
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: 49USC10904]

 
                        TITLE 49--TRANSPORTATION
 
                 SUBTITLE IV--INTERSTATE TRANSPORTATION
 
                              PART A--RAIL
 
                         CHAPTER 109--LICENSING
 
Sec. 10904. Offers of financial assistance to avoid abandonment 
        and discontinuance
        
    (a) In this section--
        (1) the term ``avoidable cost'' means all expenses that would be 
    incurred by a rail carrier in providing transportation that would 
    not be incurred if the railroad line over which the transportation 
    was provided were abandoned or if the transportation were 
    discontinued. Expenses include cash inflows foregone and cash 
    outflows incurred by the rail carrier as a result of not abandoning 
    or discontinuing the transportation. Cash inflows foregone and cash 
    outflows incurred include--
            (A) working capital and required capital expenditure;
            (B) expenditures to eliminate deferred maintenance;
            (C) the current cost of freight cars, locomotives, and other 
        equipment; and
            (D) the foregone tax benefits from not retiring properties 
        from rail service and other effects of applicable Federal and 
        State income taxes; and

        (2) the term ``reasonable return'' means--
            (A) if a rail carrier is not in reorganization, the cost of 
        capital to the rail carrier, as determined by the Board; and
            (B) if a rail carrier is in reorganization, the mean cost of 
        capital of rail carriers not in reorganization, as determined by 
        the Board.

    (b) Any rail carrier which has filed an application for abandonment 
or discontinuance shall provide promptly to a party considering an offer 
of financial assistance and shall provide concurrently to the Board--
        (1) an estimate of the annual subsidy and minimum purchase price 
    required to keep the line or a portion of the line in operation;
        (2) its most recent reports on the physical condition of that 
    part of the railroad line involved in the proposed abandonment or 
    discontinuance;
        (3) traffic, revenue, and other data necessary to determine the 
    amount of annual financial assistance which would be required to 
    continue rail transportation over that part of the railroad line; 
    and
        (4) any other information that the Board considers necessary to 
    allow a potential offeror to calculate an adequate subsidy or 
    purchase offer.

    (c) Within 4 months after an application is filed under section 
10903, any person may offer to subsidize or purchase the railroad line 
that is the subject of such application. Such offer shall be filed 
concurrently with the Board. If the offer to subsidize or purchase is 
less than the carrier's estimate stated pursuant to subsection (b)(1), 
the offer shall explain the basis of the disparity, and the manner in 
which the offer is calculated.
    (d)(1) Unless the Board, within 15 days after the expiration of the 
4-month period described in subsection (c), finds that one or more 
financially responsible persons (including a governmental authority) 
have offered financial assistance regarding that part of the railroad 
line to be abandoned or over which all rail transportation is to be 
discontinued, abandonment or discontinuance may be carried out in 
accordance with section 10903.
    (2) If the Board finds that such an offer or offers of financial 
assistance has been made within such period, abandonment or 
discontinuance shall be postponed until--
        (A) the carrier and a financially responsible person have 
    reached agreement on a transaction for subsidy or sale of the line; 
    or
        (B) the conditions and amount of compensation are established 
    under subsection (f).

    (e) Except as provided in subsection (f)(3), if the rail carrier and 
a financially responsible person (including a governmental authority) 
fail to agree on the amount or terms of the subsidy or purchase, either 
party may, within 30 days after the offer is made, request that the 
Board establish the conditions and amount of compensation.
    (f)(1) Whenever the Board is requested to establish the conditions 
and amount of compensation under this section--
        (A) the Board shall render its decision within 30 days;
        (B) for proposed sales, the Board shall determine the price and 
    other terms of sale, except that in no case shall the Board set a 
    price which is below the fair market value of the line (including, 
    unless otherwise mutually agreed, all facilities on the line or 
    portion necessary to provide effective transportation services); and
        (C) for proposed subsidies, the Board shall establish the 
    compensation as the difference between the revenues attributable to 
    that part of the railroad line and the avoidable cost of providing 
    rail freight transportation on the line, plus a reasonable return on 
    the value of the line.

    (2) The decision of the Board shall be binding on both parties, 
except that the person who has offered to subsidize or purchase the line 
may withdraw his offer within 10 days of the Board's decision. In such a 
case, the abandonment or discontinuance may be carried out immediately, 
unless other offers are being considered pursuant to paragraph (3) of 
this subsection.
    (3) If a rail carrier receives more than one offer to subsidize or 
purchase, it shall select the offeror with whom it wishes to transact 
business, and complete the subsidy or sale agreement, or request that 
the Board establish the conditions and amount of compensation before the 
40th day after the expiration of the 4-month period described in 
subsection (c). If no agreement on subsidy or sale is reached within 
such 40-day period and the Board has not been requested to establish the 
conditions and amount of compensation, any other offeror whose offer was 
made within the 4-month period described in subsection (c) may request 
that the Board establish the conditions and amount of compensation. If 
the Board has established the conditions and amount of compensation, and 
the original offer has been withdrawn, any other offeror whose offer was 
made within the 4-month period described in subsection (c) may accept 
the Board's decision within 20 days after such decision, and the Board 
shall require the carrier to enter into a subsidy or sale agreement with 
such offeror, if such subsidy or sale agreement incorporates the Board's 
decision.
    (4)(A) No purchaser of a line or portion of line sold under this 
section may transfer or discontinue service on such line prior to the 
end of the second year after consummation of the sale, nor may such 
purchaser transfer such line, except to the rail carrier from whom it 
was purchased, prior to the end of the fifth year after consummation of 
the sale.
    (B) No subsidy arrangement approved under this section shall remain 
in effect for more than one year, unless otherwise mutually agreed by 
the parties.
    (g) Upon abandonment of a railroad line under this chapter, the 
obligation of the rail carrier abandoning the line to provide 
transportation on that line, as required by section 11101(a), is 
extinguished.

(Added Pub. L. 104-88, title I, Sec. 102(a), Dec. 29, 1995, 109 Stat. 
825.)


                            Prior Provisions

    Provisions similar to those in this section were contained in 
section 10905 of this title prior to the general amendment of this 
subtitle by Pub. L. 104-88, Sec. 102(a).
    A prior section 10904, Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1404; 
Pub. L. 96-448, title IV, Sec. 402(b), Oct. 14, 1980, 94 Stat. 1941; 
Pub. L. 98-216, Sec. 2(4), Feb. 14, 1984, 98 Stat. 5, related to filing 
and procedure for applications to abandon or discontinue railroad lines 
or rail transportation, prior to the general amendment of this subtitle 
by Pub. L. 104-88, Sec. 102(a). See section 10903 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 10903, 11702, 11901 of this 
title; title 45 section 748.
