---
kind: "section"
citation: "45 U.S.C. § 746"
title: "45"
title_heading: "Railroads"
number: "746"
heading: "Certificates of value"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/45/746"
units:
  - "Chapter 16 — Regional Rail Reorganization"
  - "Subchapter III — Consolidated Rail Corporation"
---

# §746. Certificates of value

- (a) **General—** On the date when the [Corporation](/usc/45/702.md?p=5) is required to deposit securities with the [special court](/usc/45/1104.md?p=8) pursuant to [section 743(a)(1) of this title](/usc/45/743.md?p=a-1), the [Association](/usc/45/702.md?p=1) shall deposit with the [special court](/usc/45/1104.md?p=8) the certificates of value of the [Association](/usc/45/702.md?p=1) required by this section. The [Secretary](/usc/45/702.md?p=18) shall guarantee the payment of all certificates of value delivered in accordance with this subchapter. All guarantees entered by the [Secretary](/usc/45/702.md?p=18) under this section shall constitute general obligations of the United States of America for the payment or redemption of which its full faith and credit are pledged. Such guarantees shall be valid and incontestable except as to mutual mistake of fact or as to fraud or material misrepresentation by the holder of such certificates or the transferor of [rail properties](/usc/45/702.md?p=14) to which certificates of value of any series so guaranteed are issued.
- (b) **Number and distribution—** A separate series of certificates of value shall be issued to each [railroad in reorganization](/usc/45/702.md?p=16) in the [region](/usc/45/702.md?p=17) and each person leased, operated, or controlled by such a [railroad](/usc/45/702.md?p=15) that transfers [rail properties](/usc/45/702.md?p=14) to the [Corporation](/usc/45/702.md?p=5) or a [subsidiary](/usc/45/702.md?p=20) thereof. The number of certificates of value of each series to be deposited pursuant to [subsection (a)](#a) shall be equal to the number of shares of series B preferred stock of the [Corporation](/usc/45/702.md?p=5) which are required to be deposited by the [Corporation](/usc/45/702.md?p=5) with the [special court](/usc/45/1104.md?p=8), pursuant to [section 743(a)(1) of this title](/usc/45/743.md?p=a-1) in exchange for the [rail properties](/usc/45/702.md?p=14) transferred to the [Corporation](/usc/45/702.md?p=5) or a [subsidiary](/usc/45/702.md?p=20) thereof by such transferor. Certificates of value of the appropriate series shall be distributed by the [special court](/usc/45/1104.md?p=8), pursuant to [section 743(c)(4) of this title](/usc/45/743.md?p=c-4), at the same time to the same transferors, and in the same numbers of units as shares of such series B preferred stock are distributed to such transferor.
- (c) **Redemption—**
  - (1) Certificates of value, of any series, shall be redeemed by the [Association](/usc/45/702.md?p=1) on December 31, 1987, or on such earlier date as the Board of Directors of the [Association](/usc/45/702.md?p=1) and the [Finance Committee](/usc/45/702.md?p=9) jointly may determine and specify.
  - (2) Each certificate of value of each series shall be redeemable for an amount, payable in cash, equal to its base value on the redemption date, minus—
    - (A) the sum of the fair market value of the series B preferred stock applicable to such certificate, the fair market value of the common stock applicable to such certificate, and all cash dividends theretofore paid on any such series B preferred stock and on any such common stock; and
    - (B) any sums paid to a transferor of [rail properties](/usc/45/702.md?p=14) to whom such series of certificates of value was issued resulting from sales or leases by the [Corporation](/usc/45/702.md?p=5) of properties transferred to it by such transferor divided by the number of certificates of value distributed to such transferor.
  - (3) The number of shares of series B preferred stock and common stock applicable to each certificate of value of any series, pursuant to paragraph (2) of this subsection, shall be—
    - (A) one share of series B preferred stock (adjusted to reflect any stock splits, stock combinations, reclassifications or similar transactions affecting the number of shares of outstanding series B preferred stock following the date of distribution pursuant to [section 743(c)(4) of this title](/usc/45/743.md?p=c-4)); and
    - (B) the number of shares of common stock determined by dividing the total number of shares of common stock distributed pursuant to [section 743(c)(4) of this title](/usc/45/743.md?p=c-4) to the transferor receiving such series of certificates of value (adjusted to reflect any stock splits, stock combinations, reclassifications, or similar transactions affecting the number of shares of outstanding common stock following the date of distribution pursuant to [section 743(c)(4) of this title](/usc/45/743.md?p=c-4)) by the total number of certificates of value in the series so distributed to such transferor.
  - (4) The base value of each certificate of value of any series shall be the value obtained by (A) taking the net liquidation value, as determined by the [special court](/usc/45/1104.md?p=8), to which the transferor to whom such series of certificates of value is issued is entitled by virtue of transfers of [rail properties](/usc/45/702.md?p=14), under [section 743(b)(1) of this title](/usc/45/743.md?p=b-1) to the [Corporation](/usc/45/702.md?p=5) or a [subsidiary](/usc/45/702.md?p=20) thereof; (B) subtracting the value of other benefits provided under this chapter, as determined by the [special court](/usc/45/1104.md?p=8); (C) adding such amount, if any, as the [special court](/usc/45/1104.md?p=8) may determine shall be required after taking into consideration compensable unconstitutional erosion, if any, in the estate of a [railroad in reorganization](/usc/45/702.md?p=16), or of a [railroad](/usc/45/702.md?p=15) leased, operated, or controlled by such a [railroad](/usc/45/702.md?p=15), which the [special court](/usc/45/1104.md?p=8) finds to have occurred during any bankruptcy proceeding with respect to such [railroad](/usc/45/702.md?p=15); (D) adding interest from the transfer date to the redemption date to be compounded annually at a rate of 8 percent per annum; and (E) dividing the resulting value by the number of certificates of value of such series distributed to such transferor. In determining such base value, the [special court](/usc/45/1104.md?p=8) shall give due weight and consideration to the finding of the [Association](/usc/45/702.md?p=1) as to the net liquidation value to which each transferor is entitled by virtue of conveyances of [rail properties](/usc/45/702.md?p=14) under [section 743(b)(1) of this title](/usc/45/743.md?p=b-1). For purposes of this paragraph, the term “[rail properties](/usc/45/702.md?p=14)” includes all rights with respect to employee benefit plans transferred and assigned to the [Corporation](/usc/45/702.md?p=5) pursuant to [section 743(b)(6) of this title](/usc/45/743.md?p=b-6). Net liquidation value with respect to such rights shall be determined after taking into account all obligations finally transferred or assigned to the [Corporation](/usc/45/702.md?p=5) pursuant to such section.
  - (5) The fair market value of series B preferred stock and of common stock of the [Corporation](/usc/45/702.md?p=5) shall be determined in accordance with regulations prescribed by the [Association](/usc/45/702.md?p=1), on the basis of the average price of each such security in the primary established market in which such securities are traded over a period of 120 consecutive trading days ending not less than 20 nor more than 40 trading days preceding the redemption date, or, in the case of a security for which there is not an established trading market, on the basis of the fair market value thereof as determined by the majority vote of three experts in the valuation of securities, one to be selected by the [Association](/usc/45/702.md?p=1), one to be selected by the directors of the [Corporation](/usc/45/702.md?p=5) elected by the holders of the security to be valued, and one to be selected by the two first selected.
- (d) **Authorization of appropriations—** There are authorized to be appropriated to the [Secretary](/usc/45/702.md?p=18) such sums as are necessary to discharge the obligations of the United States arising under this section.

## Source credit

(Pub. L. 93–236, title III, § 306, as added Pub. L. 94–210, title VI, § 610(b), Feb. 5, 1976, 90 Stat. 104; amended Pub. L. 94–248, §§ 2, 3, Mar. 25, 1976, 90 Stat. 286.)

## Notes

### Editorial Notes

### Amendments

1976—Subsec. (c)(3)(A). Pub. L. 94–248, § 2, substituted “adjusted to reflect” for “without regard to”.

Subsec. (c)(3)(B). Pub. L. 94–248, § 3, inserted provisions relating to adjustment of number of shares of common stock to reflect any stock splits, stock combinations, etc.

### Statutory Notes and Related Subsidiaries

### Abolition of Special Court, Regional Rail Reorganization Act of 1973, and Transfer of Functions

Special court abolished and all jurisdiction and functions transferred to United States District Court for District of Columbia, see section 719(b)(2) of this title.

### Abolition of United States Railway Association and Transfer of Functions and Securities

See section 1341 of this title.

### Applicability of National Environmental Policy Act

Application of National Environmental Policy Act to actions of Commission not affected by title VI of Pub. L. 94–210, see section 619 of Pub. L. 94–210, set out as a note under section 791 of this title.