
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: 45USC720]

 
                           TITLE 45--RAILROADS
 
                CHAPTER 16--REGIONAL RAIL REORGANIZATION
 
            SUBCHAPTER II--UNITED STATES RAILWAY ASSOCIATION
 
Sec. 720. Obligations of Association


(a) General

    To carry out the purposes of this chapter, the Association is 
authorized to issue bonds, debentures, trust certificates, securities, 
or other obligations (herein cited as ``obligations'') in accordance 
with this section. Such obligations shall have such maturities and bear 
such rate or rates of interest as are determined by the Association with 
the approval of the Secretary of the Treasury. Such obligations shall be 
redeemable at the option of the Association prior to maturity in the 
manner stipulated in each such obligation, and may be purchased by the 
Association in the open market at a price which is reasonable.

(b) Maximum obligational authority

    The aggregate principal amount (exclusive of interest or additions 
to principal on account of accrual of interest) of obligations issued by 
the Association under this section which may be outstanding at any one 
time shall not exceed $395,000,000. No obligations or proceeds thereof 
shall be issued or made available after February 5, 1976, except--
        (1) to meet existing or potential commitments for loans under 
    section 721 of this title made or applied for prior to January 1, 
    1976; and
        (2) for the purpose of providing loans pursuant to subsections 
    (g) and (h) of section 721 of this title.

(c) Guarantees

    The Secretary shall guarantee the payment of principal and interest 
on all obligations issued by the Association in accordance with this 
chapter and which the Association requests be guaranteed. 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.

(d) Validity

    No obligation issued by the Association under this section shall be 
terminated, canceled, or otherwise revoked, except in accordance with 
lawful terms and conditions prescribed by the Association. Such an 
obligation shall be conclusive evidence that it is in compliance with 
this section, has been approved, and is legal as to principal, interest, 
and other terms. An obligation of the Association shall be valid and 
incontestable in the hands of a holder, except as to fraud, duress, 
mutual mistake of fact, or material misrepresentation by or involving 
such holder.

(e) The Secretary of the Treasury

    If at any time the moneys available to the Secretary are 
insufficient to enable him to discharge his responsibilities under 
subsection (c) of this section or under subsection (a) of section 746 of 
this title, he shall issue notes or other obligations to the Secretary 
of the Treasury in such forms and denominations, bearing such 
maturities, and subject to such terms and conditions as may be 
prescribed by the Secretary of the Treasury. Such obligations shall bear 
interest at a rate to be determined by the Secretary of the Treasury 
taking into consideration the current average market yield on 
outstanding marketable obligations of the United States of comparable 
maturities during the month preceding the issuance of such obligations. 
The Secretary of the Treasury is authorized and directed to purchase any 
such obligations and for such purposes is authorized to use as a public 
debt transaction the proceeds from the sale of any securities issued 
under chapter 31 of title 31. The purposes for which securities may be 
issued under such chapter are extended to include any purchase of notes 
or other obligations issued under this subsection. At any time, the 
Secretary of the Treasury may sell any such obligations, and all sales, 
purchases, and redemptions of such obligations by the Secretary of the 
Treasury shall be treated as public debt transactions of the United 
States.

(f) Authorization for appropriations

    There are hereby authorized to be appropriated to the Secretary such 
amounts as are necessary to discharge the obligations of the United 
States arising under this section.

(g) Lawful investments

    All obligations issued by the Association shall be lawful 
investments and may be accepted as security for all fiduciary, trust, 
and public funds, the investment or deposit of which shall be under the 
authority and control of the United States or any officer or officers 
thereof. All such obligations issued pursuant to this section shall be 
exempt securities within the meaning of laws administered by the 
Securities and Exchange Commission.

(Pub. L. 93-236, title II, Sec. 210, Jan. 2, 1974, 87 Stat. 1000; Pub. 
L. 94-210, title VI, Secs. 604, 607(k), Feb. 5, 1976, 90 Stat. 88, 97; 
Pub. L. 94-555, title II, Sec. 203(e), Oct. 19, 1976, 90 Stat. 2620; 
Pub. L. 96-448, title VII, Sec. 703(f)(3), Oct. 14, 1980, 94 Stat. 
1965.)

                          Codification

    In subsec. (e), ``chapter 31 of title 31'' and ``such chapter'' 
substituted for ``the Second Liberty Bond Act, as amended'' and ``such 
Act'', respectively, on authority of Pub. L. 97-258, Sec. 4(b), Sept. 
13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, 
Money and Finance.


                               Amendments

    1980--Subsec. (e). Pub. L. 96-448 inserted ``or under subsection (a) 
of section 746 of this title'' after ``subsection (c) of this section''.
    1976--Subsec. (b). Pub. L. 94-555 inserted ``(exclusive of interest 
or additions to principal on account of accrual of interest)'' after 
``aggregate principal amount'', and raised maximum amount allowed for 
outstanding obligations issued by Association to $395,000,000.
    Pub. L. 94-210, Sec. 604, substituted provisions authorizing 
$275,000,000 as maximum of aggregate amount of obligations outstanding 
at any one time and provisions relating to availability or issuance 
after Feb. 5, 1976, for provisions authorizing $1,500,000,000 as maximum 
of aggregate amount of obligations outstanding at any one time and 
provisions relating to limitations on amounts issued to Corporation and 
available for rehabilitation and modernization of rail properties.
    Subsec. (c). Pub. L. 94-210, Sec. 607(k), inserted provisions 
relating to guarantees as general obligations of the United States and 
pledge of full faith and credit for payment.


                    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 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 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 721, 725 of this title.
