Page:United States Statutes at Large Volume 72 Part 1.djvu/611

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STAT.]

PUBLIC LAW 86-626-AUG. 12, 1968 "LOAN GUARANTIES

"SEC. 503. I n order to carry out the purpose declared in section 601, the Commission, upon terms and conditions prescribed by it and consistent with the provisions of this part, may guarantee in whole or in part any public or private financmff institution, or trustee under a trust indenture or agreement for the benefit of the holders of any securities issued thereunder, by commitment to purchasCj agreement to share losses, or otherwise, against loss of principal or interest on any loan, discount, or advance, or on any commitment in connection therewith, which may be made, or which may have been made, for the purpose of aiding any common carrier by railroad subject to this Act in the financing or refinancing (1) of additions and betterments or other capital expenditures, made after January 1, 1957, or to reimburse the carrier for expenditures made from its own funds for such additions and betterments or other capital expenditures, or (2) of expenditures for the maintenance of property: Provided, That in no event shall the aggregate principal amount of all loans guaranteed by the Commission exceed$500,000,000. "LIMITATIONS

"SEC. 504. (a) No guaranty shall be made under section 503— "(1) unless the Commission finds that without such guaranty, in the amount thereof, the carrier would be unable to obtain necessary funds, on reasonable terms, for the purposes for which the loan is sought; "(2) if in the judgment of the Commission the loan involved is at a rate of interest which is unreasonably high; " (3) if the terms of such loan permit full repayment more than fifteen years after the date thereof; or "(4) unless the Commission finds that the prospective earning power of the applicant carrier, together with the character and value of the security pledged, if any, furnish reasonable assurance of the applicant's ability to repay the loan within the time fixed therefor and reasonable protection to the United States. A statement of the findings of the Commission required under the provisions of this subsection shall be made a matter of public record by the Commission with respect to each loan guaranteed under the provisions of this part. " (b) I t shall be unlawful for any common carrier by railroad subject to this Act to declare any dividend on its preferred or common stock while there is any principal or interest remaining unpaid on any loan to such carrier made for the purpose of financing or refinancing expenditures for maintenance of property of such carrier, and guaranteed under this part. "MODIFICATIONS

"SEC. 505. The Commission may consent to the modification of the provisions as to rate of interest, time of payment of interest or principal^ security, if any, or other terms and conditions of any guaranty which it shall have entered into pursuant to this part, or the renewal or extension of any such guaranty, whenever the Commission shall determine it to be equitable to do so. "PAYMENT OF GUARANTIES; ACTION TO RECOVER PAYMENTS MADE

"SEC. 506. (a) Payments required to be made as a consequence of any guaranty by the Commission made under this part shall be made by the Secretary of the Treasury from funds hereby authorized to be

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