and costs of requiring development of additional capability.

(4) The means by which the degree of economic accuracy required can be obtained at the least possible expense and with the least possible information reporting.

(5) The means by which the confidentiality of such costs can best be maintained while meeting the need for such information in regulatory proceedings.

(c) The cost accounting principles established by the Board shall require that cost information be reported or disclosed only for the essential regulatory purposes defined by the Board. (Added Pub. L. 96-448, title III, § 302(a), Oct. 14, 1980, 94 Stat. 1935.)

REFERENCES IN TEXT

The effective date of the Staggers Rail Act of 1980, referred to in subsec. (a), probably means Oct. 1, 1980, the general effective date of Pub. L. 96-448. See section 710 of Pub. L. 96-448, set out as an Effective Date of 1980 Amendment note under section 10101 of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 11163, 11166 of this title.

§ 11163. Implementation of cost accounting principles Upon the establishment of cost accounting principles by the Railroad Accounting Principles Board under section 11162 of this title, the Interstate Commerce Commission shall promptly promulgate rules to implement and enforce such principles. Not less than once every five years after the promulgation of the original rules, the Commission shall review the principles of the Board and shall, by rule, make such changes in such principles as are required to achieve the regulatory purposes of this title 2 and the goals of this subchapter. The Commission shall insure that the rules promulgated under this section are the most efficient and least burdensome means by which the required information may be developed for regulatory purposes.

(Added Pub. L. 96-448, title III, § 302(a), Oct. 14, 1980, 94 Stat. 1936.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 11164 of this title.

§ 11164. Certification of rail carrier cost accounting systems

(a) Within 180 days after the effective date of the Staggers Rail Act of 1980, each rail carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title shall file with the Commission a request for preliminary certification of its cost accounting system. The Commission shall grant such preliminary certification if it determines that the cost accounting system of such rail carrier is in compliance with the accounting standards of the Commission in effect on the day prior to

'So in original. Probably should be "subtitle".

the effective date of the Staggers Rail Act of 1980.

(b)(1) As soon as practicable, but not later than 9 months, after the promulgation of rules by the Commission under section 11163 of this title, each rail carrier described in subsection (a) of this section shall file with the Commission a request for final certification of its cost accounting system developed to comply with this section.

(2) Within 90 days, or such additional time as the Commission finds necessary, after a rail carrier files its request for final certification under paragraph (1) of this subsection, the Commission shall grant such final certification to such carrier if the Commission determines that the cost accounting system of such carrier is in compliance with the rules promulgated by the Commission under section 11163 of this title. If the Commission denies such final certification, the rail carrier shall revise its cost accounting system and file a new request for certification within 90 days after the date of such denial. The Commission shall thereupon grant final certification if it determines that such cost accounting system, as revised, is in compli ance with such rules. If the Commission again denies final certification to the rail carrier, the Commission shall prescribe a cost accounting system which such carrier shall adopt within a reasonable time and which shall be considered a finally certified cost accounting system for purposes of this section.

(c) Each rail carrier shall have and maintain a cost accounting system that is in compliance with the rules promulgated by the Commission under section 11163 of this title.

(d)(1) Certification under this section that the cost accounting system of a rail carrier is in compliance with the rules promulgated by the Commission under section 11163 of this title shall be valid until the promulgation of new rules by the Commission.

(2) After the cost accounting system of a rail carrier is certified under this section, such rail carrier may, after notifying the Commission, make modifications in such system unless, within 60 days after the date of notification, the Commission finds such modifications to be inconsistent with the rules promulgated by the Commission under section 11163 of this title.

(e) For purposes of determining whether the cost accounting system of a rail carrier is in compliance with the rules promulgated by the Commission, the Commission shall have the right to examine and make copies of any documents, papers, or records of such rail carrier relating to compliance with such rules. Such documents, papers, and records (and any copies thereof) shall not be subject to the mandatory disclosure requirements of section 552 of title 5. (Added Pub. L. 96-448, title III, § 302(a), Oct. 14, 1980, 94 Stat. 1936.)

REFERENCES IN TEXT

The effective date of the Staggers Rail Act of 1980, referred to in subsec. (a), probably means Oct. 1, 1980, the general effective date of Pub. L. 96-448. See section 710 of Pub. L. 96-448, set out as an Effective Date

of 1980 Amendment note under section 10101 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 11913a of this title.

§ 11165. Cost availability

As required by the rules of the Interstate Commerce Commission governing discovery in Commission proceedings, rail carriers shall make relevant cost data available to shippers, States, ports, communities, and other interested parties that are a party to a Commission proceeding in which such data is required. (Added Pub. L. 96-448, title III, § 302(a), Oct. 14, 1980, 94 Stat. 1937.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 11910 of this title.

§ 11166. Accounting and cost reporting

(a) To obtain expense and revenue information for regulatory purposes, the Interstate Commerce Commission may promulgate reasonable rules for rail carriers providing transportation subject to the jurisdiction of the Commission under subchapter I of chapter 105 of this title, prescribing expense and revenue accounting and reporting requirements consistent with generally accepted accounting principles uniformly applied to such carriers. Such requirements shall be cost effective and compatible with and not duplicative of the managerial and responsibility accounting requirements of those carriers. To the extent such rules are required solely to provide expense and revenue information necessary for determining railroad costs in regulatory proceedings pursuant to this title,' such rules shall be promulgated in accordance with the cost accounting principles established by the Railroad Accounting Principles Board under section 11162 of this title.

(b) Any reports required by the rules established by the Commission under this section shall include only information considered necessary for disclosure under the cost accounting principles established by the Board or under generally accepted accounting principles or the requirements of the Securities and Exchange Commission.

(Added Pub. L. 96-448, title III, § 302(a), Oct. 14, 1980, 94 Stat. 1937.)

Consolidation, merger, and acquisition of control: expedited rail carrier procedure. Employee protective arrangements in transactions involving rail carriers.

11348.

§ 11167. Report

The Railroad Accounting Principles Board shall, within 2 years after the effective date of the Staggers Rail Act of 1980, submit to the Congress a report setting forth any recommendations of the Board for appropriate legislative or administrative action in order to integrate the cost accounting principles and the cost accounting system certification process under this subchapter into existing rail carrier rate regulation under this title, including determinations under section 10709 of this title.

'So in original. Probably should be "subtitle".

11-617 VOL. 18 0-84-63

Interstate Commerce Commission authority over noncarrier that acquires control of carrier.

11349.

11350.

11351.

Temporary operating approval for transactions involving motor and water carriers. Responsibility of the Secretary of Transportation in certain transactions. Supplemental orders.

SUBCHAPTER IV-FINANCIAL STRUCTURE

Scope of authority: changes in financial structure.

Criteria for approval and authority.

11361.

11362.

11363.

Assent of holders of securities and certain

AMENDMENTS

1982-Pub. L. 97-261, § 19(a), Sept. 20, 1982, 96 Stat. 1121, struck out item 11302, which read "Issuance of securities and assumption of obligations and liabilities by motor carriers".

Pub. L. 97-261, § 21(e), Sept. 20, 1982, 96 Stat. 1123, struck out "of property" after "motor carrier" in item 11345a.

1980-Pub. L. 96-296, § 27(b), July 1, 1980, 94 Stat. 819, added item 11345a.

Pub. L. 96-258, § 1(13)(B), June 3, 1980, 94 Stat. 427, added item 11351.

(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 subchapter I of chapter 2A, chapter 2B, and subchapter I of chapter 2D of title 15, 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 other. wise 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 par ties 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 subdivi

sion of one of them.

(Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1428.)

Feb. 4, 1887, ch. 104, 24 Stat. 379, 20a (less (11) 2d, 3d, and 4th sentences, and (12)); added Feb. 28, 1920, Ch. 91, 439, 41 Stat. 494; Aug. 9, 1935, ch. 498, § 1, 49 Stat. 543; Aug. 2, 1949, ch. 487, 10, 63 Stat. 487; July 24, 1965, Pub. L. 89-86, § 1, 79 Stat. 263.

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 en