Page:United States Statutes at Large Volume 90 Part 2.djvu/1157

 PUBLIC LAW 94-555—OCT. 19, 1976

90 STAT. 2625

205), and (II) the railroad subject to such reorganization plan was in reorganization under such section 77 prior to the date of H USC 205. enactment of this Act,"; (2) in clause (iii) thereof, by inserting immediately after "other than common stock" the following: "(except in those cases in which the Secretary has provided for subordination pursuant to clause (i) of this paragraph) which is"; REDEMPTIOISr PAYMENTS AND INTEREST RATE

SEC. 214. (a) Section 506(a)(4) of the Kailroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 826(a)(4)) is amended Ante, p. 73. by striking out the period at the end thereof and inserting in lieu thereof the following: "and, except to permit the railroad to prepay its redemption payments, the number of such annual redemption payments shall in no event be less than 15; and". (b) Section 506(a) of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 826(a)) is amended by adding at the end thereof the following new paragraph: "(5) the proceeds from the issuance of which are to be expended solely to reduce the deferred maintenance on facilities, shall in no event yield (A) less than the minimum permissible yield determinable in accordance with paragraphs (3) and (4) of this subsection, nor (B) more than such railroad's rate of return on total capital (represented by the ratio which such carrier's net income, including interest on long-term debt, bore to the sum of the average shareholder's equity, long-term debt, and accunuilated deferred income tax credits for the three fiscal years preceding the date of submission of the application) as determined in accordance with the uniform system of accounts promulgated by the Commission in those cases in which such rate of return exceeded such minimum permissible yield.". OBLIGATION GUARANTEES

SEC. 215. (a) Section 511 of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 831) is amended by striking out Ante, p. 76. subsection (c) thereof and inserting in lieu thereof the following new subsection: "(c) FULL. FAITH AND CREDIT.—All guarantees entered into by the Secretary under this section shall constitute general obligations of the United States of America backed by the full faith and credit of the United States of America.". (b) Section 511(h) of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 831(h)) is amended— (1) in paragraph (1) thereof, by inserting " (A) " immediately after "secured", and by inserting immediately before the semicolon the following ", or (B) in the case of the rehabilitation or improvement of leased equipment, by the lease"; and (2) by amending paragraph (5) thereof to read as follows— "(5) the prospective earning power of the applicant, or the value or prospective earning power of any equipment or facilities to be improved, rehabilitated, or acquired (or any combination of the foregoing), together with any other security offered by the applicant, is sufficient to provide the United States with reasonable security and protection, except that if the value or prospective earning power of such equipment or facilities is equal to or

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