5 1 authorized and directed to enter into and execute on behalf 2 of the United States for the District of Columbia amendments 3 substantially as set forth above to the compact with the 4 States of Virginia and Maryland. 5 (c) The consent of Congress is granted upon the con6 dition that, within three years from the date of this enact7 ment, sections 1, 51, and 56 of title III of the compact be amended substantially as set forth in this section. 8 9 10 INTERIM ASSISTANCE SEC. 5. (a) The Commissioner of the District of Colum11 bia is authorized to contract with D.C. Transit System, 12 Incorporated, for the payment of such amounts as he may 13 deem appropriate to assist in maintaining reasonable fare 14 levels. 15 16 17 (b) Payments made pursuant to this section shall be subject to the following limitations and conditions: (1) In determining the amount of such payments the 18 Commissioner shall seek the advice and recommendations of (a) the Washington Metropolitan Area Transit Commission concerning just and reasonable fares, financing of bus opera 19 20 tions, and adequate levels of service to the public; and (b) the Washington Metropolitan Area Transit Authority concerning the impact of such payments on the proposed rail rapid transit program and upon future public ownership contemplated by section 3 of this Act. 6 1 (2) The contracts made pursuant to this section may 2 place such terms and conditions on the financing and opera3 tions of D.C. Transit System, Incorporated, as may be 4 agreed to among the Commissioner of the District of Colum5 bia, the Washington Metropolitan Area Transit Commission, 6 and D.C. Transit System, Incorporated. 7 (c) Any carrier receiving funds pursuant to this section 8 shall, in the expenditure of those funds, give priority to 9 meeting obligations to employee retirement and health and 10 welfare programs. 11 (d) The District of Columbia shall be reimbursed by 12 D.C. Transit System, Incorporated, for any excess profits, 13 income, or other funds determined by the Washington Metro14 politan Area Transit Commission or the United States court 15 of appeals to be a legitimate credit to or reserve for the 16 benefit of the ratepayer. 17 (e) The provisions of this section shall expire on June 18 30, 1972, or upon acquisition of D.C. Transit System, In19 corporated, by the Washington Metropolitan Area Transit 20 Authority, whichever is earlier. 222 APPROPRIATIONS AUTHORIZED SEC. 6. There are hereby authorized to be appropriated, 23 without fiscal year limitation, such sums as may be neces 24 U.S. SENATE, COMMITTEE ON THE DISTRICT OF COLUMBIA, MEMORANDUM FOR MEMBERS OF THE SUBCOMMITTEE ON FISCAL AFFAIRS In re: S. 1813, to provide public assistance to mass transit companies in the District of Columbia; and S. 1814, to provide for public ownership of the mass transit bus system operated by D.C. Transit System, Inc., and to authorize interim financial assistance pending public acquisition of bus transit facilities. Hearing: 9:30 a.m., Tuesday, April 29, 1969, room 6226, New Senate Office Building. S. 1813 was drafted by the Washington Metropolitan Area Transit Commission (WMATC) which regulates bus fares and service within the metropolitan area. The bill proposes to reduce fares from 30 cents to 25 cents and to make up the difference between revenues at that rate and operating costs (including a 5.2 percent return on gross operating revenues) with a public subsidy. D.C. Transit, which furnishes 98 percent of the bus service in the District, would be the major beneficiary, although the much smaller, independent WVA bus company could qualify for payments as well. The Commission estimates that D.C. Transit would receive $5,905,632 in subsidy during the first year and a total of $19,021,509 over the three-year authorization proposed. This would be in addition to school fare subsidies now received and forgiveness of fuel and real estate taxes. As a condition of the subsidy, the bill requires D.C. Transit to give priority to meeting obligations to employee retirement and health and welfare programs. The company is currently about $2 million behind in its contributions. A further condition is that the company carry out a program of improvements with the Commission authorized to withhold subsidy payment for failure to comply. S. 1814 calls on the Washington Metropolitan Area Transit Authority (WMATA) to initiate negotiations with D.C. Transit for the purchase of all company assets. The bill gives Congress' consent to changes in the Interstate Compact establishing WMATA to permit the Authority to operate the bus company once it is acquired. Maryland and Virginia are given a period of three years in which to approve the changes. While negotiations for purchase of D.C. Transit are underway, an interim subsidy would be provided to keep fares at a just and reasonable level. The Commissioner of the District with the advice of WMATC and WMATA would determine the exact fare rate and the amount or the compensating subsidy to the company. The bill puts a three-year limit on payment of the interim subsidy and attaches the condition that priority be given to payment of obligations to employee pension and health and welfare funds. In addition, the bill asks that WMATA sit in on negotiations for a new labor contract which are due to begin in October 1969. The District Government has not taken a formal position on either of these bills. Subcommittee No. 3 of the House District Committee held hearings on S. 1813 (H.R. 9686) April 3 and 18, 1969. Attachments. JACK LEWIS, Associate Counsel. To grant a franchise to D. C. Transit System, Inc., and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, TITLE I PART 1.-FRANCHISE PROVISIONS D. C. Transit 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 Columbia 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 provisions of the Interstate Commerce Act and rules and regulations and note. prescribed thereunder. 49 USC 27 (b) Wherever reference is made in this part to "D. C. Transit Definitions. 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" means all the provisions of this part 1. SEC. 2. (a) This franchise is granted for a term of twenty years: 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. Term. SEC. 3. No competitive street railway or bus line, that is, bus or PUC certifirailway line for the transportation of passengers of the character cate for comwhich runs over a given route on a fixed schedule, shall be established petitive line. 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 Legislative order to assure the Washington Metropolitan Area of an adequate policy. 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 62 per centum net after all taxes properly chargeable to transportation operations, including but not limited to income 29-234 0-69 Rates. All 70 Stat. 599. Charter and sightseeing services. Conversion to bus operation. Track removal. Taxes. taxes, on either the system rate base or on gross operating revenues would not be unreasonable, and that the Commission 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 same as that effective 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. 724), 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, fixing 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 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 a 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 Columbia 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. 499, 533), under the title "HIGHWAY FUND, GASOLINE TAX AND MOTOR VEHICLE FEES", Subtitle "STREET IMPROVEMENTS", relating to the removal of abandoned tracks, regrading 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 |