the conveyance date in 1976, and the terms and conditions upon which the additional funding would be provided. None of the cash forecasts which were considered contemplated any payment of taxes by the Trustees.
Section 605 was a last-minute addition to the amendatory statute, and received very little consideration or debate. The Senate committee never considered it. Congressman Rinaldo, the sponsor of § 605, explained to the House Committee on Interstate and Foreign Commerce that the purpose of his measure was to impose a requirement "that henceforth any such tax monies must pass through and be given to the governmental body to which they are legally owed." Hearings on H.R. 2051 and S. 231, Committee on Interstate and Foreign Commerce, 94th Cong., 4th Sess. 234 (1975).
It is simply inconceivable that Congress, having carefully made a judgment as to the amount of additional funding which would be required to keep the railroads operating until the conveyance date under the RRRA, and having, with frequently expressed reluctance, provided that necessary funding, intended, simultaneously and without significant discussion, to require the railroad to make an immediate payment of $30 million from non-existent funds.
In interpreting § 605 of the 1975 amendments, I am required to consider it in the context of the entire system of laws of which it forms a part. Brown v. Duchesne, 60 U.S. 183, 194, 15 L. Ed. 595 (1856). Construed in conjunction with § 77(j) of the Bankruptcy Act, 11 U.S.C. § 205(j), the RRRA, and the 1975 amendments themselves, § 605 seems clearly to have been intended to relate only to tax payments collected by the Trustees from tenants after the effective date of the statute. Moreover, subsection (b) of § 605 imposes criminal sanctions. In reliance upon Order No. 70, which was upheld by the Court of Appeals and denied review by the Supreme Court, the Trustees spent the money collected from tenants before § 605 was enacted. It is inconceivable that Congress intended to require the Trustees, under pain of criminal penalties, to do the impossible, namely, restore to the Debtor's estate and thence to the taxing authorities funds long since spent with judicial approval.
The taxing authorities argue that the effect of § 605 was to declare that all sums received from tenants attributable to taxes constitute trust funds. The relevance of this characterization is not entirely clear. In a sense, the argument proves too much, since it bolsters the connotation that Congress was dealing with funds actually held by the Trustees, rather than funds previously expended with court authorization. Moreover, with respect to sums due by reason of an alleged breach of trust, the obligation of the Trustees would presumably rank as an administrative claim of high priority, but it is not clear that this ranking would be any better than that already accordable to all claims for post-reorganization taxes. In short, characterizing payments received from tenants for taxes as trust funds would not really shed any further light upon Congressional intent as to when such claims should be paid. Be that as it may, the argument that these monies should be regarded as trust funds is so clearly lacking in merit as to require no discussion.
For all the foregoing reasons, I am satisfied that the procedures outlined in the July 15, 1975 report of the Trustees are in conformity with § 605.
ORDER NO. 2049
AND NOW, this 20th day of October, 1975, upon consideration of the "Petition of the Trustees Respecting Their Compliance With § 605 of the Regional Rail Reorganization Act Amendments of 1975, Public Law 95-5," and after hearing thereon, it is hereby ORDERED:
1. That the actions taken and proposed to be taken by the Trustees as set forth in their July 15, 1975 Report to the Court are hereby approved as being in conformity with the requirements of § 605 of the Regional Rail Reorganization Act Amendments of 1975.
2. That the Trustees are authorized to continue making payments to the appropriate taxing districts in the manner set forth in the aforesaid Report dated July 15, 1975.
John P. Fullam / J.