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Public Law 91-518 91st Congress, H. R. 17849 October 30, 1970 To provide tin:inci;il nssiMnmi- for ami vs::ilili.-luui-nl of .1 national mil |.a.sM-n gt_T system. to provide for the modernization of railri'.id |KisM-iigur o|Ui|>iiic'nt. to authorize the prescribing of minimum standards for railroad Imsscn^ur .-vrvkf. to amend .-ection l&i of tliu Interstate C<>miiitT<.-v Act. and for oilier lie It enacted 2>y the Senate and IJowf. of Kepre-tenUiticcis of tJie United Stale* of An«.r!ca in Congreay nfiseinblfd. That this Act m.iy .^ii Passenger lw cited us tlic "Rail Passenger Service Act of 1970". Service Act of 1970. TITLE I—FINDINGS, PURPOSES, AND DEFINITIONS \ \w*t yi'A i • J3Z / , . _.„ ,„, SEC. 101. CONGRESSIONAL FINDINGS AND DECLARATION; OF PUKPOSE. "4 STAT ' 13?B The Congress finds that modern, cflicient, intercity r.iilroail pas. nger service is a iieci'ssin part of a balanced trans]>ortation t\ stein; tliat tlic public coin cnioicu and necessity rc(|iiirc the continuance and improvement of biii.li sen ice '.<* provide fast and comfortable transpor tat ion bctueen croudcd urban areas and in other areas nf the country ; that rail passenger service >..ui help to end the congestion on our high ways and the overcrow diiijj of air\\a\a and airports; that tht tm\elcr in America should to the maximum extent feasible have freedom to choose the mode of travel most convenient to his needs: that to achie\e these goals requires- the designation of a basic national rail passenger i-ystem and the establishment of a rail passenger corporation for the purpose of pro\idinvnnit the orderly transfer of railroad passenger service to a railroad passenger cor|x>ration. SEC. 10?. DEFINITIONS. For the purposes of this Act — (1) "IJailroad" iiiKiiih a common carrier by niilroad, as defined iii section 1(:5) of pan 1 of the Interstate Commerce Act. a- amended ( JO C.S.C. !(:'.)) other than the rorpoi-.it ion created b\ title 111 of 41 ••-.at. 474; I his Act. " 54 Stat. 899. (•2) ".Secietary" means the Swreiary of Trniiapurt.-it'on or his di.le Z2£I> "• I'*''-gate unless the conicxt indicate;! oiherw-ise. (:l) ;Coinmission" n>ean-s the Inu.rstaie Comiiiem- (''on. mission. (4) "Basic system" niDan:; the system of intercity rail pr.ssc.'iger .-ervicc dcaiiriinfcil 1>\ :he Secretarv'ui.der t i l l e II a-id suction I0:5(a) of this Act. ; • fo) "In'eivity rail passenger .-ervice" mean.-, all rail pa.v-cngcrservice other than (A) commuter and other .-hort haul service in metropolitan and .suburban area.-, usually characterized by rcdincd fare, multiple ride and commutation ticket.-, ami by morning and evening peak period operations, and (B) auto ferry .service characterized by tr.insporlation of automobile.-! and their occupant.-, uherc contmcts for such service ha\e been coiiAiimmaled prior 'o enactment of tliis Act. ((i) "Avoidable loss"' means the avoidable cost.-, of providing passenger .service, le,-s revenues attrilnitable thereto, as. (le.crmincd b.v the. Intel-state C'oinmorce Commission pursuant to the provision^ o'f 6t section 5.r.S of title 5, United States Code. .. "t«- 2e3« (7) "Corporation" means the Xationa^Railroad Passenger Corporntion crentcd under title, lllof this Act. Pub. Law 91-518 S4 S7A7. 1329 - Z- October 30, 1970 ($) "Ixegional tranr-portation agency" mean* a-i auihorily, corpoi.ition. 01 other entity established for the purpose of proxiding passenger service within a region. TITLE II—KASIC NATIONAL KAIL PA6SEXGER SYSTEM SEC 201. DESIGNATION OF SYSTEM. Ill earning out the congressional findings ami declaration of purl*ec set forth in title I of this Act,the Secreti\r\, acting in coo}>cnition t.itli oilier interested Federal agencies -ind departments, isauthori/ed Frtliii.Mry -'"d diixvled to submit to the Commission and to the Coiigresa uithin report to I"" thirty days after the date of enactineiit of this Act his preliminary ar.d ?or,sr»ss. ivport j'lul rurMiiineiidatioiia for th° basic, system. Siich recomniciidations shall specify those points between which intercity passenger trains shall be operated, identify all routes over which service may l>e pro\ ided, and the trains presently operated oxeraiich routes, together with basic service characteristics of operations to b» pro» i.led within the bar"c system, taking into account schedules, nil)'-.'.*.-! of trains, connections, through car service, and Jeeping, parloi, dining, and lounge facilities. In recommending the basic systci.i the Secretary shall take into account the need for expeditious intercity rail passenger strvice within and between all regions of the cor.'in.'iilal United States. au«l the Secretary shall consider the need for such service within the States of Alaska suul Hawaii and the Comnwmvenlth of Puerto KJLO. In fonmihitinp: such rcconnncndations the Secretary shall consider opportunities for provision of faster service, more convenient service, service to more centeis of population, and service at lower cost, by thp joint operation, for passenger scf\ ice, of facilities of two or more railroad companies; the importance of a. given service to overall viability of the basic system; adequacy of other transportation facilities serving the same points: unique characteristifs and ad\milages of rail service as compared to ether modca of transportation; the relationship of public tancflts of given servicca to the costs of prouding such services; and potential profii.ibility of the serxicc. The exclusion of a particular route, train, or St«r\ ice from the basic system shall not 1'rO deemed to (reatc A presumption that the route, train, tr service is not required by public convenience and nece-^itv in anv proceeding 7? c?at. •>-!. under section I3a of the Interstate Cornmeivc AJt {4D U.S.C. 13ft). SEC 202. REVIEW OF THE BASIC SYSTEM. The Commission, the State Commissions, the repre»ent!>ti\ei> of the railroads, and labor optimizations duly nir.borized under tho Railway C •5-5 fr*a-t. 77j Labor Act to represent railroad employees shall, wl !iin thirty days •^ *i". ll"''. aftei receipt of the preliminary report of the Secretary desigiiating is '•?" iM-iifl. (]ie basic system, review such report consistent with the purposes of this Act and provide the Secretary with their comments and recommendations in writing. The Secretary shall give due consideration to r iral rc;^"t such comments and recommendations. The Secretary shall, within t' 'Vr^rMs. ninety days after the date of enactment of this Act, submit his final report designating the basic system to the Congress. Sudi final report shall include a summary of their rcconr.mcndntions together uiili his Fffc:*'vc Ja*.c. reasons for failing to auopt nny such recommendation. The basic system as designated by !he Secretary shall become effective for the- purposes of this Act upon the date that the final report of the Secretary is submitted to Congress and shall not l>e revinwnble in any court. October 30, 1970 - 3 - Pub. Law 91-518 94 S7A7. 1330 TITLE III—CREATION OF A RAIL PASSENGER CORPORATION SEC. 301. CREATION OF THE CORPORATION. Tlicre is authorized to be created a National Railroad Passenger Corporation. Tlie Corporation shall be a for profit corporation, the purpose of which shall be to provide intercity rail passeiigc'1 service. einployii:<* innovative operating and marketing concepts =o as to full\ develop the potential of modern mil service in meeting the Nation's intercity passenger transportation minircnu.'nts. The Corporation u ill not be an agency or establishment of the United States (iovcriiineiK. It shall be subject, to the provisions of this Act and. to tlio extent consistent with this Act, to the Disi net of Columbia Business Corpora - f tion Act. The right to repeal, alter, or amend this Act at any time is f73- --at- l7""; expressly reservftd. stat. :-•»:. SEC. 302. PROCESS OF ORGANIZATION. 0. C. Code 29-901. The President of the United States shall appoint not fewer than i.-icorpu.-aiors, three incorporators, by and with the advice and consent of tin Senate. appi,if.t&ij.t t& wlio shall also serve as the board of directors for one hundred and Premier.*. eighty days following the date of enactment of this Act. The incorporators shall take whatever actions are necessary to establish the Corporation, including the tiling of ait ides of incorporation, as approved by the President. SEC. 303. DIRECTORS AND OFFICERS. (a; The Corporation shall ha\e a board of f fteen directors consist- Beard of ing of Indix idiials who art- citi/eiis of the I'nitrd St.ih-s, of whom one *'re?tws. shall be elected annually In the board to serve as chairman. Eight members *-f the board shall be appointed by the President of the I'nitcd States, by and w'.th thu advice and consent of the Si-nate. foi terms of four veal's or until tl.cir sucu'.-sors ha\e been appointed and tjualified, except th:'t the first three members of the board .-o •i>pnii:t«. > d shall continue in oflice for ti,-nn.- of two year.-, and the next three member.-, for terms of three years. Any meir.ber appointed to fill a vacancy may be appointed only for th» unexpired term of HIP director whom he succeeds. At all times the Socrotar_< .shall by one of the members of the board of directors appointed by the President and .it all I lies at least one Mich member shall be a con.-iimcr represent at iu*. Tin ? members of the board shall IIP elected annually by common .-t< ckholdcrs. and f f ' r sliall be electi'd anniialh !>y preferred .Mockholders of the Corporation. The member.- of the Nwd appointed by the President and (bos'! elected by common .-tockholder.- >!ull take oflice on the one hundred and fighty-firnt day a f t e r the date of eiiactment of tliis Act. Election of the remaining four memb<>r> ^)f the board shall take place a.-, soon as practicable after the first issuance of preferred stock by tin' Corporation. PrndiiijJjJlpction of the remain ing four members, .-even iiiemhern shall Minsmutc a <|iiorum for the purpose of conducting I In* business of the board. Nodin-itor appointrd r^r.f-lct cf by the President ma\ have an\ direct or indiivct 1'inaiitial or fiiijiloj liiitcres*, ; r< nient rclatioiihhip w i t h any railroad during the time that hi scrxi-s <.'ii '"l^1n'. the board. Each of the directors not employed by the Federal (IOMTII :*sf.ci.sn.ti,-i., ment shall roci-.he compensation at the rail- of !?:{l>0 for eat h meeting travel oxof the boa:-c'< he atlendh. In addition, each director shall be reiin luirssd f'«r norciWiiry travel and subsistence expenses incurred in a tending the meetings of the board. Xo director elected by railroads slia!! \fiic-t.n nnv action of the board of director.- relating to any con tract or operating relationship brl\vcon the Corporation and a rail road, but he may bp present at moetii gs of the board at which such matters are voted upon, and he may be included for purposes of Pub. Law 91-518 c~ STA7. 1331 - 4 - October 30, 1970 a/laws, ;reslJe:.t a.'.,! ;ffi5ers :f 3 -ro^-t^n. _-.:o.'. i3S'--.i, re strut, ^r. . e- •. 1. duteri.lining a i|iiomin and 111:1.1 partu ipate in di.-ciiVioi.s .it am MH-li meeting. (b) The board of dire'-tor» is empowered to adopt and amend bt laws got U'liing the operation of {iie Corporation. Such b\ laws shall not be ineoiisi.-'tent .vitli tlu pruti-ioiis of this Act or of the articles of incorporation. (c) Tin1 articlo of incorporation of the Corporation .-hall provide fni • iuntil.ithe \ u t i n g fur .ill stoikholdcrs.ind shall piu\ idc that, upon > Kiiters-ion of one fourth of the outstanding shares, of preferred Mock, ilie i omnioii .-UH.kholders shall bo entitled to elect fum directors and the preferred stockholders .-hall be entitled to elect three directors: upon the ion-, ersion of unc-li.ilf of t he oiit.-tanding shares of preferred stock, the coinnion stockholders shall bi- entitled to elect lite directors and the preferred stockholder .-hall be entitled to elect t \ \ ( ) direct 01-,: upon the < on version of three-fourths of the oiit.-t a nding .-ha res of pieferred stock, the common stoikholders. shall be entilbd to elect six dire( tors, and 'he prefened stoi kholders .-lull be entitled to elect one ciireitoi: and upon conversion of all outstanding share.- of preferred .-lock.lhe«oinmonsloikliohlersshall be entitled to elcit ,-eten direuor.-. Am (hange of iliivttors resultinj: from .-tu-h st<« k coiitei-sion shall take elfect at the neM annual nieetinjr of the ('orpuni'ioii follouinjr siu-h ^tock convei-sion. (d) The Corporation shall h a t e a president .mil smli olhei oflKers, a.- mat \iv named al.d apjioiiiled Six the lioaul. Thi« rate.- of mitipeiisa ,;,m O'f .,]]0|lin.|-., ..\IA]] |,e fiM.,l f,\ i] K . |,,,ard. Oflin-i.- .-h;ill serte at the ple.i>tire of the bunrd. No inditidtial othei than a citi/.cn of the I'nited Slate.- may be an olli.'er of the Corporalio-i. Xo oilicei of t l i ' . Col put. 4) inn may h a ^ e a n v direct 01 indire i—u.~. of . a p i l a l stock, a • omntoii and a picfci led. r.n h of t \ h i < !i -h.il) i an t \<>;int an\ per.- "i other t h a n ( I) a railio.id or (-) .in\ per.-on i i oiitrollin ) uf t i n - Ii-it-r-iaie Coimiieiie A i-l. The .nil. h— of iin m por.uicin of ibe Cm poialioii ,-h.ill piotide for «'he f.>llottin<; rcsjici t i t r ii«;hi~ of eai h i—ue of -lock. (A) COMMON STOCK.- Common -ioc'< -hall have a par value of £10 per -hare an:I -hall be di-ignnieil fully paid and nona.—(.-sable. No dit idcnds .-!>all be paid on the common MocK win-never dividends on the prefened pcrceiitinn per annum, and ^iall be < n n m l a t i v e >o lli.il. if fin ant ditidcltd ]>eriod dividends at the rale fixed in the articles of iiiii>r].0i.ilion .-hall not h a < e bc^ti declared and paid or .-ri aside for payment on the jdcferied -hares, (lie delicieiic\ shall be tlci hired and paid 01 .-et apart for p a t i m n t prior to (he making of anv dit ulend or other di-lribntion on 'he common -haie-. (i'r Preferred .-lock shall h e e n t i l l t d to a liqnidalion preference oteri iilnmon slot k, which shall t n l i l l e pieferred .-((ukholdei.- lo .; lii|:iidating |>;iyiiu nl not !e.-.- t h a n par t a l u e ]ihis all accrued unpaid dit ideiids prior lo ant pat meiit 01. li(|uidalion to ( -t'M'kholders. October 30, 1970 - 5- Pub. Law 91-518 8* SYAT. 1332 (iii) Preferred stock shall be convertible into shares of common stock at such time and upon Mich terms as the articles of incorporation shall provide. ^b) At no time aftei the initial issue it, completed shall the aggro- -"ock o«ne»gate of the shares of common stock of the Corporation owned by a s>^v» 1 authorized to issue, in addition to the stock 'ends ,. seou.iiithori/ed l>\ subsection (a) of this section, nonxoting seuirities, rtties, etc., bonds, debentures, and oilier certificates of indebtedness as it may authorization. determine. (f) T.ie requirement of sei-tien l.~>(b) of the District of Columbia Inspection rights business Corporation Act (D.C. Code, sec. :>n-n:>0(b)) as to the per- rcquirenents, centagp. of stock which a stockholder must hold in order to havo the 6o°s*at M7 rights of inspection and copying set forth in that subsection shall * * not be applicable in the case of holders of the stock of the Corporation, and they may exercise such rights without regard to the percentage of stock they hold. SEC. 303. GENERAL POWERS OF THE CORPORATION. The Corporation is authorized to «wn, manage, operate, or contract for the operation of intercity trams operated for the purpose of providing modern, efficient, intercity transportation of passenger*, and to carry mail and express on such trains, to conduct research and development reL.tcd to its mission; and to acquire by construction, purchase, or gift, or to contract for the use of, physical facilities, equipment, and devices necessan to rail passenger operations. The Corporation shall, consistent w i t h prudent management of the alF.iirs i.f the Corpiuntion, rcl\ upon railroads to pro\ idc the employees net cssar\ to the operation and maintenance of its pas engei (rain? and tu the performance of a!! sonicer. and work incidental thereto, to the ••.\tent the railroads are able to piovidc such employee* and sen ices in an economic and efficient manner. To earn out its functions and purpose.-, the Corporation shall have the 1 usual powers cunfei red upon a stock imputation 1>\ the District of Columbia Husiness Coinoralion i... ' 6 6 Stat. 170; • 73 Stat. C42. SEC. 306. APPUCABiMTV OF THE INTERSTATE COMMERCE ACT AND -. C. JoJc OTHEK LAWS. 29-901. (a) The Corporation shall !>c doomed a common carrier In railroad w i t h i n the meaning of section 1(3) of the Intel-Mate Commerce Ail •»! ;tttt. W; and shall 1* siibjei I to all pru\ isiojih of the Interstate Commerce Ail 54 -tat. B J ^ . oilier than tho.-'o pertainingio— 49 use 1. (I) regulal ion of rales, fares, and charges; (•;) abandonment or extension of Hues of mil roads utilized solely for passenger service, and the abandonment or e.Mension of opera! ions over such lines of railroaiis, whether by trackage rights or otherwise: (3) regulation of routes and service and, except as otherwise provided in ibis Act, I he discontinuance or change of pa^cngcr t rain service oi>er!it ions. Pub. Law 91-518 84 STAT. 1333 - 6- October 30, 1970 (b) Tin* Corporation .-hull In- subject to the same laws ;r.ul regulations with respect to safety anil v.itl, lespeit to the representation of it_s emplo}ees for purposes of collective bargaining, the handling uf disputes between carriers and theii employees, umplovee retirement, .iimuiiy aiul unemployment svstems. and other dealings with its employees as am other conn.ion i a n i u i subject to part 1 of (lie Inter24 Stat. 379; state Commerce Act. 54 rtat. 913. (i ) The Corporation sh-dl not he subject to AIU State oi olhel law 4, .T~ 2-> and pertaining to the transportation of passengers h\ niilroail ..s it lelates note. to rates, routes, or service. (d) Leases and contracts'entered into by the Corporation, regardlessof the place where the same maj be executed, shall be governed bv the laws of the District of Columbia. (e) Persons contracting w i t h the Corporation for the joint use or operation of siich facilities and equipment a.- may he necessary foi the pro\ision of ellicient and expeditions passenger service -hnll bo and aro herein relieved from all prohibitions of existing l a w . incliu'.ing the antitrust laws of the I'nited States, w i t h respect to such contracts, agreements, or leases insofar as mav be neccssarv to enable limn to enter intosiich contracts nml to perform theii obligations thereunder. SEC. 307. SANCTIONS. (a) If the Corporation or any railroad engage^ in pv adiieres to any action, practice, or policy inconsistent w i t h the jjolicies and purposes of this Act. obstructs or interferes w ith any actix ities authori/.ed by this Act, re fuses, fails, or neglects to discharge its duties and responsibilities under this Act, or threatens any such violation, obstruction, interference, refusal, failure, or neglect, the district court of the United States for any district in which the Corporation or other pel son resides or m.ty he found shall h a \ o jurisdiction, except .is other wise prohibited \n l a w , upon petition of the Attorney General of the I'nited States or, in a tase iiuolving a labor agreement, upon petition of an\ employee affected therein. iiu haling duh authoi ixed employee ieprcscntati\ett, to grant Mich equitable relief as may be nceessan, or apjiropiiate to piv\en! 01 terminate an. \ iolation. conduct, or tjireat. (b) Xothingcontained in thissection shall be construed as relievinp an\ person of any punishment, liability, or sanction which may be imposed otherwise titan under this Act. SEC. 308. REPORTS TO THE CONGRESS. (a) The Corporation shall transmit to the IVeiidcnt and the Con Annual reports. <£ICN-, a n l i i u l h , commencing one \eai fiom the dale of cnaclment of this Act, and at such other times a.-> ii deems desirable, a comprehensive and detailed report of its operations, acti\ ilies, and accom pli.'.hinriits under t h i > Ac;, including a statement of receipt* and Legislative cxpenditiiics foi the piv\ iotis \e.u. At the lime of its a n n u a l re|e and the effectiveness of t h i s Act in meeting the roquireinent for a balanced national transportation s\stem, together w i t h any legislative recommendations. October 30, 1970 - 7- Pub. Law 91-518 64 STAT. 1334 TITLE IV— PROVISION OF KAIL PASSENGER SERVICES (a) (1) On or before May 1. 1971, the Corporation is aiitliori/.eil *r^^ f111 to contract ami, upon writicn request therefoi from a railr<~ul. shall •»??"•."*'• SP*Vteiidcr a contract to relieve the railroad, from and after May 1, ioe' oont ~ lcts 197.'. of its entire responsibility for the pr'>vision of intercity rail passenger service. On or after March 1, 1973, but before Jamr.iv 1, 1975, the Corporation is authorized to contract, and upo.i written request therefor, shall tender a contract to relieve the railroad of its entire responsibility for the prov isioii of intercity rail passenger .-er\ ice and .-.iidi relief shall become effective upon the d:;te on which such contract is entered into. Contracts may be entered into on or befoie May 1, 1971, notwithstanding the fact"that the decision of the Commission under section lU^f) of this Act with resiject to avoidable.'oss 2ll£i ',• 13- 3 has not become final. Any contract entered into be ft. re »udi decision of the Commission lias become final si.all be subject to adjustment to assure that the contract is consistent with such final decision of the Commission. The contract may be made upon such terms and conditions as necessary to permit the Corporation to undertake passenger service on a timely basis. Upon its entering into a valid contract (including protective arrai.gemenlo for employees), the railroad shall l« relieved of all its respuiisibiiit ie=> as a annnum cai rier of pass-iiigei-s bj.rail in intercity rail passenger sen ice under j/art I of the Interstate Commerce Act or an\ St.itu < (•2) In loiisideration of beinc relieved of this rc.-;ioi.Mbility by the ?assc::ecr servCorporation, tiic railioad shall agree to pay to ihu Corpora! ion e.ich loe otfioit p&j _/ear for three jears an amount equal to one-thin! of ."50 per centum ir.^.as. of the fully di.-jlribntcd jmssenger service deficit of the railroad as reported to the Commission for the year I'nding December 31, 190!). The payment to the Corporation may be made in cash or, at the option of the Corpora!ion, by the transfer of ra 1 passenger equipment or the provision of future service as requested l:\ the Corporation. Unless the railroad •waives 1 all rights to receive stock in e.v'nutge for its Dayments, the railroad .-hall receive common stock from the Corporation in an amount equivalent in par value to each payment. (.'!) In agreeing (o pay (lie amount specified in paragraph (-2) of this subsection, :» railroad may reserve the right to |>ay a lesser sum to be determined by calculating either of the following: (A) 100 per centum ofjlie avoidable loss of all intercity rail passenger service operated by the railroad during the period Jaimnry 1, l%fl, through December SI, lOfiO; or (B) -200 per centum of the nvo'uluhU- loss of (lie intercity '"i"l passenger service operated by the lailroad during the period January 1, 19(50, through December :M, 1909, covering all intercity service over thp routes between tho.«e points between which the Secretary, under sections %201 and '20-2 of title II of (his Act, Ar.tc, f.. 13^. has specified that intercity passenger (rains shall be operated within the basic system. If the amount owed the Corporation under either of these alternatives is agreed by tho parties to be less than thp nmount paid pursuant to paragraph (2), the Corporation shall pay the difference to the railroad and the railroad shall surrender to the Corporation an amount, of stock, nt par value,equivalent to such payment. If the railroad and the SEC. 401. ASSUMPTION OF PASSENGER SERVICE BY THE TION; COMMENCEMENT OF OPERATIONS. CORPORA- 8 Pub. Law 91-518 84 STAT. 1335 - 8- October 30, 1970 Corpor.ition are unable to agree as to the amount owed, the matter shall Li referred to the Interstate Commerce Commission for decision. The Commission, upon investigation, shall decide the issue within ninety days following the date of referral, nr viii\ gives satisfactory assurance to the Corporation of the agency's finanu.il and operating capability to provide such service, ai.d of "it.; willingness to cooperate w i t h the Corporation and w i t h othei regional ttttiisport.it ion agencies on matters of thiuiigh train tcrvict, through t.ir service, and connecting train service. The Corporation mat at any t'nie subsequent to May 1, 1071. contract witl. a regional transporfa"tiou agency to pro\ide intercity rail passenger service between points w i t h i n the basic system iiuhuled within the .service of such agency. ; . ro'.inv.wi. ( « • ) Xo railroad 01 aiij otliei person ma\, without the < oii.-ent of the Corporal ioi.. i ondiict int«Tcit\ rail jiassongor service over an\ route <»\er \\hiili t!u- Col (Miration is pui-Torniing schi-duled int(.T< it\ rail passenger sorvico |nn-suant to a contract under tliis section. SEC. 102. FACILITY AM) SERVICK AGREEMENTS. ta) The ('orjmnitiiiii may contract w i t h railroads or w i t h regional transportation agein ies for the i>.-o of t:.uks aii.l ollici f.u'ilitifs and the provision of *vr\ ice> on siuh terins and -.oiiditions .is the parties m.i\ ajirre. Tn the i>\ent of .1 f.iiliiiv to agivc. the Intei-slati- Coiuineive Commission shall, if it finds that duiu^ so is lu-tcssai^ to > a i r y out the purpost-sof this A « t , o i d e l the pro\isioii of sor.irool tin 1 u-c of Inuks or f.n ilitics t.f the lailroad \>\ tin Coipoi.ition. on siuh terms .uui for siu-h i-ompoiisatioii as the Commission m.u fix as just and iva.-oiialile, and the ri«lilsof the Corporal ion tosiiih .-vrvii-iNoi t o i h e UM- of I nicks or farjlitios of the railroad or .igi-iuy iiiidt r .-iiih order or under an order issued uinK-r subsection ( \ i ) of this section .-.hall be roiiditioned upon |i.iyment 1>\ (he Corporation of tho compfiisation fixed by the Ciimnijssion. If the amount of comptiiisation fixed is not duly and promptly ',t?.'n\, the railroad or agency entitled thereto may bring an Corporation, require . and other facilities. The Commission shall llu'reafter promptly pro coed to fix such terms and conditions as are ju^t and reasonable. SEC. -103. NEW SERVICE. (a) Tho Corporation may pro\ide intercity rail passenger service in excess of that prescril>ed for I be basic system, either within or out side the basic system, including the operation of special and e.\*ra passen«p.r trains', if consistent'with prudent manairement. Any inter city rail passenger service provided under this Mibsection for a con tinuous period of two \oars shall bo. designated by (ho Secretary as a part of the, basic system. October 30, 1970 - 9- Pub. Law 91-518 84 S7AT. 1336 (b) Any Sta*e. regional, or local agemy may request of the Corpo- '-*11 s»rvice ration mil passenger service beyond that included uithin the bask i«.e no corts less than <>G~'{ ]>cr centum of. nor more than, the solely related costs • and associate! capital costs, including interest on pa.s.-enger equipment, less revenues attributable to. such sen ice. If the Corporation and the State, regional, or local agency arc unable to agree upon a reasonable apportionment of sin-li losses, the matter shall lie referred to the .Secretary for decision. In deciding this issue the Secretary shall take into account the intent of this Act. and the impact of requiring the Corporation to bear such losses upon its ability to provide improved service within the basic system. SEC. 40J. DISCONTINUANCE OF SERVICE. Ox) Unless it has entered into a contract with the Corporation pursuant to section - i O l ( a ) ( l ) of this Act, no railroad may discontinue any intercity passenger train whatsoever prior to January 1.1ft"."*,the provisions of any other Act. the laws or constitution of any State, or ihe decision or order of. or the pendency of any proceeding before, a Federal or State court, agency, or authority to the contrary noiuith•nanding. On and a f t e r .January 1. 1075. passenger train sen ice operated by sucb railroad may be discontinued under the provisions of section 13a of the Interstate Commerce Act. Tpon filing of a notice 1- ^-*~. 571. of diseontnw:uux» by such railroad, the Corporation ma\ undertake to & " -3ainitiate passenger train operations between the points served. ( b ) ( l ) The Corporation nm-st pro\ ide the sen ice included u i t h i n the basic system until July 1. K>7:5. to the extent it hasas.-unicd responsibility for such service bv contract \ \ i t h a railroad pursuant to sect ion •K>1 of this Act. (•2) Except as provided insertion |o:5ia) of this Act.-en ice beyond that prescribed :"or the basic system undertaken by the Corporation upon its own initiative may be di.-'ontinued at any time. (:{) If at any time after July 1, l!i~:{. the Cor|x>ration determine* tli:i! any train or tniins in the ha.-ic system in whole or in part arc not required bv public convenience and neies>ii\, or \\ill impair the ibility of the Corporal inn to adequately pro\ide other ,-cr\ ice>. such Iniin or dains may be discontinued under the procedures of Mvtion l:'a of the Tnteistate Coinineivi- Act (-1!) I'.S.C. i:'a): /'*•»••«."»•//. l«nr- ;:oHo« to » ft. r. That at least t b i r l \ da\,s prior to ,in\ < h.inge or diM-ontinuancc. j'Vi-r'-rs of in whole i>r in iiari. of an\ .-er\ ice under this >ub.-ei-tion. the Corpora- Svr lce '' * "'*,*" tiou shall mail to the Governor of each State in \\hich the train in '-' tines'ion is operated, and post in e\ery station, depot, or other facility "i-rved iherebv notice of ihe piiii>o>ei] change or discontinuance. The Corporation may not < hange or di-continue thi.s.-vrvice if prior ID the end of the t h i r t y day notice period, Slate, regional, or local auenrieiciiucst continuation of the .-en ii e and u i t l i i n ninet\ daysa^ree to reiinbnrse the Corporation for a reasonable portion of an\ los.-cs assoi"iated with the continuation of :-ersue beyond the notice iit-rioil. (-1) For the purposes of paragraph <3) of this .-.nlxoi-tion. the reasonable portion of .such lo.-v<>s to be a->umed b\ the State, regional, or local agency shall be no less than i>f> 2 -i per centum of. nor more than. Ihe .solely related cosl.s ainl asso« ialed capilal cost.-, including interest on passenger equipment, les.-> re\emie.s .iliribntable to. Mich .-enice. Tf the Corporation and the Slate, regional, or local nsrenrie-.- are unable to agree upon a reasonable apportionmenl of siicli lo.-v-e.-. the niiitter 10 Pub. Law 91-518 - 10 - October 30, 1970 shall k- referred to the Secretary f0i dot i/uin. In dccidiii<: this issue the Secretary t\\-.i\\ take into account the purposes of thi> Ad and the impact of requirinirtlie Corpuratioii to beat ?«u-!> Io»es upon ii.- ability to provide improved service within (he basic sysU in. SEC. -103. I'KOTECTIVE AUKAXGEMEXTS FOIJ EMPLOYEES. (aj A railroad shall provide fair am! equitable .irranjremcnts to jinittvt the interests of eniplojitej-airerted bj. discontinuance* of intercity mil passcmrer service whether occurring Iwforc. on. or after January 1,1JI75. (b) Such protective arrangement? fliall include, without l>ein^r lim ited to, such provisions as. may be necessary for (1) the prcserv:iti) the protection of such individual employees airair.M a uorrcning of their positions with respert to their employment: (-1) assurances of jinority of reeni]>h>yineiit of employees terminated or Iai«l olF: and (.">) paid iniiniiiiror reiniminir i^xiirrsinis. Suoli arr.iniromciits ~-]\-.\}\ iin-lude provi.-ions protei-iinir iiulividii:ii employees aipiinst a \vinveiiin<; of their po.-i:i m- wi'li ix-sp^'t to their employment \vhirh ?\r.i\\ in no cvt-itt provide Denelits hvs than tl\o.-e establi.-hed ]>ui-stiant to -ei-lion ~ i ( 2 ) ( f ) of the Tiiterstate C'nimiicrre i4 z*.;*.. •(.-. Act. Any i-ontiiu-t entered into j>ui>nant l<> the provjsion> of this title 4^ v;; =. shall specify the terms and condition:- of Mich protective arraiureiuent?. No com met under section l " l ( a ) ( H of this Act lietwceii a railroad and the Corporation may l>e made imli>» the Secretary of I-abor ha-i certilied to the Corporation that the lalx>r proieciiv** pnivi^ious of taniive ivcjuirrmciit-: of Mibsection ( ' » ) of ihis section shall apply io tlic Corporation. The certification by the Secretary of 5^d)Or that employees alTcctcd have been provided" f-iir and equitable protection as rctjiiircd by tbi> -edion a condition to the completion of any transaction re<|uirinorer- and niei'hanii'S employed by contrarloiv and •iiibconiracioiv, in the giorforiiiaiiie of con>lruction work financed with I he a-i-i-tamc of fund- received under any contract or agreement enieied into under thi- title shall he paid waires at rates not less; than iho>c |>revailiniinihir eon-triiction in the locality as determined •J^ S* -. :•..!; bv tin- Secn-larv of I.alxir in accordance w i t h the Davis-Bacon Ad. 7- s- •-. ---. The Corpfiratinii -liall no< enter into any such contrict or .i»re«-ment ~ w --; -' * uirliout fir-t "i>t:iinin<5 a'leqiiale a—nnince thai ivqniivd labor standard- will be niainlainei) on the con-truction work. Health and saf"ty -tamlard- pronml«.'ate-i by the Secretary of Labor piir.-iiant to section li>7 .if the ('outmet Work MOHIV and Safely Standards Act Mrt -3 '•-•. -.. I'.S.C. :!o:'.| -hall Iv applicab'e to all con.-truction work performed uiuler -.idi ciii.:i-ad- or a^ncniciits. exccjd any construction work performed I v a railroad employee. Wa»t« rate- ]>rovided for in <-olle.-tixi- bariraininir agreement- negotiated under and jinrsicipt to the : c -• :• •-. ''>; l>ailu:i. T^ibor Act -ball be ron-idered as heiny in compliance with ; - - ' -• .!-"•. the I)avi.-Bacon Act. 4 * - •••--•-•• te) The Corpnnilion >hall not contract out any work normally performed by employee.- in a'iy b:irgaining unit covered by a contraot. between the Co: poralion or any railroad providing intercity rail p:isv MMiyer >ervice upon the date of enactment of this Act and'any h'hor or) the development and demonstration of improved rolling stock: and (G) essential fixed facilities for the operation of passenger trains on lines and routes included in the basic system over which no through passenger trains arc l>cing operated at the time of enactment of this Act, including necessary track connections between lines of the same or different railroads. SEC 602. GUARANTY OF LOANS. The Secretary is authorized, on such terms and conditions as he may prescribe, to guarantee any lender against loss of principal or interest on securities, obligations, or*I*ans issued to finance the upgrading of roadlicds and the purchase J>y the Corporation or agency of new rolling stock, rehabilitation of existing rolling stock and foV other corporate purposes. The maturity date of such securities, obli- Hat-.-it./ Jttte gations, or loans, including all extensions and renewals thereof, shall not bo later than twenty years from their date of issuance, and the amount of guaranteed loans outstanding at any time may not exceed $100,000,000. The Secretary shall prescrilx; ami collect from the lending institution a reasonable annual guaranty fee. There arc authorized Appropriation. to be appropriated such amounts as necessary to carry out this section not to exceed $100,000,000. S7AT. 1339 Pub. Law 91-518 - 12 - October 30, 1970 T1TLK VII—IXTKI51M IvMKW.KXCY FBDKKAL FIXAX01AL ASSISTAXCE SEC. 701. INTERIM AUTHORITY TO PROVIDE EMERGENCY FINANCIAL ASSISTANCE FOR RAILROADS OPERATING PASSENGER SERVICE. ia) For the i»ur|H»sc of |>eni Jttinjr a railroad to enter into or carry out a contract entered imo under this Act, the Secretary is authorized, on stii-li terms and ;-ouditioiis as lie may prescribe, to (1) make loans losiu-h railroad. 01 »•-) guarantee any fcinler airainit loss of principal or interest on any loan to such railroad. (I)) Before niakin*: a loan or a guarantee under this section, the Secretary must find, in \vriiinlc terms and conditions: and (4) there is reasonable assiinmce that the business affairs of tlie railroad will l>e co con>i-tin^ of those rijrlits-of way. tracks, and other facilities desisiiiated by the Secretary to l>e nwessarv for the j>ur|)UH> of |>n>\ idinjj intercity mil pa-->en<:er service, iiu-lndiiiir services L>inp|o\ inir hiiiM-itivc technology, within the basic system. (J) It is."the intent of the ('onjrrcss that, in the c:i.-e of a loan <;iiaraiiliv under this Act. the United Stato >hall Maud in the >aiuc position \\itli reaped to other creditor* a> in the csise if a direct loan hy the I*nitc(! States uiviiiir the I'nited States pri«. ; t\ over secmixi and unsecured creditors. rest rale, nl) Iiilcri-.--! on IIMII.- made iiinlei tin.- .-e< timi >h:dl lv at a rate not r-.l..a.^i3:. li--> than a rate determined 1>\ the Se. irtt.in of the Trwi.-my. taking into r-.:i>iilcn«tioii the cnnvnt :i\ei-iiri market vii-ld on nul.-landin^ market able obli^:i(iiiii> of 11 if Ciiilcd State.- uirl, rcmaii.ni>; ,>erii> and lo.ni <;iiar:intec> made under this sect ion sliidl not exceed SiiM),tiiHi.t)t«i. SEC. 702. AUTHORIZATION FOR APPROPRIATIONS. Tlifiv are liercii\ iiiitliori/cd ti> In- .ip|iropiialed .-iirh anionnt> not In exceed S-jlio,(lUl).(l(i|i a.- mm In- iieco.v-al\ to i ; u i \ out I lie pnrpox-.of tliis title. Am .siiiii> .ippruprialed .-hall be available unlil c.spcnded. TITM-: V I I I - MISCKLLAXHOrS PKOVISIOXS SEC. SOI. AI)E«IUACY OK SERVICE. Tin- ("o',iini:v-ioii l^ iMiihori/ed to pre.M rilic .-n, h rc^nliilion.> ;\> it »oii-»ler • he(e.->iii\ to provide .-iife and adei|ii.itc .-crv ire. ci|iiipnicnt. .mil f,1 ililii'.-. for inn-nil\ niil pa.->en^er ncrvirc. An\ |n'i->on uho \ii.l.lr,- a re)i;ill !>,. >ubjei-| to a < - i \ d pcnallv of not. to exceed $.">00 for ench \iolaiion. Karh «lav a i/iolution continues slinll constitute a separate 13 October 30, 1970 - 13 - Pub. Law 91-518 S4 S7AT. 1340 SEC Mi. EFFECT ON PENDING PROCEEDINGS. Upon enactment of this Act, no railroad may discontinue any intercity rail passenger sen-ice whatsoever other than in accordance with the provisions of this Act, notwithstanding the provisions of any other Act, the laws or constitution of any State, or the decision or order of, or the pendency of any proceeding before, any-Federal or State court, agency, or authority. SEC. 8*3. SEPARABILITY. If any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of the Act and the application of such provision to other persons or circumstances shall not be affected thereby SEC W. ACCOUNTABILITY. Section 201 of the Government Corporation Control Act (31 U-S.C. S5G) is amended by striking out ~jind~ immediately preceding "(o)" - j ;-.\t. and by inserting immediately before the period at the end thereof the ~>: ?••-.. following: "and (6) the National .Railroad Passenger Corporation". SEC. 803. RECORDS AND AUDIT OF THE CORPORATION. (1)(A) The accounts of the Corporation shall be audited annually i-'-r.-i- a--.ii-. in accordance with generally accepted auditing standards by inde- ^ L'.ie^er !err pendent certified public accountants or independent licensed*public * ="••--*»• accountants certified or licensed by n regulator) authority of a State or other political subdivision of the United States. The audit shall be conducted at the place or places where the accounts of the Corporation arc normally kept. AH book?, accounts, financial records, report^, files, and other papers, things, or property belonging to or in use by the Corporation and necessary to facilitate the audit shall be made available to the person conducting the audit; and full facilities for verifying transactions with the h:u.incc=> or securities held by dc]M>:.itoric*, fiscal agents, and custodians shall be afforded to such purson. (H) The report of each such independent audit shall be in« hided in -:«f^ -.j :«.the annual report required by iection :{05(a) of this Ad. The audit 'T«-'s, car.ter.-.s. report shall set forth the scope of the audit and incl.uh- sii« h state- irte ' f- '.Ml. inents as are necessary to present fairly the Corporation's asset?- and liabilities, surplus or deficit, with an analysis of the changes tlicrein during the year, supplemented in reasonable detail by a statement of the Corporation's income and expenses during the year, and a .-tatepifiit of the sources and application of funds, together will c independent auditor's opinion of those statements-. X 1 ( 2 ( A ) The finanria transactions of the Corporation fo. ..ny fi.-i-al A-d:t tj year during which Federal funds are available to finaiue any portion "-—p-..-oll«" •if its operations may IHJ audited I>\ the Comptroller Geiiinil of the *r«-*l. United States in accordance with this principles and procedures applicable to commercial corporate t r.Asactions and under sii y. records, reports, files, and other pajc alTonleil full facilities for verify ing trans-actions «ith the balances or .-vi urities held by depositories, fi.scal agents, and custodians. All such hooks, account.-, records, report.*, files, papers, and property of the Corporation shall remain in possession and custody of the Corporation. (H) A report of each siirh audit shall lie made by the Comptroller ej^n •., :or.Gcneral to the Congress. The rejMirt t«> the Congress shall contain f **> - T ' o r t i . such comments and infonnation as the Comptroller General may 14 Pub. Law 91-518 B-S STA7. 13*1 - 14 - October 30, 1970 rteijr-.s, cj-'.. ;j ; rri.i-^r.i. deem necessary to inform Cungre«, of the financial ope nit ions and condition of the C'orjroration. together w i t h such recommendations with respect thereto :u> he may dcciu advisable. The report shall also .-how _-|iecifically any program, expenditure, or other financial transa.-iion or undertaking olecned in the course of the audit, which, in the opinion of the Comptroller fioneral. has- been carried on or made without authority of laxv. A copy of each report shall be furnished to the President, to .he Secretary, and to the Corjioration at the time submitted to the Congress. TITLE IX-TAX DEDUCTION FOR CERTAIN PAYMENTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION SET. Mil. (:>) Part VJII of subchapter H of chapter 1 of the ciA ;t -.. * -, Internal Keienne Code of lO.'.l (relating to ?pecial deductions for :: rt.-.. •:::. . or|-oration.-) i» amended by adding A\. the end thereof thu following 26 "SC i~l-2<9'. nt>w section: -SEC. 250. CERTAIN PAYMENTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION, "(a) (IKXEI:AI. RULE.—If— "(1) any corporation which i.- a common carrier bv railroad (as defined in section 1(3) of the Interstate Commerce Act (49 . 47-; I'.S.C. 1 ( 3 ) ) ) makes a payment in cash, rail passenger cquip. "•" • mem. or .-en ices, to the National Railroad Passenger CurjK>ration thereinafter in ihi s section referred to as the 'Passenger Corpoi...iOi.*) ]>iirsuant to n contract entered into under section 401(a) of the Rail Passenger Sen-ice Art of 1070, and "(•2) no stock in the Passenger Corporation is issued at anytime to such corporation in connection with any contract entered into under such section - i n l ( a ) , then the amount of such payment shall (subject to subsection (c>) ]*• allowed as a deduction f.T the taxable year in which it is made, "(b) \VIIKX PAYMENT Is MADE.—Tiider regulations prescribed by the Secretary or hi.- delegate, a payment in rail passenger equipment .-hall l*> treated a» made when title to the equipment is transferred, and a payment in service?, shall be treated as made when the services a iv rendered. "(c) EKKEIT 1.1 CEHTAIX SriisKCjrEXT Arcjrismoxs or STOCK.— " (1) DISAI.LOWANVE or DEnLTTioxs.—I f any deduct ion lias been allowed under aub-ection (a) to a corporation and such corporation (or a successor corporation) acquires any stock in the Passenger Corporation (other than in a transaction descril»cd in scc- -; tion 371 or 3>>1) liefore the close of the 30 month period which • -^;-^ l>egins with the day on which the last payment is made to the "-'. '•'• Pa^-enircr Corporation pursuant to the contract entered into under such section 101 (a), then Mich deduction shall be disallowed (as of the clo?e of the taxable year for which it was allowed under subsection ( a ) ) . "(•2) COLLECTION- OK DEKICIKXCY.—If any deduction is disallowed by rcawin «.f paragraph ( I ) . then the periods of limitation . .,3. proudcil in -ei-noiiD O.V)1 anil 0.10-2 on the making of an assessi.l, ment and the mllection by levy or a proceeding in court shall, with respect to AM deficiency (including interest and additions to the tax) re-ulting from such a diMallowance, include one year following ihe dale on which the person acquiring the stock which results in the disallowance (in accordance with regulations prescribed by the Syretary or his delegate) notifies the Secretary or his delegate oTsuch acquisition; and such assessment and col- 15 October 30, 1970 - 15 - Pub. Law 91-518 84 STAT. 1342 lection may ]*> made notwithstanding any provision of law or rule of law which otherwise would prevert such assessment and collection. "(d) MK.MBKKS OK OOXTKOI.LKD GKOUI'.— Under regulations prescribed by the Secretary or his delegute, if a corporation is a nienilwr of n controlled group of corporations (within the meaning of section 7 1563), subsections (a)(£) and tc) shsll be applied by treating all 83 Stat 120; 8 stat. 602 inbersofsiichcontn)lled«rroupasoiiecori)onition." « (b) The table of s*ctions"for sneh part Mil is amended by adding 26 'ISC 1563* attheend thereof the following: "Sec. £X>. Certain ixyiiieotii to the Xation.il Hallroud I'.isse^ger Corporation." (?) The anjendinents made by this section shall apply to taxable years ending after the date of the enactment of this Act. Approved October 30, 1970. Effective .late. L£r.ISLATIV£ HISTORY: KO'JSE R??05«. No. 91-1J80 (Coca. or. Interstate and Forelfir. Cowserce). CCTCRESSIONAL REC03D, Vol. 116 (1970): Oct. 13, 14, considered and.passed House. Oct. 14, cor-siderad ar.d passed Senate.