§1321 Rail service obligations

Summary

For five years starting on October 21, 1986, the Corporation must follow several rules about spending, programs, sales, and maintenance. Each year it must spend either the amount of its accounting depreciation or $500,000,000 on capital spending, whichever is larger. The Board can lower that yearly spending if sound business and engineering reasons justify it, but spending cannot be below these cumulative minimums after the sale date: $350,000,000 in year 1, $700,000,000 in years 1–2, $1,050,000,000 in years 1–3, $1,400,000,000 in years 1–4, and $1,750,000,000 in years 1–5. The Corporation must keep its affirmative action and minority vendor programs as they were on February 8, 1985, follow normal business rules when selling assets (and not sell most of its railroad assets to anyone except a wholly owned subsidiary), offer any line the regulator approves for abandonment to a buyer who will provide connecting rail service for 120 days at a price equal to 75 percent of the regulator’s net liquidation value, and keep its properties in good repair and not postpone normal maintenance. Within 90 days after each fiscal year ends (or when audited statements are ready), an executive officer must send the Secretary of Transportation a signed certificate saying the Corporation meets the requirements above and include audited consolidated financial statements. Within 5 days after declaring any common or preferred stock dividend, an executive officer must send a signed certificate saying the dividend keeps the Corporation in compliance with dividend rules in this law and include quarterly financial statements and a report of total capital spending. One other numbered provision was repealed.