91ST CONGRESS 2D SESSION

S. 4011

IN THE SENATE OF THE UNITED STATES

JUNE 23, 1970

Mr. COTTON introduced the following bill; which was read twice and referred to the Committee on Commerce

A BILL

To assure performance by railroads engaged in interstate commerce of transportation services necessary to the maintenance of a national transportation system, and for other purposes. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Emergency Transportation 4 Assistance Act of 1970".

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SEC. 2. It is the purpose of this Act to provide for emer

gency financial assistance to rail carriers to aid them to meet 8 temporary and urgent financial requirements which, if not 9 met, might seriously impair their ability to perform those 10 transportation services necessary to the maintenance of a na

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1 tional transportation system adequate to meet the needs of the

2 commerce of the United States, the postal service, and the

3 national defense.

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DEFINITIONS

SEC. 3. For the purposes of this Act—

(1) the term "Secretary" means the Secretary of

Transportation;

(2) the term "rail carrier" means any common carrier by railroad subject to part I of the Interstate Commerce Act (49 U.S.C. 1-27).

GUARANTEES

SEC. 4. (a) To carry out the purpose of this Act, the

13 Secretary is authorized to guarantee, in whole or in part, pay

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ment of principal and interest on loans made to rail carriers. 15 Before making a guarantee under this section, the Secretary

16 must find, in writing, that

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(1) the loan is necessary to carry out the purposes of this Act;

(2) the loan is not otherwise available on reasonable terms and conditions; and

(3) the general financial condition of the rail car

rier, upon obtaining the loan to be guaranteed, would

be such as to hold out a reasonable assurance of its 24 ability to repay the loan within the time fixed therefor

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and afford reasonable protection to the United States.

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1 A loan guaranteed under this section may not bear interest

2 at a rate exceeding such per centum per annum as the Secre

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tary deems reasonable, taking into account the range of in4 terest rates prevailing in the private market for similar loans 5 and the risks assumed by the Federal Government; nor may 6 its maturity date, including all extensions and renewals 7 thereof, be later than fifteen years from its date of issuance. 8 The Secretary may prescribe such other terms and condi9 tions as he deems appropriate, and may prescribe and col10 lect from the lender a guarantee fee at a reasonable annual

rate in connection with each loan guaranteed under this Act. 12 (b) At no time shall the outstanding aggregate prin13 cipal amount of all loans guaranteed under this section 14 exceed $750,000,000.

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DECLARATION OF DIVIDENDS

SEC. 5. No rail carrier may declare any stock dividend 17 while there is any principal or interest remaining unpaid 18 on any loan to such carrier for which the Secretary stands

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as guarantor, in whole or in part, under this Act, unless the 20 Secretary consents in writing and after finding that the

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payment of the dividend would not be inconsistent with the purposes of this Act.

CONSULTATION WITH RAIL CARRIERS

SEC. 6. The Secretary shall consult, as necessary, with

25 any rail carrier which has received a loan guaranteed under

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1 this Act concerning any matter which may bear upon the

2 ability of such carrier to meet its obligations as they become

3 due.

PAYMENT OF GUARANTEES; ACTION TO RECOVER

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PAYMENTS MADE

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SEC. 7. (a) To enable the Secretary to carry out his rights and responsibilities under section 4 of this Act, he is 8 authorized to issue to the Secretary of the Treasury notes or 9 other obligations in such forms and denominations, bearing 10 such maturities, and subject to such terms and conditions, 11 as may be prescribed by the Secretary with the approval of 12 the Secretary of the Treasury. Such notes or other obligations 13 shall bear interest at a rate determined by the Secretary of 14 the Treasury, taking into consideration the current average 15 market yield on outstanding marketable obligations of the 16 United States of comparable maturities during the month preceding the issuance of the notes or other obligations. The

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Secretary of the Treasury is authorized and directed to pur19 chase any notes and other obligations issued hereunder and 20 for that purpose he is authorized to use as a public debt trans

action the proceeds from the sale of any securities issued

under the Second Liberty Bond Act, as amended, and the

purposes for which securities may be issued under that Act,

as amended, are extended to include any purchase of such

notes and obligations. The Secretary of the Treasury may

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1 at any time sell any of the notes or other obligations acquired 2 by him under this subsection. All redemptions, purchases, 3 and sales by the Secretary of the Treasury of such notes or 4 other obligations shall be treated as public debt transactions 5 of the United States. There are hereby authorized to be ap6 propriated to the Secretary such sums as may be necessary

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to pay the principal and interest on the notes or obligations

8 issued by him to the Secretary of the Treasury.

9 (b) Any guarantee made by the Secretary under this 10 Act shall not be terminated, canceled, or otherwise revoked, 11 except as provided by terms and conditions prescribed by the

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Secretary under section 4 of this Act; shall be conclusive 13 evidence that such guarantee complies fully with the pro14 visions of this Act and of the approval of the principal 15 amount, interest rate, and all other terms of the guarantee; 16 and shall be incontestable from the date the guarantee is made, except as to any person participating in, or having 18 knowledge on that date, of fraud, duress, or mutual mistake of fact relating to the guarantee.

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(c) The Attorney General shall take such action as may be appropriate to enforce any right accruing to the United States by reason of its having made guarantees under this 23 Act, or by reason of its having paid money or incurred ex24 penses as a result of making such guarantees.