45 U.S.C. § 1321 — Rail service obligations

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821, and sec- tions 825, 829, 831, 1105, 1115, and 1116 of this title and section 10362 of Title 49, Transportation, repealed sec- tions 761 to 769c, 797l, 825a, 1107, 1110, and 1114 of this title, and enacted provisions set out as a note under section 797 of this title.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. Page 265 TITLE 45—RAILROADS § 1323 1 See References in Text note below. (b) Compliance certificates (1) Within 90 days after the close of each of its fiscal years, or at the time its financial state- ments have been audited, whichever occurs later, the Corporation shall deliver to the Sec- retary of Transportation a certificate executed by an executive officer of the Corporation. Such certificate shall certify that, as of such date, the Corporation is in compliance with all require- ments (other than the requirement regarding a common stock dividend or a preferred stock div- idend) set forth in this section. Such certificate shall include audited consolidated financial statements. (2) Within 5 days after the declaration of any common stock dividend or preferred stock divi- dend, the Corporation shall deliver to the Sec- retary of Transportation a certificate executed by an executive officer of the Corporation. Such certificate shall certify that, after giving effect to any such dividend, the Corporation shall be in compliance with any requirement regarding a common stock dividend or a preferred stock div- idend set forth in this section. Such certificate shall include— (A) quarterly financial statements; and (B) a report of the Corporation’s total cap- ital expenditures, for the period with respect to which the dividend has been declared, and the fiscal year to date, and shall compare such capital expenditures to the budgeted capital expenditures and to the capital expenditures during the comparable peri- ods of the previous fiscal year. (Pub. L. 99–509, title IV, § 4021, Oct. 21, 1986, 100 Stat. 1898; Pub. L. 101–213, § 2(b)(3), Dec. 11, 1989, 103 Stat. 1843.) Editorial Notes AMENDMENTS 1989—Subsec. (a)(2). Pub. L. 101–213 struck out par. (2) which set forth circumstances under which Corporation could declare or pay a common or preferred stock divi- dend and defined terms ‘‘common stock dividend’’ and ‘‘preferred stock dividend’’. 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. § 1322. Ownership limitations (a) General (1) During a period of 3 years beginning on the sale date, no person, directly or indirectly, may acquire or hold securities representing more than 10 percent of the total votes of all out- standing voting securities of the Corporation. (2) This subsection shall not apply— (A) to the employee stock ownership plan (or successor plans) of the Corporation, (B) to the Secretary of Transportation, (C) to a railroad as described under sub- section (b), (D) to underwriting syndicates holding shares for resale, or (E) in the case of shares beneficially held for others, to commercial banks, broker-dealers, clearing corporations, or other nominees. (b) Railroads (1) During a period of 1 year beginning on the sale date, no railroad may purchase or hold, di- rectly or indirectly, more than 10 percent of any class of stock of the Corporation. During such period, no railroad may file an application with the Commission for a merger or consolidation with the Corporation or the acquisition of con- trol of the Corporation under section 11344 1 of title 49. (2) During a period of 3 years beginning on the sale date, any railroad which purchases or holds any stock of the Corporation shall vote such stock in the same proportion as all other com- mon stock of the Corporation is voted. After the expiration of 1 year after the sale date, the pre- ceding sentence shall not apply to any railroad with respect to which the Commission has ap- proved an application for a merger or consolida- tion with the Corporation or the acquisition of control of the Corporation under section 11344 1 of title 49. (3) As used in this subsection, the term ‘‘rail- road’’ means a class I railroad as determined by the Commission under the definition in effect on October 21, 1986, and includes any entity control- ling, controlled by, or under common control with any railroad (other than the Corporation or its subsidiaries). (Pub. L. 99–509, title IV, § 4022, Oct. 21, 1986, 100 Stat. 1900.) Editorial Notes REFERENCES IN TEXT Section 11344 of title 49, referred to in subsec. (b)(1), (2), was omitted in the general amendment of subtitle IV of Title 49, Transportation, by Pub. L. 104–88, title I, § 102(a), Dec. 29, 1995, 109 Stat. 804. Provisions similar to those in section 11344 are contained in sections 11324 and 14303 of Title 49. 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. § 1323. Board of Directors The Board of Directors of the Corporation shall be comprised as follows: