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The words "is subject to this subtitle" are substituted for "shall be subject to all applicable provisions of this chapter and to the rules, regulations, and requirements of the Commission thereunder" for clarity and to eliminate redundancy.

§ 11350. Responsibility of the Secretary of Transportation in certain transactions

(a) When a rail carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title sends a proposed transaction to the Secretary of Transportation under section 11346(a) of this title or the Secretary develops a proposed transaction for submission to the Commission under that section, the Secretary shall publish a summary and a detailed account of the transaction in the Federal Register and give notice of the transaction to the Attorney General and to the chief executive officer of each State in which property of a rail carrier involved in the transaction is located. The Secretary shall initiate an informal proceeding on the proposed transaction under section 553 of title 5.

(b) By the 10th day after an application is submitted to the Commission under section 11346 of this title, the Secretary shall complete and send to the Commission a study of the proposed transaction about

(1) the needs of rail transportation in the geographical area affected by the transaction; (2) the effect of the transaction on competition in rail transportation and other modes of transportation in the geographical area affected by the transaction;

(3) the environmental impact of the transaction and of alternative choices of action;

(4) the effect of the transaction on employment;

(5) the cost of rehabilitation and modernization of track, equipment, and other facilities, with a comparison of the potential savings or losses from other possible choices of action;

(6) the rationalization of the rail system; (7) the impact of the transaction on shippers, consumers, and rail carrier employees;

(8) the effect of the transaction on communities in the geographical area affected by the transaction and on geographical areas contiguous to the affected areas; and

(9) whether the proposed transaction will improve rail service.

(Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1440.)

HISTORICAL AND REVISION NOTES

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tuted for "situated" for clarity. The words "under section 553 of title 5" are added for clarity in view of 49:1655(h).

In subsection (b), the words "shall complete and send to the Commission a study" are substituted for "submit a report to the Commission setting forth the results of each study conducted pursuant to clause (iv)" for clarity. The words "of the" are substituted for "with respect to" and "with respect to the proposed transaction which is the object of such study" for clarity. The words "the retention and promotion" are omitted as surplus. The words "in rail transportation and other modes of transportation" are substituted for "in the provision of rail and other transporta. tion services" for clarity.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 11346 of this title.

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Feb. 4, 1887, ch. 104, 24 Stat. 379, 5(10); added Feb. 28, 1920, ch. 91, § 407, 41 Stat. 480; June 16, 1933, ch. 91, § 202, 48 Stat. 218; restated Sept. 18, 1940, ch. 722, § 7, 54 Stat. 908; Feb. 5, 1976, Pub. L. 94-210, 403(a), (b)(5), 90 Stat. 63, 65.

The words "When cause exists" are substituted for "for good cause shown" for consistency with other sections of the revised title. The words "as it may deem necessary" are omitted as covered by "appropriate". The words "in a proceeding" are added for consisten

cy.

EFFECTIVE DATE

Section effective Oct. 17, 1978, see section 3(d) of Pub. L. 96-258, set out as an Effective Date of 1980 Amendment note under section 10525 of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 11912 of this title.

SUBCHAPTER IV-FINANCIAL

STRUCTURE

SUBCHAPTER REFERRED TO IN OTHER SECTIONS This subchapter is referred to in title 26 section 354. § 11361. Scope of authority: changes in financial

structure

(a) The authority of the Interstate Commerce Commission to act under this subchapter is exclusive. The Commission may approve and authorize a carrier, as defined in section 11301(a)(1) of this title, to change (1) a part of a class of its securities, as defined in section 11301(a)(2) of this title, or (2) a part of an instrument under which a class of its securities is

issued or a class of its obligations is secured. When a change is approved and authorized by the Commission under this subchapter, the carrier may carry out the change notwithstanding an express provision in the affected instrument or a State law and without getting other approval from the Commission or from a State authority. A person participating in carrying out a change that is approved and authorized under this subchapter is exempt from all other law, including State and municipal law, as necessary to let that person carry out the change. (b) The Commission may not approve an application filed under this section by a carrier that is in equity receivership or reorganization under subchapter IV of title 11.1

(c) A power granted to a carrier under this subchapter changes its powers under its corporate charter and under State law.

(d) This subchapter does not affect the negotiability of a security of a carrier or of the obligation of a carrier that assumed liability related to a security. This subchapter does not apply to an equipment-trust certificate under which a carrier is obligated, to an evidence of indebtedness of a carrier the payment of which is secured solely by equipment, or to another instrument under which that equipment-trust certificate or evidence of indebtedness was issued or by which either of them is secured.

(Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1441; Pub. L. 97-449, § 5(g)(9), Jan. 12, 1983, 96 Stat. 2443.)

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In subsection (a), the words "to act under this subchapter" are substituted for "conferred by this section" for clarity. The word "exclusive" is substituted for "exclusive and plenary" as being more appropriate. The words "in respect of any" are omitted as unnecessary in view of the restatement. The word "change" is substituted for "alteration or modification" as being more inclusive. The word "hereunder" is omitted as unnecessary in view of the restatement. The words "The Commission may approve and authorize When... approved and authorized . . . the carrier may carry out" are substituted for "It shall be lawful ... with the approval and authorization of the Commission . . . for a carrier" for clarity. The words "as provided in paragraph (2) of this section" are omitted as unnecessary in view of the restatement. The words "being hereinafter in this section sometimes called 'securities" are omitted as surplus. The words "of an instrument" are substituted for "of any mortgage, indenture, deed of trust, corporate charter, or other instrument" as being more inclusive. The words "hereinafter referred to as instruments" are omitted as unnecessary in view of the restatement. The words

'See References in Text note below.

"under which . . . is issued" are substituted for "pursuant to which . . . shall have been issued" for clarity. The words "may carry out the change" are substituted for "shall have full power to make any such alteration or modification and to take any actions incidental or appropriate thereto, and may make any such alteration or modification and take any such actions" as being more appropriate and precise. The words "notwithstanding an express provision in the affected instrument or a State law" are substituted for "any express provision contained in any mortgage, indenture, deed of trust, corporate charter, stock certificate, or other instrument or any provision of State law to the contrary notwithstanding" for clarity and as being more inclusive. The words "without getting other approval from the Commission or from a State authority" are substituted for "and any such alteration or modification may be made without securing the approval of the Commission under section 208 of Title 11 or other paragraph of this section, and without securing approval of any State authority" for clarity and as being more inclusive. The words "A person participating" are substituted for "any carrier and its officers and employees and any other persons, participating" as being more inclusive. The words "under this subchapter" are substituted for "under the provisions of this section" to conform to the restatement. The words "in carrying out" are substituted for "in the making... or the taking of any such actions" for clarity. The words "is exempt from all other law, including State and municipal law" are substituted for "shall be, and they are, relieved from the operation of all restraints, limitations, and prohibitions of law, Federal, State, or municipal" for clarity. The words "as necessary to let" are substituted for "as may be necessary to enable" for clarity. The words "so approved and authorized in accordance with the conditions and with the amendments, if any, imposed by the Commission" are omitted as surplus.

In subsection (b), the words "may not" are substituted for "shall not" for clarity. The words "that is" are substituted for "while" for clarity. The words "in process of" are omitted as surplus. The words following the 1st comma in the 1st sentence of 49:20b(13) are omitted as executed.

In subsection (c), the words "shall be deemed to be" are omitted as unnecessary. The words "in addition to" are omitted as surplus.

In subsection (d), the words "This subchapter does not affect" are substituted for "The provisions of this section shall not affect" for clarity. The words "in any way" are omitted as surplus. The words "related to a security" are substituted for "in respect thereto" for clarity. The words "Provided, That" are omitted as surplus. The words "This subchapter does not apply" are substituted for "the provisions of this section shall not apply" for clarity. The words "under which" are substituted for "in respect of which" for clarity.

REFERENCES IN TEXT

Subchapter IV of title 11, referred to in subsec. (b) probably means subchapter IV (§ 1161 et seq.) of chapter 11 of Title 11, Bankruptcy.

AMENDMENTS

1983-Subsec. (b). Pub. L. 97-449 substituted “subchapter IV" for "section 205".

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 11362 of this title.

§ 11362. Criteria for approval and authority

(a) A carrier may apply to the Interstate Commerce Commission for approval and authority to make a change under this subchapter. To approve a proposed change, the

§ 11362

TITLE 49-TRANSPORTATION

Commission must find that the proposed change

(1) is within the scope of section 11361 of this title;

(2) will be in the public interest;

(3) will be in the best interests of the carrier, of each class of its stockholders, and of the holders of each class of the carrier's obligations that are affected by the change; and

(4) will not be against the interests of a creditor of the carrier who is not affected by the change.

If the change involves an issuance of securities, the Commission must also make the findings required under section 11301(d)(1) of this title.

(b)(1) The Commission shall begin a proceeding under this section on receipt of an application but may require an applicant to get assurances of assent to the change from the holders of the outstanding shares of the securities that will be affected by the change before continuing with the proceeding. The Commission may determine the percentage of the principal amount or number of those shares needed to establish assurance of assent to the change. A class of securities is considered to be affected by a proposed change only if the change is proposed to a part of that class or to a part of an instrument under which that class was issued or by which it is secured. However, if a proposed change is to an instrument under which at least 2 classes of securities were issued and are outstanding or secured by that instrument, only those classes to which the change is related are considered to be affected. The Commission shall divide the securities to be affected by a proposed change under this subchapter into reasonable classes for purposes of this subchapter.

(2) On receipt of an application of a carrier under this section the Commission shall notify, and file a copy of the application with, the chief executive officer of each State in which that carrier operates. The appropriate authorities of those States are entitled to be admitted as parties to a proceeding under this section to represent the rights and interests of their people and States.

(c) The carrier must give notice of the proceeding to the holders of the class of securities affected. The Commission may direct the carrier to give notice to other persons the Commission determines to have an interest in the proceeding. The carrier may give notice under this subsection only after it gets assurances of assent when they are required under this section.

(d) The Commission may impose conditions governing the proposed change. The Commission may determine the effective date for a change it approves and authorizes under this subchapter and may allow it to become effective on publication of a declaration to that effect by the carrier. After an application is approved, the Commission may change a condition imposed and impose supplemental requirements for good cause shown subject to the requirements of this subchapter.

(Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1441.)

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In subsection (a), the words "A carrier may apply" are substituted for "the carrier seeking authority therefor shall, pursuant to such rules and regulations as the Commission shall prescribe, present an applica tion to the Commission" for clarity and to eliminate redundancy in view of section 10321(a) of the revised title that gives the Commission the general power to prescribe regulations to carry out the revised title. The words "To approve a proposed change, the Commission must find" are substituted for "If the Commission, after hearing ... shall find that" for clarity. The words "after hearing" are omitted from the sentence in view of subchapter II of chapter 5 of title 5. The word "If" is substituted for "in any case where" for clarity. The words "not inconsistent with pars. graph (1) of this section" are omitted as surplus.

In subsection (b)(1), the words "on receipt of an application" are substituted for "Upon presentation of any such application" for clarity. The words "Commis sion shall begin a proceeding" are substituted for "the Commission shall set such application for public hear ing" for clarity in view of subchapter II of chapter 5 of title 5. The words "but may require an applicant" are substituted for "may, in its discretion, but need not" to eliminate redundancy. The words "to get" are substituted for "to secure" for clarity. The word "change" is substituted for "alteration or modification" for consistency. The words "before continuing with the proceeding" are substituted for "as a condition precedent to further consideration" for clarity. The words "The Commission may determine" are substituted for "as the Commission shall in its discretion determine" for clarity. The words "For the purposes of this section" are omitted as unnecessary in view of the restatement. The words "is considered" are substituted for "shall be deemed" for clarity. The word "part" is substituted for "provision" for consistency. The words "under which" are substituted for "pursuant to which" for clarity. The words "However, if" are substituted for "Provided, That in any case where" for clarity. The words "at least 2" are substituted for "more than one" for clarity. The words "were issued and are outstanding" are substituted for "shall have been issued and be outstanding" for clarity. The words "only those classes to which the change is related are considered to be af fected" are substituted for "any alteration or modification proposed as to any provision of such instrument which does not relate to all of the classes of securities issued thereunder, shall be deemed to affect only the class or classes of securities to which such alteration or modification is related" for clarity. The words "under this subchapter" are substituted for "for the purposes of this section" to conform to the revised title. The word "reasonable" is substituted for "just

and reasonable" for clarity. See the revision note to section 10101 of the revised title. The words "as it shall determine" are omitted as unnecessary in view of subchapter II of chapter 5 of title 5.

In subsection (b)(2), the text of the source provision is omitted and the relevant part of 49:20a(6) is added for clarity. The words "chief executive officer" are substituted for "Governor" since the District of Columbia is included in the definition of "State" in section 10102 of the revised title.

In subsection (c), the words "shall set such application for public hearing" are omitted as unnecessary in view of the restatement. The words "The carrier must give notice of the proceeding" are substituted for "the carrier shall give reasonable notice of such hearing" for clarity and to eliminate the qualification "reasonable" since the Commission may prescribe the manner in which notice is given. The words "The carrier may give notice under this subsection only after it gets assurances of assent when they are required under this section" are substituted for "If the Commission shall not require the applicant to secure any such assurances, or when such assurances, as the Commission may require shall have been secured . . . [the carrier shall give... notice]" for clarity. The words "in such manner, by mail, advertisement, or otherwise, as the Commission may find practicable and may direct" are omitted as unnecessary in view of the restatement.

In subsection (d), the words "impose conditions governing" are substituted for "subject to such terms and conditions and with such amendments as it shall determine" for clarity. The words "just and reasonable" are omitted as unnecessary in view of the criteria for approval under the revised section and in view of section 706 of title 5. The words "The Commission may determine" are substituted for "Such order shall make provisions as to" for clarity. The words "the effective date" are substituted for "the time when ... shall become and be binding" for clarity. The word "binding" is omitted from the sentence in view of subchapter II of chapter 103 of the revised title. The words "may allow" are substituted for "which may be❞ for clarity. The last sentence is substituted for 49:20b(8) (last sentence) for clarity in view of subchapter II of chapter 5 of title 5 and subchapter II of chapter 103 of the revised title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 11363 of this title.

§ 11363. Assent of holders of securities and certain other instruments

(a)(1) After making the findings required under section 11362(a) of this title, the Commission may approve and authorize the change if it is assented to by the holders of at least 75 percent of the aggregate principal amount or number of outstanding shares of each class of securities affected by the change. The Commission may increase the percentage required for assent under this subsection for a class of shares when an increase is in the public interest and

(A) 75 percent of the shares in that class are held by less than 25 security holders; or

(B) that class is entitled to vote for the election of directors of the carrier and the Commission determines that the assent of at least 25 percent of the security holders of that class are controlled by the carrier or a person controlling the carrier.

(2) The carrier may withdraw its application after the Commission makes the findings required under section 11362(a) of this title. If the application is not withdrawn, the Commis

sion must require the carrier to submit the proposed change, with conditions imposed by the Commission, to the holders of each class of its securities affected by the change for their assent or rejection.

(b)(1) In determining the percentage of outstanding securities when making a finding under section 11362(a) of this title, a security that secures an evidence of indebtedness of the carrier or of a company controlling or controlled by the carrier is considered to be outstanding unless the Commission determines that the proposed change does not materially affect the interest of the holder of that evidence of indebtedness. When that security is considered to be outstanding, assent to a proposed change may be given, notwithstanding another instrument, only

(A) if the security is pledged as security under an instrument under which an evidence of indebtedness was issued and is outstanding, by the holder of a majority of the principal amount of the evidence of indebtedness; or

(B) if the security secures an evidence of indebtedness not issued under an instrument under which an evidence of indebtedness was issued, by the holder of the evidence of indebtedness.

(2) In addition to a submission required under subsection (a) of this section, the Commission shall require the carrier to submit a proposed change to a security referred to in this subsection, with requirements imposed by the Commission, to the holder of the evidence of indebtedness referred to in paragraph (1)(A) and (B) of this subsection as appropriate, for assent or rejection. A carrier is not required to submit the change to the trustee of the instrument referred to in that paragraph.

(c) If the Commission determines that the assent of the holder of a security not entitled to vote for the election of directors of the carrier or an evidence of indebtedness is in the control of the carrier or of a person controlling the carrier, that security or evidence of indebtedness is not considered to be outstanding.

(Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1442.) HISTORICAL AND REVISION NOTES

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11363(a) (2).

11363(b)....

49:20b(2) (4th sentence words between 8th

comma and

period).

49:20b(3) (2d and 3d sentences). 11363(c)..... 49:20b(3) (less 1st-3d and last sentences).

Feb. 4, 1887, ch. 104, 24 Stat. 379. § 20b(2) (4th sentence, words between 8th comma and period, 8th sentence), (3) (less 1st and last sentences); added Apr. 9, 1948, ch. 180, 2, 62 Stat. 163; Aug. 16, 1957, Pub. L. 85-150, 1, 2, 71 Stat. 369.

In subsection (a)(1), the words "After making the findings required under section 11362(a) of this title" are added for clarity. The words "the Commission may approve and authorize the change if it is assented to"

are substituted for "If the Commission shall find that as a result of such submission the proposed alteration or modification has been assented to... the Commission shall enter an order approving and authorizing the proposed alteration or modification upon the terms and conditions and with amendments, if any, so determined to be just and reasonable" for clarity and to eliminate redundancy in view of subsection (b) of the restated section. The words "The Commission may increase the percentage required for assent under this subsection" are substituted for "such larger percentage, if any as the Commission may determine" for clarity. The words "just and reasonable" are omitted in view of the criteria for an increase under the revised section and in view of section 706 of title 5. The words "at least 25" are substituted for "25 ... or more" for consistency.

In subsection (a)(2), the words "The carrier may withdraw its application" are substituted for "(unless the applicant, carrier shall withdraw its application)" for clarity. The words "must require the carrier to submit" are substituted for "shall cause the carrier to submit" for clarity. The words "in such manner as it shall direct" are omitted as unnecessary in view of the restatement in section 11364(a) of the revised title.

In subsection (b)(1), the words "In determining . . when making a finding under section 11362(a) of this title" are substituted for "For the purpose of the finding of the Commission referred to in paragraph (2) of this section" for clarity. The words "the percentage of outstanding securities" are substituted for "as to whether the required percentage of the aggregate principal amount of number of shares outstanding of each class of securities affected by any proposed alteration or modification has assented to the making of such alteration or modification" for clarity and to eliminate redundancy in view of the restatement. The words "is considered" are substituted for "shall be deemed" for clarity. The words "in its discretion" are omitted as surplus. The words "that evidence of indebtedness" are substituted for "the evidence or evidences of indebtedness secured by such security" for clarity. The words "When that security is considered to be outstanding" are substituted for "Whenever any such pledged security is, for said purposes, to be deemed outstanding" for consistency. The words "in respect of such security" are omitted as unnecessary in view of the restatement. The words "notwithstanding another instrument" are substituted for "any express or implied provision in any mortgage, indenture, deed of trust, note or other instrument to the contrary notwithstanding" as being more inclusive. The words "as follows" are omitted as surplus. The word "instrument" is substituted for "mortgage, indenture, deed of trust, or other instrument" for consistency. The words "and in any such case" are omitted as surplus.

In subsection (b)(2), the words "shall require" are substituted for "shall cause" for clarity. The words "in such manner as it shall direct" are omitted as unnecessary in view of the restatement. The words "as the Commission shall have determined to be just and reasonable" are omitted as unnecessary in view of the restatement. The words "referred to in paragraph (1)(A) and (B) of this subsection as appropriate" are substituted for "issued and outstanding pursuant to such mortgage, indenture, deed of trust, or other instrument, or . . . not so issued" for clarity and to eliminate redundancy. The words "A carrier is not required to submit" are substituted for "need not be submitted" for clarity. The words "but assent in respect of any such security shall be determined as hereinbefore in this section provided" are omitted as surplus.

In subsection (c), the words "For the purposes of this section" are omitted as unnecessary in view of the restatement. The words "Commission determines" are substituted for "in the determination of the Commission" for clarity. The words "the assent of the holder of a security not entitled to vote for the election of directors of the carrier or an evidence of indebtedness is in the control of the carrier or of a person controlling

the carrier" are substituted for “a security (other than a security entitled to vote for the election of directors of the carrier) or an evidence of indebtedness... the assent of the holder thereof . . . is within the control of the carrier or of any person or persons controlling the carrier" for clarity.

§ 11364. Procedure

(a) The Commission may prescribe the manner in which assents, assurances of assent, or rejections of the security holders may be solicited whether the solicitation is made before or after the Commission approves and authorizes the proposed change.

(b) The Commission may approve a bank or trust company, incorporated under the law of the United States or a State, that is a member of the Federal Reserve System and has a capital and surplus of at least $2,000,000, to receive assents and revocations of assents from security holders. The Commission may require the security holders to send those assents and revocations to that bank or trust company. That bank or trust company shall certify the result of the submission to the Commission. The Commission may rely on that certification as conclusive evidence in determining the result of that submission.

(Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1443.)

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The words "may prescribe" are substituted for "shall have the power to make such general rules and regulations and such special requirements in any par ticular case" for clarity in view of section 10321(a) of the revised title giving the Commission the power to prescribe regulations to carry out the revised subtitle. The words between the semicolon and period in 49:20b(2) (5th sentence) are omitted as surplus. The words "The Commission may rely" are substituted for "the Commission may, in its discretion, rely" for clar ity.

§ 11365. Effect of change on other persons

(a) When a change becomes effective under this subchapter, the change is binding on, and changes the rights of

(1) each holder of a security of the carrier of each class affected by the change; and

(2) a trustee or other party to an instru ment under which a class of securities has been issued or by which it is secured.

(b) An authorization and approval of a change under this subchapter is authority for, and approval of, a corresponding change of the obligation of another carrier that assumed liability related to that class of securities if that carrier consents to the change in writing. When consent is given, the corresponding change becomes effective when the change of the class of securities or instrument becomes binding. A person who is liable or obligated on a class of

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