
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: 45USC745]

 
                           TITLE 45--RAILROADS
 
                CHAPTER 16--REGIONAL RAIL REORGANIZATION
 
              SUBCHAPTER III--CONSOLIDATED RAIL CORPORATION
 
Sec. 745. Continuing reorganization; supplemental transactions


(a) Proposals

    If the Secretary or the Association determines that, as part of 
continuing reorganization, further restructuring of rail properties in 
the region through transactions supplemental to the final system plan 
would promote the establishment and retention of a financially self-
sustaining rail service system in the region adequate to meet the needs 
of the region, the Secretary or the Association, as the case may be, may 
develop proposals for such supplemental transactions as are necessary or 
appropriate to implement the needed restructuring. Transfers of rail 
properties included in proposals developed by the Association shall be 
limited to (1) rail properties which would have qualified for 
designation under section 716(c)(1)(A) of this title but which were not 
transferred or conveyed under the final system plan, and which the 
Association finds to be essential to the efficient operations of the 
Corporation, and (2) transfers, consistent with the final system plan, 
of rail properties from the Corporation to a subsidiary thereof. Each 
proposal (other than a proposal developed by the Association) shall be 
submitted in writing to the Association and shall state and describe any 
transactions proposed, the rail properties involved, the parties to such 
transactions, the financial and other terms of such transactions, the 
purposes of the chapter or the goals of the final system plan intended 
to be effectuated by such transactions, and such other information 
incidental thereto as the Association may prescribe. Within 10 days 
after receipt of a proposal developed by the Secretary, and upon the 
development of a proposal developed by the Association, the Association 
shall publish a summary of such proposal in the Federal Register, and 
shall afford interested persons (including the Corporation when property 
is to be transferred to or from the Corporation) an opportunity to 
comment thereon.

(b) Evaluation by Association

    The Association shall analyze each proposal containing one or more 
supplemental transactions, taking into account the comments of 
interested persons and statements and exhibits submitted at any public 
hearings which may have been held. The Association shall, within 120 
days after the publication of a summary thereof under subsection (a) of 
this section, publish in the Federal Register a report evaluating such 
proposal. Such evaluation shall state whether the supplemental 
transactions contained in such proposal, considered in their entirety, 
are (1) in the public interest and consistent with the purposes of this 
chapter and the goals of the final system plan, and (2) fair and 
equitable. If the Corporation opposes, or seeks modification of, any 
such proposed transfer, its written comments shall be given due 
consideration by the Association and shall be published as part of the 
evaluation. Within 30 days after the Association publishes its report, 
each proposed transferor or transferee shall notify the Association in 
writing as to whether any proposed supplemental transaction requiring 
the transfer of any property from or to such transferor or transferee is 
acceptable to such proposed transferor or transferee. If any such 
proposed transferor (other than the Corporation) or transferee fails to 
notify the Association that any proposed supplemental transaction 
requiring the transfer of any property from such transferor or to such 
transferee is acceptable to it, no further administrative or judicial 
proceedings shall be conducted with respect to such proposed 
supplemental transaction.

(c) Review by Commission

    Within 90 days after the publication in the Federal Register of each 
report referred to in subsection (b) of this section, the Commission 
shall determine whether the supplemental transactions referred to in the 
report, considered in their entirety, would be in the public interest 
and consistent with the purposes of this chapter and the goals of the 
final system plan. In making such determination, the Commission shall 
give due consideration to the views received by it, within 30 days after 
the publication of the applicable report, from the Corporation and the 
Secretary. The Commission may condition its approval of such 
supplemental transactions on such reasonable terms and conditions as it 
may deem necessary in the public interest. The approval by the 
Commission of such supplemental transactions shall not be a prerequisite 
to the consummation of such transactions, but any determination of the 
Commission modifying, approving, or disapproving any proposed 
supplemental transactions shall be given due weight and consideration by 
the special court in the proceedings prescribed in subsection (d) of 
this section. If the Commission fails to act within the time period 
provided in this subsection, the supplemental transactions involved 
shall be deemed to have been approved by the Commission. The Commission 
may prescribe such regulations as may be necessary for the 
administration of this section.

(d) Special court proceedings

    (1) If the Association has made the determination pursuant to 
subsection (b) of this section that a proposal for supplemental 
transactions is in the public interest and consistent with the purposes 
of this chapter and the goals of the final system plan, and is fair and 
equitable, the Association shall, within 40 days after the date of the 
Commission's determination under subsection (c) of this section, or 
after the expiration of the 90-day period referred to in such subsection 
(c) of this section, whichever is applicable, petition the special court 
for an order of such court finding that such proposal for supplemental 
transactions is in the public interest and consistent with the purposes 
of this chapter and the goals of the final system plan, and is fair and 
equitable, and directing the Corporation to carry out the supplemental 
transactions specified in such proposal. If the Association has 
determined, pursuant to subsection (b) of this section that a proposal 
made by the Secretary is not in the public interest or is not consistent 
with the purposes of this chapter and the goals of the final system plan 
or is not fair and equitable, the Secretary may, if he determines that 
such proposal is in the public interest and consistent with the purposes 
of this chapter and the goals of the final system plan and is fair and 
equitable, petition the special court for an order of such court finding 
that such proposal for supplemental transactions is in the public 
interest and consistent with the purposes of this chapter and the goals 
of the final system plan and is fair and equitable, and directing the 
Corporation to carry out any supplemental transactions specified in such 
proposal. Such a petition shall be submitted to the special court within 
90 days after the date of the Commission's determination under such 
subsection (c) of this section, or after the expiration of the 90-day 
period referred to in such subsection (c) of this section, whichever is 
applicable.
    (2) After the filing of a petition under paragraph (1) of this 
subsection, the special court shall decide, after a hearing, whether the 
proposed supplemental transactions contained in such petition, 
considered in their entirety, are in the public interest and consistent 
with the purposes of this chapter and the goals of the final system plan 
and are fair and equitable. If the special court determines that such 
proposed supplemental transactions, considered in their entirety, are in 
the public interest and consistent with the purposes of this chapter and 
the goals of the final system plan and are fair and equitable, it shall, 
upon making such determination, issue such orders as may be necessary to 
direct the Corporation to consummate the transactions. If the special 
court determines that such proposed supplemental transactions, 
considered in their entirety, are not in the public interest or not 
consistent with the purposes of this chapter and the goals of the final 
system plan, or are not fair and equitable, it shall file an opinion 
stating its conclusion and the reasons therefor. In such event the 
Association (in the case of a proposal developed by the Association) or 
the Secretary (in the case of a proposal developed by the Secretary) 
may, within 120 days after the filing of such opinion, certify to the 
special court that the terms and conditions of the proposal have been 
modified consistent with the opinion of the court and are acceptable to 
each proposed transferor (other than the Corporation) or transferee, and 
may petition the special court for reconsideration of the proposal as so 
modified. After the filing of such petition, the special court shall 
decide, after a hearing, whether the proposal as modified by the 
certification is in the public interest and consistent with the purposes 
of this chapter and the goals of the final system plan and is fair and 
equitable, and shall enter such further orders as are consistent with 
its determination.
    (3) The Corporation is authorized to petition the special court and 
to be represented regarding any proposed supplemental transaction, 
contained in a proposal developed by either the Association or the 
Secretary, which involves the properties of the Corporation.
    (4) In proceedings under this subsection, the special court is 
authorized to exercise the powers of a reorganization court.
    (5) Any evaluation by the Association, the Secretary, or the 
Commission shall not be reviewable in any court except the special court 
in accordance with the provisions of this section. The supplemental 
transactions shall not be restrained or enjoined by any court nor shall 
they be otherwise reviewable by any court other than by the special 
court to the extent provided in this section.
    (6) Notwithstanding any other provision of this chapter, no 
findings, determinations, or proceedings shall be required with respect 
to any proposal for supplemental transactions other than as expressly 
set forth in this section.
    (7) Repealed. Pub. L. 97-35, title XI, Sec. 1155(b), Aug. 13, 1981, 
95 Stat. 679.
    (8) A final order or judgment of the special court entering or 
denying an order pursuant to this subsection shall be reviewable in the 
same manner as provided in section 719(e)(3) of this title.

(e) ``Fair and equitable'' defined

    As used in this section, the term ``fair and equitable'' means fair 
and equitable, in accordance with the standards applicable to the 
approval of a plan of reorganization (or a step in such plan) under 
section 77 of the Bankruptcy Act \1\ to--
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    \1\ See References in Text note below.
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        (1) the estates of railroads in reorganization in the region and 
    persons leased, operated, or controlled by such railroads who have 
    conveyed rail properties, under section 743(b)(1) of this title, in 
    exchange for securities of the Corporation, the Association, or 
    profitable railroads and other benefits provided as a consequence of 
    this chapter and to any subsequent holders of such securities at the 
    time of the supplemental transaction involved; and
        (2) the holders of other securities of the Corporation.

Whenever any property or securities of the Corporation are required to 
be valued in order to determine whether the terms of a supplemental 
transaction are fair and equitable, the special court shall give proper 
recognition to the contributions to the Corporation by all classes of 
security holders, except that such court shall not assign to the series 
B preferred stock or the common stock of the Corporation any values 
added to those securities, by reason of investment by the Association in 
debentures and series A preferred stock of the Corporation, in excess of 
any value required by constitutional principles applicable to a 
reorganization process.

(f) Expedited proposals

    (1) Within 240 days after the effective date of the Staggers Rail 
Act of 1980, the Secretary, after providing an opportunity for comments 
from interested parties, shall determine whether to initiate a proposal 
for a supplemental transaction under this section for the transfer of 
all rail properties of the Corporation in the States of Connecticut and 
Rhode Island to another railroad in the region. If the Secretary 
determines that--
        (A) the proposed transferee railroad is financially and 
    operationally capable of assuming the freight operations and freight 
    service obligations of the Corporation on a financially self-
    sustaining basis;
        (B) the proposed transfer would promote the establishment and 
    retention of a financially self-sustaining rail system in the States 
    of Connecticut and Rhode Island adequate to meet the needs of such 
    States; and
        (C) the proposed transfer is consistent with the goals set forth 
    in section 716(a)(8) of this title,

the Secretary shall develop such a proposal and may, after providing the 
Association, the Commission, and the States of Connecticut and Rhode 
Island an opportunity to review and comment on such proposal, petition 
the special court for an order to carry out such proposal.
    (2)(A) Within 10 days after August 13, 1981, the Secretary shall 
initiate discussions and negotiations for the transfer of some or all of 
the Corporation's rail properties and freight service obligations in the 
States of Connecticut and Rhode Island to one or more parties under a 
plan which provides for continued rail freight service on all lines 
operated by the Corporation on August 13, 1981, for at least four years.
    (B) Within 120 days after August 13, 1981, the Secretary shall 
petition the special court for an order to transfer all of the 
Corporation's rail properties and freight service obligations in the 
States of Connecticut and Rhode Island to one or more railroads in the 
Region--
        (i) which have under subparagraph (A) of this paragraph 
    completed negotiations and submitted to the Secretary a proposal to 
    assume all of the freight operations and freight service obligations 
    of the Corporation in such States on a financially self-sustaining 
    basis for a period of at least four years; or
        (ii) which have developed a proposal to assume all of the 
    freight operations and freight service obligations of the 
    Corporation in such States under an agreement by and between the 
    Corporation and such railroad or railroads; or
        (iii) which have, prior to May 1, 1981, submitted a proposal to 
    the Secretary for such a transfer.

For the purpose of this section, an order to transfer may include the 
Corporation if the Corporation agrees to maintain service over lines 
retained by the Corporation for four years.
    (C) To permit efficient and effective rail operations consistent 
with the public interest, as a part of any transfer under paragraph 
(2)(B) of this subsection, the Secretary shall promote the transfer of 
additional non-mainline Corporation properties in adjoining States that 
connect with properties that are the subject of such transfer.
    (D) The special court shall determine a fair and equitable price for 
the rail properties to be transferred under this subsection, and shall, 
unless the parties otherwise agree, establish divisions of joint rates 
for through routes over such properties which are fair and equitable to 
the parties. The special court shall establish a method to ensure that 
such divisions are promptly paid.
    (E) Notwithstanding any other provision of law or agreement in 
effect on May 1, 1981, the special court shall require that the railroad 
or railroads to which properties are to be transferred under this 
subsection assume all charges payable by the Corporation to Amtrak for 
the carriage of property by rail over those portions of the Northeast 
Corridor in Connecticut and Rhode Island. If the Corporation operates 
any rail freight service over those portions of the Northeast Corridor 
in Connecticut and Rhode Island after the date of such transfer, the 
Corporation shall pay Amtrak any compensation that may be separately 
agreed upon by the Corporation and Amtrak, and the railroad or railroads 
to which properties are transferred under this subsection shall not be 
obligated to pay any compensation owed by the Corporation to Amtrak for 
such post-transfer operations by the Corporation.
    (3) If the special court determines that a proposal developed under 
this subsection is fair and equitable, meets the requirements of this 
subsection, and is in the public interest, it shall issue such orders as 
may be necessary to carry out such proposal. The provisions of 
paragraphs (2)-(6) of subsection (d) of this section shall apply to the 
determination of the special court under this subsection, except that 
the standards for such determination shall be those set forth in this 
paragraph.
    (4)(A) Any employee who was protected by the compensatory provisions 
of subchapter V \2\ of this chapter immediately prior to August 13, 
1981, and who is deprived of employment as a result of the transfer of 
rail properties under this subsection shall be eligible for benefits 
under section 797 \2\ of this title.
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    \2\ See References in Text note below.
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    (B) As used in this paragraph, ``employee deprived of employment'' 
means any employee who is unable to secure employment through the normal 
exercise of seniority rights, but does not include any employee who 
refuses an offer of employment with a railroad acquiring properties 
under this subsection.

(g) Transfer of properties and freight service obligations of specific 
        lines

    (1) Within 20 days after August 13, 1981, the Secretary shall 
initiate discussions and negotiations for the expedited transfer of all 
properties and freight service obligations of the Corporation with 
respect to the following lines: Canaan, Connecticut, to Pittsfield, 
Massachusetts; North Adams Junction, Massachusetts, to North Adams, 
Massachusetts; Hazardville, Connecticut, to Springfield, Massachusetts; 
Westfield, Massachusetts, to Easthampton, Massachusetts; Westfield, 
Massachusetts, to Holyoke, Massachusetts.
    (2) Within 120 days after August 13, 1981, the Secretary shall 
transfer, provided a qualified purchaser offers to purchase, the 
Corporation's properties and freight service obligations described in 
paragraph (1) of this subsection to another railroad or railroads in the 
Region which are determined by the Secretary to be qualified. A 
qualified purchaser is defined as a railroad financially self-sustaining 
which guarantees continuous service for at least four years.
    (3) The Secretary shall determine a fair and equitable price for the 
rail properties to be transferred under this subsection, and shall, 
unless the parties otherwise agree, establish divisions of joint rates 
for through routes over such properties which are fair and equitable to 
the parties.
    (4) The Secretary shall determine fair and equitable terms for the 
provision of such trackage rights, on segments of the Corporation's 
lines not to exceed 5 miles per line transferred, to acquiring carriers 
as may be necessary to operate such transferred lines in an efficient 
manner.

(Pub. L. 93-236, title III, Sec. 305, as added Pub. L. 94-210, title VI, 
Sec. 610(b), Feb. 5, 1976, 90 Stat. 100; amended Pub. L. 96-448, title 
VI, Sec. 601(a), Oct. 14, 1980, 94 Stat. 1958; Pub. L. 97-35, title XI, 
Sec. 1155, Aug. 13, 1981, 95 Stat. 677; Pub. L. 98-620, title IV, 
Sec. 402(48), Nov. 8, 1984, 98 Stat. 3360; Pub. L. 104-317, title VI, 
Sec. 605(c)(2), Oct. 19, 1996, 110 Stat. 3859.)

                       References in Text

    Section 77 of the Bankruptcy Act, referred to in subsec. (e), was 
classified to section 205 of former Title 11, Bankruptcy. The Bankruptcy 
Act (act July 1, 1898, ch. 541, 30 Stat. 544, as amended) was repealed 
effective Oct. 1, 1979, by Pub. L. 95-598, Secs. 401(a), 402(a), Nov. 6, 
1978, 92 Stat. 2682, section 101 of which enacted revised Title 11. For 
current provisions relating to railroad reorganization, see subchapter 
IV (Sec. 1161 et seq.) of chapter 11 of Title 11.
    The effective date of the Staggers Rail Act of 1980, referred to in 
subsec. (f)(1), probably means Oct. 1, 1980, the effective date of 
section 601(a) of Pub. L. 96-448, which enacted subsec. (f) of this 
section. See section 710 of Pub. L. 96-448, set out as an Effective Date 
of 1980 Amendment note under section 1170 of Title 11.
    Subchapter V of this chapter, referred to in subsec. (f)(4)(A), was 
repealed by Pub. L. 97-35, title XI, Sec. 1144(a)(1), Aug. 13, 1981, 95 
Stat. 669.
    Section 797 of this title, referred to in subsec. (f)(4)(A), was 
repealed by Pub. L. 99-509, title IV, Sec. 4024(c), Oct. 21, 1986, 100 
Stat. 1904, effective on the sale date (Apr. 2, 1987).


                               Amendments

    1996--Subsec. (d)(4). Pub. L. 104-317, which directed amendment of 
par. (4) by striking out ``a judge of the United States district court 
with respect to such proceedings and such powers shall include those 
of'', was executed by striking out text which contained the words 
``judge of a United States'' rather than ``judge of the United States'' 
to reflect the probable intent of Congress.
    1984--Subsec. (d)(2). Pub. L. 98-620 substituted ``After'' for 
``Within 180 days after'' at beginning of first and last sentences.
    1981--Subsec. (d)(7). Pub. L. 97-35, Sec. 1155(b), struck out par. 
(7) which related to applicable requirements to supplemental 
transactions.
    Subsec. (f). Pub. L. 97-35, Sec. 1155(a), in par. (2) substituted 
provisions relating to discussions and negotiations, judicial procedures 
applicable, etc., for transfers, for provisions relating to 
establishment of a fair and equitable price for properties, and in par. 
(4) substituted provisions relating to eligibility for benefits of 
employees deprived of employment, for provisions relating to expedited 
supplemental transactions.
    Subsec. (g). Pub. L. 97-35, Sec. 1155(c), added subsec. (g).
    1980--Subsec. (f). Pub. L. 96-448 added subsec. (f).


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-317 effective 90 days after Oct. 19, 1996, 
and except as otherwise provided, applicable to proceedings that arise 
or continue after such effective date, see section 605(e) of Pub. L. 
104-317, set out as a note under section 719 of this title.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-620 not applicable to cases pending on Nov. 
8, 1984, see section 403 of Pub. L. 98-620, set out as a note under 
section 1657 of Title 28, Judiciary and Judicial Procedure.


                    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.

 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 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.
    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.


          Rail Abandonment and Discontinuance of Service Report

    Section 904 of Pub. L. 94-210 directed Secretary to submit to 
Congress, within ninety days of Feb. 5, 1976, a report on anticipated 
effect of any abandonment of lines of railroad and any discontinuances 
of rail service in States outside the region as defined in section 702 
of this title, prior to repeal by Pub. L. 103-272, Sec. 7(b), July 5, 
1994, 108 Stat. 1379.

                  Section Referred to in Other Sections

    This section is referred to in sections 702, 719, 741, 743 of this 
title.
