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July 24, 1956

(s. 30731

Public Law 757

CHAPTER 669

AN ACT
To grant a franchise to 1), C. Transit System, Inc., and for other purposes.

Be it onucted by the Senate and House of Representatives of the D. C. Trenele United States of America in Congress assembled,

Syat om, Inc.

Franchise.

TITLE I

Part 1.-FRANCHISE PROVISIONS

nota.

Definitions,

SECTION 1. (a) There is hereby granted to D. C. Transit System, Inc., a corporation of the District of Columbia (referred to in this part as the "Corporation") a franchise to operate a mass transportation system of passengers for hire within the District of Columbia and between the District of Colunibia and points within the area (referred · to in this part as the “Washington Metropolitan Area”) comprising all of the District of Columbia, the cities of Alexandria and Falls Church, and the counties of Arlington and Fairfax in the Commonwealth of Virginia and the counties of Montgomery and Prince Georges in the State of Maryland, subject, however, to the rights to render service within the Washington Metropolitan Area possessed, at the time this section takes effect, by other common carriers of passengers: Provided, That nothing in this section shall be construed to exempt the Corporation from any law or ordinance of the Commonwealth of Virginia or the State of Maryland or any political subdivision of such Commonwealth or State, or of any rule, regulation, or order issued

under the authority of any such law or ordinance, or from applicable 48 USC 27 and provisions of the Interstate Commerce Act and rules and regulations

prescribed thereunder.

(b) Wherever reference is made in this part to “D. C. Transit System, Inc." or to the "Corporation", such reference shall include the successors and assigns of D. C. Transit System, Inc.

(c) As used in this part the term “franchise“ nieans all the provisions of this part 1.

SEC. 2. (a) This franchise is granted for a term of twenty sears: Provided, however, That Congress reserves the right to repeal this franchise at any time for its non-use.

(b) In the event of cancellation of this franchise by Congress after seven years from the date this franchise takes effect for any reason other than non-use, the Corporation waives its claim for any damages for loss of franchise.

Sec. 3. No competitive street railway or bus line, that is, bus or for competitiv

railway line for the transportation of passengers of the character which runs over a given route on a fixed schedule, shall be established to operate in the District of Columbia without the prior issuance of a certificate by the Public Utilities Commission of the District of Columbia (referred to in this part as the "Commission") to the effect that the competitive line is necessary for the convenience of the public.

Sec. 4. It is hereby declared as a matter of legislative policy that in policy.

order to assure the Washington Metropolitan Area of an adequate transportation system operating as a private enterprise, the Corporation, in accordance with standards and rules prescribed by the Commission, should be afforded the opportunity of earning such return as to make the Corporation an attractive investment to private investors. As an incident thereto the Congress finds that the opportunity to earn a return of at least 612 per centum net after all taxes properly chargeable to transportation operations, including but not limited to income

Torm.

PUC certificat

Iine.

Leglul

85-894 0 - 67 - 16

Rates.

taxes, on either the system rate base or on gross operating revenues would not be unreasonable, and that the Comunission should encourage and facilitate the shifting to such gross operating revenue base as promptly as possible and as conditions warrant; and if conditions warrant not later than August 15, 1958. It is further declared as a matter of legislative policy that if the Corporation does provide the Washington Metropolitan Area with a good public transportation system, with reasonable rates, the Congress will maintain a continuing interest in the welfare of the Corporation and its investors.

Sec. 5. The initial schedule of rates which shall be effective within the District of Columbia upon commencement of operations by the Corporation shall be the sanie as that etřoctive for service by Capital Transit Company approved by the Commissioners of the District of Columbia pursuant to the Act of August 14, 1955 (Public Law No. 389, 84th Congress; 69 Stat. 72+), in effect on the date of the enactment of this Act, and shall continue in effect until August 15, 1957, and thereafter until superseded by a schedule of rates which becomes effective under this section. Whenever on or after August 15, 1957, the Corporation files with the Commission a new schedule of rates such new schedule shall become effective on the tenth day after the date of such filing, unless the Commission prescribes a lesser time within which such new schedule shall go into effect, or unless prior to such tenth day the Commission suspends the operation of such new schedule. Such suspension shall be for a period of not to exceed one hundred twenty days from the date such new schedule is filed. If the Commission suspends such new schedule it shall immediately give notice of a hearing upon the matter and, after such hearing and within such suspension period, shall determine and by order fix the schedule of rates to be charged by the Corporation. If the Commission does not enter an order, to take effect at or prior to the end of the period of suspension, fizing the schedule of rates to be charged by the Corporation, the suspended schedule filed by the Corporation may be put into effect by the end of such period, and shall remain in effect until the Commission has issued an appropriate order based on such proceeding.

Sec. 6. The Corporation is hereby authorized and empowered to engage in special charter or sightseeing services subject to compliance 1cet. with applicable laws, rules and regulations of the District of Columbia and of the municipalities or political subdivisions of the States in which such service is to be performed, and with applicable provisions of the Interstate Commerce Act and rules and regulations prescribed thereunder.

Sec. 7. The Corporation shall be obligated to initiate and carry out bus operation. i plan of gradual conversion of its street railway operations to bus operations within seven years from the date of the enactment of this Act upon terms and conditions prescribed by the Commission, with such regard as is reasonably possible when appropriate to the highway development plans of the District of Columbin and the economies implicit in coordinating the Corporation's track removal program with such plans; except that upon good and sufficient cause shown the Commission may in its discretion extend beyond seven years, the period for carrying out such conversion. All of the provisions of the full paragraph of the District of Columbia Appropriation Act, 1942 (55 Stat. 199, 533), under the title “HIGHWAY FUND, GASOLINE TAX AND MOTOR VEHICLE FEes", subtitle “STREET IMPROVEMENTS”, relating to the removal of abandoned tracks, regrat ing of track areas, and paving abandoned track areas, shall be applicable to the Corporation.

Sec. 8. (a) As of August 15, 1956, paragraph numbered 5 of section 6 of the Act entitled "An Act making appropriations to provide for the expenses of the Government of the District of Columbia for the fiscal

Charlor and sightseeing ser

Converulon to

Track romoval.

Tues.

68 Stat, 118.

61 Stol. 328.

D. C. Cod. 47. ch, 15.

1207.

F. x ernptions.

63 Stat, 112 D. C. Cod. 47260 to 47-2629.

63 Stot. 124. D. C. Code 47. 2701 to 47-27 14,

63 Stat. !23.

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Horor vonilo fuel tex.

year ending June thirtieth, nineteen hundred and three, and for other purposes”, approved July 1, 1902, as amended (D. C. Code, sec. 47-1701), is amended by striking out the third and fourth sentences und inserting in lieu thereof the following: Ench gus, electric-lighting, and telephone company shall pay, in addition to the taxes herein men. tioned, the franchise tuns imposed loy the District of Columbia Income and Franchise Tax Act of 19-17, and the tax imposed upon stock in

trade of dealers in general merchandise under paragraph numbered C. Code 47. 2 of section 6 of said Act approved July 1, 1902, as amended."

(b) Notwithstanding subsection (a) of this section, the Corporation shall be exempt from the following taxes:

(1) The gross sales tax levied under the District of Columbia Sales Tax Act;

(2) The compensating use tax levied under the District of Columbia Use Tax Act;

(3) The excise tax upon the issuance of titles to motor vehicles and trailers levied under subsection (j) of section 6 of the District of Columbia 'Tr:lffic Act of 1925, as anended (D. C. Code, sec. 40–603 (j) (4));

(4) The taxes imposed on tangible personal property, to the same extent that the Capital Transit ('ompany was exempt from such taxes immediately prior to the effective date of this section under the provisions of the Act of July 1, 1903, as amended; and

(5) The mileage tax imposed by subparagraph (b) of paragraph ..? 555 68 31 of sertion 7 of the Act approved July 1, 1902, as amended (D. C.

Coxle, sec. 47–2331 (b)).

Src. 9. (a) Except as hereinafter provided, the Corporation shall not, with respect to motor fuel purchased on or after September 1, 19950, pay any part of the motor vehicle fuel tax levied under the Act

entitled "An Act to provide for a tax on motor vehicle fuels sold 6. Sat. 17. within the District of Columbia, and for other purposes", approved 1901 to 17-1919,*. April 23, 1924, as amended (D. C. Code, title 47, chapter 16).

(b) For the purposes of this section

(1) the term “ 614 per centum rate of return” means a 642 per centum rate of return net after all taxes properly chargeable to transportation operations, including but not limited to income taxes, on the system rate base of the Corporation, except that with respect to any period for which the Commission utilizes the operating ratio method to fix the rates of the Corporation, such term $21:2!) mean a return of 612 per centum net after all taxes properly chargeable to transportation operations, including but not limited to income taxes, based on gross operating revenues; and

(2) the term "full amount of the Federal income taxes and the : District of Columbia franchise tax levied upon corporate income' means the amount which would have been payable in the absence of write-offs in connection with the retirement of street railway property as contemplated by section 7 of this part, but only to the extent that such write-offs are not included as an operating

expense in determining net earnings for rate-making purposes. (c) As soon as practicable after the twelve-month period ending on August 31, 1957, and as soon as practicable after the end of each subsequent twelve-month period ending on August 31, the Coinnuission shall deterinine the Corporation's net opernting income for such twelve-month period and the amount in dollars by which it exceeds or is less than a 612 per centum rate of return for such twelve-month period. In such determination the Commission shall include as an operating expense the full amount of the niotor vehicle fuel tax which would be due but for the provisions of this section on the motor fuel purchased by the Corporation during the twelve-month period, and

Dofinitions.

Dotonnination of tax by operating ratio.

Collection.
Ponalties.

the full amount of the Federal income taxes and the District of Columbia franchise tax levied upon corporate income. The Commission shall certify its determination to the Commissioners of the District of Columbia or their designated agent. If the net operating income so certified by the Commission equals or is more than a 61/2 per centum rate of return, the Corporation shall be required to pay to such Commissioners, or their designated agent, the full amount of the motor vehicle fuel taxes due on the purchases of motor fuel made by the Corporation during such twelve-inonth period. If the net operating income so certified is less than a 64 per centun rate of return, the Corporation shall pay to such Commissioners, or their designated Agent, in full satisfaction of the motor vehicle fuel tax for such period wa amount, if any, equal to the full amount of said motor vehicle fuel tas reduced by the amount necessary to raise the Corporation's rate of return to 672 per centum for such period, after taking into account the effect of such reduction on the amount of the Federal income taxes and the District of Columbia franchise tax levied upon corporate income payable by the Corporation for such period. Within thirty days after being notified by the said Commissioners or their designated agent of the amount of the motor vehicle fuel tax due under this section, the Corporation shall pay such amount to the said Coinmissioners or their designated agent.

(d) If not paid within the period specified in subsection (c), the motor vehicle fuel tax payable under this section and the penalties thereon may be collected by the Commissioners of the District of Columbia or their designated agent in the manner provided by law for the collection of taxes due the District of Columbia on personal property in force at the time of such collection; and liens for the motor rehicle fuel tax payable under subsection (c) and penalties thereon may be acquired in the same manner that liens for personal property taxes are acquired.

(e) Where the amount of the motor vehicle fuel tax payable under subsection (c), or any part of such amount, is not paid on or before the time specified therein for such payment, there shall be collected, as part of the tax, interest upon such unpaid amount at the rate of one-half of 1 per centum per month or portion of a month.

(f) The Commissioners of the District of Columbia or their desig- uzemption cero nated agent are hereby authorized and directed to issue to the Corporation such certificates as may be necessary to exempt it from paying any importer the motor vehicle fuel tax imposed by such Act of April 23, 43 Stat: 196. 1924, as amended, or as heren fter amended.

(g) (1) From and after the time fixed in parngraph (2) of this subsection the Corporation shall not be required to pay renl estate taxes upon any real estate owned by it in the District of Columbia and used and useful for the conduct of its public transportation operations to the extent that the Commission has determined under such rules and regulations as it may issue that the Corporation's net operating income in the previous year was insuflicient, after giving effect to the tax relief provided in the preceding subsections, to ufford it a 642 per centum rate of return.

(2) This subsection shall take effect upon the completion of the program contemplated in section 7 of this part, as certified by the Com-mission to the Commissioners of the District of Columbia, or at such earlier time as the Commission may find that the said program has been so substantially completed that the taking effect of this subsection would be appropriate in the public interest and shall so certify to the Commissioners of the District of Columbia. Søc. 10. (a) The Corporation shall not be charged any part of the

Snow removal, expense of removing, sanding, salting, treating, or handling snow on

Interest.

D. C. Cod. 471901 to 17-1919.

Real estato taron.

Ellective date.

etc.

37 Stat. 132.

Merger or consolidation

Future transfer to another agency.

Sacurides.

Interest rate.

54 Stat. 905. 49 USC S.

the streets of the District of Columbia, except that the Corporation shall sweep snow from the streetcar tracks at its own expense so long as such tracks are in use by the Corporation.

(l») The pornograph which begins “Llorenfter every street railway company" which appears under the heading "STREETS” in the Act entitled "An Act making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June thirtieth, nineteen hundred and thirteen, and for other purposes”, approved June 26, 1912 (D. C. Code, sec. 7-614), is hereby repealed.

Sec. 11. The provisions of law set forth in Title 43, sections 501 through 503 of the District of Columbia code shall not be deemed to restrict any merger or consolidation of the Corporation with any other company or companies engaged in mass transportation in the District of Columbia or the Washington Metropolitan Area: Provided, however, That any such merger or consolidation shall be subject to the approval of the Commission.

Sec. 12. Nothing in this part shall prevent the transfer, by or under the authority of any other Act of Congress, to any other agency of any of the functions which are by this part granted to or imposed upon the Commission.

Sec. 13. (a) The Corporation is hereby authorized to issue or create loans, mortgages, deeds of trust, notes or other securities to any banking or other institution or institutions and to Capital Transit Company, with respect to the acquisition of assets of Capital Transit Company (including any corporation controlled by Capital Transit Company), provided that the interest rate thereon shall not exceed 5 per centum per amuum, but the aggregate principal shall not exceed the cost of acquiring the assets of Capital Transit Company,

(b) (1) Section 5 of the Interstate Commerce Act shall not be construed to require the approval or authorization of the Interstate Commerce Commission of any transaction within the scope of paragraph (2) of such section 5 if the only parties to such transaction are the Corporation (including any corporation wholly controlled by the Corporation) and the Capital Transit Company (including any corporation wholly controlled by the Capital Transit Company). The issuance or creation of any securities provided for in subsection (a) shall not be subject to the provisions of section 20a of the Interstate Commerce Act.

(2) No approval of the acquisition of assets referred to in subsection (a), or of the issuance or creation of any securities provided for in subsection (a) in connection with such acquisition, shall be required from any District of Columbia agency or commission.

(c). This section shall not apply to any issuance of securities constituting a public offering to which the Securities Act of 1933 applies.

(d) Notwithstanding the provisions of section 109 (a) of the Civil Jeronautics Act of 19:38

(1) no air carrier shall be required (because of the fact that a person becomes or remains an officer, director, member or stockholder holding a controlling interest of the Corporation, or of any common carrier controlled by the Corporation which engaged in mass transportation of passengers for hire in the Washington Metropolitan Area, or is elected or reelected as an officer or director) to secure the authorization or approval of the Civil Jeronautics Board in order to have and retain such person as an officer or director, or both, of such air carrier if such person is an officer or director of such air carrier at the time this section takes effect; and

41 Stat, 494. 49 USC 20 a.

48 Stat, 74. 15 USC 77 a.

52 Stat. 1002. 49 USC 489.

Officers and directors.

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