45 U.S.C. § 725 — Interim agreements

Page 180 TITLE 45—RAILROADS § 725 Subsec. (b). Pub. L. 94–210, § 607(m)(1), substituted ‘‘$7,000,000’’ for ‘‘$5,000,000’’. Subsec. (c). Pub. L. 94–436 substituted provisions au- thorizing appropriations of such sums as are necessary not to exceed $20,000,000 for the period beginning May 1, 1976, and ending Sept. 30, 1977 to remain available until Sept. 30, 1978 for provisions authorizing appropriations of such sums as are necessary not to exceed $40,000,000 to remain available until expended. Pub. L. 94–210, § 607(m)(2), authorized appropriation of not to exceed $14,000,000 for fiscal period which includes fiscal period ending Sept. 30, 1977. 1974—Subsec. (c). Pub. L. 93–488 substituted ‘‘$40,000,000’’ for ‘‘$26,000,000’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 effective Aug. 13, 1981, see section 1169 of Pub. L. 97–35, set out as an Effective Date note under section 1101 of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–448 effective Oct. 1, 1980, see section 710(a) of Pub. L. 96–448, set out as a note under section 1170 of Title 11, Bankruptcy. EFFECTIVE DATE OF 1979 AMENDMENT Amendment by Pub. L. 96–73 effective Oct. 1, 1979, see section 501(a) of Pub. L. 96–73. 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. ABOLITION OF UNITED STATES RAILWAY ASSOCIATION AND TRANSFER OF FUNCTIONS AND SECURITIES See section 1341 of this title. APPLICABILITY OF NATIONAL ENVIRONMENTAL POLICY ACT Application of National Environmental Policy Act to actions of Commission not affected by title VI of Pub. L. 94–210, see section 619 of Pub. L. 94–210, set out as a note under section 791 of this title. § 725. Interim agreements (a) Purposes Prior to the date upon which rail properties are conveyed to the Corporation under this chapter, the Secretary, with the approval of the Association, is authorized to enter into agree- ments with the trustees of the railroads in reor- ganization in the region (or railroads leased, op- erated, or controlled by railroads in reorganiza- tion)— (1) to perform the program maintenance on designated rail properties of such railroads until the date rail properties are conveyed under this chapter; (2) to improve rail properties of such rail- roads; and (3) to acquire rail properties for lease or loan to any such railroads until the date such rail properties are conveyed under this chapter, and subsequently for conveyance pursuant to the final system plan, or to acquire interests in such rail properties owned by or leased to any such railroads or in purchase money obli- gations therefor. (b) Conditions Agreements pursuant to subsection (a) of this section shall contain such reasonable terms and conditions as the Secretary may prescribe. In addition, agreements under paragraphs (1) and (2) of subsection (a) of this section shall provide that— (1) to the extent that physical condition is used as a basis for determining, under section 716(f) or 743(c) of this title, the value of prop- erties subject to such an agreement and des- ignated for transfer to the Corporation under the final system plan, the physical condition of the properties on the effective date of the agreement shall be used; and (2) in the event that property subject to the agreement is sold, leased, or transferred to an entity other than the Corporation, the trust- ees or railroad shall pay or assign to the Sec- retary that portion of the proceeds of such sale, lease, or transfer which reflects value at- tributable to the maintenance and improve- ment provided pursuant to the agreement. (c) Obligations Notwithstanding section 720(b) of this title, the Association shall issue obligations under section 720(a) of this title in an amount suffi- cient to finance such agreements and shall re- quire the Corporation to assume any such obli- gations. The aggregate amount of obligations issued under this section and outstanding at any one time shall not exceed $300,000,000. The Asso- ciation, with the approval of the Secretary, shall designate in the final system plan that portion of such obligations issued or to be issued which shall be refinanced and the terms thereof, and that portion from which the Corporation shall be released of its obligations. (d) Conveyance The Secretary may convey to the Corporation or any subsidiary thereof, with or without re- ceipt of consideration, any property or interests acquired by, transferred to, or otherwise held by the Secretary pursuant to this section or section 723 of this title. (Pub. L. 93–236, title II, § 215, Jan. 2, 1974, 87 Stat. 1004; Pub. L. 94–5, § 7, Feb. 28, 1975, 89 Stat. 8; Pub. L. 94–210, title VI, § 607(i), Feb. 5, 1976, 90 Stat. 97.) Editorial Notes AMENDMENTS 1976—Subsec. (d). Pub. L. 94–210 inserted ‘‘or any sub- sidiary thereof’’ after ‘‘Corporation’’. 1975—Pub. L. 94–5 expanded provisions covering in- terim agreements for the acquisition, maintenance, and improvement of railroad properties, substituted provisions setting out the requisite conditions of such agreements for provisions making only a general re- quirement that such agreements identify the type and quality of improvements to be made, raised from $150,000,000 to $300,000,000 the maximum amount of out- standing obligations, and substituted provisions direct- ing the Association in the final system plan to des- Page 181 TITLE 45—RAILROADS § 726 1 See References in Text note below. ignate that portion of the obligations which shall be re- financed and that portion from which the Corporation shall be released of its obligations for provisions pro- hibiting the Secretary’s entry into agreements unless he issues regulations setting forth procedures and guidelines for the administration of this section, sub- stituted provisions authorizing the Secretary to convey to the Corporation property or interests held by the Secretary pursuant to this section or section 723 of this title for provisions relieving the Corporation of the duty of compensating railroads in reorganization for that portion of transferred properties attributable to the acquisition, maintenance, or improvement of such properties under this section. Statutory Notes and Related Subsidiaries ABOLITION OF UNITED STATES RAILWAY ASSOCIATION AND TRANSFER OF FUNCTIONS AND SECURITIES See section 1341 of this title. APPLICABILITY OF NATIONAL ENVIRONMENTAL POLICY ACT Application of National Environmental Policy Act to actions of Commission not affected by title VI of Pub. L. 94–210, see section 619 of Pub. L. 94–210, set out as a note under section 791 of this title. § 726. Debentures and series A preferred stock (a) General The Association is authorized, in accordance with the provisions of this section, and such rules and regulations as it may prescribe, to in- vest 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 $2,629,000,000 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 be prescribed by the Association), to pro- vide— (A) for the modernization, rehabilitation and maintenance of rail properties of the Corpora- tion; (B) for the acquisition of equipment and other capital needs; (C) for the refinancing of indebtedness which was incurred by the Corporation under section 721 of this title or which was incurred under section 725 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 deben- tures and, thereafter, of up to $2,300,000,000 of se- ries A preferred stock shall be made by the As- sociation as required and requested by the Cor- poration, unless the Finance Committee makes an affirmative finding that— (A) the Corporation has failed in any mate- rial 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 Directors) to attain the overall operating (including re- habilitation) and financial results projected for the Corporation in the final system plan (including any modifications of such projected results and of the performance margins appli- cable 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 (C) it is not reasonably likely, taking into consideration all relevant factors including the overall operating (including rehabilita- tion) and financial results achieved by the Corporation, that the Corporation will be able to become financially self-sustaining without requiring Federal financial assistance substan- tially in excess of the amounts authorized in this section. (3)(A) Amounts transferred to the Association pursuant to section 509(b)(1) 1 of the Railroad Re- vitalization and Regulatory Reform Act of 1976 may be used to purchase series A preferred stock of the Corporation to provide for the implemen- tation by the Corporation of a program to re- duce the Corporation’s work force, if the Fi- nance Committee finds that the implementation of such program will result in substantial sav- ings to the United States. (B) An employee who ceases to be an employee as a result of the reduction of work force under a program implemented pursuant to this para- graph shall not, by reason of so ceasing to be an employee, or by reason of any work or employ- ment entered into after so ceasing to be an em- ployee, lose such employee’s current connection with the railroad industry for the purposes of the Railroad Retirement Act of 1974 [45 U.S.C. 231 et seq.]. (4) Purchases of up to $329,000,000 of a series A preferred stock shall be made by the Associa- tion, subject to the availability of appropria- tions, as required and requested by the Corpora- tion, if the Finance Committee makes an af- firmative finding that the Corporation has taken appropriate action to eliminate losses on light density lines and other lines which are un- profitable. Such action shall include the imposi- tion of surcharges on such lines, the abandon- ment of such lines, and the transfer of such lines. (5) The authority of the Association to pur- chase debentures or series A preferred stock of the Corporation shall terminate October 21, 1986. (c) Finding, direction, and review by Congress (1) If the Finance Committee makes an affirm- ative 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 pre- ferred 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