Page:United States Statutes at Large Volume 90 Part 1.djvu/128

 90 STAT. 7 8 Publication in Federal Register.

PUBLIC LAW 9 4 - 2 1 0 — F E B. 5, 1976 (g) NOTICE.—Upon receipt of an application for the guarantee of an obligation under this section, the Secretary shall cause a notice of such application to be published in the Federal Register and shall invite and afford interested persons a n opportunity to submit comments on such application. (h) PREQUISITES FOR GUARANTEES.—No obligation shall be guaranteed and no commitment shall be made to guarantee any obligation under this section, unless and until the Secretary makes a finding in writing that— (1) a n obligation for equipment acquisition, rehabilitation, o r improvement is secured by the particular equipment which is to be financed or refinanced by such obligation; (2) payment of the obligation is required by its terms to be made within 25 j^ears from the date of its execution; (3) the financing or refinancing is justified by the present and probable future demand for rail services to be rendered by the applicant and will serve to meet demonstrable needs for rail services and to provide shippers with improved service; (4) the applicant has given reasonable assurances that the facilities or equipment to be acquired, rehabilitated, o r improved with the proceeds of the obligation will be economically and efficiently utilized; (5) the probable value of any equipment or facilities to be improved, rehabilitated, or acquired is sufficient to provide the United States with reasonable security and protection in the event of default by the obligor, in the case of repossession by the holder of the obligation or i n the case of possession or purchase by the Secretary; and (6) the transaction will result in an improvement in the ability of any affected railroad to t r a n s p o r t passengers or freight. (i) GENERAL REQUIREMENT.—The recipients of any g u a r a n t e e s of, or

Periodic inspection.

of any commitments to guarantee, an obligation under this section, shall, consistent with their capital resources, maintain their facilities. on a continuing basis, i n accordance w i t h standards promulgated under this subsection. The Secretary shall assure compliance with this requirement by regular periodic inspection. (j) CONDITIONS OF GUARANTEES.—No g u a r a n t e e of, and n o commit-

Hearing.

ment to guarantee, an obligation may be granted, approved, or extended under this section, unless the obligor first agrees in writing that so long as any principal o r interest is due and payable on such obligation— (1) there will be no increase in discretionary dividend payments over the average ratio which such payments bore to eiamings for the applicable fiscal period during the 5 years preceding such proposed increase, without prior approval of such increase by the Secretary; (2) the (Obligor will not use assets or revenues (other than cash) related to or derived from railroad operations in nonrailroad enterprises, without prior approval in writing from the Secretary; and (3) the obligor will take all reasonable and practicable steps possible, in accordance with such guidelines as may be established by the Secretary, to improve the ec[uitable distribution and efficient and expeditious use of all equipment and facilities in order to improve rail service. A p p r o v a l under paragraph (1) o r (2) of this subsection may only be granted if, after a public hearing with an opportunity for interested persons to submit comments, the Secretary makes a written finding

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