properties, under section 303(b)(1) of this title to the Corporation or a subsidiary thereof; (B) subtracting the value of other benefits provided under this Act, as determined by the special court; (C) adding such amount, if any, as the special court may determine shall be required after taking into consideration compensable unconstitutional erosion, if any, in the estate of a railroad in reorganization, or of a railroad leased, operated, or controlled by such a railroad, which the special court finds to have occurred during any bankruptcy proceeding with respect to such railroad; (D) adding interest from the transfer date to the redemption date to be compounded annually at a rate of 8 percent per annum; and (E) dividing the resulting value by the number of certificates of value of such series distributed to such transferor. In determining such base value, the special court shall give due weight and consideration to the finding of the Association as to the net liquidation value to which each transferor is entitled by virtue of conveyances of rail properties under section 303 (b)(1) of this title. For purposes of this paragraph, the term 'rail properties' includes all rights with respect to employee benefit plans transferred and assigned to the Corporation pursuant to section 303 (b)(6) of this title. Net liquidation value with respect to such rights shall be determined after taking into account all obligations finally transferred or assigned to the Corporation pursuant to such section. "(5) The fair market value of series B preferred stock and of common stock of the Corporation shall be determined in accordance with regulations prescribed by the Association, on the basis of the average price of each such security in the primary established market in which such securities are traded over a period of 120 consecutive trading days ending not less than 20 nor more than 40 trading days preceding the redemption date, or, in the case of a security for which there is not an established trading market, on the basis of the fair market value thereof as determined by the majority vote of three experts in the valuation of securities, one to be selected by the Association, one to be selected by the directors of the Corporation elected by the holders of the security to be valued, and one to be selected by the two first selected. "(d) AUTHORIZATION TOR APPROPRIATIONS.—There are authorized to be appropriated to the Secretary such sums as are necessary to discharge the obligations of the United States arising under this section.". OFFICERS AND DIRECTORS OF THE CORPORATION

611. (a) Section 301(c) of such Act (45 U.S.C. 741(c)) is LI. amended by inserting " (1) " immediately before "The members", by deleting the second sentence of such paragraph (1) and by adding at the end thereof the following new paragraph: " (2) Notwithstanding any provision of State law, after the date of enactment of this paragraph, the members of the executive committee of the Association (including duly authorized representatives of members who are authorized by this Act to be represented) and the chief executive officer and chief operating officer of the Corporation shall adopt the bylaws of the Corporation and serve as the Board of DirecSEC.

90 STAT. 105

Base value.

45 USC 743

"Rail properties.

Post, p. 110. Fair market value.

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Page:United States Statutes at Large Volume 90 Part 1.djvu/156

 90 STAT. 106

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PUBLIC LAW 94-210—FEB. 5, 1976 tors of the Corporation until all members of the Board of Directors of the Corporation have been selected in accordance with subsection (d) of this section. The chief executive officer shall serve as chairman of such Board until a chairman thereof is selected pursuant to subsection (d) of this section, after which time such chairman shall serve at the pleasure of such Board.". (b) Section 301(d) of such Act (45 U.S.C. 741(d)) is amended to read as follows: " (d) BOARD OF DIRECTORS.— (1) Notwithstanding any provision of

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State law, the articles of incorporation and bylaws of the Corporation shall provide that the Board of Directors of the Corporation shall consist of 13 members selected in accordance with the articles and bylaws of the Corporation, as follows: "(A) six individuals selected by the holders of the Corporation's debentures and series A preferred stock voting as one class, with every $100 principal amount of debentures, and every $100 liquidation amount of series A preferred stock each receiving one vote for directors; "(B) three individuals selected by the holders of the Corporation's series B preferred stock; and "(C) two individuals selected by the holders of the Corporation's common stock. " (2) The chief executive officer and the chief operating officer of the Corporation shall also serve on the Board, but the chief executive officer and chief operating officer of the Corporation shall not be entitled to vote on the election or removal of either. I n the event a vacancy occurs on the Board of Directors due to death, disability or resignation of a director (other than resignations pursuant to this subsection), such vacancy shall be filled only by a vote of the holders of the class of securities that initially elected such director. Two members of the Board selected by the holders of the Corporation's debentures and series A preferred stock shall resign when the total of the principal amount of the outstanding debentures and the amount of the liquidation amount of the outstanding series A preferred stock, once having exceeded $1,500,000,000, has been reduced below that amount; two additional members of the Board selected by the holders of the Corporation's debentures and series A preferred stock of the Corporation shall resign when the total of the principal amount of the outstanding debentures and the amount of the liquidation amount of the outstanding series A preferred stock, once having exceeded $1,500,000,000, has been reduced below $750,000,000. The two remaining members of the Board selected by the holders of the Corporation's debentures and series A preferred stock shall resign when all the debentures and series A preferred stock have been redeemed by the Corporation. As directors resign in accordance with the foregoing provisions, the election of corporate directors to fill the vacancies created by their resignations shall be governed by applicable State law and the articles and bylaws of the Corporation.". (c) Section 301 of such Act (45 U.S.C. 741) is amended by (1) striking out subsection (f) thereof; (2) redesignating subsection (g) thereof as subsection (h); and (3) inserting therein the following two new subsections: "(f)^ OFFICERS.—The officers of the Corporation shall include a chief executive officer and a chief operating officer, who shall be appointed by the Board of Directors and who shall serve at the pleasure of the Board; and such other officers as shall be provided for in the bylaws of the Corporation.

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Page:United States Statutes at Large Volume 90 Part 1.djvu/157

 PUBLIC LAW 94-210—FEB. 5, 1976

90 STAT. 107

"(g) VOTING TRUSTEES.—For and during the period between the deposit of securities of the Corporation with the special court, in accordance with section 303(a) of this title, and the distribution of 45 USC 743. such securities, in accordance with section 303(c) of this title, the special court shall, within 30 days after the date of conveyance pursuant to section 303(b)(1) of this Act, appoint one or more voting trustees for each class of securities which is so deposited. Such voting trustees shall, on behalf of the distributees, exercise the rights of the holders of such securities as their interests may appear. Within 30 days after such appointment, such voting trustees shall select members of the Board of Directors of the Corporation on behalf of the holders of the class of securities whose rights they exercise pursuant to this subsection.". MISCELLANEOUS AMENDMENTS TO TITLE III

SEC. 612. (a) Section 303(b)(3) of such Act (45 U.S.C. 743(b)(3)) is amended to read as follows: " (3)(A)(i) Notwithstanding any other provision of this Act, if an interest in railroad rolling stock is included in the rail properties conveyed pursuant to subsection (b)(1) of this section, and if such conveyance is in accordance with the requirements of clause (ii) of this subparagraph, the conveyance of such properties shall be deemed an assignment. Any such assignment shall relieve the assignor of liability for any breach which occurs after the date of such conveyance, except that such assignor shall remain liable for any breach, event of default, or violation of covenant which occurred (and any charges or obligations which accrued) prior to the date of such conveyance, regardless of whether the assignee thereof assumes such liabilities, charges or obligations. If any such liabilities, charges, or obligations (accrued prior to the date of such conveyance) are paid by or on behalf of any person or entity other than such assignor, such person or entity shall have a claim to direct reimbursement, as a current expense of administration, from such assignor, together with interest on the amount so paid. "(ii) A conveyance referred to in clause (i) of this subparagraph may be effected only if— " (I) the Corporation or a subsidiary thereof, the profitable railroad operating in the region, or the State or responsible person to whom such conveyance is made assumes all of the obligations under any applicable conditional sale agreement, equipment trust agreement, or lease with respect to such rolling stock (including any obligations which accrued prior to the date on which such properties are conveyed), and " ( II) such conveyance is made subject to such obligations. As used in this subparagraph, the term 'railroad rolling stock means assets which could be carried in Interstate Commerce Commission account numbers 52,53,54, and 57. "(B) Subject to the provisions of this paragraph, the provisions of this Act shall not affect the title and interests of any lessor, equipment trust trustee, or conditional sale vendor under any conditional sale agreement, equipment trust agreement, or lease under section 77(j) of the Bankruptcy Act (11 U.S.C. 205(j)). A profitable railroad operating in the region, the Corporation or a subsidiary thereof, or a State or responsible person, to whom such a conveyance is made as assignee or as lesseCj shall assume all liability under such conditional sale agreement, equipment trust agreement, or lease. Such an assignment or conveyance to, and such an assumption of liability by.

Railroad rolling stock, conveyance.

"Railroad rolling stock."

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Page:United States Statutes at Large Volume 90 Part 1.djvu/158

 90 STAT. 108

PUBLIC LAW 94-210—FEB. 5, 1976

such a profitable railroad, Corporation, subsidiary, State, or respon., sible person shall not be deemed a breach, an event of default, or a ' violation of any covenant of any such conditional sale agreement, equipment trust agreement, or lease so assigned or conveyed, notwithstanding any provisions of any such agreement or lease.". (b) Section 201 of the Government Corporation Control Act (31 U.S.C. 856) is amended by (1) inserting "and" after the comma at the end of subsection (7) thereof; and (2) deleting ", and (9) the Consolidated Rail Corporation to the extent provided in the Regional 45 USC 701 note. Rail Reorganization Act of 1973." and inserting in lieu thereof ".". (c)(1) Section 303(a)(1) of such Act (45 U.S.C. 743(a)(1)) is amended by inserting after "Corporation", the second time it appears " "or any subsidiary thereof". (2) Paragraphs (1) and (2) of section 303(b) of such Act (45 U.S.C. 743(b)(1) and (2)) are amended by inserting after "Corporation" each time it appears therein (except the first time) "or any subsidiary thereof". (3) Section 303(c)(1) of such Act (45 U.S.C. 743(c)(1)) is amended by inserting after "Corporation" each time it appears "or any subsidiary thereof". (4) Paragraph (2)(A) of section 303(c) of such Act (45 U.S.C. 743 (c)(2)(A)) is amended by striking "Corporation" the second time it appears and inserting in lieu thereof "Corporation or any subsidiarv thereof". (d)(1) Section 303(a)(2) of such Act (45 U.S.C. 743(a)(2)) is amended by inserting after "region" the first time it appears "and each State or responsible person (including a government entity)". (2) Section 303(b)(1) oi such Act (45 U.S.C. 743(b)(1)) is amended (A) by inserting immediately after "region" the first place it appears the following: ", States, and responsible persons", and (B) by striking out "and the respective profitable railroads operating in the region" and inserting in lieu thereof ", the respective profitable railroads operating in the region. States, and responsible persons". (3) Section 303(b)(2) of such Act (45 U.S.C. 743(b)(2)) is amended by striking out "and the respective profitable railroads operating in the region" and inserting in lieu thereof ", the respective profitable railroads operating in the region, States, and responsible persons". (4) Paragraph (4) of section 303(b) of such Act (45 U.S.C. 743 (b) (4)) is amended by striking "or the profitable railroad" and inserting in lieu thereof ", profitable railroad. State, or responsible person". (5) Section 303(c) of such Act (45 U.S.C. 743(c)) is amended by striking "and profitable railroads operating in the region" and inserting in lieu thereof ", profitable railroads operating in the region, .., States, and responsible persons". • ' • •' ' (6) Paragraph (1)(A) (ii) of section 303(c) of such Act (45 U.S.C. 743(c)(1)(A) (ii)) is amended by inserting "State, or responsible person" after "region,". (7) Paragraph (3) of section 303(c) of such Act (45 U.S.C. 743(c) (3)) is amended by inserting ", State, or responsible person" after "region" and by inserting after "railroad" each time it appears therein (except the first time) ", State, or responsible person". (8) Paragraph (4) of section 303(c) of such Act (45 U.S.C. 743 (c) (4)) is amended by inserting ", States, and responsible persons" after "railroads". (e) Section 303(c)(2) of such Act (45 U.S.C. 743(c)(2)) is amended by (1) striking out "shall" in the clause preceding subparagraph (A) thereof and inserting "may" in lieu thereof; (2) striking

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Page:United States Statutes at Large Volume 90 Part 1.djvu/159

 PUBLIC LAW 94-210—FEB. 5, 1976

90 STAT. 109

out the semicolon at the end of subparagraph (A) thereof and inserting in lieu thereof ", except that at least one share of series B preferred stock and one certificate of value shall be allocated to each such railroad;"; and (3) amending subparagraph (C) thereof to read as follows: "(C) entera judgment against the Corporation if the judgment would not endanger the viability or solvency of the Corporation.". (f) Section 303(c) of such Act (45 U.S.C. 743(c)) is amended by adding at the end thereof the following new paragraph: "(5) Whenever the special court omers, pursuant to section 303(b) ' (1) of this title, the transfer or conveyance to the Corporation or any subsidiary thereof of rail properties designated under section 206 (c)(1)(C) or (D) of this Act, to the National Railroad Passenger 45 USC 716. Corporation, to a profitable railroad, or to a State, or responsible person (including a government entity), the United States shall pay any judgment entered against the Corporation with respect to the conveyance of any such rail properties or against the National Railroad Passenger Corporation, such profitable railroad. State, or responsible person, plus interest thereon at such rate as is constitutionally required. The United States may, in its discretion, represent the Corporation or the National Railroad Passenger Corporation, such profitable railroad. State or responsible person, in any proceedings before the special court that could result in such a judgment against the Corporation under paragraph (2) of this subsection or against the National Railroad Passenger Corporation, such profitable railroad. State or responsible person, under paragraph (3) of this subsection. The Corporation, the National Railroad Passenger Corporation, any rofitable railroad. State, or responsible person, which is represented y the United States of America shall cooperate diligently in whatever manner the United States shall reasonably request of it in connection with such proceedings. Neither the Corporation, or its subsidiaries, nor the National Railroad Passenger Corporation, any profitable railroad. State or responsible person, shall be obligated to reimburse the United States for any moneys paid by the United States pursuant to this section.". (g) Section 303(d) of such Act (45 U.S.C. 743(d)) is amended by (1) striking out "5" and inserting in lieu thereof "20". (h) Section 303(c)(4) of such Act (45 U.S.C. 743(c)(4)) is amended by (1) striking out "subsection (b) " and inserting in lieu thereof "subsection (a) "; and (2) inserting after "region" the following: "and to persons leased, operated, or controlled by such railroads who so transferred or conveyed rail properties". (i) Section 303 of such Act (45 U.S.C. 743) is amended by (1) adding ", certificates of value" after "securities" in subsection (c)(1) ,, (A)(i) thereof, in the preamble of subsection (c)(2) and in subsection (c)(2) thereof, and in subsection (c)(3) thereof; (2) adding "and certificates of value" after "of the Corporation" in subsection (c)(2) (A) thereof and after "Corporation's securities" in subsection (c)(2) (B) thereof; (3) striking out "obligations of the Association" each place the phrase appears and inserting in lieu thereof "certificates of value issued by the Association"; and (4) striking out "obligations" each place it appears other than as part of such phrase and inserting in lieu thereof "certificates of value". (j)(1) Section 301(a) of such Act (45 U.S.C. 741(a)) is amended by inserting immediately after "Corporation" the following: "or such other corporate name as may be duly adopted by the Corporation". (2) Section 201(k) of such Act (45 U.S.C. 7 l l (k)), as redesignated by section 603(a) of this Act, is amended (A) by striking out "these provisions" in the third sentence thereof and inserting in lieu thereof "this provision"; (B) by striking out "or the Corporation" each place

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