
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 45USC716]

 
                           TITLE 45--RAILROADS
 
                CHAPTER 16--REGIONAL RAIL REORGANIZATION
 
            SUBCHAPTER II--UNITED STATES RAILWAY ASSOCIATION
 
Sec. 716. Final system plan


(a) Goals

    The final system plan shall be formulated in such a way as to 
effectuate the following goals:
        (1) the creation, through a process of reorganization, of a 
    financially self-sustaining rail and express service system in the 
    region;
        (2) the establishment and maintenance of a rail service system 
    adequate to meet the rail transportation needs and service 
    requirements of the region;
        (3) the establishment of improved high-speed rail passenger 
    service, consonant with the recommendations of the Secretary in his 
    report of September 1971, entitled ``Recommendations for Northeast 
    Corridor Transportation'';
        (4) the preservation, to the extent consistent with other goals, 
    of existing patterns of service by railroads (including short-line 
    and terminal railroads), and of existing railroad trackage in areas 
    in which fossil fuel natural resources are located, and the 
    utilization of those modes of transportation in the region which 
    require the smallest amount of scarce energy resources and which can 
    most efficiently transport energy resources;
        (5) the retention and promotion of competition in the provision 
    of rail and other transportation services in the region;
        (6) the attainment and maintenance of any environmental 
    standards, particularly the applicable national ambient air quality 
    standards and plans established under the Clean Air Act Amendments 
    of 1970, taking into consideration the environmental impact of 
    alternative choices of action;
        (7) the movement of passengers and freight in rail 
    transportation in the region in the most efficient manner consistent 
    with safe operation, including the requirements of commuter and 
    intercity rail passenger service; the extent to which there should 
    be coordination with the National Railroad Passenger Corporation and 
    similar entities; and the identification of all short-to-medium 
    distance corridors in densely populated areas in which the major 
    upgrading of rail lines for high-speed passenger operation would 
    return substantial public benefits; and
        (8) the minimization of job losses and associated increases in 
    unemployment and community benefit costs in areas in the region 
    presently served by rail service.

(b) Factors

    The final system plan shall be based upon due consideration of all 
factors relevant to the realization of the goals set forth in subsection 
(a) of this section. Such factors include the need for and the cost of 
rehabilitation and modernization of track, equipment, and other 
facilities; methods of achieving economies in the cost of rail 
operations in the region; means of achieving rationalization of rail 
services and the rail service system in the region; marketing studies; 
the impact on railroad employees; consumer needs; traffic analyses; 
financial studies; and any other factors identified by the Association 
under section 712(b) \1\ of this title or in the report of the Secretary 
required under section 714(a) of this title.
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(c) Designations

    The final system plan shall designate--
        (1) which rail properties of railroads in reorganization in the 
    region or of railroads leased, operated, or controlled by any 
    railroad in reorganization in the region--
            (A) shall be transferred to the Corporation: 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;
            (B) shall be offered for sale to a profitable railroad 
        operating in the region and, if such offer is accepted, operated 
        by such railroad; the plan shall designate what additions shall 
        be made to the designation under subparagraph (A) of this 
        paragraph and what alternative designations shall be made under 
        this paragraph in the event such profitable railroad fails to 
        accept such offer;
            (C) shall be purchased, leased, or otherwise acquired from 
        the Corporation by the National Railroad Passenger Corporation 
        in accordance with the exercise of its option under section 
        791(d) of this title for improvement to achieve the goal set 
        forth in subsection (a)(3) of this section;
            (D) may be purchased or leased from the Corporation by (i) a 
        State or a local or regional transportation authority to meet 
        the needs of commuter and intercity rail passenger service, 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
            (E) if not otherwise required to be operated by the 
        Corporation, a government entity, or a responsible person, are 
        suitable for use for other public purposes, including highways, 
        other forms of transportation, conservation, energy 
        transmission, education or health care facilities, or 
        recreation. In carrying out this subparagraph, the Association 
        shall solicit the views and recommendations of the Secretary, 
        the Secretary of the Interior, the Administrator of the 
        Environmental Protection Agency, and other agencies of the 
        Federal Government and of the States and political subdivisions 
        thereof within the region, and the general public; and

        (2) which rail properties of profitable railroads operating in 
    the region may be offered for sale to the Corporation or to other 
    profitable railroads operating in the region subject to paragraphs 
    (3) and (4) of subsection (d) of this section. Any rail properties 
    designated to be offered for sale to the Corporation may be sold 
    instead to a subsidiary of the Corporation.

(d) Transfers

    All transfers or conveyances pursuant to the final system plan shall 
be made in accordance with, and subject to, the following principles:
        (1) All rail properties to be transferred to the Corporation or 
    any subsidiary thereof by a profitable railroad, by trustees of a 
    railroad in reorganization, or by any railroad leased, operated, or 
    controlled by a railroad in reorganization in the region, shall be 
    transferred in exchange for stock and other securities of the 
    Corporation or any subsidiary thereof (including obligations of the 
    Association) and the other benefits accruing to such railroad by 
    reason of such transfer.
        (2) All rail properties to be conveyed to a profitable railroad 
    operating in the region by trustees of a railroad in reorganization, 
    or by any railroad leased, operated, or controlled by a railroad in 
    reorganization in the region, shall be conveyed in exchange for 
    compensation from the profitable railroad.
        (3) Notwithstanding any other provision of this chapter, no 
    acquisition under this chapter shall be made by any profitable 
    railroad operating in the region without a determination with 
    respect to each such transaction and all such transactions 
    cumulatively (A) by the Association, upon adoption and release of 
    the preliminary system plan, that such acquisition or acquisitions 
    will not materially impair the profitability of any other profitable 
    railroad operating in the region or of the Corporation, and (B) by 
    the Commission, which shall be made within 90 days after adoption 
    and release by the Association of the preliminary system plan, that 
    such acquisition or acquisitions will be in full accord and comply 
    with the provisions and standards of subchapter III \2\ of chapter 
    113 of title 49. 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 published under section 717(b)(2) of this 
    title shall be deemed to be timely if made prior to the adoption of 
    the final system plan under section 717(c) of this title. The 
    determination by the Association shall not be reviewable in any 
    court. The determination by the Commission shall not be reviewable 
    in any court.
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    \2\ See References in Text note below.
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        (4) Where the final system plan designates specified rail 
    properties of a railroad in reorganization in the region, or of a 
    railroad leased, operated, or controlled by a railroad in 
    reorganization in the region, to be offered for sale to and operated 
    by a profitable railroad operating in the region, such designation 
    shall terminate 7 days after February 5, 1976, unless, prior to such 
    date, such profitable railroad has notified the Association in 
    writing of its acceptance of such offer. 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. Where the final system 
    plan designates specified rail properties of a profitable railroad 
    operating in the region as authorized to be offered for sale or 
    lease to the Corporation or to other profitable railroads operating 
    in the region, such designation and authorization shall terminate 95 
    days after the effective date of the final system plan unless, prior 
    to such date, a binding agreement with respect to such properties 
    has been entered into and concluded.
        (5) All properties--
            (A) transferred by the Corporation pursuant to subsection 
        (c)(1)(C) of this section and section 791(d) of this title;
            (B) transferred by the Corporation to any State (or local or 
        regional transportation authority), pursuant to subsection 
        (c)(1)(D) of this section, or
            (C) transferred by the Corporation to any State, local or 
        regional transportation authority, or the National Railroad 
        Passenger Corporation, within 3 years after the date of 
        conveyance, pursuant to section 743(b)(1) of this title, to meet 
        the needs of commuter or intercity rail passenger service,

    shall be transferred at a value related to the value received from 
    the Corporation pursuant to the final system plan for the transfer 
    to such Corporation of such properties. The value of any such 
    properties, which are transferred pursuant to subparagraph (B) or 
    (C) of this paragraph, shall be adjusted to reflect the value 
    attributable to any applicable maintenance and improvement provided 
    by the Corporation (to the extent the Corporation has not been 
    released from the obligation to pay for such improvements) and the 
    cost to the Corporation of transferring such properties. The 
    Corporation, its Board of Directors, and its individual directors 
    shall not be liable to any party, for money damages or in any other 
    manner, solely by reason of the fact that the Corporation 
    transferred property pursuant to section 743 of this title to meet 
    the needs of commuter or intercity rail passenger service or for 
    purposes of providing rail marine freight floating service, except 
    as otherwise provided with respect to the Corporation pursuant to 
    section 743(c)(2) of this title.
        (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 February 5, 1976.
        (7) Notwithstanding any contrary provision in the options 
    conveyed to the Corporation by railroads in reorganization, or 
    railroads leased, operated, or controlled by a railroad in 
    reorganization, with respect to the acquisition by the Corporation 
    pursuant to the final system plan, on behalf of a State (or a local 
    or regional transportation authority) of rail properties designated 
    under subsection (c)(1)(D) of this section, such options shall not 
    be deemed to have expired prior to 7 days after September 30, 1976. 
    The exercise by the Corporation of any such option shall be 
    effective if it is made, prior to the expiration of such 7-day 
    period, in the manner prescribed in such options.

(e) Corporation features

    The final system plan shall set forth--
        (1) pro forma earnings for the Corporation, as reasonably 
    projected and considering the additions or changes in the 
    designation of rail properties to be operated by the Corporation 
    which may be made under subsection (d)(4) of this section;
        (2) the capital structure of the Corporation, based on the pro 
    forma earnings of the Corporation as set forth, including such debt 
    capitalization as shall be reasonably deemed to conform to the 
    requirements of the public interest with respect to railroad debt 
    securities, including the adequacy of coverage of fixed charges; and
        (3) the manner in which employee stock ownership plans may, to 
    the extent practicable, be utilized for meeting the capitalization 
    requirements of the Corporation, taking into account (A) the 
    relative cost savings compared to conventional methods of corporate 
    finance; (B) the labor cost savings; (C) the potential for 
    minimizing strikes and producing more harmonious relations between 
    labor organizations and railway management; (D) the projected 
    employee dividend incomes; (E) the impact on quality of service and 
    prices to railway users; and (F) the promotion of the objectives of 
    this chapter of creating a financially self-sustaining railway 
    system in the region which also meets the service needs of the 
    region and the Nation.

(f) Value

    The final system plan shall designate the value of all rail 
properties to be transferred under the final system plan and the value 
of the securities and other benefits to be received for transferring 
those rail properties to the Corporation in accordance with the final 
system plan.

(g) Other provisions

    The final system plan may recommend arrangements among various 
railroads for joint use or operation of rail properties on a shared 
ownership, cooperative, pooled, or condominium-type basis, subject to 
such terms and conditions as may be specified in the final system plan. 
The final system plan shall also make such designations as are 
determined to be necessary in accordance with the provisions of section 
762 or 763 \3\ of this title.
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    \3\ See References in Text note below.
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(h) Obligational authority

    The final system plan shall recommend the amount of obligations of 
the Association which are necessary to enable it to implement the final 
system plan.

(i) Terms and conditions for securities

    The final system plan may include terms and conditions for any 
securities to be issued by the Corporation in exchange for the 
conveyance of rail properties under the final system plan which in the 
judgement of the Association will minimize any actual or potential debt 
burden on the Corporation. Any such terms and conditions for securities 
of the Corporation which purport to directly obligate the Association 
shall not become effective without affirmative approval, with or without 
modification by a joint resolution of the Congress.

(j) Additional properties deemed designated

    Any rail properties over which rail service was being provided as of 
February 5, 1976, 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)(3) 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.

(Pub. L. 93-236, title II, Sec. 206, Jan. 2, 1974, 87 Stat. 994; Pub. L. 
94-5, Sec. 2(b), Feb. 28, 1975, 89 Stat. 7; Pub. L. 94-210, title VI, 
Sec. 607(e)-(j), (o)-(q), title VIII, Sec. 807, Feb. 5, 1976, 90 Stat. 
96-98, 143; Pub. L. 94-436, Secs. 2, 4, Sept. 30, 1976, 90 Stat. 1398; 
Pub. L. 94-555, title II, Sec. 202(a), (c), Oct. 19, 1976, 90 Stat. 
2616, 2617; Pub. L. 95-611, Sec. 4(a), Nov. 8, 1978, 92 Stat. 3090.)

                       References in Text

    Clean Air Act Amendments of 1970, referred to in subsec. (a)(6), 
mean Pub. L. 91-604, Dec. 31, 1970, 84 Stat. 1676. For complete 
classification of this Act to the Code, see Short Title of 1970 
Amendment note set out under section 7401 of Title 42, The Public Health 
and Welfare, and Tables.
    Section 712(b) of this title, referred to in subsec. (b), which 
related to additional duties of the Association, was repealed and 
section 712(c) of this title was redesignated section 712(b) by Pub. L. 
97-35, title XI, Sec. 1148(a), Aug. 13, 1981, 95 Stat. 674.
    Section 714 of this title, referred to in subsec. (b), was omitted 
from the Code.
    Subchapter III of chapter 113 of title 49, referred to in subsec. 
(d)(3), was omitted in the general amendment of subtitle IV of Title 49, 
Transportation, by Pub. L. 104-88, title I, Sec. 102(a), Dec. 29, 1995, 
109 Stat. 804. Previously, in subsec. (d)(3), ``subchapter III of 
chapter 113 of title 49'' was substituted for ``section 5 of part I of 
the Interstate Commerce Act (49 U.S.C. 5)'' on authority of Pub. L. 95-
473, Sec. 3(b), Oct. 17, 1978, 92 Stat. 1446, the first section of which 
enacted subtitle IV (Sec. 10101 et seq.) of Title 49.
    Sections 762 and 763 of this title, referred to in subsec. (g), were 
repealed by Pub. L. 94-210, title VIII, Sec. 806, Feb. 5, 1976, 90 Stat. 
143, eff. Apr. 1, 1978.


                               Amendments

    1978--Subsec. (d)(5)(C). Pub. L. 95-611 substituted ``3 years'' for 
``900 days''.
    1976--Subsec. (c)(1)(A). Pub. L. 94-210, Sec. 607(g), inserted 
proviso relating to notice by the Corporation to the Association.
    Subsec. (c)(1)(B). Pub. L. 94-210, Sec. 607(f), inserted provision 
relating to alternative designations to be made under this paragraph.
    Subsec. (c)(1)(D). Pub. L. 94-210, Sec. 607(j), designated existing 
provision as cl. (i) and added cl. (ii).
    Subsec. (c)(2). Pub. L. 94-210, Sec. 607(h), inserted provision 
relating to sale of designated properties to a subsidiary of the 
Corporation.
    Subsec. (d)(1). Pub. L. 94-210, Sec. 607(i), inserted ``or any 
subsidiary thereof'' after ``Corporation'' wherever appearing.
    Subsec. (d)(3). Pub. L. 94-210, Sec. 607(e), inserted provisions 
relating to correction to the preliminary system plan published in 40 
Fed. Reg. 16377, determinations made with respect to such correction by 
the Commission, and determinations made with respect to acquisitions 
referred to in any supplement to the preliminary system plan.
    Subsec. (d)(4). Pub. L. 94-210, Sec. 607(o), inserted provision 
relating to modification of offer until the date of acceptance, and 
substituted ``95'' for ``60'' and ``7 days after February 5, 1976,'' for 
``30 days after the effective date of the final system plan''.
    Subsec. (d)(5). Pub. L. 94-555, Sec. 202(a), inserted ``or for 
purposes of providing rail marine freight floating service'' after 
``intercity rail passenger service''.
    Pub. L. 94-436, Sec. 2, inserted provision relieving the 
Corporation, its Board of Directors, and its individual directors from 
liability to any party by reason of the fact that the Corporation 
transferred property pursuant to section 743 of this title.
    Pub. L. 94-210, Sec. 807, restructured provisions and substituted 
provisions relating to valuation of transferred properties transferred 
by the Corporation and adjustment of such valuation, for provisions 
relating to valuation of transferred properties sold by the Corporation.
    Subsec. (d)(6). Pub. L. 94-210, Sec. 607(p), added par. (6).
    Subsec. (d)(7). Pub. L. 94-555, Sec. 202(c), inserted ``by the 
Corporation pursuant to the final system plan'' after ``with respect to 
the acquisition''.
    Pub. L. 94-436, Sec. 4, added par. (7).
    Subsec. (j). Pub. L. 94-210, Sec. 607(q), added subsec. (j).
    1975--Subsec. (a)(1). Pub. L. 94-5 inserted ``and express'' after 
``rail''.


                    Effective Date of 1978 Amendment

    Section 4(b) of Pub. L. 95-611 provided that: ``The amendment made 
by this Act [probably meaning this section 4, which amended section 716 
of this title] shall be effective on January 2, 1974.''


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-555 effective Oct. 1, 1976, see section 303 
of Pub. L. 94-555, set out as a note under section 702 of this title.

  Abolition of Interstate Commerce Commission and Transfer of Functions

    Interstate Commerce Commission abolished and functions of Commission 
transferred, except as otherwise provided in Pub. L. 104-88, to Surface 
Transportation Board effective Jan. 1, 1996, by section 702 of Title 49, 
Transportation, and section 101 of Pub. L. 104-88, set out as a note 
under section 701 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 appropriate, 
see section 205 of Pub. L. 104-88, set out as a note under section 701 
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.

                  Section Referred to in Other Sections

    This section is referred to in sections 702, 717, 718, 725, 743, 
744, 745, 747, 791 of this title; title 49 sections 24907, 24909.
