§11301. Authority of certain carriers to issue securities and assume obligations and liabilities
(a) In this section-
(1) "carrier" means a rail or sleeping car carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title (except a street, suburban, or interurban electric railway not operated as a part of a general railroad system of transportation), and a corporation organized to provide transportation by rail carrier subject to that subchapter.
(2) "security" means a share of capital stock, a bond, or other evidence of interest in, or indebtedness of, a carrier.
(b)(1) Subject to the Securities Act of 1933 (15 U.S.C. 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), and the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.), the Commission has exclusive jurisdiction to approve the issuance of securities by a carrier and the assumption of an obligation or liability related to the securities of another person by a carrier. A carrier may not issue securities or assume those obligations or liabilities without the approval of the Commission. No other approval is required. A security issued or obligation or liability assumed by a carrier in violation of this subsection or in violation of a condition prescribed by the Commission under subsection (d) of this section is void. However, a security or obligation issued or assumed under authority of this section is not void for failure to comply with a procedural requirement of this section or other matter preceding entry of the order of the Commission.
(2) Paragraph (1) of this subsection does not apply to notes issued by a carrier if the notes mature not more than 2 years after their date of issue and total (with all then outstanding notes having a maturity of not more than 2 years) not more than 5 percent of the par value of the then outstanding securities of that carrier. If the securities do not have a par value, the par value of those securities is the fair market value on the date of issue. Paragraph (1) of this subsection applies to a subsequent funding of notes referred to in this paragraph.
(c)(1) A carrier issuing notes referred to in subsection (b)(2) of this section shall file a certificate of notification with the Commission by the end of the 10th day after they are issued. That notification must include substantially the same matter required by the Commission for an application for authority to issue other securities.
(2) A carrier that pledges, repledges, or otherwise disposes of a security referred to in an application for authority or a certificate of notification under this section as pledged or held unencumbered in the treasury of that carrier shall file a certificate of notification with the Commission by the end of the 10th day after it disposes of the security.
(d)(1) The Commission may begin a proceeding under this section on application of a carrier. Before taking final action, the Commission must investigate the purpose and use of the securities issue or assumption and the proceeds from it. The Commission may approve any part of the application and may require the carrier to comply with appropriate conditions. After an application is approved under this section, the Commission may change a condition previously imposed or use that may be made of the securities or proceeds for good cause shown subject to the requirements of this section. The Commission may approve an application under this section only when it finds that the securities issue or assumption-
(A) is for a lawful object within the corporate purpose of the carrier and reasonably appropriate for that purpose;
(B) is compatible with the public interest;
(C) is appropriate for or consistent with the proper performance by the carrier of service to the public as a common carrier; and
(D) will not impair the financial ability of the carrier to provide the service.
(2) An application or certificate must be made under oath and signed and filed for the carrier by a designated executive officer who knows the matters stated in the application or certificate. On receipt of an application of a carrier under this section, the Commission shall have a copy of the application served on the chief executive officer of each State in which that carrier operates. The appropriate authorities of those States are entitled to be admitted as parties to a proceeding under this section to represent the rights and interests of their people and States.
(e) The Commission shall require a carrier that issues securities, including notes, under this section to submit reports to it. The reports must identify the disposition of those securities and the application of the proceeds from their disposition.
(f) This section does not imply a guaranty or obligation of those securities by the United States Government. This section does not apply to securities issued or obligations or liabilities assumed by the United States Government, a State, or an instrumentality or political subdivision of one of them.
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| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 11301(a)(1) | 49:20a(1). | Feb. 4, 1887, ch. 104, |
| 11301(a)(2) | 49:20a(2) (1st sentence 10th–35th words). | |
| 11301(b)(1) | 49:20a(2) (1st sentence less 10th–35th and 73d–136th words and last sentence), (7), (11) (1st sentence). | |
| 11301(b)(2) | 49:20a(9) (1st and 2d sentences and last sentence proviso). | |
| 11301(c)(1) | 49:20a(9) (less 1st and 2d sentences and last sentence proviso). | |
| 11301(c)(2) | 49:20a(5). | |
| 11301(d) | 49:20a(2) (1st sentence 73d–136th words and last sentence words before proviso), (3), (4), (6). | |
| 11301(e) | 49:20a(10). | |
| 11301(f) | 49:20a(2) (last sentence proviso), (8). |
In subsection (a)(1), the words "As used . . . the term" are omitted as surplus. The words "to provide" are substituted for "for the purpose of engaging" for clarity. The word "steam" is omitted as surplus in view of 49:1(18) and 1a(1).
In subsection (a)(2), the words "(hereinafter in this section collectively termed 'securities')" are omitted as unnecessary in view of the restatement.
In subsection (b)(1), the words "Subject to subchapter I of chapter 2A, chapter 2B, and subchapter I of chapter 2D of title 15" are added to reflect the concurrent jurisdiction established under section 308 of the Railroad Revitalization and Regulatory Reform Act of 1976. The word "exclusive" is substituted for "exclusive and plenary" because it is inclusive. The words "No other approval is required" are substituted for "and a carrier may issue securities and assume obligations or liabilities in accordance with the provisions of the section without securing approval other than as specified herein" for clarity and consistency because section 308 of that Act did not extend concurrent jurisdiction to the States. The words "may not" are substituted for "It shall be unlawful for" for clarity. The words "issue securities" are added in view of the restatement. The words "Lessor, lessee, guarantor, indorser, surety, or otherwise" are omitted as surplus. The words "natural or artificial" are omitted as surplus in view of the definition of "person" in section 10102 of the revised title. The words "even though permitted by the authority creating the carrier corporation" are omitted as surplus. The words "in violation of this subsection . . . is void" are substituted for "for which under the provisions of this section the authorization of the Commission is required, shall be void, if issued or assumed without such authorization therefor having first been obtained" in view of the restatement of 49:20a. The words "in violation of a condition prescribed by the Commission under subsection (d) of this section" are substituted for "contrary to any term or condition of such order of authorization as modified by any order supplemental thereto entered prior to such issuance or assumption" for clarity.
In subsection (b)(2), the words "Paragraph (1) of this subsection does not apply" are substituted for "The foregoing provisions of this section shall not apply" to conform to the restatement of 49:20a. The words "issued by a carrier if the notes" are substituted for "to be issued by the carrier maturing" for clarity. The words "date of issue" are substituted for "date thereof" for clarity. The word "together" is omitted as surplus. The words "not more than 2 years" are substituted for "of two years or less" for consistency. The word "if" is substituted for "In the case of" for clarity. The word "is" is substituted for "for the purposes of this paragraph shall be" to reflect the statement of fact. The words "Paragraph (1) of this section applies" are substituted for "the provisions of this section respecting other securities shall apply" for clarity.
In subsection (c)(1), the words "in such form as may from time to time be determined and prescribed by the Commission" are omitted as unnecessary in view of section 10321(a) of the revised title. The words "must include substantially the same matter" are substituted for "setting forth as nearly as may be the same matters" for clarity in view of the power of the Commission to prescribe the contents of the notification under section 10321(a) of the revised title.
In subsection (c)(2), the words "otherwise disposes" are substituted for "sold . . . or otherwise disposed" as being inclusive. The words "pledges, repledges" are retained for clarity. The words "referred to in" are substituted for "set forth and described in" for clarity in view of the further identification of those securities as being "pledged or held unencumbered in the treasury". The words "subsequent to the filing of such application or certificate" are omitted as unnecessary in view of the restatement. The words "by the end of the 10th day after it disposes" are substituted for "within ten days after such sale, pledge, repledge, or other disposition" for clarity and consistency. The words "to that effect, setting forth therein all such facts as may be required by the Commission" are omitted as unnecessary in view of the power of the Commission to prescribe the contents of the notification under subsection (d) of the revised section.
In subsection (d)(1), the first sentence is added for clarity and substituted for the last sentence of 49:20a(6) in view of subchapter II of chapter 5 of title 5. The words "Before taking final action" are substituted for "the Commission by order" in 49:20a(2) for consistency. The 3d and 4th sentences are substituted for 49:20a(3) for clarity in view of subchapter II of chapter 5 of title 5 and subchapter II of chapter 103 of the revised title. The words "for a lawful object within the corporate purpose of the carrier and reasonably appropriate for that purpose" are substituted for "is for some lawful object within its corporate purposes . . . and (b) is reasonably necessary and appropriate for such purpose" for clarity. The word "appropriate" is substituted for "necessary and appropriate" as being more inclusive.
In subsection (d)(2), the words "Every application for authority shall be made in such form and contain such matters as the Commission may prescribe" are omitted in view of section 10321(a) of the revised title. The words "executive officer who knows the matters stated in" are substituted for "its president, a vice president, auditor, comptroller, or other executive officer having knowledge of the matters therein set forth" as being more inclusive and for clarity. The word "duly" is omitted as surplus. The words "application of a carrier under this section" are substituted for "application for authority" in 49:20a(5) for clarity. The words "shall have a copy of the application served on the chief executive officer" are substituted for "shall cause notice thereof to be given and a copy filed with the governor" for clarity. The words "The appropriate authorities of those States" are substituted for "The railroad commissions, public service, or utilities commissions, or other appropriate State authorities of the State" as being more inclusive. The words "are entitled" are substituted for "shall have the right" for clarity. The words "to be admitted as parties to a proceeding under this section" are substituted for "to make before the Commission such representations as they may deem just and proper" for clarity in view of subchapter II of chapter 5 of title 5. The words "to represent the rights and interests of their people and States" are substituted for "for preserving and conserving the rights and interests of their people and the States, respectively, involved in such proceedings" for clarity.
In subsection (e), the word "reports" is substituted for "periodical or special reports" as being more inclusive. The words "The reports must identify" are substituted for "which shall show" for clarity.
In subsection (f), the words "This section does not" are substituted for "nothing herein shall be construed" and "Provided, That nothing in this section is to be construed as applying" in 49:20a (8) and (2), respectively, for clarity. The words "political subdivision" are substituted for "political subdivision or municipal corporation" as being more inclusive.
Pub. L. 103–429
This amends 49:11301(b)(1) to provide a cross-reference that conforms to the style of title 49.
References in Text
The Securities Act of 1933, referred to in subsec. (b)(1), is act May 27, 1933, ch. 38, title I,
The Securities Exchange Act of 1934, referred to in subsec. (b)(1), is act June 6, 1934, ch. 404,
The Investment Company Act of 1940, referred to in subsec. (b)(1), is title I of act Aug. 22, 1940, ch. 686,
Amendments
1994-Subsec. (b)(1).
Section Referred to in Other Sections
This section is referred to in sections 11322, 11348, 11361, 11362, 11367, 11709, 11911 of this title; title 45 sections 726, 791, 830.