45 U.S.C. § 1312 — Public offering

Page 263 TITLE 45—RAILROADS § 1312 (2) In selecting the investment banking firms to serve as co-lead managers of the public offer- ing under paragraph (1), consideration shall be given to the firm’s institutional and retail dis- tribution capabilities, financial strength, knowl- edge of the railroad industry, experience in large scale public offerings, research capability, and reputation. In addition, recognition shall also be given to contributions made by particular in- vestment banking firms before October 21, 1986, in demonstrating and promoting the long-term financial viability of the Corporation. (b) Payment to United States (1) Not later than 30 days after October 21, 1986, the Corporation shall transfer to the Sec- retary of the Treasury $200,000,000. (2) On or before February 1, 1987, or 30 days be- fore the sale date, whichever occurs first, the Secretary of Transportation shall determine whether to require the Corporation to transfer to the Secretary of the Treasury, in addition to amounts transferred under paragraph (1), not to exceed $100,000,000, taking into account the via- bility of the Corporation. The Corporation shall transfer such funds as are required to be trans- ferred under this paragraph. (c) Registration statement The Corporation shall prepare and cause to be filed with the Securities and Exchange Commis- sion a registration statement with respect to the securities to be offered and sold in accord- ance with the securities laws and the rules and regulations thereunder in connection with the initial and any subsequent public offering. (d) Omitted (Pub. L. 99–509, title IV, § 4011, Oct. 21, 1986, 100 Stat. 1895.) Editorial Notes REFERENCES IN TEXT This part, referred to in subsec. (a), was in the origi- nal ‘‘this subpart’’ meaning subpart A (§§ 4011–4013) of part 2 of subtitle A of title IV of Pub. L. 99–509, Oct. 21, 1986, 100 Stat. 1895, which enacted this part and amend- ed section 726 of this title. For complete classification of subpart A to the Code, see Tables. CODIFICATION Subsec. (d) of this section amended section 726 of this title. § 1312. Public offering (a) Structure of public offering (1) After the registration statement referred to in section 1311(c) of this title is declared ef- fective by the Securities and Exchange Commis- sion, the Secretary of Transportation, in con- sultation with the Secretary of the Treasury, the Chairman of the Board of Directors of the Corporation, and the co-lead managers, shall offer the United States shares for sale in a pub- lic offering, except as provided in paragraphs (2) and (3). (2) The Secretary of Transportation, after such consultation, may elect to offer less than all of the United States shares for sale at the time of the initial sale. (3) Under no circumstances shall the Secretary of Transportation offer any of the United States shares for sale unless, before the sale date, the Secretary determines, after such consultation, that the estimated sum of the gross proceeds from the sale of all the United States shares will be an adequate amount. A determination by the Secretary under this paragraph shall not be re- viewable. (4) In making a determination under para- graph (3), the Secretary shall have the goal of obtaining at least $2,000,000,000 in aggregate gross proceeds for the United States from the public offering and any payments made under section 1311(b) of this title. (b) Subsequent sales If the Secretary of Transportation elects to offer for sale less than all the United States shares, the Secretary shall sell the remaining United States shares in subsequent public offer- ings. (c) Consent of Corporation not required Any public offering under this section may be made without the consent of the Corporation. (d) Authority to require stock splits (1) The Secretary of Transportation, in con- sultation with the co-lead managers and the Chairman of the Board of Directors of the Cor- poration, may, in connection with the initial public offering described in subsection (a), be- fore the filing of the registration statement re- ferred to in section 1311(c) of this title, require the Corporation to declare a stock split or re- verse stock split. (2) The Corporation shall take such action as may be necessary to comply with the Sec- retary’s requirements under this subsection. (e) Cancellation of other securities held by United States (1) In consideration for amounts transferred to the United States under section 1311(b) of this title, the Secretary of Transportation shall, con- current with the initial public offering described in subsection (a), deliver to the Corporation all preferred stock, 7.5 percent debentures, and con- tingent interest notes of the Corporation. The Corporation shall immediately cancel such de- bentures, preferred stock, and contingent inter- est notes, and any interest of the United States in such debentures, preferred stock, and contin- gent interest notes shall be thereby extin- guished. (2) For purposes of regulation by the Commis- sion and State public utility regulation, the ac- tions authorized by this subsection, the public offering, and the value of the consideration re- ceived therefor shall not change the value of the Corporation’s assets net of depreciation and shall not be used to alter the calculation of the Corporation’s stock or asset values, rate base, expenses, costs, returns, profits, or revenues, or otherwise affect or be the basis for a change in the regulation of any railroad service, rate, or practice provided or established by the Corpora- tion, or any change in the financial reporting practice of the Corporation. (f) Minority investment banking firms The Secretary of Transportation shall ensure that minority owned or controlled investment banking firms shall have an opportunity to par- Page 264 TITLE 45—RAILROADS § 1313 ticipate to a significant degree in any public of- fering under this subchapter. (g) Investment banking firm requirements (1) The level of any investment banking firm’s participation in the public offering shall be con- sistent with that firm’s financial capabilities. (2) No investment banking firm which was not in existence on September 1, 1986, shall partici- pate in the public offering. (h) Government Accountability Office authority to conduct audits The Government Accountability Office may make such audits as may be deemed appropriate by the Comptroller General of the United States of all accounts, books, records, memoranda, cor- respondence, and other documents and trans- actions of the Corporation and the co-lead man- agers associated with the public offering. The co-lead managers shall agree, in writing, to allow the Government Accountability Office to make such audits. The Government Account- ability Office shall report the results of all such audits to the Congress. (Pub. L. 99–509, title IV, § 4012, Oct. 21, 1986, 100 Stat. 1896; Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814.) Editorial Notes REFERENCES IN TEXT This subchapter, referred to in subsec. (f), was in the original ‘‘this part’’ meaning part 2 (§§ 4011–4038) of sub- title A of title IV of Pub. L. 99–509, Oct. 21, 1986, 100 Stat. 1895, which enacted this subchapter, amended sec- tions 702, 726, 727, 741, 797, former section 821, and sec- tions 825, 829, 831, 1105, 1115, and 1116 of this title and section 10362 of Title 49, Transportation, repealed sec- tions 761 to 769c, 797l, 825a, 1107, 1110, and 1114 of this title, and enacted provisions set out as a note under section 797 of this title. For complete classification of part 2 to the Code, see Tables. AMENDMENTS 2004—Subsec. (h). Pub. L. 108–271 substituted ‘‘Gov- ernment Accountability Office’’ for ‘‘General Account- ing Office’’ in heading and wherever appearing in text. Statutory Notes and Related Subsidiaries ABOLITION OF INTERSTATE COMMERCE COMMISSION AND TRANSFER OF FUNCTIONS Interstate Commerce Commission abolished and func- tions of Commission transferred, except as otherwise provided in Pub. L. 104–88, to Surface Transportation Board effective Jan. 1, 1996, by section 1302 of Title 49, Transportation, and section 101 of Pub. L. 104–88, set out as a note under section 1301 of Title 49. References to Interstate Commerce Commission deemed to refer to Surface Transportation Board, a member or employee of the Board, or Secretary of Transportation, as appro- priate, see section 205 of Pub. L. 104–88, set out as a note under section 1301 of Title 49. § 1313. Fees (a) Investment banking firm fees The Secretary of Transportation, in consulta- tion with the Secretary of the Treasury, shall agree to pay to investment banking firms and other persons participating with such firms in the public offering the absolute minimum amount in fees necessary to carry out the public offering. (b) Costs of public offering All costs of the public offering payable by the Secretary of Transportation shall be paid from the proceeds of the public offering. (Pub. L. 99–509, title IV, § 4013, Oct. 21, 1986, 100 Stat. 1897.) PART B—OTHER MATTERS RELATING TO SALE § 1321. Rail service obligations (a) Obligations of Corporation During a period of 5 years beginning on Octo- ber 21, 1986, the following obligations shall apply to the Corporation: (1) The Corporation shall spend in each fiscal year the greater of (A) an amount equal to the Corporation’s depreciation for financial re- porting purposes for such year or (B) $500,000,000, in capital expenditures. With re- spect to any fiscal year, the Corporation’s Board of Directors may reduce the required capital expenditures for such year to an amount which the Board determines is justi- fied by prudent business and engineering prac- tices, except that the Corporation’s capital ex- penditures shall not be less than $350,000,000 for its first fiscal year beginning after the sale date, a total of $700,000,000 for its first two fis- cal years beginning after the sale date, a total of $1,050,000,000 for its first three fiscal years beginning after the sale date, a total of $1,400,000,000 for its first four fiscal years be- ginning after the sale date, and a total of $1,750,000,000 for its first five fiscal years be- ginning after the sale date. (2) Repealed. Pub. L. 101–213, § 2(b)(3), Dec. 11, 1989, 103 Stat. 1843. (3) The Corporation shall continue its af- firmative action program and its minority vendor program, substantially as such pro- grams were being conducted by the Corpora- tion as of February 8, 1985, subject to any pro- visions of applicable law. (4) The Corporation shall not permit to occur any transaction or series of transactions (other than in the ordinary course of business of the Corporation and its subsidiaries) where- by all or any substantial part of the railroad assets and business of the Corporation and its subsidiaries taken as a whole are sold, leased, transferred, or otherwise disposed of to any corporation or entity other than to a wholly owned subsidiary of the Corporation. (5) The Corporation shall offer any line for which an abandonment certificate is issued by the Commission to a purchaser who agrees to provide interconnecting rail service. Such offer shall last for the 120-day period following the date of issuance of the abandonment cer- tificate and the price for such abandoned line shall be equal to 75 percent of net liquidation value as determined by the Commission, pur- suant to regulations that had been issued under section 748 of this title. (6) The Corporation and its subsidiaries shall maintain, preserve, protect, and keep their re- spective properties in good repair, working order, and condition, and shall not permit de- ferral of normal and prudent maintenance nec- essary to provide and maintain rail service.