
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 45USC741]

 
                           TITLE 45--RAILROADS
 
                CHAPTER 16--REGIONAL RAIL REORGANIZATION
 
              SUBCHAPTER III--CONSOLIDATED RAIL CORPORATION
 
Sec. 741. Formation and structure


(a) Establishment

    There shall be established within 300 days after January 2, 1974, in 
accordance with the provisions of this section, a corporation to be 
known as the Consolidated Rail Corporation or such other corporate name 
as may be duly adopted by the Corporation.

(b) Status

    The Corporation shall be a for-profit corporation established under 
the laws of a State and shall not be an agency or instrumentality of the 
Federal Government. The Corporation shall be deemed a rail carrier 
subject to part A of subtitle IV of title 49, shall be subject to the 
provisions of this Act and, to the extent not inconsistent with such Act 
and subtitle IV of title 49, shall be subject to applicable State law. 
The principal office of the Corporation or of its principal railroad 
operating subsidiary shall be located in Philadelphia in the 
Commonwealth of Pennsylvania.

(c) Incorporators

    (1) The members of the executive committee of the Association shall 
be the incorporators of the Corporation and shall take whatever steps 
are necessary to establish the Corporation, including the filing of 
articles of incorporation.
    (2) Notwithstanding any provision of State law, after February 5, 
1976, the members of the executive committee of the Association 
(including duly authorized representatives of members who are authorized 
by this chapter to be represented) and the chief executive officer and 
chief operating officer of the Corporation shall adopt the bylaws of the 
Corporation and serve as the Board of Directors of the Corporation until 
all members of the Board of Directors of the Corporation have been 
selected in accordance with subsection (d) of this section. The chief 
executive officer shall serve as chairman of such Board until a chairman 
thereof is selected pursuant to subsection (d) of this section, after 
which time such chairman shall serve at the pleasure of such Board.

(d) Board of Directors

    (1) Notwithstanding any provision of State law, the articles of 
incorporation and bylaws of the Corporation shall provide that the Board 
of Directors of the Corporation shall consist of 13 members selected in 
accordance with the articles and bylaws of the Corporation, as follows:
        (A) six individuals selected by the holders of the Corporation's 
    debentures and series A preferred stock voting as one class, with 
    every $100 principal amount of debentures, and every $100 
    liquidation amount of series A preferred stock each receiving one 
    vote for directors;
        (B) three individuals selected by the holders of the 
    Corporation's series B preferred stock; and
        (C) two individuals selected by the holders of the Corporation's 
    common stock.

    (2) The chief executive officer and the chief operating officer of 
the Corporation shall also serve on the Board, but the chief executive 
officer and chief operating officer of the Corporation shall not be 
entitled to vote on the election or removal of either. In the event a 
vacancy occurs on the Board of Directors due to death, disability or 
resignation of a director, such vacancy shall be filled only by a vote 
of the holders of the class of securities that initially elected such 
director.

(e) Initial capitalization

    (1) The Corporation is authorized to issue debentures, series A 
preferred stock, series B preferred stock, common stock, contingent 
interest notes, and other securities.
    (2) Debentures and series A preferred stock shall be issued 
initially to the Association. Series B preferred stock and common stock 
shall be issued initially to the estates of railroads in reorganization 
in the region, to railroads leased, operated, and controlled by 
railroads in reorganization in the region, and to other persons leased, 
operated or controlled by a railroad in reorganization who are 
transferors of rail properties in exchange for rail properties 
transferred to the Corporation pursuant to the final system plan. 
Notwithstanding any other provisions of State or Federal law, the series 
B preferred stock and common stock shall have terms and conditions not 
inconsistent with the final system plan. As a condition of its 
investment in the Corporation, the Association may require that the 
Corporation adopt limitations consistent with the final system plan on 
the circumstances under which dividends on the series B preferred stock 
and common stock are payable so long as any of the debentures or series 
A preferred stock are outstanding. Notwithstanding anything to the 
contrary in the final system plan, the initial authorized number of 
shares of series B preferred stock may be 35,000,000, and the 
Corporation may issue initially for the purpose of the deposit required 
under section 743(a)(1) of this title such numbers of shares of series B 
preferred and common stock as the Association shall certify to the 
Special Court pursuant to section 719(c)(1)(3) of this title, including 
any modifications in such numbers of shares as may be ordered by the 
Special Court for the purpose of, and in connection with, such deposit 
and certification.

(f) Officers

    The officers of the Corporation shall include a chief executive 
officer and a chief operating officer, who shall be appointed by the 
Board of Directors and who shall serve at the pleasure of the Board; and 
such other officers as shall be provided for in the bylaws of the 
Corporation.

(g) Voting trustees

    For and during the period between the deposit of securities of the 
Corporation with the special court, in accordance with section 743(a) of 
this title, and the distribution of such securities, in accordance with 
section 743(c) of this title, the special court shall, within 30 days 
after the date of conveyance pursuant to section 743(b)(1) of this 
title, appoint one or more voting trustees for each class of securities 
which is so deposited. Such voting trustees shall, on behalf of the 
distributees, exercise the rights of the holders of such securities as 
their interests may appear. Within 30 days after such appointment, such 
voting trustees shall select members of the Board of Directors of the 
Corporation on behalf of the holders of the class of securities whose 
rights they exercise pursuant to this subsection.

(h) Annual report

    The Corporation shall transmit to the Congress and the President, 
not later than 90 days after the end of each fiscal year, a 
comprehensive and detailed report on all activities and accomplishments 
of the Corporation during the preceding fiscal year.

(i) Liability of directors

    No director of the Corporation shall be liable, for money damages or 
otherwise, to any party by reason of the fact that such person is or was 
a director, if, with respect to the subject matter of the action, suit, 
or proceeding, such person was fulfilling a duty which he in good faith 
reasonably believed to be required by law or vested in him in his 
capacity as a director of the Association or as an officer of the United 
States. The United States shall indemnify such person against all 
judgments, amounts paid in settlement, and costs and expenses (including 
fees of accountants, experts, and attorneys), actually and reasonably 
incurred in connection with any such action, suit, or proceeding in 
which such person is determined to have met such standard of conduct. 
This subsection shall not be construed to grant any immunity from any 
criminal law of the United States.

(j) Signal systems

    If, within two years after August 13, 1981, the Corporation applies 
for the permission of the Secretary to substitute manual block signal 
systems for automatic block signal systems on lines on which less than 
20,000,000 gross tons of freight are carried annually, the Secretary 
shall approve or disapprove such application within 90 days of its 
submission.

(k) Governing provisions after sale

    The provisions of this chapter shall not apply to the Corporation 
and to activities and other actions and responsibilities of the 
Corporation and its directors and employees after the sale date, other 
than with regard to--
        (1) section 702 of this title;
        (2) section 711(d) of this title;
        (3) section 713 of this title, but only with respect to 
    information relating to proceedings before the special court 
    established under section 719(b) of this title;
        (4) section 719 of this title, other than subsection (f) 
    thereof;
        (5) section 726(f)(8) of this title, but only as such authority 
    applies to activities related to the ESOP and related trust before 
    the sale date;
        (6) section 726(f)(9) of this title, but only as such 
    indemnification applies to activities relating to the ESOP and 
    related trust before the sale date;
        (7) section 726(f)(10) of this title with respect to all 
    securities of the Corporation issued or transferred in connection 
    with the public offering under the Conrail Privatization Act [45 
    U.S.C. 1301 et seq.] and all securities of ConRail Equity 
    Corporation and all interests in the ESOP;
        (8) section 727(c) and (e) of this title;
        (9) subsection (b) of this section, but only with respect to 
    matters covered by the last sentence of such subsection;
        (10) subsection (i) of this section, but only as such authority 
    applies to service as a director of the Corporation before the sale 
    of the interest of the United States in the common stock of the 
    Corporation;
        (11) section 742 of this title, but only to the extent of (A) 
    the creation and maintenance of the power and authority of the 
    Corporation to operate rail service and to rehabilitate, improve, 
    and modernize rail properties, and (B) the creation and maintenance 
    of the powers of the Corporation as a railroad in any State in which 
    it operates as of the sale date;
        (12) section 743(b)(1) and (2) of this title, but only to the 
    extent of establishing the legal effect of the conveyance of 
    property ordered and of the deeds and other instruments executed, 
    acknowledged, delivered, or recorded in connection therewith and the 
    quality of title acquired in such property;
        (13) section 743(b)(3)(B) of this title with respect to the 
    effect of an assignment, conveyance, or assumption as set forth in 
    the last sentence of such subparagraph (B);
        (14) section 743(b)(5) of this title;
        (15) section 743(b)(6) of this title, but only with respect to 
    establishing and maintaining the rights of the Corporation with 
    respect to, limiting its obligations with respect to, and 
    establishing the status of, the employee pension and welfare benefit 
    plans transferred to the Corporation thereunder and with respect to 
    the exclusivity of the jurisdiction of the special court and the 
    limitation of jurisdiction of other courts;
        (16) section 743(e) of this title;
        (17) section 744 of this title, but only with respect to the 
    finality of abandonments completed before the sale date pursuant to 
    the authority thereof;
        (18) section 745 of this title, but only as to the effect, and 
    continuing administration, of supplemental transactions consummated 
    before the sale date;
        (19) section 748 of this title, but only (A) as to the finality 
    of abandonments completed before the sale date and (B) as to 
    abandonments of lines where a notice or notices of insufficient 
    revenues with respect to such lines have been filed before November 
    1, 1985;
        (20) section 791(a)(2) of this title, but only with respect to 
    activities before the sale date;
        (21) section 791(b)(2) and (b)(3) of this title, but only with 
    respect to issuance of and transactions in any security of the 
    Corporation before the sale date;
        (22) section 797a(e) of this title;
        (23) section 797b of this title;
        (24) section 797c of this title;
        (25) sections 797e(a), 797f, and 797g(a) of this title, but only 
    insofar as they establish part of the prevailing status quo for the 
    Corporation's employees' rates of pay, rules, and working 
    conditions, such provisions to continue to apply unless changed 
    pursuant to section 156 of this title;
        (26) section 797h of this title;
        (27) section 797i(b)(1) of this title;
        (28) section 797j of this title; and
        (29) section 797m of this title, but only with regard to 
    disputes or controversies specified in such section that arose 
    before the sale date.

(Pub. L. 93-236, title III, Sec. 301, Jan. 2, 1974, 87 Stat. 1004; Pub. 
L. 94-210, title VI, Secs. 608, 611, 612(j)(1), (3), (m), Feb. 5, 1976, 
90 Stat. 99, 105, 109, 110; Pub. L. 94-216, Secs. 1, 3, Feb. 17, 1976, 
90 Stat. 191; Pub. L. 94-248, Sec. 4, Mar. 25, 1976, 90 Stat. 286; Pub. 
L. 97-35, title XI, Sec. 1141, Aug. 13, 1981, 95 Stat. 653; Pub. L. 99-
509, title IV, Sec. 4032, Oct. 21, 1986, 100 Stat. 1906; Pub. L. 104-88, 
title III, Sec. 327(2), Dec. 29, 1995, 109 Stat. 951.)

                       References in Text

    This Act, referred to in subsec. (b), means the Regional Rail 
Reorganization Act of 1973, Pub. L. 93-236, Jan. 2, 1974, 87 Stat. 985, 
as amended, which is classified principally to this chapter (Sec. 701 et 
seq.). For complete classification of this Act to the Code, see Short 
Title note set out under section 701 of this title and Tables.
    The Conrail Privatization Act, referred to in subsec. (k)(7), is 
subtitle A (Secs. 4001-4052) of title IV of Pub. L. 99-509, Oct. 21, 
1986, 100 Stat. 1892, which is classified principally to chapter 22 
(Sec. 1301 et seq.) of this title. For complete classification of this 
Act to the Code, see Short Title note set out under section 1301 of this 
title and Tables.

                          Codification

    In subsec. (b), ``such Act and subtitle IV of title 49'' substituted 
for ``such Acts'', on authority of Pub. L. 95-473, Sec. 3(b), Oct. 17, 
1978, 92 Stat. 1466, the first section of which enacted subtitle IV 
(Sec. 10101 et seq.) of Title 49, Transportation.
    The last sentence of subsec. (f) of this section as originally 
enacted, which amended section 856 of former Title 31, Money and 
Finance, was repealed by Pub. L. 97-258, Sec. 5(b), Sept. 13, 1982, 96 
Stat. 1068, the first section of which enacted Title 31.


                               Amendments

    1995--Subsec. (b). Pub. L. 104-88, Sec. 327(2), substituted ``rail 
carrier subject to part A of subtitle IV of title 49'' for ``common 
carrier by railroad under section 1(3) of the Interstate Commerce Act 
(49 U.S.C. 1(3))''.
    1986--Subsec. (k). Pub. L. 99-509 added subsec. (k).
    1981--Subsec. (d)(2). Pub. L. 97-35, Sec. 1141(a), struck out 
provisions respecting resignations.
    Subsec. (e)(1). Pub. L. 97-35, Sec. 1141(b), substituted ``The'' for 
``In order to carry out the final system plan, the''.
    Subsec. (j). Pub. L. 97-35, Sec. 1141(c), substituted provisions 
relating to signal systems for provisions relating to corporate 
simplification.
    1976--Subsec. (a). Pub. L. 94-210, Sec. 612(j)(1), inserted ``or 
such other corporate name as may be duly adopted by the Corporation'' 
after ``Corporation''.
    Subsec. (b). Pub. L. 94-210, Sec. 612(j)(3), inserted ``or of its 
principal railroad operating subsidiary'' after ``of the Corporation''.
    Subsec. (c). Pub. L. 94-210, Sec. 611(a), designated existing 
provisions as par. (1), struck out provision relating to service of the 
incorporators as the Board of Directors, and added par. (2).
    Subsec. (d). Pub. L. 94-210, Sec. 611(b), designated existing 
provisions as par. (1), inserted provision relating to applicability of 
State law, decreased membership from 15 to 13, and revised criteria for 
selection to membership, and added par. (2).
    Subsec. (e). Pub. L. 94-210, Sec. 608, designated existing 
provisions as par. (1), substituted provisions authorizing issuance of 
debentures, series A preferred stock, series B preferred stock, common 
stock, contingent interest notes, and other securities, for provisions 
relating to issuance of stock and other securities, and added par. (2).
    Subsec. (e)(2). Pub. L. 94-248 inserted provisions relating to 
initial authorized number of shares of series B preferred stock and 
provisions setting such number at 35,000,000.
    Subsec. (f). Pub. L. 94-210, Sec. 611(c), added subsec. (f). Former 
subsec. (f), which related to a Federal Government audit of the 
Corporation, was struck out.
    Subsec. (g). Pub. L. 94-210, Sec. 611(c), added subsec. (g). Former 
subsec. (g) redesignated (h) ``Annual report''.
    Subsec. (h). Pub. L. 94-216, Sec. 1, redesignated subsec. (h) 
``Liability of directors'' as (i).
    Pub. L. 94-210, Secs. 611(c), 612(m), redesignated former subsec. 
(g) as (h) ``Annual report'' and added subsec. (h) ``Liability of 
directors''.
    Subsec. (i). Pub. L. 94-216, Secs. 1, 3, redesignated former subsec. 
(h) ``Liability of directors'' as (i) and substituted ``a director of 
the Association'' for ``a director of the Corporation''. Former subsec. 
(i) redesignated (j).
    Pub. L. 94-210, Sec. 612(m), added subsec. (i) ``Corporate 
simplification''.
    Subsec. (j). Pub. L. 94-216, Sec. 1, redesignated former subsec. (i) 
``Corporate simplification'' as (j).


                    Effective Date of 1995 Amendment

    Amendment by Pub. L. 104-88 effective Jan. 1, 1996, see section 2 of 
Pub. L. 104-88, set out as an Effective Date note under section 701 of 
Title 49, Transportation.


                    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.

 Abolition of Special Court, Regional Rail Reorganization Act of 1973, 
                        and Transfer of Functions

    Special court abolished and all jurisdiction and functions 
transferred to United States District Court for District of Columbia, 
see section 719(b)(2) 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 702, 719, 726 of this title.
