45 U.S. Code § 721 - Loans
The Association is authorized, in accordance 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 railroad in reorganization which has been found to be reorganizable under section 77 of the Bankruptcy Act pursuant to section 717(b) of this title) in the region, for purposes of achieving the goals of this chapter; to a State or local or regional transportation authority pursuant to section 763  of this title; 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 proceedings under section 77 of the Bankruptcy Act. No such loan shall be made by 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 shall in no way be affected by this chapter.
Each application for such a loan shall be made in writing to the Association in such form and with such content and other submissions as the Association shall prescribe to protect reasonably 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.
Each loan shall be extended in such form, under such terms and conditions, and pursuant to such regulations as the Association deems appropriate. Such loan shall bear 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 chapter.
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 goals of this chapter are reasonably likely to be achieved.
 See References in Text note below.
 See References in Text note below.
 So in original. The period probably should be a semicolon.
 So in original. Should be “Corporation,”.
Section 77 of the Bankruptcy Act, referred to in subsecs. (a) and (h)(3)(B), was classified to section 205 of former Title 11, Bankruptcy. The Bankruptcy Act (act July 1, 1898, ch. 541, 30 Stat. 544, as amended) was repealed effective Oct. 1, 1979, by Pub. L. 95–598, §§ 401(a), 402(a), Nov. 6, 1978, 92 Stat. 2682, section 101 of which enacted revised Title 11. For current provisions relating to railroad reorganization, see subchapter IV (§ 1161 et seq.) of chapter 11 of Title 11.
The Employers’ Liability Act (45 U.S.C. 51–60), referred to in subsec. (h)(1)(A)(v), is act Apr. 22, 1908, ch. 149, 35 Stat. 65, as amended, and is classified generally to chapter 2 (§ 51 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 51 of this title and Tables.
In the closing par. of subsec. (h)(6)(A), “section 688 of title 2” and “section 682(5) of title 2” substituted for “section 1017 of the Congressional Budget and Impoundment Control Act of 1974 (31 U.S.C. 1407)” and “section 1011(5) of that Act (31 U.S.C. 1401(5))”, respectively, to reflect the transfer of sections 1407 and 1401 of former Title 31, Money and Finance, to sections 688 and 682 of Title 2, the Congress.
1998—Subsec. (i). Pub. L. 105–178 struck out heading and text of subsec. (i). Text read as follows: “Upon application by the Corporation or any other railroad, the Secretary shall, pursuant to the provisions of and within the obligational limitations contained in sections 831 through 833 of this title, guarantee obligations of the Corporation or such railroad for the purpose of electrifying high-density mainline routes if the Secretary finds that such electrification will return operating and financial benefits to the Corporation or such railroad and will facilitate compatibility with existing or renewed electrification systems. Upon application by the Corporation or by any railroad in reorganization in the region which receives a loan under subsection (a) of this section, the Secretary shall, pursuant to the provisions of and within the obligational limitations contained in sections 831 through 833 of this title, guarantee obligations of the Corporation or such railroad for purposes of making capital improvements to coal export facilities. The aggregate unpaid principal amount of obligations which may be guaranteed by the Secretary under this paragraph shall not exceed $200,000,000 at any one time.”
1980—Subsec. (d). Pub. L. 96–448, § 408, substituted “Association is not required to make the findings with respect to subsections (e)(3) and (f) of this section and may” for “Association may” in provision preceding par. (1), “$7,500,000” for “$4,000,000” in par. (2), and “December 31, 1981” for “December 31, 1980” in provision following par. (2).
Subsec. (i). Pub. L. 96–448, § 407, substituted “Corporation or any other railroad, the Secretary” for “Corporation, the Secretary”, “Corporation or such railroad for the purpose” for “Corporation for the purpose”, and “Corporation or such railroad and will facilitate” for “Corporation and will facilitate” and inserted provision authorizing the Secretary, upon application and with regard to obligational limitations, to guarantee obligations of the Corporation or such railroad for the purposes of making capital improvements to coal export facilities.
1979—Subsec. (d)(2). Pub. L. 96–101 substituted “$4,000,000” for “$2,000,000”, “and determines that such railroad is making a good faith effort to establish an employee stock ownership plan for review and approval by the Association” for “and such railroad has in effect an employee stock ownership plan which has been approved by the Association”, and “December 31, 1980” for “December 31, 1979” and inserted provision requiring that any such approval be conditioned upon a written commitment that by December 31, 1980, the railroad will adopt an employee stock ownership plan which will acquire qualifying employer securities with a fair market value of $250,000.
Subsec. (h)(1)(A)(viii). Pub. L. 96–73, § 204(b)(1), substituted “funding for continuation, by the Corporation, of medical and life insurance coverage and benefits for retired employees of railroads in reorganization as required and limited by section 743(b)(6)(B) of this title” for “funding for payment, when due, of medical and life insurance benefits for employees (whether or not their employment was governed by a collective bargaining agreement) on account of their service with a railroad in reorganization prior to the date of conveyance pursuant to section 743(b)(1) of this title, and for individuals who retired, prior to such date of conveyance, from service with a railroad in reorganization”.
Subsec. (h)(6). Pub. L. 96–73, § 204(b)(2)(A)–(C), redesignated existing provisions as subpar. (A), and in subpar. (A) as so redesignated, redesignated former subpars. (A) to (C) as cls. (i) to (iii), respectively, and former cls. (i) and (ii) of former subpar. (A) as subcls. (I) and (II) of cl. (i), respectively, and added subpar. (B).
1978—Subsec. (d). Pub. L. 95–611 inserted provision authorizing increase of loans to railroads until Dec. 31, 1979.
1976—Subsec. (g). Pub. L. 94–210 added subsec. (g).
Subsec. (h). Pub. L. 94–210 added subsec. (h).
Subsec. (h)(1). Pub. L. 94–555, § 203(a), increased aggregate principal amount of loan agreements, at any given time, to $350,000,000; substituted “such railroads in reorganization” for “the transferors” after “railroad, in behalf of”; struck out “and obligations” after “all other current accounts”; inserted “(including claims for accrued vacation and wages and similar claims arising in connection with labor and services performed)” after “section 153 of this title”; added clauses (vii) to (x) to subpar. (A); authorized Association to make loans pursuant to subpar. (A), as amended, and inserted reference to section 743(b)(6) of this title; inserted provisions that claim arising prior to conveyance of rail properties must be presented to a railroad in reorganization in the region, or the Corporation within 2 years after Oct. 19, 1976, and that loan requested is for direct payment made for services or materials, the furnishing of which avoided disruption of ordinary business relationships prior to date of conveyance or made to avoid postconveyance disruptions; and added subcls. (I) and (II) to cl. (V) relating to provisions to be included in joint agreement between Finance Committee and the Corporation.
Subsec. (h)(2). Pub. L. 94–555, § 203(b), inserted “and for the payment of only those accounts payable which relate to the obligations of the estates identified in paragraph (1) of this subsection” after “section 743(b)(1) of this title”, and inserted provisions relating to the jurisdiction of district courts in railroad reorganization proceedings.
Subsec. (h)(4)(D). Pub. L. 94–555, § 203(c), added subpar. (D).
Subsec. (h)(5)(B). Pub. L. 94–555, § 203(d), inserted provisions relating to filing proof of claim for administrative expense.
Subsec. (h)(6)(A)(i). Pub. L. 94–555, § 220(a), substituted “paragraph (1)(B)(v)” for “paragraph (1)(E)”.
Subsec. (i). Pub. L. 94–210 added subsec. (i).
1975—Subsec. (a). Pub. L. 94–5, § 5(a), substituted “for purposes of achieving the goals of this chapter” for “for purposes of assisting in the implementation of the final system plan”.
Subsec. (e)(1). Pub. L. 94–5, § 5(b), substituted “achieve the goals of this chapter” for “carry out the final system plan”.
Subsec. (f). Pub. L. 94–5, § 5(c), substituted “goals of this chapter” for “goals of the final system plan”.
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