An Act to authorize and direct the maintenance of adequate and efficient rail services in the Midwest and Northeast region of the United States, and for other purposes.
PL 93-236 (H.R.9142), enacted 01/02/1974

87 STAT. ] 
PUBLIC L
A
W 93-236-JAN. 2, 1974 
985 
Public Law 93-236 
AN A C T 
January 2, 1974 
To authorize and direct the maintenance of adequate and efficient rail services 
[H. R. 9142] 
in the Midwest and Northeast region of the United States, and for other 
purposes. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled^ That this Act, Re^or^'in'iziHon^ 
divided into titles and sections according to the following table of Act, o
f "973. 
contents, may be cited as the "Kegional Rail Reorganization Act of 
1973". 
TABLE OF CONTENTS 
TITLE I—GENERAL PROVISIONS 
Sec. 101. Declaration of policy. 
Sec. 102. Definitions. 
TITLE II—UNITED STATES RAILWAY ASSOCIATION 
Sec. 201. Formation and structure. 
Sec. 202. General powers and duties of the Association. 
Sec. 203. Access to information. 
Sec. 204. Report. 
Sec. 205. Rail Services Planning Office. 
Sec. 206. Final system plan. 
Sec. 207. Adoption of final system plan. 
Sec. 208. Review by Congress. 
Sec. 209. Judicial review. 
Sec. 210. Obligations of the Association. 
Sec. 211. Loans. 
Sec. 212. Records, audit, and examination. 
Sec. 213. Emergency assistance pending implementation. 
Sec. 214. Authorization for appropriations. 
Sec. 215. Maintenance and improvement of plant. 
TITLE III—CONSOLIDATED RAIL CORPORATION 
Sec. 301. Formation and structure. 
Sec. 302. Powers and duties of the Corporation. 
Sec. 303. Valuation and conveyance of rail properties. 
Sec. 304. Termination of rail service. 
TITLE IV—LOCAL RAIL SERVICES 
Sec. 401. Findings and purposes. 
Sec. 402. Rail service continuation subsidies. 
Sec. 403. Acquisition and modernization loans. 
Sec, 
Sec, 
Sec, 
Sec 
Sec, 
Sec, 
Sec, 
Sec, 
TITLE V—EMPLOYEE PROTECTION 
501. Definitions. 
502. Employment offers. 
503. Assignment of work. 
504. Collective-bargaining agreements. 
505. Employee protection. 
506. Contracting out. 
507. Arbitration. 
508. Acquiring railroads. 
500. Payment of benefits. 
TITLE VI—MISCELLANEOUS PROVISIONS 
Sec. 801. Relationship to other laws. 
Sec. 602. Annual evaluation by the Secretary. 
Sec. 603. Freight rates for recyclables. 
See. 604. Separability. 
11 use 1 note. 
986 
PUBLIC L
A
W 93-236-JAN. 2, 1974 
[87 STAT. 
^ 
DECLARATION OF POLICY 
SEC. 101. (a) FINDINGS.—The Congress finds and declares that— 
(1) Essential rail service in the midwest and northeast region 
of the United States is provided by railroads which are today 
insolvent and attempting to undergo reorganization under the 
30 sta^ 544.^^ 
Bankruptcy Act. 
('2) This essential rail service is threatened with cessation or 
significant curtailment because of the inability of the trustees of 
such railroads to formulate acceptable plans of reorganization. 
This rail service is operated over rail properties which were 
acquired for a public use, but which have been permitted to 
deteriorate and now require extensive rehabilitation and modern-
ization. 
(3) The public convenience and necessity require adequate and 
efficient rail service in this region and throughout the Nation to 
meet the needs of commerce, the national defense, the environ-
ment, and the service requirements of passengers, LTnited States 
mail, shippers. States and their political subdivisions, and 
consumers. 
(4) Continuation and improvement of essential rail service in 
this region is also necessary to preserve and maintain adequate 
national rail services and an efficient national rail transportation 
system. 
(5) Eail service and rail transportation offer economic and 
environmental advantages with respect to land use, air pollution, 
noise levels, energy efficiency and conservation, resource alloca-
tion, safety, and cost per ton-mile of movement to such extent 
that the preservation and maintenance of adequate and efficient 
rail service is in the national interest. 
(6) These needs cannot be met without substantial action by 
the Federal Government. 
(b) PURPOSES.—It is therefore declared to be the purpose of 
Congress in this Act to provide for— 
(1) the identification of a rail service system in the midwest and 
northeast region which is adequate to meet the needs and service 
requirements of this region and of the national rail transportation 
system; 
(2) the reorganization of railroads in this region into an eco-
nomically viable system capable of providing adequate and effi-
cient rail service to the region; 
(3) the establishment of the United States Railway Association, 
with enumerated powers and responsibilities; 
(4) the establishment of the Consolidated Rail Corporation, 
with enumerated powers and responsibilities; 
(5) assistance to States and local and regional transportation 
authorities for continuation of local rail services threatened with 
cessation; and 
(6) necessary Federal financial assistance at the lowest possible 
cost to the general taxpayer. 
DEFINITIONS 
SEC. 102. As used in this Act, unless the context otherwise requires— 
(1) "Association" means the United States Railway Associa-
tion, established under section 201 of this Act; 
(2) "Commission" 
means 
the 
Interstate 
Commerce 
Commission; 
(3) "Corporation" means the Consolidated Rail Corporation 
required to he established under section 301 of this Act; 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
987 
(4) "effective date of the final system plan" means the date on 
which the final system plan or any revised final system plan is 
deemed approved by Congress, in accordance with section 208 of 
this Act; 
(5) "employee stock ownership plan" means a technique of 
corporate finance that uses a stock bonus trust or a company stock 
money purchase pension trust which qualifies under section 401 
(a) of the Internal Revenue Code of 1954 (26 U.S.C. 401(a)) in yg^stu VOQ'.'^' 
connection with the financing of corporate improvements, trans-
fers in the ownership of corporate assets, and other capital 
requirements of a corporation and which is designed to build 
beneficial equity ownership of shares in the employer corporation 
into its employees substantially in proportion to their relative 
incomes, without requiring any cash outlay, any reduction in pay 
or other employee benefits, or the surrender of any other rights 
on the part of such employees. 
(6) "final system plan" means the plan of reorganization for 
the restructure, rehabilitation, and modernization of railroads 
in reorganization prepared pursuant to section 206 and approved 
pursuant to section 208 of this Act; 
(7) "includes" and variants thereof should be read as if the 
phrase "but is not limited to" were also set forth; 
(8) "Office" means the Rail Services Planning Office estab-
lished under section 205 of this Act; 
(9) "profitable railroad" means a railroad which is not a rail-
road in reorganization. The term does not include the Corpora-
tion, the National Railroad Passenger Corporation, or a railroad 
leased, operated, or controlled by a railroad in reorganization in 
the region; 
(10) "rail properties" means assets or rights owned, leased, or 
otherwise controlled by a railroad which are used or useful in rail 
transportation service; except that the term, when used in con-
junction with the phase "railroads leased, operated, or controlled 
by a railroad in reorganization", shall not include assets or rights 
owned, leased, or otherwise controlled by a Class I railroad which 
is not wholly owned, operated, or leased by a railroad in reorga-
nization but is controlled by a railroad in reorganization; 
(11) "railroad" means a common carrier by railroad as defined 
in section 1(3) of part I of the Interstate Commerce Act (49 
U.S.C. 1(3)). The term includes the Corporation and the 
4i stat. 474; 
National Railroad Passenger Corporation; 
(12) "railroad in reorganization" means a railroad which is 
subject to a bankruptcy proceeding and which has not been deter-
mined by a court to be reorganizable or not subject to reorganiza-
tion pursuant to this Act as prescribed in section 207(b) of this 
Act. A "bankruptcy proceeding" includes a proceeding pursuant 
to section 77 of the Bankruptcy Act (11 U.S.C. 205) and an equity 
^9 stat. 911; 
! • 
• 
1 
i. T 
^ 
J 
76 Stat. 572. 
receivership or equivalent proceeding; 
(13) "Region" means the States of Maine, New Hampshire, Ver-
mont, Massachusetts, Connecticut, Rhode Island, New York, New 
Jersey, Pennsylvania, Delaware, Maryland, Virginia, West Vir-
ginia, Ohio, Indiana, Michigan, and Illinois; the District of 
Columbia; and those portions of contiguous States in which are 
located rail properties owned or operated by railroads doing busi-
ness primarily in the aforementioned jurisdictions (as determined 
by the Commission by order) ; 
(14) "Secretary" means the Secretary of Transportation or his 
^ 
delegate, unless the context indicates otherwise; and 
(15) "State" means any State or the District of Columbia. 
988 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
TITLE II—UNITED STATES RAILWAY ASSOCIATION 
FORMATION AND STRUCTURE 
SEC. 201. (a^ ESTABLISHMENT.—There is established, in accordance 
with the provisions of this section, an incorporated nonprofit asso-
ciation to be known as the United States Railway Association. 
(b) ADMINISTRATION.—The Association shall be directed by a Board 
^ 
of Directors. The individuals designated, pursuant to subsection (d) 
(2) of this section, as the Government members of such Board shall 
be deemed the incorporators of the Association and shall take whatever 
steps are necessary to establish the Association, including filing of 
articles of incorporation, and serving as an acting Board of Directors 
for a period of not more than 45 days after the date of incorporation 
' 
of the Association. 
(c) STATUS.—The Association shall be a government corporation of 
the District of Columbia subject, to the extent not inconsistent with 
this title, to the District of Columbia Nonprofit Corporation Act 
76 Stat. 265. 
(D.C. Code, sec. 29-1001 et seq.). Except as otherwise provided, 
employees of the Association shall not be deemed employees of the 
Federal Government. The Association shall have succession until dis-
solved by Act of Congress, shall maintain its principal office in the 
District of Columbia, and shall be deemed to be a resident of the Dis-
trict of Columbia with respect to venue in any legal proceeding. 
(d) BOARD OF DIRECTORS.—^The Board of Directors of the Associa-
tion shall consist of 11 individuals, as follows: 
(1) the Chairman, a qualified individual who shall be appointed 
by the President, by and with the advice and consent of the Senate; 
(2) three Government members, who shall be the Secretary, 
the Chairman of the Commission, and the Secretary of the Treas-
ury, or their duly authorized representatives; and 
(3) seven nongovernment members, who shall be appointed 
by the President, by and with the advice and consent of the 
Senate, on the following basis— 
(A) one to be selected from a list of qualified individuals 
recommended by the Association of American Railroads or 
its successor who are representatives of profitable railroads; 
(B) one to be selected from a list of qualified individuals 
recommended by the American Federation of Labor and 
Congress of Industrial Organizations or its successor who 
, 
are representative of railroad labor; 
(C) one to be selected from a list of qualified individuals 
recommended by the National Governors Conference; 
(D) one to be selected from a list of qualified individuals 
X 
recommended by the National League of Cities and Confer-
ence of Mayors; 
(E) two to be selected from lists of qualified individuals 
recommended by shippers and organizations representative of 
significant shipping interests including small shippers; 
(F) one to D
© selected from lists of qualified individuals 
recommended by financial institutions, the financial com-
munity, and recognized financial leaders. 
As used in this paragraph, a list of qualified individuals shall 
consist of not less than three individuals. 
Except for the members appointed under paragraphs (1) and (3) 
(A), (B), (E), and (F), no member of the Board may have any 
employment or other direct financial relationship with any railroaa. 
Compensation, 
j ^ member of the Board who is not otherwise an employee of the Fed-
87 STAT.] 
PUBLIC LAW 93-236-JAN. 2, 1974 
• ',--:^-''^^.:. i 
989 
eral Government may receive $300 per diem when engaged in the 
actual performance of his duties plus reimbursement for travel, sub-
sistence, and other necessary expenses incurred in the performance of 
such duties. 
(e) TERMS OF OrricE.—The terms of office of the nongovernment 
members of the Board of Directors of the Association first taking 
office shall expire as designated by the President at the time of nomi-
nation—two at the end of the second year; two at the end of the 
fourth year; and three at the end of the sixth year. The term of office 
of the Chairman of such Board shall be 6 years. Successors to mem-
bers of such Board shall be appointed in the same manner as the 
original members and, except m the case of government members, 
shall have terms of office expiring 6 years from the date of expiration 
of the terms for which their predecessors were appointed. Any indi-
vidual appointed to fill a vacancy occurring prior to the expiration of 
any term of office shall be appointed for the remainder of that term. 
(f) QUORUM.—Beginning 45 days after the date of incorporation of 
the Association, six members of the Board, including three of the non-
government members, shall constitute a quorum for the transaction of 
any function of the Association. 
(g) PRESIDENT.—The Board of Directors of the Association, upon 
the recommendation of the Secretary, shall appoint a qualified indi-
vidual to serve as the President of the Association at the pleasure of 
the Board. The President of the Association, subject to the direction of 
the Board, shall manage and supervise the affairs of the Association. 
(h) EXECUTIVE COMMITTEE.—The Board of Directors of the Asso-
ciation shall have an executive committee which shall consist of the 
Chairman of the Board, the Secretary, the Chairman of the Commis-
sion, and two other members who shall be selected by the members of 
the Board. 
(i) MISCELLANEOUS.—(1) The Association shall have a seal which 
shall be judicially recognized. 
(2) The Administrator of General Services shall furnish the 
Association with such offices, equipment, supplies, and services as 
he is authorized to furnish to any other agency or instrumentality of 
the United States. 
(3) The Secretary is authorized to transfer to the Association or the 
Corporation rights in intellectual property which are directly related 
to the conduct of the functions of the Association or the Corporation, 
to the extent that the Federal Government has such rights and to the 
extent that transfer is necessary to carry out the purposes of this Act. 
(j) USE OF NAMES.—No person, except the Association, shall here-
after use the words "United States Kailway Association" as a name 
for any business purpose. No person, except the corporation directed 
to be established under section 301 of this Act, shall hereafter use the 
words "Consolidated Kail Corporation" as a name for any business 
purpose. Violations of these provisions may be enjoined by any court 
of general jurisdiction in an action commenced by the Association or 
the Corporation. In any such action, the Association or the Corporation 
Penalty. 
may recover any actual damages flowing from such violation, and, in 
addition, shall be entitled to punitive damages (regardless of the 
existence or nonexistence of actual damage) in an amount not to 
exceed $100 for each day during which such violation was committed. 
The district courts of the United States shall have jurisdiction over 
actions brought under this subsection, without regard to the amount in 
controversy or the citizenship of the parties. 
80 Stat. 460; 
J3 Stat. 864. 
990 
, 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
GENERAL POWERS AND DUTIES OF THE ASSOCIATION 
SEC. 202. (a) GENERAL.—To carry out the purposes of this Act, the 
Association is authorized to— 
(1) engage in the preparation and implementation of the final 
system plan; 
(2) issue obligations under section 210 of this title and make 
loans under section 211 of this title; 
(3) provide assistance to States and local or regional trans-
portation authorities in accordance with section 403 of this Act; 
(4) sue and be sued, complain and defend, in the name of the 
Association and through its own attorneys; adopt, amend, and 
repeal bylaws governing the operation of the Association and 
such rules and regulations as are necessary to carry out the 
authority granted under this Act; conduct its affairs, carry on 
operations, and maintain offices; 
(5) appoint, fix the compensation, and assign the duties of such 
^ 
attorneys, agents, consultants, and other full- and part-time 
employees as it deems necessary or appropriate; except that (1) 
no officer of the Association, including the Chairman, may receive 
compensation at a rate in excess of that prescribed for level I of 
the Executive Schedule under section 5312 of title 5, United States 
Code; and (2) no individual may hold a position in violation of 
regulations which the Secretary shall establish to avoid conflicts 
of interest and to protect the interests of the public; 
(6) acquire and hold such real and personal property as it 
deems necessary or appropriate in the exercise of its responsibili-
ties under this Act, and to dispose of any such property held by it; 
(7) consult Avith the Secretary of the Army and the Chief of 
Engineers and request the assistance of the Corps of Engineers, 
and the Secretary of the Army may direct the Corps of Engineers 
to cooperate fully with the Association, the Corporation, or any 
entity designated in accordance with section 206(c)(1)(C) in 
order to carry out the purposes of this Act; 
(8) consult on an ongoing basis with the Chairman of the Fed-
eral Trade Commission and the Attorney General to assess the 
possible anticompetitive effects of various proposals and to nego-
tiate provisions which would, to the greatest extent practicable in 
accordance with the purposes of this Act and the goal set forth 
7 
in section 206(a) (5) of this title, alleviate any such anticompeti-
tive effects; 
(9) consult witli representatives of science, industry, agricul-
ture, labor, environmental protection and consumer organizations, 
and other groups, as it deems advisable; and 
(10) enter into, without regard to section 3709 of the Revised 
Statutes of the United States (41 U.S.C. 5), such contracts, leases, 
cooperative agreements, or other transactions as may be neces-
sary in the conduct of its functions and duties with any person 
V 
(including a government entity). 
(b) DUTIES.—In addition to its duties and responsibilities under 
other provisions of this Act, the Association shall— 
~ 
(1) prepare a survey of existing rail services in the region, 
including patterns of traffic movement; traffic density over identi-
fied lines; pertinent costs and revenues of lines; and plant, equip-
ment, and facilities (includng yards and terminals) ; 
^^^'^y- 
(2) prepare an economic and operational study and analysis of 
present and future rail service needs in the region; the nature and 
volume of the traffic in the region now being moved by rail or 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
991 
likely to be moved by rail in the future; the extent to which avail-
able alternative moaes of tmnsportation could move such traffic 
as is now carried by railroads in reorganization; the relative eco-
nomic, social, and environmental costs that would be involved in 
the use of such available alternative modes, including energy 
resource costs; and the competitive or other effects on profitable 
railroads; 
(3) prepare a study of rail passenger services in the region, in 
terms of scope and quality; 
(4) consider the views of the Office and of all government 
officials and persons who submit views, reports, or testimony 
under section 205(d) (1) of this title or in the course of proceed-
ings conducted by the Office; 
(5) .consider methods of achieving economies in the cost of rail 
system operations in the region including consolidation, pooling, 
and joint use or operation of lines, facilities, and operating equip-
ment; relocation; rehabilitation and modernization of equip-
ment, track, and other facilities; and abandonment of lines con-
sistent with meeting needs and service requirements; together 
with the anticipated economic, social, and environmental costs 
and benefits of each such method; 
(6) consider the effect on railroad employees of any restructur-
ing of rail services in the region; 
(7) make available to the Secretary, the Director of the Office 
and appropriate committees of the Congress all studies, data, and 
other information acquired or developed by the Association. 
(c) INVESTMENT OF FUNDS.—Uncommitted funds of the Association 
shall be kept in cash on hand or on deposit, or invested in obligations 
of the United States or guaranteed thereby, or in obligations, partic-
ipations, or other investments which are lawful investments for 
fiduciary, trust, or public funds. 
(d) EXEMPTION FROM TAXATION.—The Association, including its 
franchise, capital reserves, surplus, security holdings, and income 
shall be exempt from all taxation now or hereafter imposed by the 
United States, any commonwealth, territory, dependency, or posses-
sion thereof, or by any State or political subdivision thereof, except 
tliat any real property of the Association shall be subject to taxation 
to the same extent according to its value as other real property is 
taxed. 
(e) ANNUAL REPORT.—The Association shall transmit to the Con- gres7°and°pfe°s"~ 
gress and the President, not later than 90 days after the end of each dent. 
fiscal year, a comprehensive and detailed report on all activities of the 
Association during the preceding fiscal year. Each such report shall 
include (1) the Association's statement of specific and detailed objec-
tives for the activities and programs conducted and assisted under this 
Act; (2) statements of the Association's conclusions as to the effective-
ness of such activities and programs in meeting the stated objectives 
and the purposes of this Act, measured through the end of the preced-
ing fiscal year; (3) recommendations with respect to any legislation or 
administrative action which the Association deems necessary or desir-
able; (4) a statistical compilation of the obligations issued and loans 
made under this Act; (5) a summary of outstanding problems con-
fronting the Association, in order of priority; (6) all other informa-
tion required to be submitted to the Congress pursuant to any other 
provision of this Act; and (7) the Association's projections and f)lans 
for its activities and programs during the next fiscal year. 
(f) BUDGET.—The receipts and disbursements of the Association 
(other than administrative expenses referred to in subsection (g) of 
992 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
Budget, trans-
mittal to Con-
gress. 
70 Stat. 667; 
85 Stat. 37. 
Budget, trans-
mittal to Office of 
Management and 
Budget and Con-
gress. 
this section) in tlie discharge of its functions shall not be included in 
the totals or the budget of the United States Government, and shall be 
exempt from any annual expenditure and net lending (budget out-
lays) limitations imposed on a budget of the United States Govern-
ment. The Chairman of the Association shall transmit annually to the 
Congress a budget for program activities and for administrative 
expenses of the Association. The Chairman shall report annually to the 
Congress the amount of net lending of the Association, which would 
be included in the totals of the b u r e t s of the United States Govern-
ment, if the Association's activities were not excluded from those totals 
as a result of this section. 
(g) ACCOUNTABILITY.— (1) Section 201 of the Government Corpora-
tion Control Act (31 U.S.C. 866) is amended by striking out "and" 
at the end of clause (6) and by inserting immediately before the period 
at the end thereof the following: ", (8) the United States Railway 
Association". 
(2) The Chairman of the Association shall transmit annually to the 
Office of Management and Budget a budget for administrative 
expenses of the Association. Whenever the Association submits any 
budget estimate or request to the Office of Management and Budget, it 
shall concurrently transmit a copy of the estimate or request to the 
Congress. Within budgetary constraints of the Congress, the maxi-
mum feasible and prudent budgetary flexibility shall be provided to 
the Association to permit effective operations. 
Recordkeeping. 
Reports. 
y 
' 
ACCESS TO INFORMATION 
SEC. 203. (a) PLANNING.—Each railroad operating in the region 
shall provide such relevant information as may be requested by the 
Secretary, the Office, or the Association in connection with the per-
formance of their respective functions under any provision of this 
Act. No information may be requested under this subsection after the 
effective date of the final system plan. 
(b) OTHER.—Each railroad or other person or government entity 
seeking financial assistance from the Association shall maintain and 
make available such records, make and submit such reports, and pro-
vide such data, materials, or other relevant information as may be 
requested by the Association. 
(c) ENFORCEMENT.—Where authorized under subsection (a) or (b) 
of this section and upon presenting appropriate credentials and a writ-
ten notice of inspection authority, any officer or employee duly desig-
nated by the Secretary, the Office, or the Association may, at reasonable 
times, inspect records, papers, processes, rolling stock, systems, equip-
ment, or facilities and may, in furtherance of their respective functions 
under this Act, hold such hearings, sit and act at such times and places, 
administer such oaths, and require by subpoena or other order the 
attendance and testimony of such witnesses and the production of such 
information as is deemed advisable. Subpoenas shall be issued under 
the signature of the Secretary, the Director of the Office, or the Chair-
man or President of the Association and may be served by any duly 
designated individual. In case of contumacy or refusal to obey such a 
subpoena or order by any person who resides, is found, or transacts 
business within the jurisdiction of any district court of the United 
States, such district court shall, upon petition, have jurisdiction to issue 
to such person an order requiring him to comply forthwith. Failure to 
obey such an order is punishable by such court as a contempt of court. 
(d) CONGRESS.—Nothing in this section shall authorize the with-
holding of information from any duly authorized committee of the 
Congress. 
87 STAT.] 
PUBLIC LAW 93-236-JAN. 2, 1974 
993 
REPORT 
SEC. 204. (a) PREPARATION.—Within 30 days after the date of enact-
ment of this Act, the Secretary shall prepare a comprehensive report 
containing his conclusions and recommendations with respect to the 
o-eographic zones within the region in and between which rail service 
should be provided and the criteria upon which such conclusions and 
recommendations are based. The Secretary may use as a basis for the 
identification of such geographic zones the standard metropolitan sta-
tistical areas, groups of such areas, counties, or groups of counties 
having similar economic characteristics such as mining, manufactur-
ing, or farming. 
(b) SUBMISSION.—The Secretary shall submit the ref)ort required 
by subsection (a) of this section to the Office, the Association, the Gov-
ernor and public utilities commission of each State studied in the 
report, local governments, consumer organizations, environmental 
groups, the public, and the Congress. The Secretary shall further cause 
a copy of the report to be published in the Federal Kegister. 
Publication in 
Federal Register. 
RAIL SERVICES PLAXXIXG OFFICE 
SEC. 205. (a) ESTABLISHMENT.—There is established, on the date 
of enactment of this Act, a new Office in the Commission to be known 
as the Rail Services Planning Office. The Office shall function con-
tinuously pursuant to the provisions of this Act, and shall cease to 
exist 5 years after the date of enactment of this Act. The Office shall 
be administered by a director. 
(b) DIRECTOR.—The Director of the Office shall be appointed by 
the Chairman of the Commission with the concurrence of 5 members 
of the Commission. The Director of the Office shall administer and be 
r'esponsible for the discharge of the functions and duties of the Office 
from the date he takes office unless removed for cause by the Commis-
sion. He shall be compensated at a rate to be set by the Chairman of 
the Commission without regard to the provisions of title 5, United 
States Code, governing appointments in the competitive service, 
classification, and General Schedule pay rates, but at a rate not in 
excess of the maximum rate for GS-18 of the General Schedule under 
section 5332 of such title. 
(c) POWERS.—The Director of the Office is subject to the direction 
of, and shall report to, such member of the Commission as the Chair-
man thereof shall designate. The Chairman may designate himself as 
that member. Such Director is authorized, with the concurrence of 
such member or (in case of disagreement) the Chairman of the Com-
mission, to— 
(1) appoint, fix the compensation, and assign the duties of 
employees of the Office without regard to the provisions of title 5, 
United States Code, governing appointments in tlie competitive 
service, and to procure temporary and intermittent services to the 
same extent as is authorized under section 3109 of title 5, United 
States Code, but at rates not to exceed $250 a day for qualified 
experts. Each department, agency, and instrumentality of the 
executive branch of the Federal Government and each independent 
regulatory agency of the United States is authorized and shall give 
careful consideration to a request to furnish to the Director of the 
Office, upon written request, on a reimbursable basis or otherwise, 
such assistance as the Director deems necessary to carry out the 
functions and duties of the Office. Such assistance includes trans-
fer of personnel with their consent and without prejudice to their 
position and rating; and 
Termination 
date. 
80 Stat. 378. 
5 use 101 et 
seq. 
5 use 5332 
note. 
80 Stat. 416. 
994 
PUBLIC LAW 93-236-.JAN. 2, 1974 
[87 STAT. 
amho"rUy'!' 
(2) eiitei' liito, \vithout regard to section 3709 of the Kevised 
Statutes of the United States (41 U.S.C. 5), such contracts, leases, 
cooperative agreements, or other transactions as may be necessary 
in the conduct of the functions and duties of the Office, with any 
person (inchiding a government entity). 
(d) DUTIES.—In addition to its duties, and responsibilities under 
other provisions of this Act, the Office shall— 
(1) study and evaluate the Secretary's report on rail services in 
the region required under section 204(a) of this Act and submit 
its report thereon to the Association within 120 days after the 
date of enactment of this Act. The Office shall also solicit, study, 
and evaluate the views with respect to present and future rail 
service needs of the region from Governors of States within the 
region; mayors and chief executives of political subdivisions 
within such States; shippers; the Secretary of Defense; manufac-
turers, wholesalers, and retailers within the region; consumers of 
goods and products shipped by rail; and all other interested per-
pubiic hearings. 
j^^j^g ^j^g Office shall conduct public hearings to solicit comments 
on such report and to I'eceive such views; 
(2) employ and utilize the services of attorneys and such other 
personnel as may be requii-ed in order properly to protect the 
interests of those communities and users of rail service which, for 
whatever reason, such as their size or location, might not other-
wise be adequately represented in the course of the hearings and 
evaluations which the Office is required to conduct and perform 
under other provisions of this Act; 
standards, 
(3) withiu 180 days after the date of enactment of this Act, 
pu ication. 
determine and publish standards for determining the "revenue 
attributable to the rail properties", the "avoidable costs of pro-
viding service", and "a reasonable return on the value", as those 
phrases are used in section 304 of this Act, after a proceeding in 
accordance with the.provisions of section 553 of title 5, United 
80 Stat. 383. 
Statcs Codc; aud 
(4) assist States and local and regional transportation agencies 
in making determinations whether to provide rail service continu-
ation subsidies to maintain in operation particular rail properties 
by establishing criteria for determining whether particular rail 
properties are suitable for rail service continuation subsidies. Such 
critei'ia sliould include the following considerations: Rail prop-
erties are suitable if the cost of the required subsidy for such 
pr-operties per year to the taxpayers is less than the cost of ter-
inination of rail service over such properties measured by 
inci-eased fuel consumption and operational costs for alternative 
modes of ti-ansportation; the cost to the gross national product in 
terms of reduced output of goods and services; the cost of relo-
cating or assisting tlirough unemployment, retraining, and wel-
fare benefits to individuals and firms adversely affected thereby; 
and the cost to the environment measured by damage caused by 
increased polhition. 
FINAL SYSTEM PLAX 
SEC. 206. (a) GOALS.—The final system plan shall be formulated in 
such a way as to effectuate the following goals: 
(1) the creation, through a process of reorganization, of a finan-
cially self-sustaining rail service system in the region; 
(2) the estalishment and maintenance of a rail service system 
adequate to meet the rail transportation needs and service require-
ments of the region; 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
995 
(3) the establishment of improved high-speed rail passenger 
service, consonant with the recommendations of the Secretary 
in his report of September 1971, entitled "Recommendations for 
Northeast Corridor Transportation"; 
(4) the preservation, to the extent consistent with other goals, 
of existing patterns of service by railroads (including short-line 
and terminal railroads), and of existing railroad trackage in areas 
in which fossil fuel natural resources are located, and the utiliza-
tion of those modes of transportation in the region which require 
the smallest amount of scarce energy resources and which can 
most efficiently transport energy resources; 
(5) the retention and promotion of competition in the provision 
of rail and other transportation services in the region; 
(6) the attainment and maintenance of any environmental 
standards, particularly the applicable national ambient air quality 
standards and plans established under the Clean Air Act Amend-
ments of 1970, taking into consideration the environmental impact 
42 use' is57b 
of alternative choices of action; 
n°te. 
(7) the movement of passengers and freight in rail transporta-
tion in the region in the most ei^cient manner consistent with safe 
operation, including the requirements of commuter and intercity 
rail passenger service; the extent to which there should be coordi-
nation with the National Railroad Passenger Corporation and 
similar entities; and the identification of all short-to-medium dis-
tance corridors in densely populated areas in which the major 
upgrading of rail lines for high-speed passenger operation would 
return substantial public benefits; and 
(8) the minimization of job losses and associated increases in 
unemployment and community benefit costs in areas in the region 
presently served by rail service. 
(b) FACTORS.—The final system plan shall be based upon due con-
sideration of all factors relevant to the realization of the goals set 
forth in subsection (a) of this section. Such factors include the need 
for and the cost of rehabilitation and modernization of track, equip-
ment, and other facilities; methods of achieving economies in the cost 
of rail operations in the region; means of achieving rationalization of 
rail services and the rail service system in the region; marketing 
studies; the impact on railroad employees; consumer needs; traffic 
analyses; financial studies; a,nd any other factors identified by the 
Association under section 202(b) of this title or in the report of the 
Secretary required under section 204 (a) of this title. 
(c) DESIGNATIOXS.—^The final system plan shall designate— 
(1) which rail properties of railroads in reorganization in the 
region or of railroads leased, operated, or controlled by any rail-
road in reorganization in the region—• 
(A) shall be transferred to the Corporation; 
(B) shall be oifered for sale to a profitable railroad operat-
ing in the region and, if such offer is accepted, operated by 
such railroad; the plan shall designate what additions shall be 
made to the designation under subparagraph (A) of this para-
graph in the event such profitable railroad fails to accept 
such offer; 
(C) shall be purchased, leased, or otherwise acquired from 
the Corporation by the National Railroad Passenger Cor-
poration in accordance with the exercise of its option under 
section 601(d) of this Act for improvement to achieve the goal 
Pos^ p. 1021. 
set forth in subsection (a) (3) of this section; 
996 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
(D) may be purchased or leased from the Corporation by 
a State or a local or regional transportation authority to meet 
the needs of commuter and intercity rail passenger service; 
and 
(E) if not otherwise required to be operated by the Corpo-
ration, a government entity, or a responsible person, are suit-
able for use for other public purposes, including highways, 
other forms of transportation, conservation, energy trans-
mission, education or health care facilities, or recreation. In 
carrying out this subparagraph, the Association shall solicit 
the views and recommendations of the Secretary, the Secre-
tary of the Interior, the Administrator of the Environmental 
Protection Agency, and other agencies of the Federal Govern-
ment and of the States and political subdivisions thereof 
within the region, and the general public; and 
(2) which rail properties of profitable railroads operating in 
the region may be offered for sale to the Corporation or to other 
profitable railroads operating in the region subject to paragraphs 
(3) and (4) of subsection (d) of this section. 
(d) TRANSFERS.—All transfers or conveyances pursuant to the final 
system plan shall be made in accordance with, and subject to, the 
following principles: 
(1) All rail properties to be transferred to the Corporation by 
a profitable railroad, by trustees of a railroad in reorganization, 
or by any railroad leased, operated, or controlled by a railroad 
in reorganization in the region, shall be transferred in exchange 
for stock and other securities of the Corporation (including obli-
gations of the Association) and the other benefits accruing to such 
railroad by reason of such transfer. 
(2) All rail properties to be conveyed to a profitable railroad 
operating in the region by trustees of a railroad in reorganization, 
or by any railroad leased, operated, or controlled by a railroad 
in reorganization in the region, shall be conveyed in exchange 
for compensation from the profitable railroad. 
(3) Notwithstanding any other provision of this Act, no acquisi-
tion under this Act shall be made by any profitable railroad oper-
ating in the region without a determination with respect to each 
such transaction and all such transactions cumulatively (A) by 
the Association, upon adoption and release of the preliminary 
system plan, that such acquisition or acquisitions will not 
materially impair the profitability of any other profitable rail-
road operating in the region or of the Corporation, and (B) by 
the Commission, which shall be made within 90 days after adop-
tion and release by the Association of the preliminary system plan, 
that such acquisition or acquisitions will be in full accord and 
comply with the provisions and standards of section 5 of part I 
79^stat^ 284^°' 
of the Interstate Commerce Act (49 U.S.C. 5). The determination 
by the Association shall not be reviewable in any court. The deter-
mination by the Commission shall not be reviewable in any court. 
(4) Where the final system plan designates specified rail prop-
erties of a railroad in reorganization in the region, or of a rail-
road leased, operated, or controlled by a railroad in reorganization 
in the region, to be offered for sale to and operated by a profitable 
railroad operating in the region, such designation shall terminate 
30 days after the effective date of the final system plan unless, 
prior to such date, such profitable railroad has notified the Associ-
ation in writing of its acceptance of such offer. Where the final 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
997 
system plan designates specified rail properties of a profitable 
railroad operating in the region as authorized to be offered for 
sale or lease to the Corporation or to other profitable railroads 
operating in the region, such designation and authorization shall 
terminate 60 days after the effective date of the final system plan 
unless, prior to such date, a binding agreement with respect to 
such properties has been entered into and concluded. 
(5) All properties sold by the Corporation pursuant to sections 
206(c) (1) (C) and 601(d) of this Act shall be transferred at a 
^°^'' P- ^^^i. 
value related to the value received for the transfer to the Corpora-
tion of such properties. 
(e) CORPORATION FEATURES.—The final system plan shall set forth— 
(1) pro forma earnings for the Corporation, as reasonably pro-
jected and considering the additions or changes in the designation 
of rail properties to be operated by the Corporation Avhich may 
be made under subsection (d)(4) of this section; 
(2) the capital structure of the Corporation, based on the pro 
forma earnings of the Corporation as set forth, including such 
debt capitalization as shall be reasonably deemed to conform to 
the requirements of the public interest with respect to railroad 
debt securities, including the adequacy of coverage of fixed 
charges; and 
(3) the manner in which employee stock ownership plans may, 
to the extent practicable, be utilized for meeting the capitalization 
requirements of the Corporation, taking into account (A) the 
relative cost savings compared to conventional methods of cor-
porate finance; (B) the labor cost savings; (C) the potential for 
minimizing strikes and producing more harmonious relations 
between labor organizations and railway management; (D) the 
projected employee dividend incomes; (E) the impact on quality 
of service and prices to railway users; and (F) the promotion of 
the objectives of this Act of creating a financially self-sustaining 
railway system in the region which also meets the service needs 
of the region and the Nation. 
(f) VALUE.—The final system plan shall designate the value of all 
rail properties to be transferred under the final system plan and the 
value of the securities and other benefits to be received for transferring 
those rail properties to the Corporation in accordance with the final 
system plan. 
(g) OTHER PROVISIONS.—The final system plan may recommend 
arrangements among various railroads for joint use or operation of 
rail properties on a shared ownership, cooperative, pooled, or condo-
minium-type basis, subject to such terms and conditions as may be 
specified in the final system plan. The final system plan shall also 
make such designations as are determined to be necessary in accord-
ance with the provisions of section 402 or 403 of this Act. 
(h) OBLIGATIONAL AUTHORITY.—The final system plan shall recom-
mend the amount of obligations of the Association which are necessary 
to enable it to implement the final system plan. 
(i) TERMS AND CONDITIONS FOR SECURITIES.—The final system plan 
may include terms and conditions for any securities to be issued by the 
Corporation in exchange for the conveyance of rail properties under 
the final system plan which in the judgement of the Association will 
minimize any actual or potential debt burden on the Corporation. Any ^ congressional 
such terms and conditions for securities of the Corporation which pur-
port to directly obligate the Association shall not become effective 
without affirmative approval, with or Avithout modification by a joint 
resolution of the Congress. 
Publication in 
Federal Register 
998 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
ADOPTIOX o r FINAL SYSTEM PLAX 
SEC. 207. (a) PRELIMINARY SYSTEM PLAN.—(1) Within 300 days 
after the date of enactment of this Act, the Association shall adopt and 
release a preliminary system plan prepared by it on the basis of reports 
and other information submitted to it by the Secretary, the Office, and 
interested j)ersons in accordance with this Act and on the basis of its 
own investigations, consultations, research, evaluation, and analysis 
miua^'ro^'c'on"^' 
pursuaiit to this Act. Coj)ies of the preliminary system plan shall be 
gress. 
transmitted by the Association to the Secretary, the Office, the Gov-
ernor and public utility commission of each State in the region, the 
Congress, each court having jurisdiction over a railroad in reorganiza-
tion in the region, the special court, and interested persons, and a copy 
shall be published in the Federal Register. The Association shall invite 
and afford interested persons an opportunity to submit comments on 
the preliminary system plan to the Association within 60 days after 
the date of its release. 
Public hearings, 
^2) The Officc IS authorizcd and directed to hold public heardngs on 
the preliminary system plan and to make available to the As^jociation 
a summary and analysis of the evidence received in the course of such 
proceedings, together with its critique and evaluation of the prelim-
inary system plan, not later than 60 days after the date of release of 
such plan. 
(b) APPROVAL.—Within 120 days after the date of enactment of this 
Act each LTnited States district court or other court having jurisdiction 
over a railroad in reorganization shall decide whether the railroad is 
reorganizable on an income basis within a reasonable time under sec-
76^stf^ 572"' 
fioi^ ^^ of the Bankruptcy Act (11 U.S.C. 205) and that the public 
interest would be better served by continuing the present reorganiza-
tion proceedings than by a reorganization under this Act. Within 60 
days after the submission of the report by the Office, under section 
205 (d) (1) of this title, on the Secretary's report on rail services in the 
i-egion, each United States district court or other court having juris-
diction over a railroad in reorganization shall decide whether or not 
such railroad shall be reorganized by means of transferring some of its 
rail properties to the Corporation pursuant to the provisions of this 
Act. Because of the strong public interest in the continuance of rail 
transportation in the region pursuant to a system plan devised under 
the provisions of this Act, each such court shall order that the reorga-
nization be proceeded with pursuant to this Act unless it (1) has found 
that the railroad is reorganizable on an income basis w^ithin a reason-
able time under section 77 of the Bankruptcy Act (11 U.S.C. 205) and 
that the public interest would be better served by such a reorganiza-
tion than by a reorganization under this Act, or (2) finds that this 
Act does not provide a process which would be fair and equitable to 
the estate of the railroad in reorganization in which case it shall dis-
miss the reoi'ganization proceeding. If a court does not enter an order 
or make a finding as required by this subsection, the reorganization 
shall be proceeded with pursuant to this Act. An appeal from an order 
made under this section may be made only to the special court. Appeal 
to the special court shall be taken within 10 days following entry of 
an order pursuant to this subsection, and the special court shall com-
plete its review and render its decision within 80 days after such 
appeal is taken. There shall be no review of the decision of the special 
court. 
(c) ADOPTION.—^TVithin 420 days after the date of enactment of this 
Act, the executive committee of the Association shall prepare and 
submit a final system plan for the approval of the Board of Directors 
of the Association. A copy of such submission shall be simultaneously 
Plan evaluation, 
submittal to Con-
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
999 
presented to the Commission. The submission shall reflect evaluation 
of all responses and summaries of responses received, testimony at 
any public hearings, and the results of additional study and review. 
Within 30 days thereafter, the Board of Directors of the Association 
shall by a majority vote of all its members approve a final system 
plan which meets all of the requirements of section 206 of this title, 
(d) REVIEW OF COMMISSION.—^Within 30 days following the adop-
tion of the final system plan by the Association under subsection (c) 
of this section and the submission of such plan to Congress under 
section 208(a) of this title, the Commission shall submit to the Con-
gress an evaluation of the final system plan delivered to both Houses gr°s"s 
of Congress. 
REVIEW BY CONGRESS 
SEC. 208-. (a) GENERAL.—The Board of Directors of the Association 
shall deliver the final system plan adopted by the Association to both 
Houses of Congress and to the Committee on Interstate and Foreign 
Commerce of the House of Representatives and the Committee on 
Commerce of the Senate. The final system plan shall be deemed 
approved at the end of the first period of 60 calendar days of con-
tinuous session of Congress after such date of transmittal unless either 
the House of Representatives or the Senate passes a resolution during 
such period stating that it does not favor the final system plan. 
(b) REVISED PLAN.—If either the House or the Senate passes a 
resolution of disapproval under subsection (a) of this section, the 
Association, with the cooperation and assistance of the Secretary and 
the Office, shall prepare, determine, and adopt a revised final system 
plan. Each such revised plan shall be submitted to Congress for review 
pursuant to subsection (a) of this section. 
(c) COMPUTATION.—For purposes of this section— 
(1) continuity of session of Congress is broken only by an 
adjournment sine die; and 
(2) the days on which either House is not in session because of 
an adjournment of more than 3 days to a day certain are excluded 
in the computation of the 60-day period. 
JUDICIAL REVIEW 
SEC. 209. (a) GENERAL.—Notwithstanding any other provision of 
law, the final system plan which is adopted by the Association and 
which becomes effective after review by the Congress is not subject 
to review by any court except in accordance with this section. After 
the final system plan becomes effective under section 208 of this title, 
it may be reviewed with respect to matters concerning the value of the 
rail properties to be conveyed under the plan and the value of the con-
sideration to be received for such properties. 
(b) SPECIAL COURT.—Within 30 days after the date of enactment of 
this Act, the Association shall make application to the judicial panel 
on multi-district litigation authorized by section 1407 of title 28, 
United States Code, for the consolidation in a single, three-judge dis- 
^^ ^'^*- ^°^-
trict court of the United States of all judicial proceedings with respect 
to the final system plan. Within 30 days after such application is 
received, the panel shall make the consolidation in a district court 
(cited herein as the "special court") which the panel determines to be 
convenient to the parties and the one most likely to be able to conduct 
any proceedings under this section with the least delay and the greatest 
possible fairness and ability. Such proceedings shall be conducted by 
the special court which shall be composed of three Federal judges who 
shall be selected by the panel, except that none of the judges selected 
49 Stat. 911; 
76 Stat. 572. 
Rules. 
1000 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
ma}^ be a judge assigned to a proceeding involving any railroad in reor-
ganization in the region under section 77 of the Bankruptcy Act (11 
II.S.C. 20oi). The special court is authorized to exercise the povi^ers of a 
district judge in any judicial district with respect to such proceedings 
and such powers shall include those of a reorganization court. The 
special court shall have the power to order the conveyance of rail prop-
erties of railroads leased, operated, or controlled by a railroad in reor-
ganization in the region. The panel may issue rules for the conduct of 
Its functions under this subsection. No determination by the panel 
under this subsection may be reviewed in any court. 
(c) DELIVERY OF PLAN TO SPECIAL COURT.—Within 90 days after its 
effective date, the Association shall deliver a certified copy of the final 
system plan to the special court and shall certify to the special court— 
(1) which rail properties of the res])8ctive railroads in reorga-
nization in the region and of any railroad leased, operated, or 
controlled by such railroads in rooi'ganization are to be trans-
ferred to the Corporation, in accordance with the final system 
plan; 
(2) which rail properties of the respective railroads in reorga-
nization in the region or railroads leased, operated, or controlled 
by such railroads in reorganization are to be conveyed to profita-
ble railroads, in accordance with the final system plan; 
(3) the amount, terms, and value of the securities of the Corpo-
ration (including any obligations of the Association) to be 
exchanged for those rail properties to be transferred to the Cor-
poration pursuant to the final system plan, and as indicated in 
paragraph (1) of this subsection; and 
(4) that the transfer of rail properties in exchange for securities 
of the Corporation (including any obligations of the Association) 
and other benefits is fair and equitable and in the public interest. 
(d) BANKRUPTCY COURTS.—Within 90 days after its effective date, 
the Association shall deliver a certified copy of the final system plan to 
each district court of the United States or any other court having 
jurisdiction over a railroad in reorganization in the region and shall 
certify to each such court— 
(1) which rail properties of that railroad in reorganization are 
to be transferred to the Corporation under the final system plan ; 
and 
(2) which rail properties of that railroad in reorganization, if 
any, are to be conveyed to profitable railroads operating in the 
region, under the final system plan. 
OBLIGATIONS OF T H E ASSOCIATION 
SEC. 210. (a) GENERAL.—To carry out the purposes of this Act, 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 matur-
ities 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 
if, reasonable. 
(b) 
MAXIMUM OBLIGATIONAL AUTHORITY.—Except as otherwise 
provided in the last., sentence of this subsection, the aggregate amount 
of obligations of the Association issued under this section which may 
be outstanding at any one time shall not exceed $1,500,000,000 of which 
the aggregate amount issued to the Corporation shall not exceed 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1001 
$1,000,000,000. Of the aggregate amount of obligations issued to the 
Corporation by the Association, not less than $500,000,000 shall be 
available solely for the rehabilitation and modernization of rail prop-
erties acquired by the Corporation under this Act and not disposed of 
by the Corporation pursuant to section 206(c) (1) (C) of this Act. Any 
modification to the limitations set forth in this subsection shall be 
made by joint resolution adopted by the Congress. 
(c) GUARANTEES.—The Secretary shall guarantee the paj^ment of 
principal and interest on all obligations issued by the Association in 
accordance with this Act and which the Association requests be 
guaranteed. 
(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 Associ-
ation. Such an obligation shall be conclusive evidence that it is in 
compliance with this section, has been api)roved, 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) T H E SECRETARY OF THE TREASURY.—If at any time the monej/s 
available to the Secretary are insufficient to enable him to discharge his 
responsibilities under subsection (c) of this section, 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 Secre-
tary 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 
purpose is authorized to use as a public debt transaction the proceeds 
from the sale of any securities issued under the Second Liberty Bond 
Act, as amended. The purposes for Avhich securities may be issued 
ti^^icyf^' 
under such Act 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 author-
ized to be appropriated to the Secretary such amounts as are neces-
sary to discharge the obligations of the United States arising under 
this section. 
(g) LAWFUL INVESTMENTS.—All obligations issued by the Associa-
tion 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. 
LOANS 
SEC. 211. (a) GENERAL.—The Association is authorized, in accord-
ance with the provisions of this section and such rules and regulations 
as it shall prescribe, to make loans to the Corporation, the National 
Railroad Passenger Corporation, and other railroads (including a 
1002 
PUBLIC LAW 93-236-JAN. 2, 1974 
fe? 
STAT. 
49 Stat. 911 
76 Stat. 572 
Publication in 
Federal Register 
Interest rate. 
railroad in reorganization which has been found to be reorganizable 
under section Y7 of the Bankruptcy Act pursuant to section 207(b) 
ii'usc'20'5. 
of this title) in the region, for purposes of assisting in the imple-
mentation of the final system plan; to a State or local or regional 
transportation authority pursuant to section 403 of this Act; and 
to provide assistance in the form of loans to any railroad which (A) 
connects with a railroad in reorganization, and (B) is in need of 
financial assistance to avoid reorganization proceedmgs under sec-
tion 77 of the Bankruptcy Act (11 U.S.C. 205). No such loan shall be 
made bv the Association to a railroad unless such loans shall, where 
applicable, be treated as an expense of administration. The rights 
referred to in the last sentence of section 77 (j) of the Bankruptcy Act 
(11 U.S.C. 205 (j)) shall in no way be affected by this Act. 
(b) APPLICATIONS.—Each application for such a loan shall be made 
in writing to the Association m such form and with such content and 
other submissions as the Association shall prescribe to protect reason-
ably the interests of the United States. The Association shall publish 
a notice of the receipt of each such application in the Federal Register 
and shall afford interested persons an opportunity to comment thereon. 
(c) TERMS AND CONDITIONS.—Each loan shall be extended in such 
form, under such terms and conditions, and pursuant to such regula-
tions as the Association deems appropriate. Such loan shall Dear 
interest at a rate not less than the greater of a rate determined by 
the Secretary of the Treasury taking into consideration (1) the rate 
prevailing in the private market for similar loans as determined by 
the Secretary of the Treasury, or (2) the current average yield on 
outstanding marketable obligations of the Association with remaining 
periods of maturity comparable to the average maturities of such 
loans, plus such additional charge, if any, toward covering costs of 
the Association as the Association may determine to be consistent with 
the purposes of this Act. 
(d) MODIFICATIONS.—The Association is authorized to approve any 
modification of any provision of a loan under this section, including 
the rate of interest, time of payment of interest or principal, security, 
or any other term or condition, upon agreement of the recipient of the 
loan and upon a finding by the Association that such modification is 
equitable and necessary or appropriate to achieve the policy declared 
in subsection (f) of this section. 
(e) PREREQUISITES.—The Association shall make a finding in writ-
ing, before making a loan to any applicant under this section, that—-
(1) the loan is necessary to carry out the final system plan or to 
prevent insolvency; 
(2) it is satisfied that the business affairs of the applicant will 
be conducted in a reasonable and prudent manner; and 
(3) the applicant has offered such security as the Association 
deems necessary to protect reasonably the interests of the United 
States. 
(f) POLICY.—It is the intent of Congress that loans made under this 
section shall be made on terms and conditions which furnish reasonable 
assurance that the Corporation or the railroads to which such loans 
are granted will be able to repay them within the time fixed and that 
the gx>als of the final system plan are reasonably likely to be achieved. 
RECORDS, A U D I T , AND EXAMINATION 
SEC. 212. (a) RECORDS.—Each recipient of financial assistance under 
this title, whether in the form of loans, obligations, or other arrange-
ments, shall keep such records as the Association or the Secretary shall 
prescribe, including records which fully disclose the amount and dis-
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
100? 
position by such recipient of the proceeds of such assistance and such 
other records as will facilitate an effective audit. 
(b) AUDIT AND EXAMINATION.—The Association, the Secretary, and 
the Comptroller General of the United States, or any of their duly 
authorized representatives shall, until the expiration of 3 years after 
the implementation of the final system plan, have access for the pur-
pose of audit and examination to any books, documents, papers, and 
records of such recipients which in the opinion of the Association, the 
Secretary, or the Comptroller General may be related or pertinent to 
the loans, obligations or other arrangements referred to in subsection 
(a) of this section. The Association or any of its duly authorized repre-
sentatives shall, until any financial assistance received under this title 
has been repaid to the Association, have access to any such materials 
which concern any matter that may bear upon— 
(1) the aliility of the recipient of such financial assistance to 
make repayment within the time fixed therefor; 
(2) the effectiveness with which the proceeds of such assistance 
is used; and 
(3) the implementation of the final system plan and the realiza-
tion of the declaration of policy of this Act. 
EMERGENCY ASSISTANCE PENDING 
IMPLEMENTATION 
SEC. 213. (a) EMERGENCY ASSISTANCE.—The Secretary is authorized, 
pending the implementation of the final system plan, to pay to the 
trustees of railroads in reorganization such sums as are necessary for 
the continued provision of essential transportation services by such 
railroads. Such payments shall be made by the Secretary upon such 
reasonable terms and conditions as the Secretary establishes, except 
that recipients must agree to maintain and provide service at a level 
no less than that in effect on the date of enactment of this Act. 
(b) AUTHORIZATION FOR APPROPRIATIONS.—There are authorized to 
be appropriated to the Secretary for carrying out this section such 
sums as are necessary, not to exceed $85,000,000, to remain available 
until expended. 
AUTHORIZATION FOR APPROPRIATIONS 
SEC. 214. (a) SECRETARY.—There are authorized to be appropriated 
to the Secretary for purposes of preparing the reports and exercising 
other functions to be performed by him under this Act such sums as 
are necessary, not to exceed $12,500,000, to remain available until 
expended. 
(b) OFFICE.—There are authorized to be appropriated to the Com-
mission for the use of the Office in carrying out its functions under this 
Act such sums as are necessary, not to exceed $5,000,000, to remain 
available until expended. The budget for the Office shall be submitted taf"o'^ c^on^^eTs"" 
by the Commission directly to the Congress and shall not be subject to 
review of any kind by any other agency or official of the United States. 
Moneys appropriated for the Office shall not be withheld by any agency 
or official of the United States or used by the Commission for any 
purpose other than the use of the Office. No part of any other moneys 
appropriated to the Commission shall be withheld by any other agency 
or official of the United States to offset any moneys appropriated pur-
suant to this subsection. 
(c) ASSOCIATION.—There are authorized to be appropriated to the 
Association for purposes of carrying out its administrative expenses 
\mder this Act such sums as are necessary, not to exceed $26,000,000, to 
remain available until expended. 
1004 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
MAINTENANCE AND IMPROVEMENT OF PLANT 
SEC. 215. Prior to the date upon which, rail properties are conveyed 
to the Corporation under this Act, the Secretary, with the approval 
of the Association, is authorized to enter into agreements with 
railroads in reorganization in the region (or railroads leased, oper-
ated, or controlled by railroads in reorganization) for the acquisition, 
maintenance, or improvement of railroad facilities and equipment 
necessary to improve property that will be in the final system plan. 
Agreements entered into pursuant to this section shall specifically 
identify the type and quality of improvements to be made pursuant. 
to such agreements. Notwithstanding section 210(b) of this title, the 
Association shall issue obligations under section 210(a) of this title 
in an amount sufficient to finance such agreements and shall require the 
Corporation to assume any such obligations. However, the Association 
may not issue obligations under this section in an aggregate amount 
in excess of $150,000,000. The Secretary may not enter into any agree-
ments under this section until he issues regulations setting forth pro-
cedures and guidelines for the administration of this section. The 
Corporation shall not be required under title I I I of this Act to compen-
sate any railroad in reorganization for that portion of the value of 
rail properties transferred to it under this Act which is attributable 
to the acquisition, maintenance, or improvement of such properties 
under this section. 
TITLE III—CONSOLIDATED RAIL CORPORATION 
FORMATION AND STRUCTURE 
SEC. 301. (a) ESTABLISHMENT.—There shall be established within 
300 days after the date of enactment of this Act, in accordance with 
the provisions of this section, a corporation to be known as the Con-
solidated Rail 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 common carrier by railroad under section 1(3) of the 
s/staus//.^' 
Interstate Commerce Act (49 U.S.C. 1(3)), shall be subject to the 
provisions of this Act and, to the extent not inconsistent with such 
Acts, shall be subject to applicable State law. The principal office of 
the Corporation shall be located in Philadelphia in the Common-
wealth of Pennsylvania. 
(c) INCORPORATORS.—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, includ-
ing the filing of articles of incorporation. The incorporators shall also 
serve as the Board of Directors of the Corporation until the stock and 
other securities of the Corporation are distributed to the estates of the 
railroads in accordance with section 303(c) of this title and shall 
adopt the intial bylaws of the Corporation. 
(d) BOARD OF DIRECTORS.—The Board of Directors of the Corpora-
tion shall consist of 15 individuals selected in accordance with the arti-
cles and bylaws of the Corporation: Provided, That so long as 50 per 
centum or more, as determined by the Secretary of the Treasury, of the 
outstanding indebtedness of the Corporation consists of obligations 
of the Association or other debts owing to or guaranteed by the United 
States, three of the members of such board shall be the Secretary, the 
Chairman and the President of the Association and five of the mem-
bers of such board shall be individuals appointed as such by the 
President, by and with the advice and consent of the Senate. 
, -•'-'-'i.^T'ji^ssisa 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1005 
(o) 1 NiTLAL (•AinTAi.izATioN.—111 ovdi'.v to csin v out the linul system 
plan the Corporation is authorized to issue stock and other securities. 
Convinon stock shall be issued initially to the estates of railroads in 
reorjranization in tlie region in exchange for rail properties conveyed 
to the CoT'poration pursuant to the final system plan. Xothing in this 
subsecticm shall preclude the Corporation from repurchasing the com-
mon stock initially issued through payments out of profits in order to 
establish an employee stock ownership plan; and nothing in this sub-
section shall preclude the recipients of common stock initially issued 
from establishing an employee stock ownership plan. 
(f) AUDIT AND EXPENDITURES.—So long as 50 per centum or more, 
as determined by the Secretary of the Treasury, of the outstanding 
indebtedness of the Corporation consists of obligations of the Associa-
tion or other debts owing to or guaranteed by the United States, the 
Corporation shall be subject to the provisions of the Government Cor-
poration (Control Act for the purposes of a Federal Government audit. 
59 stat. 597. 
Section 201 of the Government Corporation Control Act (31 U.S.C. ^o^te."^^ ^^^ 
S56) is amended by inserting at the end thereof the following: ", and 
Ante, p. 992. 
(9) the C!onsolidated Rail Corporation to the extent provided in the 
Regional Rail Reorganization Act of 1973.". 
(g) ANNUAL REPORT.—The Corporation shall transmit to the Con- ^^ss°Ind°pfeTi'~ 
gress and the President, not later than 90 days after the end of each den^t! ^" 
fiscal year, a comprehensive and detailed report on all activities and 
accomj)lisliments of the Corporation during the preceding fiscal year. 
POWERS A N D DUTIES OF THE CORPORATION 
SK(\ 30-2. The Corporation shall have all of the powers and is subject 
to all of the duties vested in it under this Act, in addition to the pow-
ers conferred upon it under the laws of the State or States in which 
it is incorporated and the powers of a railroad in any State in which 
it opeiates. The Corporation is authorized and directed to— 
(a) acquire rail properties designated in the final system plan 
to be transferied or conveyed to it; 
(b) operate rail service over such rail properties except as pro-
vided under sections 304 (e) and 601 (d) (3) of this Act; 
(c) rehabilitate, improve, and modernize such rail properties: 
and 
(d) maintain adequate and efficient rail services. 
So long as 50 per centum or more, as determined by the Secretary of 
the Treasury, of the outstanding indebtedness of the Corporation con-
sists of obligations of the Association or other debts owing to or guar-
anteed by the United States, the Corporation shall not engage in 
activities which are not related to transportation. 
VALUATION AND CONVEYANCE OF RAIL PROPERTIES 
SEC. 303. (a) DEPOSIT W I T H COURT.—Within 10 days after delivery 
of a cei-tified copy of a final system plan pursuant to section 209(c) 
of this Act— 
(1) the Corporation, in exchange for the rail properties of the 
railroads in reorganization in the region and of railroads leased, 
operated, or controlled by railroads in reorganization in the region 
to be transferred to the Corporation, shall deposit with the special 
court all of the stock and other securities of the Corporation and 
obligations of the Association designated in the final system plan 
to be exchanged for such rail properties; 
(2) each profitable railroad operating in the region purchasing 
tail properties from a railroad in reorganization in the region, or 
from a railroad leased, operated, or controlled by a railroad in 
1006 
PUBLIC LAW 93-236-JAN. 2, 1974 
fe? 
STAT. 
reorganization in the region, as provided in the final system plan 
shall deposit with the special court the compensation to be paid 
for such rail properties. 
(b) CONVEYANCE OF KAIL PROPERTIES.— (1) The special court shall, 
within 10 days after deposit under subsection (a) of this section of the 
securities of the Corporation, obligations of the Association, and com-
pensation from the profitable railroads operating in the region, order 
the trustee or trustees of each railroad in reorganization in the region 
to convey forthwith to the Corporation and the respective profitable 
railroads operating in the region, all right, title, and interest in the 
rail properties of such railroad in reorganization and shall itself order 
the conveyance of all right, title, and interest in the rail properties of 
any railroad leased, operated, or controlled by such railroad in reorga-
nization that are to be conveyed to them under the final system plan 
as certified to such court under section 209(d) of this Act. 
(2) All rail properties conveyed to the Corporation and the respec-
tive profitable railroads operating in the region under this section 
shall be conveyed free and clear of any liens or encumbrances, but 
subject to such leases and agreements as shall have previously bur-
dened such properties or bound the owner or operator thereof in pur-
suance of an arrangement with any State, or local or regional 
transportation authority under which financial support from such 
State, or local or regional transportation authority was being provided 
at the time of enactment of this Act for the continuance of rail passen-
ger service or any lien or encumbrance of no greater than 5 years' 
duration which is necessary for the contractual performance by any 
person of duties related to public health or sanitation. Such convey-
ances shall not be restrained or enjoined by any court. 
(3) Notwithstanding anything to the contrary contained in this Act, 
if railroad rolling stock is included in the rail properties to be con-
veyed, such conveyance may only be effected if the profitable railroad 
operating in the region or the Corporation to whom the conveyance 
is made assumes all of the obligations under any conditional sale agree-
ment, equipment trust agreement, or lease in respect to such rolling 
stock and such conveyance is made subject thereto; and the provisions 
of this Act shall not affect the title and interests of any lessor, equip-
ment trust trustee, or conditional sale vendee or assignee under such 
conditional sale agreement, equipment trust agreement or lease under 
section 77 (j) of the Bankruptcy Act (11 U.S.C. 205 (j)). 
(4) Notwithstanding anything to the contrary contained in this 
Act, if a railroad in reorganization has leased rail properties from a 
lessor that is neither a railroad nor controlled by or affiliated with 
a railroad, and such lease has been approved by the lessee railroad's 
reorganization court prior to the date of enactment of this Act, con-
veyance of such lease may only be effected if the Corporation or the 
profitable railroad to whom the conveyance is made assumes all of 
the terms and conditions specified in the lease, including the obliga-
tion to pay the specified rent to the non-railroad lessor. 
(c) FINDINGS AND DISTRIBUTION.— (1) After the rail properties 
have been conveyed to the Corporation and profitable railroads oper-
ating in the region under subsection (b) of this section, the special 
court, giving due consideration to the findings contained in the final 
system plan, shall decide— 
(A) whether the transfers or conveyances— 
(i) of rail properties of each railroad in reorganization, 
or of each railroad leased, operated, or controlled by a rail-
road in reorganization, to the Corporation in exchange for 
the securities and the other benefits accruing to such rail-
49 Stat. 911, 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1007 
road as a result of such exchange, as provided in the final 
system plan and this Act, and 
(ii) of rail properties of each railroad in reorg-anization, 
or of each railroad leased, operated, or controlled by a rail-
road in reorganization, to a profitable railroad operating in 
the region, in accordance with the final system plan, 
are in the public interest and are fair and equitable to the estate 
of each railroad in reorganization in accordance with the standard 
of fairness and equity applicable to the approval of a plan of 
reorganization or a step in such a plan under section 77 of the 
Bankruptcy Act (11 U.S.C. 205), or fair and equitable to a rail- 
,^\l\%l\''' 
road that is not itself in reorganization but which is leased, oper-
ated, or controlled by a railroad in reorganization; and 
(B) whether the transfers or conveyances are more fair and 
equitable than is required as a constitutional minimum. 
(2) If the special court finds that the terms of one or more exchanges 
for securities and other benefits are not fair and equitable to an estate 
of a rail-road in reorganization, or to a railroad leased, operated, or 
controlled by a railroad in reorganization, which has transferred rail 
properties pursuant to the final system plan, it shall— 
(A) enter a judgment reallocating the securities of the Corpora-
tion in a fair and equitable manner if it has not been fairly 
allocated among the railroads transferring rail properties to the 
Corporation; and 
(B) if the lack of fairness and equity cannot be completely 
cured by a reallocation of the Corporation's securities, order the 
Corporation to provide for the transfer to the railroad of other 
securities of the Corporation or obligations of the Association as 
designated in the final system plan in such nature and amount as 
would make the exchange or exchanges fair and equitable; and 
(C) if the lack of fairness and equity cannot be completely 
cured by reallocation of the Corporation's securities or by pro-
viding for the transfer of other securities of the Corporation or 
obligations of the Association as designated in the final system 
plan, enter a judgment against the Corporation. 
(3) If the special court finds that the terms of one or more con-
veyances of rail properties to a profitable railroad operating in the 
region in accordance with the final system plan are not fair and equi-
table, it shall enter a judgment against such profitable railroad. If the 
special court finds that the terms of one or more conveyances or 
exchanges for securities or other benefits are fairer and more equitable 
than is required as a constitutional minimum, then it shall order the 
return of any excess securities, obligations, or compensation to the 
Corporation or a profitable railroad so as not to exceed the constitu-
tional minimum standard of fairness and equity. 
(4) Upon making the findings referred to in this subsection, the 
special court shall order distribution of the securities, obligations, and 
compensation deposited with it under subsection (b) of this section to 
the trustee or trustees of each railroad in reorganization in the region 
who conveyed right, title, and interest in rail properties to the Corpo-
ration and the respective profitable railroads under such subsection. 
(d) APPEAL.—A finding or determination entered pursuant to sub-
section (c) of this section may be appealed directly to the Supreme 
Court of the United States in the same manner that an injunction 
order may be appealed under section 1253 of title 28, United States 
Code: Provided, That such appeal is exclusive and shall be filed in the 
^^ stat. 928. 
Supreme Couit not more than 5 days after such finding or determina-
tion is entered by the special court. The Supreme Court shall dismiss 
1008 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
iiny siu'li appeal within 7 «iays after tlie entry of such an appeal if it 
determines tnat sueli an appeal would not be in tlie uiterest of an expe-
ditious conclusion of the proceedings and shall grant the highest pri-
ority to the determination of any such apijeals MIUCII it determines 
not to dismiss. 
rERMlXATIOX OE KAIL SERVICE 
SEC. 304. (a) DISGONTINUAXCE.—Except as provided in subsections 
(c) and (f) of this section, (1) rail service on rail j)roperties of a rail-
road in the region which transfers to the Corporation or to profitable 
railroads operating in the region all or substantially all of its rail 
IH'operties designated for such conveyance in the final system plan, and 
(2) rail service on I'ail properties of a profitable railroad operating in 
the region which transfers substantially all of its rail properties to the 
(^n'poration or to other railroads pursuant to the final system plan may 
be discontinued to the extent such discontinuance is not precluded by 
the terms of the leases and agreements referred to in section 303(b) (2) 
of this title if— 
(A) the final system plan does not designate rail service to be 
operated over such rail properties; and 
(B) not sooner than 30 days following the effective date of the 
final system plan the trustee or trustees of the applicable rail-
road in reorganization or a profitable i-ailroad give notice in 
writing of intent to discontinue such rail service on a date certain 
which is not less than 60 days after the date of such notice; and 
(C) the notice required by paragraph (B) of this subsection is 
sent by certified mail to the Go\ei'nor and State transportation 
agencies of each State and to tlie government of each political 
subdivision of each State in which such rail propei'ties are located 
and to each shipper who lias used such rail service during the 
previous 12 months. 
(b) ABANDONMEXT.— (1) Rail i^roperties over which rail service has 
been discontinued under subsection (a) of this section may not be 
abandoned sooner than 120 days after tlie effective date of such dis-
continuance except as provided in subsections (c) and (f) of this 
section. Thereafter, except as provided in subsection (c) of this section, 
such rail properties may be abandoned npon 30 days' notice in writ-
ing to all those required to receive notice under j^aragraph (2) (C) of 
subsection (a) of this section. 
(2) Tn any case in which rail ])roperties proposed to be abandoned 
under this section are designated by the final system j^lan as rail prop-
erties which are suitable for nse for other public purposes (including 
roads or highways, other forms of mass transportation, conservation, 
and recreation), such rail properties shall not be sold, leased, 
exchanged, or otherwise disposed of during the 180-day period begin-
ning on the date of notice of proposed abandonment under this section 
uidess such rail properties have first been offered, upon reasonable 
terms, for ac(]uisition for public purposes. 
(c) LTMITATIOXS.—Rail service may be discontinued and rail prop-
oities may be abandoned under subsections (a) and (b) of this section 
notwithstanding any provision of the Interstate Commerce Act (49 
I'.S.C^ 1 et seq.) or the constitution or law of any State or the deci-
sion of any couit or administrative agency of the United States or of 
any State. Xo rail service may be discontiimed and no rail properties 
may be abandoned pursuant to this section— 
(1) after 2 years from the effective date of the final system plan 
or more than 2 years after the final payment of any rail service 
t'ontinuation subsidy is received, whichever is later; or 
24 Stat. 379. 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1009 
(2) if a shipper, a State, the Uhited States, a local or regional 
transportation authority, or an^ responsible person offers— 
(A) a rail service continuation subsidy which covers the 
difference between the revenue attributable to such rail prop-
erties and the avoidable costs of providing service on such 
rail properties plus a reasonable return on the value of such 
rail properties; 
(B) a rail service continuation subsidy which is payable 
pursuant to a lease or agreement with a State, or a local or 
regional transportation authorit}^, under which financial sup-
port was being provided at the time of the enactment of this 
Act for the continuance of rail passenger service; or 
(C) to purchase, pursuant to subsection (d) of this section, 
such rail properties in order to operate rail service over such 
properties. 
If a rail service continuation subsidy is offered, the government or 
person offering the subsidy shall enter into an operating agreement 
with the Corporation or any responsible person (including a govern-
ment entity) under which the Corporation or such person (including a 
government entity) will operate rail service over such rail properties 
and receive the difference between the revenue attributable to such 
properties and the avoidable costs of providing service on such rail 
properties and the trustee of any railroad in reorganization shall 
receive a reasonable rate of return on the value of any rail properties 
for which a rail service is operated under such subsidy. 
(d) PuRCHASK.—If an offer to purchase is made under subsection 
(c) (2) (C) of this section, such offer shall be accompanied by an offer 
of a rail service continuation subsidy. Such subsidy shall continue until 
the purchase transaction is completed, unless a railroad assumes 
operations over such rail properties on its own account pursuant to an 
order or authorization of the Commission. Whenever a railroad iji 
reorganization in the region or a profitable railroad gives notice of 
intent to discontinue service pursuant to subsection (a) of this section, 
such railroad shall, upon the request of anyone apparently qualified 
to make a purchase offer promptly make available its most recent 
reports on the physical condition of such property together with such 
traffic and revenue data as would be required under subpart B of part 
1121 of chapter X of title 49 of the Code of Federal Ptegulations and 
^^ ^^^ ^^^'^• 
such other data necessary to ascertain the avoidable costs of providing 
service over such rail properties. 
(e) ABANDONMENT BY CORPORATION.—After the rail system to be 
operated by the Corporation under the final system plan has been in 
operation for 2 years, the Commission may authorize the Corporation 
to abandon any rail properties as to which it determines that rail serv-
ice over such properties is not required by the public convenience and 
necessity. The Commission may, at any time after the effective date 
of the final system plan, authorize additional rail service in the region 
or authorize the abandonment of rail properties which are not being 
operated by the Corporation or by any other person. Determinations 
by the Commission under this subsection shall be made pursuant to 
applicable provisions of the Interstate Commerce Act (49 U.S.C. 1). 
^'* ^*^*- ^^•'• 
(f) INTERIM ABANDONMENT.—After the date of enactment of this 
Act, no railroad in reorganization may discontinue service or abandon 
any line of railroad other than in accordance with the provisions of 
this Act, unless it is authorized to do so by the Association and unless 
no affected State or local or regional transportation authority reason-
ably opposes such action, notwithstanding any provision of any other 
Federal law, the constitution or law of any State, or decision or order 
of, or the pendency of any proceeding before any Federal or State 
court, agency, or authority. 
1010 
PUBLIC LAW 93-236--JAN. 2, 1974 
[87 STAT. 
TITLE IV—LOCAL RAIL SERVICP^S 
FINDINGS AND PURPOSE 
SEC. -401. (a) FINDINGS.—The Congress finds and declares that— 
(1) The Nation is facing an energy shortage of acute propor-
tions in the next decade. 
(2) Railroads are one of the most energy-efficient modes of 
transportation for the movement of passengers and freight and 
cause the least amount of pollution. 
(3) Abandonment, termination, or substantial reduction of rail 
service in any locality will adversely affect the Nation's long-term 
and immediate goals with respect to energy conservation and 
environmental protection. 
(4) Under certain circumstances the cost to the taxpayers of 
rail service continuation subsidies would be less than the cost of 
abandonment of rail service in terms of lost jobs, energy shortages, 
and degradation of the environment. 
(b) PURPOSE.—Therefore, it is declared to be the purpose of the 
Congress to authorize the Secretary to maintain a program of rail 
service continuation subsidies. 
RAIL SERVICE CONTINUATION SUBSIDIES 
SEC. 402. (a) GENERAL.—The Secretary shall provide 
financial 
assistance in accordance with this section for the purpose of rail 
service continuation subsidies. For purposes of subsection (b)(1) of 
this section the Federal share of a rail service continuation subsidy 
shall be 70 per centum and the State share shall be 30 per centum. For 
purposes of subsection (b) (2) of this section a State receiving dis-
cretionary assistance shall, be required to contribute at least 30 per 
centum of the cost of the program for which the Federal assistance is 
provided. 
(b) ENTITLEMENT.— (1) Each State in the region is entitled to an 
amount for rail service continuation subsidies from 50 per centum of 
the sums appropriated each fiscal year for such purpose in the ratio 
which the total rail mileage in such State, as determined by the Secre-
tary and measured in point-to-point length (excluding yard tracks 
and sidings), bears to the total rail mileage in all the States in the 
region, measured in the same manner, except that the entitlement of 
each State shall be no less than 3 per centum, and the entitlement of 
no State shall be more than 10 per centum, of 50 per centum of the 
funds appropriated. In the event that the total amount allocated under 
this formula, due to the application of the maximum and minimum 
limitations which it establishes, is greater or less than 50 per centum 
of the funds appropriated, the excess or deficiency, as the case may be, 
shall be added to or deducted from the Secretary's discretionary fund 
provided for in paragraph (2) of this subsection. The entitlement of 
any State which is withheld in accordance with this section and any 
sums not used or committed by a State during the preceding fiscal year 
shall be paid into the discretionary fund provided for in paragraph 
(2) of this subsection, 
(2) The Secretary is authorized to provide discretionary financial 
assistance to a State or a local or regional transportation authority in 
the region for the purpose of continuing local rail services, including 
assistance for the purposes enumerated in section 403 of this title. 
(c) ELIGIBILITY.—A. State in the region is eligible to receive rail 
service continuation subsidies pursuant to subsection (b) of this sec-
tion in any fiscal j^ear if— 
-VSf":;;! 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1011 
(1) the State has established a State plan for rail transporta-
tion and local rail services which is administered or coordinated by 
a designated State agency and such plan provides for the equi-
table distribution of such subsidies among State, local, and 
regional transportation authorities; 
(2) the State agency has authority and administrative juris-
diction to develop, promote, supervise, and support safe, adequate, 
and efficient rail services; employs or will employ, directly or 
indirectly, sufficient trained and qualified personnel; and main-
tains or will maintain adequate programs of investigation, 
research, promotion, and development with provision for public 
participation; 
(3) the State provides satisfactory assurance that such fiscal 
control and fund accounting procedures will be adopted as may 
be necessary to assure proper disbursement of, and accounting for, 
Federal funds paid under this title to the State; and 
(4) the State complies with the regulations of tlie Secretary 
issued under this section. 
(d) RKGULATIOXS.—Within 90 days after the date of enactment of 
this Act, the Secretary shall issue, and may from time to time amend, 
reguhitions witli respect to basic and discretionary rail service c( n-
tinuation subsidies, 
(e) PAYMENT,—The Secretary shall pay to each State in the i-egion 
an amount equal to its entitlement under subsection (b)(1) of this 
section. Any amounts, which are not expended or committed by a State 
pursuant to subsection (b) during the ensuing fiscal year shall be 
returned by such State to the Secretary, who may use such amounts 
in accordance with subsection (b) (2) of this section, 
(f) TERiSr.—A vail service continuation subsidy between a State, or a 
local or i-egional authority, and the Corporation or other responsible 
person (including a government entity) may not exceed a term of 2 
years. 
(g) RECORD, AI'DTT, AXD ExA:\rixATTox.— (1) Each recipient of 
financial assistance under this section, w^hether in the form of grants, 
subgrauts. contracts, subcontracts, or other ari-angements, shall keep 
such refolds as the Secretary shall pi-escribe. including records Avhicli 
fullv disclose the amount and disposition by such recipient of the pro-
ceeds of such assistance, the total cost of the project or undertaking in 
connection Avifh Avhich such assistance was given or used, the amount 
of that portion of the cost of the project supplied by other sources, and 
sn^li otlioT records as Avill facilitate an effective audit. 
(2) The Seci'otarv and the Compti'oller General of the United States, 
or anv of their dnly autliorized representatives shall, until the expira-
tion of r, years after completion of the project or undertaking referred 
to in ])aragraph (1) of this subsection, have access for the purpose of 
audit and examination to any books, documents, papers, and records of 
such receipts which in the opinion of the Secretary or the Comptroller 
Ge-^eral may be I'elated or pertinent to the grants, contracts, or other 
ari-angenients referi-ed to in such paragraph. 
(h) 'WiTiTHOLDixo.—If the Secretary, after reasonable notice and 
opportunity for a hearing to any State agencv, finds that a State is not 
eligible for rail service continuation subsidies under subsections (c) 
and (d) of this section, payment to such State shall not be made until 
there is no longer any failure to comply. 
(i) AUTHORIZATION FOR APPROPRIATIONS.— (1) There is authorized 
to be aj^propriated to carry out the purposes of this section such sums 
as are necessary, not to exceed $90,000,000 for each of the 2 fiscal years 
including and following the effective date of the final system plan. 
Such sums as are appropriated shall remain available until expended. 
GAG audit. 
1012 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
(2) Oiie-Iuilf of the sums appropriated pursuant to the authorization 
of this subsection shall be reserved for allocation to States in the region 
under subsection (b)(1) of this section. One-half of the sums appropri-
ated pursuant to the authorization of this subsection shall be reserved 
for distribution by the Secretary under subsection (b) (2) of this 
section. 
(j) DEFINITIOX.—As used in this section, "rail service continuation 
subsidies" means subsidies calculated in accordance with the provisions 
of section 205(d) (3) of this Act to cover costs of operating adequate 
and efficient rail service, including where necessary improvement and 
maintenance of tracks and related facilities. 
ACQUISITION AXD MODERNIZATIOX LOANS 
SEC. 103. (a) ACQUISITION.—If a State which is eligible for assist-
ance under section 402(c) of this title or a local or regional trans-
portation authority has made an oifer to purchase any I'ail properties 
of a railroad pursuant to section 304(c) (2) (C) of this Act or other 
lawful authority, the Secretary is authorized to direct the Association 
to provide loans to such State or local or regional transportation 
authority not to exceed 70 per centum of the purchase price: Provided^ 
however^ That any recipient of such loan is no longer eligible for a rail 
service continuation subsidy pursuant to section 402 of this title. 
(b) MODERNIZATION.—In addition to such acquisition loans, the 
Secretary is authorized to direct the Association to provide additional 
assistance not to exceed 70 per centum of the cost of restoring or 
repairing such rail properties to such condition as will enable safe and 
efficient rail transportation operations over such rail properties. Such 
financial assistance may be in the form of a loan or the guarantee of 
a loan. The Association shall provide such financial assistance as the 
Secretary may direct under this section and shall adopt regulations 
describing its procedures for such assistance. With the approval of the 
Secretary, a State may expend sums received by it under section 402 
of this title for acquisition and modernization pursuant to this section. 
TITLE V—EMPLOYEE PKOTECTION 
DEFINITIONS 
SEC. 501. As used in this title unless the context otherwise requires— 
(1) ''acquiring railroad" means a railroad, except tli« Corp)oration, 
which seeks to acquire or has acquired, pursuant to the provisions of 
this Act, all or a part of the rail properties of one or more of the rail-
roads in reorganization, the Corporation, or a profitable railroad; 
(2) "employee of a railroad in reorganization" means a person 
who, on the effective date of a conveyance of rail properties of a rail-
road in reorganization to the Corporation or to an acquiring railroad, 
has an employment relationship with either said railroad in reorgani-
zation or any carrier (as defined in parts I and I I of the Interstate 
Commerce Act) which is leased, controlled, or operated by the rail-
road in reorganization except a president, vice president, treasurer, 
secretary, comptroller, and any other person who performs functions 
corresponding to those performed by \h& foregoing officers; 
(3) "protected employee" means any employee of an acquiring rail-
road adversely affected by a transaction and any employee of a rail-
road in reorganization Avho on the effective date of this Act have not 
reached age 65; 
(4) "class or craft of employees" means a group of emploj'ees, rec-
ognized and treated as a unit for purposes of collective bargaining, 
49 use 1, 301. 
', ',^t?«?5f i • 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1013 
44 Stat. 577. 
45 u s e 151. 
-which is represented by a labor organization that has been duly author-
ized or recognized pursuant to the Kailway Labor Act as its repre-
sentative for purposes of collective bargaining; 
(5) "representative of a class or craft of employees" means a labor 
organization which has been duly authorized or recognized as the 
collective bargaining representative'of a class or craft of employees 
pursuant to the Railway Labor Act; 
(6) "deprived of employment" means the inability of a protected 
employee to obtain a position by the normal exercise of his seniority 
rights with the Corporation after properly electing to accept employ-
ment therewith or, the subsequent loss of a position and inability, by 
the normal exercise of his seniority rights under the applicable collec-
tive bargaining agreements, to obtain another position with the Corpo-
ration: Provided^ liowever^ That provisions in existing collective 
bargaining agreements of a railroad in reorganization, which do not 
require a protected employee, in the normal exercise of seniority 
rights, to make a change in residence, in order to maintain his pro-
tection, will be preserved and will also be extended and be applicable 
to all other protected employees of that same craft or class. It shall 
not, however, include any deprivation of employment by reason of 
death, retirement, resignation, dismissal or disciplinary suspension 
•for cause, failure to work due to illness or disability, nor any severance 
of employment covered by subsections (d) and (e) of section 505 of 
this title; 
(7) "employee adversely affected with respect to his compensation" 
means a protected employee who suffers a reduction in compensation; 
(8) "transaction" means actions taken pursuant to the provisions of 
this Act or the results thereof; and 
(9) "change in residence" means transfer to a work location Avhich 
is located either (A) outside a radius of 30 miles of the employee's 
former work location and farther from his residence than was his 
former work location or (B) is located more than 30 normal highway 
route miles from his residence and also farther from his residence 
than was his former work location. 
EMPLOYMENT 
OFFERS 
SEC. 502. (a) AITLICABLE LAW.—The Corporation and, where appli-
cable, the Association shall be subject to the provisions of the Rail-
way Labor Act and shall be considered employers for purposes of the 
Railroad Retirement Act, Railroad Retirement Tax Act, and the Rail- 
^s stat. i283. 
road Unemployment Insurance Act. The Corporation, in addition, 
5
2 sta^^ioaV. 
shall, except as otherwise specifically provided by this Act, be subject 
45 use 367. 
to all Federal and State laws and regulations applicable to carriers 
by railroad. 
(b) JMAXDATORV OFFER.—The Corporation shall offer employment, 
to be effective as of the date of a conveyance or discontinuance of 
service under the pi'ovisions of this Act, "to each employee of a rail-
road in reorganization who has not already accepted an offer of 
ernployment by the Association, where applicable, or an acquiring 
railroad. Such offers of employment to employees represented by labor 
organizations will be confined to their same craft or.class. The Corpo-
ration shall apply to said employees the protective provisions of this 
title. 
(c) ASSOCIATION.—After the transfer of rail properties pursuant to 
section 303, the Association, in employing any additional employees, 
shall give priority consideration to employees of a railroad in reorga-
nization and the provisions of this title shall apply to any such 
employees employed by the Association as if they were employees of 
the Corporation. 
1014 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
ASSIGNMEXT OF WORK 
SEC. 503. The Corporation shall have the rialit to assio-n, allocate, 
reassign, reallocate, and consolidate work formerly jDerformed on the 
rail properties acquired pursuant to the provisions of this Act from 
a railroad in reorganization to any location, facility, or position on its 
system provided it does not remove said work from coverage of a col-
lective-bargaining agreement and does not infringe upon the existing 
classification of work rights of any craft or class of employees at the 
location or facility to which said work is assigned, allocated, reas-
signed, reallocated, or consolidated and shall have the right to transfer 
to an acquiring railroad the work incident to the rail properties or 
facilities acquired by said acquiring railroad pursuant to this Act, 
subject, however, to the provisions of section 508 of this title. 
COLLECTIVE-BARGAINIXG AGREEMENTS 
SEC. 504. (a) INTERIM APPLICATIOX.—Until completion of the agree-
ments provided for under subsection (d) of this section, the Corpora-
tion shall, as though an original party thereto, assume and apply on 
the particular lines, properties, or facilities acquired all obligations 
under existing collective-bargaining agreements covering all crafts and 
classes employed thereon, except that the Agreement of May 1936, 
Washington, D.C. and provisions in other existing job stabilization 
agreements shall not be applicable to transactions effected pursuant to 
this Act with respect to which the provisions of section 505 of this title 
shall be superseding and controlling. During this period, employees of 
a railroad in reorganization who have seniority on the lines, proper-
ties, or facilities acquired by the Corporation pursuant to this Act 
shall have prior seniority roster rights on such acquired lines, proper-
ties, or facilities. 
(b) SINGLE IMPLEMENTING AGREEMENT.—On or before the date 
of the adoption of the final system plan by the Board of Directors of 
the Association as provided in section 207(c) of this Act, the repre-
sentatives of the various classes or crafts of the employees of a rail-
road in reorganization involved in a conveyance pursuant to this Act 
and representatives of the Corporation shall commence negotiation 
of a single implementing agreement for each class and craft of 
employees affected providing (1) the identification of the specific 
employees of the railroad in reorganization to whom the Corporation 
offers employment; (2) the procedure by which those employees of 
the railroad in reorganization may elect to accept employment with 
the Corporation; (3) the procedure for acceptance of such employees 
into the Corporation's employment and their assignment to positions 
on the Corporation's system; (4) the procedure for determining the 
seniority of such employees in their respective crafts or classes on the 
Corporation's system which shall, to the extent possible, preserve 
their prior seniority rights; and (5) the procedure.for determining 
equitable adjustment in rates of comparable positions. If no agree-
ment with respect to the matters referred to in this subsection is 
reached by the end of 30 days after the commencement of negotiations, 
the parties shall within an additional 10 days select a neutral referee 
and, in the event they are unable to agree upon the selection of such 
referee, then the National Mediation Board shall immediately appoint 
a referee. After a referee has been designated, a hearing on the dispute 
shall commence as soon as practicable. Not less than 10 days prior 
to the effective date of any conveyance pursuant to the provisions of 
44 Stat. 57 7. 
45 u s e 151. 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1015 
this Act, the referee shall resolve and decide all matters in dispute 
with respect to the negotiation of said implementing agreement or 
agreements and shall render a decision which shall be final and 
binding and shall constitute the implementing agreement or agree-
ments between the parties with respect to the transaction involved. 
The salary and expenses of the referee shall be paid pursuant to the 
provisions of the Railway Labor Act. 
(c) RELATIONSHIP TO OTHER PROVISIONS.—Notwithstanding failure 
for any reason to complete implementing agreements provided for in 
subsection (b) of this section, the Corporation may proceed with a 
conveyance of properties, facilities, and equipment pursuant to the 
provisions of this Act and effectuate said transaction: Provided^ That 
all protected employees shall be entitled to all of the provisions of 
such agreements, as finally determined, from the time they are 
adversely .affected as a result of any such conveyance. 
(d) TSEW COLLECTIVE-BARGAINING AGREEMENTS.—Not later than 60 
days after the effective date of any conveyance pursuant to the provi-
sions of this Act, the representatives of the various classes or crafts 
of the employees of a railroad in reorganization involved in a con-
veyance and representatives of the Corporation shall commence nego-
tiations of new collective-bargaining agreements for each class and 
craft of employees covering the rates of pay, rules, and working con-
ditions of employees who are employees of the Corporation, which 
collective-bargaining agreements shall include appropriate provisions 
concerning rates of pay, rules, and working conditions but shall not 
include any provisions for job stabilization resulting from any trans-
action effected pursuant to this Act which may exceed or conflict with 
those established or prescribed herein. 
EM PLOTEE PROTECTION 
SEC. 505. (a) EQITIVALEXT POSITION.—A protected employee whose 
employment is governed by a collective-bargaining agreement will not, 
except as explicitly provided in this title, during the period in which 
he is entitled to protection, be placed in a worse position with respect 
to compensation, fring^e benefits, rules, working conditions, and rights 
and privileges pertaining thereto. 
(b) MoxTiFLY DISPLACE^FEXT ALLOWAXCE.—A protected employee, 
who has been deprived of employment or adversely affected with 
respect to his compensation shall be entitled to a monthlj' displacement 
allowance computed as follows: 
(1) Said allowance shall be determined by computing the 
total compensation received by the employee, including vacation 
allowances and monthly compensation guarantees, and his total 
time paid for during the last 12 months immediately prior to his 
being adversely affected in which he performed compensated 
service more than 50 per centum of each of such months, based 
upon his normal work schedule, and by dividing separately the 
total compensation and the total time paid for by 12, thereby 
producing the average monthly compensation and average 
monthly time paid for; and, if an employee's compensation in his 
current position is less in any month in which he performs work 
than the aforesaid average compensation, he shall be paid the 
difference, less any time lost on account of voluntary absences 
other than vacations, but said protected employee shall be com-
pensated in addition thereto at the rate of the position filled for 
any time worked in excess of his average monthly time, Promded^ 
however^ That— 
48 Stat. 1283. 
1016 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
(A) in determining compensation in his current employ-
ment the protected employee shall be treated as occupying the 
position, producing the highest rate of pay to which his quali-
fications and seniority entitle him under the applicable collec-
tive bargaining agreement and which does not require a 
change in residence; 
(B) the said monthly displacement allowance shall be 
reduced by the full amount of any unemployment com-
pensation benefits received by the protected employee and 
shall be reduced by an amount equivalent to any earnings 
of said protected employee in any employment subject to the 
Railroad Retirement Act and 60 per centum of any earnings 
in any employment not subject to the Railroad Retirement 
Act: 
(C) a protected employee's average monthly compensation 
shall be adjusted from time to time thereafter to reflect sub-
sequent general wage increases; 
(D) should a protected employee's service total less than 12 
montns in which he performs more than 50 per centum com-
pensated service based upon his normal work schedule in 
each of said months, his average monthly compensation shall 
be determined by dividing separately the total compensation 
received by the employee and the total time for which he 
was paid oy the number of months in which he performed 
more than 50 per centum compensated service based upon his 
normal work schedule; and 
(E) the monthly displacement allowance provided by this 
section shall in no event exceed the sum of $2,500 in any month 
except that such amount shall be adjusted to reflect subsequent 
f
eneral wage increases. 
A protected employee's average monthly compensation 
under this section shall be based upon the rate of pay applicable 
to his employment and shall include increases in rates of pay not 
in fact paid but which were provided for in national railroad labor 
agreements generally applicable during the period involved. 
(3) If a protected employee who is entitled to a monthly dis-
placement allowance served as an agent or a representative of a 
chiss or craft of employees on either a full- or part-time basis in the 
12 months immediately preceding his being adversely affected, 
his monthly displacement allowance shall be computed by taking 
the average of the average monthly compensation and average 
monthly time paid for oi the protected employees immediately 
above and below him on the same seniority roster or his own 
monthly displacement allowance, whichever is greater. 
(4) An employee and his representative shall be furnished with 
a protected employee's average monthly compensation and average 
monthly time paid for, computed in accordance with the terms of 
this subsection, together with the data upon which such computa-
tions are based, within 30 days after the protected employee 
notifies the Corporation in writing that he has been deprived of 
employment or adversely affected with respect to his compensation. 
(c) DURATION OF DISPLACEMENT ALLOWANCE.—The monthly dis-
placement allowance provided for in subsection (b) of this section shall 
continue until tlie attainment of age 65 by a protected employee with 
5 or more years of service on the effective date of this Act and, in the 
case of a protected euiployee who has less than 5 years service on such 
date, shall continue for a period equal to his total prior years of serv-
ice: Provided^ That sueli monthly displacement allowance shall termi-
^•T'Spl;:. ' 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1017 
nate upon the protected employee's death, retirement, resignation, or 
dismissal for cause; and shall be suspended for the period of 
disciplinary suspension for cause, failure to work due to illness or dis-
ability, voluntary furlough, or failure to retain or obtain a position 
available to him by the exercise of his seniority rights in accordance 
with the provisions of this section. 
(d) TRANSFER.— (1) A protected employee who has been deprived of 
employment may be required by the Corporation, in inverse seniority 
order and upon reasonable notice, to transfer to any bona fide vacancy 
for which he is qualified in his same class or craft of employee on any 
part of the Corporation's system and shall then be governed by the 
collective-bargaining agreement applicable on the seniority district 
to which transferred. If such transfer requires a change in residence, 
any such protected employee may choose (A) to voluntarily furlough 
himself at his home location and have his monthly displacement allow-
ance suspended during the period of voluntary furlough, or (B) to be 
severed from employment upon payment to him of a. separation allow-
ance computed as provided in subsections (e) and (f) of this section, 
which separation allowance shall be in lieu of all other benefits 
provided by this title. 
(2) Such protected employee shall not be required to transfer to a 
location requiring a change in residence unless there is a bona fide need 
for his services at such location. Such bona fide need for services con-
templates that the transfer be to a position which has not and cannot 
be filled by employees who are not required to make a change in resi-
dence in the seniority district involved and which, in the absence of 
this section, would have required the employment of a new employee. 
(3) Such protected employee who, at the request of the Corporation, 
has once accepted and made a transfer to a location requiring a change 
in residence shall not be required again to so transfer for a period of 
3 years. 
(4) Transfers to vacancies requiring a change in residence shall be 
subject to the following: 
(A) The vacancy shall be first offered to the junior qualified 
protected employee deprived of employment in the seniority dis-
trict where the vacancy exists, and each such employee shall have 
20 days to elect one of the options set forth in paragraph (1) of 
this subsection. If that employee elects not to accept the transfer, 
it will then be offered in inverse seniority order to the remaining 
qualified, j^rotected employees deprived of employment on the 
seniority district, who will each have 20 days to elect one of the 
options set forth in paragraph (1) of this subsection. 
(B) If the vacancy is not filled by the procedure in paragraph 
(4) (A) of this subsection, the vacancy will then be offered in the 
inverse order of seniority to the qualified protected employees 
deprived of employment on the system and each of such employees 
will be afforded 30 days to elect one of the options set forth in 
paragraph (1) of this subsection. 
(C) The provisions of this paragraph shall not prevent the 
adoption of other procedures pursuant to an agreement made by 
the Corporation and representative of the class or craft of 
employees involved. 
(e) SEPARATION ALLOWANCE.—A protected employee who is ten-
dered and accepts an offer by the Corporation to resign and sever his 
employment relationship in consideration of payment to him of a 
separation allowance, and any protected employee whose employment 
1018 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
relationship is severed in accordance with subsection (d) of this sec-
tion, shall oe entitled to receive a lump-sum separation allowance not 
to exceed $20,000 in lieu of all other benefits provided by this title. Said 
lump-sum separation allowance, in the case of a protected employee 
who had not less than e
3 nor more than 5 years of service as of the date 
of this Act, shall amount to 270 days' pay at the rate of the position 
last held and, in the case of a protected employee having had 5 or 
more years' service, shall amount to the number of days' pay indicated 
below at the rate of the position last held dependent upon the age of 
the protected employee at the time of such termination of employment: 
60 or under 
360 days' pay 
61 
300 days' pay 
62 
240 days' pay 
63 
180 days' pay 
64 
120 days' pay. 
(f) TERMINATION ALLOWANCE.—The Corporation may terminate 
the employment of an employee of a railroad in reorganization, who 
lias less tlian 3 years' service as of the effective date of this Act: Pro-
vided^ however^ That in such event the terminated employee shall be 
entitled to receive a lump sum separation allowance in an amount 
determined as follows: 
2 to 3 years' service 
180 days' pay at the rate of the posi-
tion last held. 
1 to 2 years' service 
90 days' pay at the rate of the posi-
tion last held. 
Less than 1 year's service 
.5 days' pay at the rate of the position 
last held for each month of service. 
(g) MOVING EXPENSE BENEFITS.—Any protected employee who is 
i-ecjuired to make a change of residence as the result of a transaction 
shall be entitled to the following benefits— 
(1) Reimbursement for all expenses of moving his household 
and other personal effects, for the traveling expense of himself 
and members of his family, including living expenses for himself 
and his family, and for his own actual wage loss, not to exceed 
10 working days. Provided^ That the Corporation or acquiring 
railroad shall, to the same extent provided above, assume said 
expenses for any employee furloughed within 3 years after chang-
ing liis point of employment as a result of a transaction^ who 
elects to move his place of residence back to his original point of 
employment. No claim for reimbursement shall be paid under the 
provisions of this section unless such claim is presented to the 
Corporation or acquiring railroad within 90 days after the date 
on which the expenses were incurred. 
(2) (A) (i) If the protected employee owns, or is under a con-
tract to purchase, his own home in the locality from which he is 
required to move and elects to sell said home, he shall be reim-
bursed for any loss suffered in the sale of his home for less than 
its fair market value. In each case the fair market value of the 
home in question shall be determined as of a date sufficiently prior 
to the date of the transaction so as to be unaft'ected thereby. The 
Corporation or an acquiring railroad shall in each instance be 
afforded an opportunity to purchase the home at such fair market 
value before it is sold by the employee to any other person. 
(ii) A protected employee may elect to waive the provisions of 
paragraph (2) (A) (i) of this subsection and to receive, in lieu 
thereof, an amount equal to his closing costs which are ordinarily 
paid for and assumed by a seller of real estate in the jurisdiction 
87 STAT.] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1019 
ill which the residence is located. Such costs shall include a real 
estate commission paid to a licensed realtor (not to exceed $3,000 
or 6 per centum of sale price, whichever is less), and any prepay-
ment penalty required by the institution holding the mortgage; 
such costs shall not include the payment of any "points" by the 
seller. 
(B) If the protected employee holds an unexpired lease on a 
dwelling occupied by him as his home, he shall be protected from 
all loss and cost in securing the cancellation of said lease. 
(C) No claim for costs or loss shall be paid under the provi-
sions of this paragraph unless the claim is presented to the Corpo-
ration or an acquiring railroad within 90 days after such costs 
or loss are incurred. 
(D) Should a controversy arise with respect to the value of 
the home, the costs or loss sustained in its sale, the costs or loss 
under a contract for purchase, loss or cost in securing termination 
of a lease, or any other question in connection with these matters, 
it shall be decided through joint conference between the employee, 
or his representative, and the Corporation or an acquiring rail-
road. In the event they are unable to agree, the dispute or con-
troversy may be referred by either party to a board of competent 
real estate appraisers, selected in the following manner: One to 
be selected by the employee or his representative and one by the 
Corporation or acquiring railroad and these two, if unable to 
agree upon a valuation within 30 days, shall endeavor by agree-
ment within 10 days thereafter to select a third appraiser, or 
to agree to a method by which a third appraiser shall be selected, 
and, failing such agreement, either party may request the National 
Mediation Board to designate within 10 days a third qualified 
real estate appraiser whose designation will be binding upon the 
parties. A decision of a majority of the appraisers shall be 
required and said decision shall be final and conclusive. The salary 
and expenses of the third or neutral appraiser, including the 
expenses of the appraisal board, shall be borne equally by the 
parties to the proceedings. All other expenses shall be paid by 
the party incurring them, including the compensation of the 
appraiser selected by such party. 
(h) APPLICATION OF TITLE.—Should a railroad rearrange or adjust 
its forces in anticipation of a transaction with the purpose or effect of 
depriving a protected employee of benefits to which he otherwise 
would have become entitled under this title, the provisions of this 
title will apply to such employee. 
CONTRACTING OUT 
SEC. 506. All work in connection with the operation or services pro-
vided by the Corporation on the rail lines, properties, equipment, or 
facilities acquired pursuant to the provisions of this Act and the main-
tenance, repair, rehabilitation, or modernization of such lines, prop-
erties, equipment, or facilities which has been performed by practice 
or agreement in accordance with provisions of the existing contracts 
in effect with the representatives of the employees of the classes or 
crafts involved shall continue to be performed by said Corporation's 
employees, including employees on furlough. Should the Corporation 
lack a sufficient number of employees, including employees on fur-
lough, and be unable to hire additional employees, to perform the 
work required, it shall be permitted to subcontract that part of such 
48 Stat. 1193 
50 Stat. 208. 
1020 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
work which cannot be performed by its employees, including those on 
furlough, except where agreement by the representatives of the 
employees of the classes or crafts involved is required by applicable 
collective-bargaining agreements. The term "unable to hire additional 
employees" as used in this section contemplates establishment and 
maintenance by the Corporation of an apprenticeship, training, or 
recruitment program to provide an adequate number of skilled 
employees to perform the work. 
ARBITRATION 
SEC. 507. Any dispute or controversy with respect to the interpreta-
tion, application, or enforcement of the provisions of this title, except 
section 504(d) and those disputes or controversies provided for in sub-
section (g) (2) (D) of section 505 and subsection (b) of section 504 
which have not been resolved within 90 days, may be submitted by 
either party to an Adjustment Board for a final and binding decision 
thereon as provided in section 3 Second, of the Railway Labor Act, in 
4ru'sc Ts3. 
which event the burden of proof on all issues so presented shall be upon 
the Corporation or, where applicable, the Association. 
ACQTJIRING RAILROADS 
SEC. 508. An acquiring railroad shall offer such employment and 
afford such employment protection to employees of a railroad from 
which it acquires properties or facilities pursuant to this Act, and shall 
further protect its own employees who are adversely affected by such 
acquisition, as shall be agreed upon between the said acquiring railroad 
and the representatives of such employees prior to said acquisition: 
Provided^ however^ That the protection and benefits provided for pro-
tected employees in such agreements shall be the same as those specified 
in section 505 of this title: And provided further^ hoioever^ That unless 
and until such agreements are reached, the acquiring railroad shall not 
enter into purchase agreements pursuant to section 303 of this Act. 
TAYMENTS OF BENEFITS 
SEC. 509. The Corporation, the Association (where applicable), and 
acquiring railroads, as the case may be, shall be responsible for the 
actual payment of all allowances, expenses, and costs provided pro-
tected employees pursuant to the provisions of this title. The Corpora-
tion, the Association (where applicable), and acquiring railroads shall 
then be reimbursed for such actual amounts paid protected employees, 
not to exceed the aggregate sum of $250,000,000, pursuant to the pro-
visions of this title by the Railroad Retirement Board upon certifica-
tion to said Board by the Corporation, the Association (where 
applicable), and acquiring railroads of the amounts paid such employ-
ees. Such reimbursement shall be made from a separate account main-
tained in the Treasury of the United States to be know as the Regional 
Appropriation. '^QXI Transportatlou Protective Account. There is hereby authorized to 
be appropriated to such protective account annually such sums as may 
be required to meet the obligations payable hereunder, not to exceed in 
the aggregate, however, the sum of $250,000,000. There is further 
authorized to be appropriated to the Railroad Retirement Board 
annually such sums as may be necessary to provide for additional 
administrative expenses to be incurred by the Board in the perform-
ance of its functions under this section. 
15 u s e 
15 u s e 
15 u s e 
15 u s e 
15 use 
24 Stat. 
30 Stat. 
1. 
12. 
58. 
8, 9. 
13. 
379 
544 
87 STAT. ] 
PUBLIC LAW 93-236-JAN. 2, 1974 
1021 
TITLE VI—MISCELLANEOUS PROVISIONS 
RELATIONSHIP TO OTHER LAWS 
SEC. 601. (a) ANTITRUST.—(1) Except as specifically provided in 
paragraph (2) of this subsection, no provision of this Act shall be 
deemed to convey to any railroad or employee or director thereof any 
immunity from civil or criminal liability, or to create defenses to 
actions, under the antitrust laws. 
(2) The antitrust laws are inapplicable with respect to any action 
taken to formulate or implement the final system plan where such 
action was in compliance with the requirements of such plan. 
(3) As used in this subsection, "antitrust laws" includes the Act of 
July 2,1890 (ch. 647, 26 Stat. 209), as amended; the Act of October 15, 
1914 (ch. 323, 38 Stat. 730), as amended; the Federal Trade Commis-
sion Act (38 Stat. 717), as amended; sections 73 and 74 of the Act of 
August 27, 1894 (28 Stat. 570), as amended; the Act of June 19,1936 
(ch. 592, 49 Stat. 1526), as amended; and the antitrust laws of any 
State or subdivision thereof. 
(b) COMMERCE AND BANKRUPTCY.—The provisions of the Interstate 
Commei'ce Act (49 U.S.C. 1 et seq.) and the Bankruptcy Act (11 
U.S.C. et seq.) are inapplicable to transactions under this Act to the 
extent necessary to formulate and implement the final system plan 
whene\er a provision of any such Act is inconsistent with this Act. 
(c) ENVIRONMENT.— (1) The provisions of section 102(2) (C) of 
the National Environmental Policy Act of 1969 (42 U.S.C. 4332 
(2) (C)) shall not apply with respect to any aotion taken under author- 
^^ ^*^*- ^^2-
ity of tliis Act before the effective date of the final system plan. 
(d) NORTHEAST CORRIIX)R.— (1) Rail properties designated in 
accordance with section 206(c) (1) (C) of this Act shall be leased or ^"'^' ?• ^^s. 
may (at its option) be purchased or otherwise acquired by the National 
Railroad Passenger Corporation. The Corporation shall negotiate an 
appropriate sale or lease agreement with the National Railroad Pas-
senger Corporation as provided in the final system plan. 
(2) Properties acquired by purchase, lease, or otherwise pursuant 
to this subsection shall be improved in order to meet the goal set forth 
in section 206(a) (3) of this Act, relating to improved high-speed pas-
senger service, by the earliest practicable date after the date of enact-
ment of this Act. 
(3) The Secretary shall begin the necessary engineering studies and 
improvements upon enactment. 
(4) The final system plan shall provide for any necessary coordina-
tion with freight or commuter services of use of the facilities desig-
nated in section 206(c) (1) (C) of this Act. Such coordination may be 
effectuated through a single operating entity, designated in the final 
system plan, or as mutually agreed upon by the interested parties. 
(5) Construction or improvements made pursuant to this subsec-
tion may be made in consultation with the Corps of Engineers. 
(e) EMERGENCY SERVICE.—Section 1(16) of the Interstate Com-
merce Act (49 U.S.C. 1 (16)) is amended by inserting " (a)" before the 
^i stat. MI. 
word "AVhenever" in the first sentence and adding the following new 
paragra])h: 
"(b) Whenever any carrier by railroad is unable to transport the 
traffic offered it because— 
"(1) its cash position makes its continuing operation impos-
sible ; 
"(2) it has been ordered to discontinue any service by a court: 
or 
84 Stat. 971 
1022 
PUBLIC LAW 93-236-JAN. 2, 1974 
[87 STAT. 
"(3) it has abandoned service without obtaining a certificate 
from the Commission pursuant to this section; 
the Commission may, upon the same procedure as provided in para-
graph (15) of this section, make such just and reasonable directions 
with respect to the handling, routing, and movement of the traffic 
available to such carrier and its distribution over such carrier's lines, 
as in the opinion of the Commission will best promote the service in 
the interest of the public and the commerce of the people subject to the 
following conditions: 
"(xA.) Such direction shall be effective for no longer than 60 days 
unless extended by the Commission for cause show^n for an additional 
designated period not to exceed 180 days. 
"(B) No such directions shall be issued that would cause a carrier 
to operate in violation of the Federal Railroad Safety Act of 1970 (45 
U.S.C. 421) or that would substantially impair the ability of the 
carrier so directed to serve adequately its own patrons or to meet its 
outstanding common carrier obligations. 
"(C) The directed carrier shall not, by reason of such Commission 
direction, be deemed to have assumed or to become responsible for the 
debts of the other carrier. 
"(D) The directed carrier shall hire employees of the other carrier 
to the extent such employees had previously performed the directed 
service for the other carrier, and, as to such employees as sihall be so 
hired, the directed carrier shall be deemed to have assumed all existing 
employment obligations and practices of the other carrier relating 
thereto, including, but not limited to, agreements governing rate of 
pay, rules and working conditions, and all employee protective con-
ditions commencing with and for the duration of the direction. 
"(E) Any order of the Commission entered pursuant to this para-
graph shall provide that if, for the period of its effectiveness, the cost, 
as hereinafter defined, of handling, routing, and moving the traffic 
of another carrier over the other carrier's lines of road shall exceed 
the direct revenues therefor, then upon request, payment shall be made 
to the directed carrier, in the manner hereinafter provided and within 
90 days after expiration of such order, of a sum equal to the amount 
by which such cost has exceeded said revenues. The t^rm 'cost' shall 
mean those expenditures made or incurred in or attributable to the 
operations as directed, including the rental or lease of necessary equip-
ment, plus an appropriate allocation of common expenses, ov^erheads, 
and a reasonable profit. Such cost shall be then currently recorded by 
the carrier or carriers in such manner and on such forms as by general 
order may be prescribed by the Commission and shall be submitted 
to and subject to audit by the Commission. The Commission shall 
certify promptly to the Secretary of the Treasury the amount of pay-
ment to be made to said carrier or carriers under the provisions of this 
paragraph. Payments required to be made to a carrier under the provi-
sions of this paragraph shall be made by the Secretary of the Treasury 
from funds hereby authorized to be appropriated in such amounts as 
may be necessary for the purpose of carrying out the provisions 
hereof.". 
A N N U A L EVALUATION BY THE SECRETARY 
"Cost. 
gress 
Report to Con- 
g^^^ gQg ^g ^^^^ ^^ j^^g annual report each year, the Secretary shall 
transmit to Congress each year a comprehensive report on the effec-
tiveness of the Association and the Corporation in implementing the 
purposes of this Act, together with any i-ecommendations for addi-
tional legislative or other action. 
87 
STAT.] 
PUBLIC LAW 93-237-JAN. 2, 1974 
1023 
FREIGHT RATES FOR 
RECYCLABLES 
SEC. 603. The Commission shall, by expedited proceedings, adopt 
appropriate rules under the Interstate Commerce Act (49 U.S.C. 1 et 
seq.) which will eliminate discrimination against the shipment of 
recyclable materials in rate structures and in other Commission 
practices whei-e such discrimination exists. 
SEPARABILITY 
SEC. 604. If any provision of this Act or the application thereof to 
any person or circumstances is held invalid, the remainder of this Act 
and the application of such provision to other persons or circumstances 
shall not be affected thereby. 
Approved January 2, 1974. 
24 Stat. 379. 
Public Law 93-237 
AN ACT 
To amend the Small Business Act. 
January 2, 1974 
[S. 2482] 
Be it enacted by the Senate and House of Representatives 
of the 
United States of America in Congress assemhhd, 
AUTHORIZATION 
SECTION 1. Paragrapli (4) of section 4(c) of the Small Business Act 
is amended— 
(1) by striking out "$4,300,000,000'' and inserting in lieu thereof 
"$4,875,000,000"; 
(2) by striking out "$500,000,000" where it appears in clause 
(B) and inserting in lieu thereof "$556,250,000"; 
(3) by striking out "$500,000,000" where it appears in clause 
(C) and inserting in lieu thereof "$525,000,000"; and 
(4) by striking out "$350,000,000" and inserting in lieu thereof 
"$381,250,000". 
Any additional amounts authorized by this Act which are not obli-
gated by June 30,1974, shall no longer be available after that date. 
Small Business 
Act, amendments. 
80 Stat. 132; 
86 Stat. 382. 
15 u s e 633. 
LOAN TO MEET REGULATORY STANDARDS 
SEC. 2. (a) Section 7(b) (5) of the Small Business Act is amended to 
read as follows: 
"(5) to make such loans (either directly or in cooperation with 
banks or other lending institutions through agreements to partici-
pate on an immediate or deferred basis) as the Administration 
may determine to be necessary or appropriate to assist any small 
business concern in effecting additions to or alterations in its 
plant, facilities, or methods of operation to meet requirements 
imposed on such concern pursuant to any Federal law, any State 
law enacted in conformity therewith, or any regulation or order 
of a duly authorized. Federal, State, regional, or local agency 
issued in conformity with such Federal law, if the Administration 
determines that such concern is likely to suffer substantial eco-
nomic injury without assistance under this paragraph: Provided, 
That the maximum loan made to any small business concern under 
this paragraph shall not exceed the maximum loan which, under 
rules or regulations prescribed by the Administration, may be 
86 Stat. 1633. 
15 u s e 636.