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and local governments of the area served. Grants, rather than loans or loan guarantees, were found generally to be needed.
A principal reason for this approach was to provide a maximum benefit from the broad resources of the Federal Government without, at the same time, setting up situations in which the Federal Government might become intimately involved in the management of local transportation should financial difficulties develop, as they have on the New Haven. It was not considered desirable that any program should be adopted which could lead to Federal intervention in such matters as schedules, fares, wages, and other issues of day-to-day system operations. These are best handled locally, and, I might add, parenthetically, subject to appropriate regulation.
The Federal program authorized in the Urban Mass Transportation Act of 1964 also requires that the Federal assistance go only to these projects which are part of a “unified or officially coordinated urban transportation system as a part of the comprehensively planned development of the urban area, and are necessary for the sound, economic, and desirable development of such area." The failure to incorporate such planning requirements in any of the bills under consideration is, it would seem, a serious defect. As the Housing Administrator, Dr. Robert C. Weaver, testified, with reference to such an omission in another bill previously being considered by the Subcommittee on Surface Transportation of this committee:
Omission of this requirement ignores the many ways in which urban transportation crucially affects the provision of other necessary public facilities and otherwise vitally shapes the kinds of cities in which so many of our citizens live and work.
Fortunately, in the case of the New Haven, there is planning underway. Some 3 years ago, the Governors of the States of New York, Connecticut, and New Jersey organized the Tri-State Transportation Committee to undertake a massive transportation study of the complex Metropolitan New York region. That study is now well underway and is being cooperatively financed by the three States and the Federal Government, which has contributed highway and urban planning assistance funds. I might add that I now understand the status of this committee is very likely to be changed soon to a permanent commission, since the State of New Jersey has also indicated its willingness to go along with that arrangement.
Arrangements for implementing any public regional transportation programs adopted as an output of the Tri-State studies have, admittedly, been lagging. It is true that Connecticut has organized and funded a State transportation authority, and that New Jersey has created an office of rail transportation within its State highway department. Also, New York is, I understand, presently considering legislation to create an appropriate agency to channel support for essential commuter services. Although these actions are commendable and desirable, they fall short of meeting a situation such as the New Haven presents. Not only must the individual States have taken action, but there must also be agreement among the States with respect to transportation services which cross State lines, and the commuter services are among these.
Suitable interstate compacts could greatly facilitate the provision of Federal assistance to the New Haven under the urban mass transportation program, in accord with the planning and program requirements I have quoted. However, S. 348 and S. 1234 are not suitable types of interstate compacts. These bills provide for compacts which contain provisions unacceptable to the Federal Government, especially the provisions for Federal guarantee of bonds up to $500 million. Additionally, these bills differ from customary procedure in that they provide for prior congressional consent to enter into a detailed compact agreement.
Senator PASTORE. May I interrupt at this point? In the event that an adjustment is made that would remove the objection on the part of the Treasury Department with reference to that guarantee element that you have raised, let us assume they do create a four-State compact or five-State compact, including New Jersey, with reference to the whole New Haven. Would that authority under the compact still have the power to transact with you with reference to the commuter service?
Mr. KOHL. It would depend upon the provisions of the compact.
Senator PASTORE. I mean if they made an application would they be in order?
Mr. KOHL. I would presume they would be.
Senator PASTORE. The reason I raise the question—I think I have to be a little explicit about this–Senator Javits' bill calls for a twoState compact with an open end, which means that other States could come in. I guess that his purpose is merely to save the commuter service at this point. Now, Senator Pell's bill, of course, calls for a four-State compact, but that would encompass the whole operation of the New Haven Railroad.
Let us assume that we took the Pell bill together with the Ribicoff bill, which has nothing to do with the compact; that gives authorization to ICC to disperse funds, but if we took a combination of the Pell bill and the Ribicoff bill, would that authority have the power to come before you and make application for funds under the Urban Mass Transportation Act, insofar as it pertains to the commuter service ?
Mr. KOHL. I would presume that it would. I think the provisions of the compact could very simply
Senator PASTORE. Would you refer this question to your legal experts and see if they agree with us on that? You do not have to answer it for me right away if you want to give this some thought.
Mr. KOHL. In the absence of any compact agency, I think no prior finding could be made, sir. The Urban Mass Transportation Act requires that an applicant have the legal, financial, and technical capacity to carry out the project, and so long as the agency had the financial, legal, and technical capacity to undertake the operation of the commuter services, I would presume that they would be qualified for assistance.
Senator PASTORE. Let me go a step further, Mr. Kohl. The Pell bill provides for a four-State authority, which means the running of the whole railroad, including commuter service, on a permanent basis. Now, the Authority's responsibility, of course, would be to run the whole railroad. The commuter service is still part of the New Haven Railroad. Even though the responsibility of the Authority encompasses the entire railroad, would it still be a recognizable authority to negotiate under the Urban Mass Transportation Act, insofar as the provisions of that law apply to the commuter service?
Mr. KOHL. It could be.
Mr. KOHL. S. 348 provides for State action through an interstate compact among the four States-New York, Connecticut, Rhode Island, and Massachusetts—in which the New Haven Railroad operates. Thus, if it were otherwise desirable, it could help to deal with the commuter problems at both the New York-New Haven and the Providence-Boston interstate segments of the New Haven system.
S. 1234 is similar to S. 348 in its interstate compact provisions, but restricts the arrangement to two States-New York and Connecticut. It thus emphasizes the New York commuter problem, which is admittedly great. However, it does not seem to us that New York and Connecticut have shown any more justification for special Federal assistance, to be provided in connection with proposed compacts, than Rhode Island and Massachusetts.
Senator PASTORE. What does that mean?
Mr. KOHL. That means that we would favor S. 348 insofar as the extent of the compact, because the railroad does involve commuter services at both ends, and a single compact would be simpler than several multiple compacts.
Similarly, the committee should recognize that there are a number of other areas where rail passenger service is in need of public assistance which can effectively be provided only through interstate compacts. Developing situations may shortly require such compacts covering services between New York and New Jersey, New Jersey, Pennsylvania and Delaware; Maryland, the District of Columbia, and Virginia; and Illinois, Indiana, and Wisconsin.
S. 325 would provide for no local public contribution to its proposed assistance for railroad passenger operations and for no organization through which containing local responsibility might be exercised. Although S. 1289 does provide for a local contribution to its proposed short-term operating subsidies, it too, is defective in providing no assurance that the States and localities will properly assume their longterm passenger transportation responsibilities.
Senator PASTORE. Before you get off that, you say S. 325 would provide for no local contribution. It does provide for matching, does it not?
Mr. KOHL. Except for the short term.
Mr. Kohl. And no organization through which the continuing local responsibility might be exercised.
Senator PASTORE. In other words, you are saying continuing local responsibility. Is that what you mean by that?
Mr. Kohl. That in order to qualify under the Urban Mass Transportation Act one of the basic statutory requirements is that the sponsor of any project for assistance be assured of continuing control, so that any assisted facilities may continue in the public use for which the support is granted.
Senator PASTORE. In other words, as you are explaining it now, if we just passed the Ribicoff bill you could not get any relief under
the Urban Mass Transportation Act to assist the commuter service?
Mr. KOHL. Not under the present arrangements. There would have to be a suitable public sponsor representing local interests, and this would not be set up under the Ribicoff bill.
Senator PASTORE. Could not those local sponsors be those under the agreement that we are talking about between the authority that was created in Connecticut and the authority that was created in New York?
Mr. KOHL. It could be, but there is no provision for that under the Ribicoff bill.
Senator PASTORE. Would the legislation itself have to contain it? Mr. KOHL. Not necessarily.
Senator PASTORE. Well, if it exists—I mean it is there. They do have an authority in Connecticut.
Mr. KOHL. Yes.
Senator PASTORE. Once that is done, will not these people have the status to make application ?
Mr. KOHL. Yes, they will, but there is no reference to this arrangement. There is nothing in the Ribicoff bill that would encourage and accelerate the acquisition of that status by the local agencies.
With respect to rail commuter transportation problems, and to the extent that they are separable from other aspects of the transportation services, we believe that the provisions of the urban mass transportation program provide a far more desirable approach.
In the present situation on the New Haven, it is believed that the demonstration provisions of this program offer an immediate resource for temporary use while the necessary interstate compact and longterm financial assistance arrangements are being worked out by the States. The States of Connecticut and New York, working with the Tri-State Committee, have now submitted a draft of a proposal for a project to demonstrate “the legal, financial, and technical strategies necessary to establish a workable arrangement for continuing and improving commuter services” and have indicated that about $1.5 million of State funds would be available for the required local one-third contribution to an approximately $4.5 million project. This could provide substantial interim assistance in continuing the essential services now under curtailment action by the New Haven trustees. It is hoped that this would provide both guidelines and time for the States and localities to work out long-term arrangements with the New Haven trustees for assuming responsibility regarding commuter service. These arrangements, it should be noted, could also provide guidelines for the working out of similar problems in other localities.
Senator PASTORE. Could any of the money available under the Urban Mass Transportation Act be used for operational purposes?
Mr. KOHL. Not directly, sir, but under the demonstration program, for temporary arrangements while various organizational and financial agreements were being worked out, contracts could be entered into for the provision of certain specified train services and compensation to the railroad, to avoid any financial drain on the railroad during that temporary period.
Senator PASTORE. And how much money have you got for that? Mr. Kohl. Well, this could be a major share of this $4.5 million fund.
In turn, Federal assistance could then be provided for the needed long-term financial arrangements under the present Federal capital grant program.
In summary, we favor State and local action to take on responsibility, as necessary, for commuter and other urban rail passenger problems, through the development of long-range local plans and participation in practical financial arrangements to implement them. A Federal matching grant program is already available to assist in the capital investment necessary to carry out such arrangements. We do not support legislation to subsidize from Federal funds the operations of such rail service.
Since the four bills under consideration are inconsistent with these policies, we cannot recommend that your committee consider them favorably.
Senator PASTORE. Any questions? Senator PELL. With regard to your last point, Mr. Kohl, you said Federal assistance could be provided for needed long-term financial arrangements under the present Federal capital grant program. How much funds do you have available in this connection?
Mr. KOHL. The present appropriation was $60 million, and in the President's budget request for the coming fiscal year $150 million, as authorized under the act.
Senator PELL. Do you believe, looking at the demands and the needs of our Nation as a whole, because what we do here is important in that it sets something of a precedent, that you would have enough capital in that program to meet the capital needs of this authority if it was formed?
Mr. KOHL. This, of course, would be limited to the needs of the commuter services under the urban mass transportation program. The provisions of the act call for matching funds. These could go up to two-thirds of the net cost over and above that which could be supported out of any revenue arrangements, and I think that for the time being these amounts are adequate.
Senator Pell. There might be a difference of opinion on that, but I appreciate your viewpoint.
Now I would like to come back to page 3 of your testimony and cover the last point there, the last two sentences. First, the less important one, where you make objection to prior congressional consent. You heard the colloquy between Mr. Martin and ourselves. Would you bear with us that while it is not the normal custom there have been ample precedents that when there is an emergency it can be done and is quite justified ?
Mr. Kohl. I would point out, Senator Pell, that the Congress in considering the Urban Mass Transportation Act struck out the provision for advance approval of interstate compacts for commuter service arrangements, so that our reaction was based upon that action in the last Congress.
Senator PELL. That is what we did on this end of the avenue, but you would agree with my point that there is ample precedent to deal with it if we feel justified in doing it?
Mr. KOHL. That is the pleasure of the Congress.