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PUBLIC LAW 92-349-JULY 13, 1972

[86

STAT.

Public Law 92-349 July 13, 1972 [H. R. 1 5 5 0 7 ]

National Capital Transportation Act of 1972.

AN ACT To amend the National Capital Transportation Act of 1969 to provide for Federal guarantees of obligations issued by the Washington Metropolitan Area Transit Authority, to authorize an increased contribution by the District of Columbia, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "National Capital Transportation Act of 1972". TITLE I—FEDERAL GUARANTEES OF WASHINGTON M E T R O P O L I T A N A R E A T R A N S I T AUTHORITY OBLIGATIONS

"I*?;ie?:i44i SEC. 101. The National Capital Transportation Act of 1969 is note. " ° * * amended by adding at the end thereof the following new sections: "GUARANTEE or TRANSIT AUTHORITY OBLIGATIONS

9. (a) The Secretary of Transportation is authorized to guarantee, and to enter into commitments to guarantee, upon such terms and conditions as he may prescribe, payment of principal of and interest on bonds and other evidences of indebtedness (including shortterm notes) issued with the approval of the Secretary of the Treasury by the Transit Authority under the Compact. No such guarantee or commitment to guarantee shall be made unless the Secretary of Transportation determines and certifies that— "(1) the obligation to be guaranteed represents an acceptable financial risk to the United States and the prospective revenues of the Transit Authority (including payments under section 10) furnish reasonable assurance that timely payments of interest on such obligation will be made; "(2) the Transit Authority has entered into an agreement with the Secretary of Transportation providing for reasonable and prudent action by the Transit Authority respecting its financial condition if at any time the Secretary, in his discretion, determines that such action would be necessary to protect the interest of the United States; "(3) unless the obligation is a short-term note (as determined by the Secretary), it will be sold through a process of competitive bidding as prescribed by the Secretary of Transportation; and "(4) the rate of interest payable with respect to such obligation is reasonable in light of prevailing market yields. Notwithstanding clause (3) of the preceding sentence, the Secretary of Transportation may guarantee an obligation under this section sold through a process of negotiation if he makes a determination that prevailing market conditions would result in a higher net interest cost or would otherwise increase the cost of issuing the obligation if the obligation was sold through the competitive bidding process. The Secretary's determination shall be in writing and shall contain a detailed explanation of the reasons therefor. " (b) Any guarantee of obligations made by the Secretary of Transportation under this section shall be conclusive evidence of the eligibility of the obligations for such guarantee, and the validity of any guarantee so made shall be incontestable, except for fraud or material misrepresentation, in the hands of a holder of the guaranteed obligation. ,, ^....... ,, •"SEC.

Conditions.

Conclusive evidence of eli bility.

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