
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: 45USC823]

 
                           TITLE 45--RAILROADS
 
        CHAPTER 17--RAILROAD REVITALIZATION AND REGULATORY REFORM
 
    SUBCHAPTER II--RAILROAD REHABILITATION AND IMPROVEMENT FINANCING
 
Sec. 823. Administration of direct loans and loan guarantees


(a) Applications

    The Secretary shall prescribe the form and contents required of 
applications for assistance under section 822 of this title, to enable 
the Secretary to determine the eligibility of the applicant's proposal, 
and shall establish terms and conditions for direct loans and loan 
guarantees made under that section.

(b) \1\ Full faith and credit
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    \1\ So in original. There are two subsections designated (b).
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    All guarantees entered into by the Secretary under section 822 of 
this title shall constitute general obligations of the United States of 
America backed by the full faith and credit of the United States of 
America.

(b) \1\ Assignment of loan guarantees

    The holder of a loan guarantee made under section 822 of this title 
may assign the loan guarantee in whole or in part, subject to such 
requirements as the Secretary may prescribe.

(c) Modifications

    The Secretary may approve the modification of any term or condition 
of a direct loan, loan guarantee, direct loan obligation, or loan 
guarantee commitment, including the rate of interest, time of payment of 
interest or principal, or security requirements, if the Secretary finds 
in writing that--
        (1) the modification is equitable and is in the overall best 
    interests of the United States; and
        (2) consent has been obtained from the applicant and, in the 
    case of a loan guarantee or loan guarantee commitment, the holder of 
    the obligation.

(d) Compliance

    The Secretary shall assure compliance, by an applicant, any other 
party to the loan, and any railroad or railroad partner for whose 
benefit assistance is intended, with the provisions of this subchapter, 
regulations issued hereunder, and the terms and conditions of the direct 
loan or loan guarantee, including through regular periodic inspections.

(e) Commercial validity

    For purposes of claims by any party other than the Secretary, a loan 
guarantee or loan guarantee commitment shall be conclusive evidence that 
the underlying obligation is in compliance with the provisions of this 
subchapter, and that such obligation has been approved and is legal as 
to principal, interest, and other terms. Such a guarantee or commitment 
shall be valid and incontestable in the hands of a holder thereof, 
including the original lender or any other holder, as of the date when 
the Secretary granted the application therefor, except as to fraud or 
material misrepresentation by such holder.

(f) Default

    The Secretary shall prescribe regulations setting forth procedures 
in the event of default on a loan made or guaranteed under section 822 
of this title. The Secretary shall ensure that each loan guarantee made 
under that section contains terms and conditions that provide that--
        (1) if a payment of principal or interest under the loan is in 
    default for more than 30 days, the Secretary shall pay to the holder 
    of the obligation, or the holder's agent, the amount of unpaid 
    guaranteed interest;
        (2) if the default has continued for more than 90 days, the 
    Secretary shall pay to the holder of the obligation, or the holder's 
    agent, 90 percent of the unpaid guaranteed principal;
        (3) after final resolution of the default, through liquidation 
    or otherwise, the Secretary shall pay to the holder of the 
    obligation, or the holder's agent, any remaining amounts guaranteed 
    but which were not recovered through the default's resolution;
        (4) the Secretary shall not be required to make any payment 
    under paragraphs (1) through (3) if the Secretary finds, before the 
    expiration of the periods described in such paragraphs, that the 
    default has been remedied; and
        (5) the holder of the obligation shall not receive payment or be 
    entitled to retain payment in a total amount which, together with 
    all other recoveries (including any recovery based upon a security 
    interest in equipment or facilities) exceeds the actual loss of such 
    holder.

(g) Rights of the Secretary

                           (1) Subrogation

        If the Secretary makes payment to a holder, or a holder's agent, 
    under subsection (g) of this section in connection with a loan 
    guarantee made under section 822 of this title, the Secretary shall 
    be subrogated to all of the rights of the holder with respect to the 
    obligor under the loan.

                     (2) Disposition of property

        The Secretary may complete, recondition, reconstruct, renovate, 
    repair, maintain, operate, charter, rent, sell, or otherwise dispose 
    of any property or other interests obtained pursuant to this 
    section. The Secretary shall not be subject to any Federal or State 
    regulatory requirements when carrying out this paragraph.

(h) Action against obligor

    The Secretary may bring a civil action in an appropriate Federal 
court in the name of the United States in the event of a default on a 
direct loan made under section 822 of this title, or in the name of the 
United States or of the holder of the obligation in the event of a 
default on a loan guaranteed under section 822 of this title. The holder 
of a guarantee shall make available to the Secretary all records and 
evidence necessary to prosecute the civil action. The Secretary may 
accept property in full or partial satisfaction of any sums owed as a 
result of a default. If the Secretary receives, through the sale or 
other disposition of such property, an amount greater than the aggregate 
of--
        (1) the amount paid to the holder of a guarantee under 
    subsection (g) of this section; and
        (2) any other cost to the United States of remedying the 
    default,

the Secretary shall pay such excess to the obligor.

(i) Breach of conditions

    The Attorney General shall commence a civil action in an appropriate 
Federal court to enjoin any activity which the Secretary finds is in 
violation of this subchapter, regulations issued hereunder, or any 
conditions which were duly agreed to, and to secure any other 
appropriate relief.

(j) Attachment

    No attachment or execution may be issued against the Secretary, or 
any property in the control of the Secretary, prior to the entry of 
final judgment to such effect in any State, Federal, or other court.

(k) Investigation charge

    The Secretary may charge and collect from each applicant a 
reasonable charge for appraisal of the value of the equipment or 
facilities for which the direct loan or loan guarantee is sought, and 
for making necessary determinations and findings. Such charge shall not 
aggregate more than one-half of 1 percent of the principal amount of the 
obligation.

(Pub. L. 94-210, title V, Sec. 503, as added and amended Pub. L. 105-
178, title VII, Sec. 7203(a)(1), (4), June 9, 1998, 112 Stat. 475, 477.)

                          Codification

    The text of section 831(c) of this title, which was transferred to 
subsec. (b) of this section, relating to full faith and credit backing 
of guarantees entered into by Secretary, by Pub. L. 105-178, title VII, 
Sec. 7203(a)(4), June 9, 1998, 112 Stat. 477, was based on Pub. L. 94-
210, title V, Sec. 511, Feb. 5, 1976, 90 Stat. 76; Pub. L. 94-555, title 
II, Sec. 215(a), Oct. 19, 1976, 90 Stat. 2625; Pub. L. 105-178, title 
VII, Sec. 7203(a)(2), (3), June 9, 1998, 112 Stat. 477.


                            Prior Provisions

    A prior section 823, Pub. L. 94-210, title V, Sec. 503, Feb. 5, 
1976, 90 Stat. 69; Pub. L. 94-555, title II, Sec. 216(b), Oct. 19, 1976, 
90 Stat. 2627, related to classification and designation of rail lines, 
prior to repeal by Pub. L. 105-178, title VII, Sec. 7203(a)(1), June 9, 
1998, 112 Stat. 471.


                               Amendments

    1998--Subsec. (b). Pub. L. 105-178, Sec. 7203(a)(4), redesignated 
subsec. (c) of section 831 of this title as subsec. (b) of this section, 
relating to full faith and credit backing of guarantees entered into by 
Secretary. See Codification note above.
