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gregate by not less than such number of voters as will equal three percent of the entire vote cast for governor at the preceding biennial state election, or if in case of a proposal for amendment introduced into the general court by a member of either house, consideration thereof in joint session is called for by vote of either house, such proposal shall, not later than the second Wednesday in May be laid before a joint session of the two houses, at which the president of the senate shall preside; and if the two houses fail to agree upon a time for holding any joint session hereby required, or fail to continue the same from time to time until final action has been taken upon all amendments pending, the governor shall call joint session or continuance thereof,

Article XLVIII-Part IV Section 3. Amendments of Proposed Amendments.

A proposal for an amendment to the constitution introduced by initiative petition shall be voted upon in the form in which it was introduced, unless such amendment is amended by vote of three-fourths of the members voting thereon in joint session, which vote shall be taken by call of the yeas and nays if called for by any member.

Section 4. Legislative Action-Final legislative action in the joint session upon any amendment shall be taken only by call of the yeas and nays, which shall be entered upon the journal of the two houses; and an unfavorable vote at any stage preceding final action shall be verified by call of the yeas and nays, to be entered in like manner.

At such joint session a legislative amendment receiving the affirmative votes of à majority of all the members elected, or an initiative amendment receiving the affirmative votes of not less than one-fourth of all the members elected, shall be referred to the next general court.

Section 5. Submission to the People-If in the next general court a legislative amendment shall again be agreed to in joint session by a majority of all the members elected, or if an initiative amendment or a legislative substitute shall again receive the affirmative votes of at least one-fourth of all the members elected, such fact shall be certified by the clerk of such joint session to the secretary of the commonwealth, who shall submit the amendment to the people at the next state election. Such amendment shall become part of the constitution if approved, in the case of a legislative amendment by a majority of the voters voting thereon, or if approved, in the case of an initiative amendment or a legislative substitute, by voters equal in number to at least thirty percent of the total number of ballots cast at such state election and also by a majority of the voters voting on such amendment.


Article VII $ 8. [Gift or loan of state credit or money prohibited; exceptions for enumerated


The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking; nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking, but the foregoing provisions shall not apply to any fund or property now held or which may hereafter be held by the state for educational purposes.

* * *

Article 10 85. [Public corporations : restrictions on creation and powers; accounts; obliga

tions of].

No public corporation (other than a county, city, town, village, school district or fire district or an improvment district established in a town or towns) possessing both the power to contract indebtedness and the power to collect rentals, charges, rates or fees for the services or facilities furnished or supplied by it shall hereafter be created except by special act of the legislature. * * *

Neither the state nor any political subdivision thereof shall at any time be liable for the payment of any obligations issued by such a public corporation heretofore or hereafter created, nor may the legislature accept, authorize acceptance of or impose such liability upon the state or any political subdivision thereof; but the state or a political subdivision thereof may, if authorized by the legislature, acquire the properties of any such corportaion and pay the indebtedness thereof.

Article 10Supplement 87. [Guarantee of obligations of Port of New York Authority issued for financ

ing purchase of railroad passenger cars]. Notwithstanding any provision of this or any other article of this constitution, the legislature may by law, which shall take effect without submission to the people, make or authorize making the state liable for the payment of the principal of and interest on obligations of the port of New York authority issued pursuant to legislation heretofore or hereafter enacted, to purchase or refinance the purchase of, or to repay advances from this state made for the purpose of purchasing, railroad passenger cars, including self-propelled cars, and locomotives and other rolling stock used in passenger transportation, for the purpose of leasing such cars to any railroad transporting passengers between municipalities in the portion of the port of New York district within the state, the majority of the trackage of which within the port of New York district utilized for the transportation of passengers shall be in the state; provided, however, that the total amount of obligations with respect to which the state may be made liable shall not exceed one hundred million dollars at any time, and that all of such obligations shall be due not later than thirty-five years after the effective date of this section.

To the extent payment is not otherwise made or provided for, the provisions of section sixteen of article seven shall apply to the liability of the state incurred pursuant to this section, but the powers conferred by this section shall not be subject to the limitations of this or any other article. Adopted by the people Nov. 7, 1961, eff. Jan. 1, 1962.

Article XIX

8 1. [Proposal of amendment; procedure by attorney-general; approval by legis.

lature; ratification by people). Any amendment or amendments to this constitution may be proposed in the senate and assembly, whereupon such amendment or amendments shall be referred to the attorney-general whose duty it shall be within twenty days thereafter to render an opinion in writing to the senate and assembly as to the effect of such amendment or amendments upon other provisions of the constitution. Upon receiving such opinion, if the amendment or amendments as proposed or as amended shall be agreed to by a majority of the members elected to each of the two houses, such proposed amendment or amendments shall be entered on their journals, and the ayes and noes taken thereon, and referred to the next regular legislative session convening after the succeeding general election of members of the assembly, and shall be published for three months previous to the time of making such choice; and if in such legislative session, such proposed amendment or amendments shall be agreed to by a majority of all the members elected to each house, then it shall be the duty of the legislature to submit each proposed amendment or amendments to the people for approval in such manner and at such times as the legislature shall prescribe; and if the people shall approve and ratify such amendment or amendments by a majority of the electors voting thereon, such amendment or amendments shall become a part of the constitution on the first day of January next after such approvas. Neither the failure of the attorney-general to render an opinion concerning such a proposed amendment nor his failure to do so timely shall affect the validity of such proposed amendment or legislative action thereon.


Article XXXI

8 1. Borrowing power of general assembly—The general assembly shall have no powers, hereafter, without the express consent of the people, to incur state debts to an amount exceeding fifty thousand dollars, except in time of war, or in case of insurrection or invasion; nor shall they in any case, without such consent, pledge the faith of the state for the payment of the obligations of others. This section shall not be construed to refer to any money that may be deposited with this state by the government of the United States.

Article XIII Of Amendments The general assembly may propose amendments to this Constitution by the votes of a majority of all the members elected to each house. Such propositions

for amendment shall be published in the newspapers, and printed copies of them shall be sent by the secretary of state, with the names of all the members who shall have voted thereon, with the yeas and nays, to all the town and city clerks in the state. The said propositions shall be, by said clerks, inserted in the warrants or notices by them issued, for warning the next annual town and ward meetings in April; and the clerks shall read said propositions to the electors when thus assembled, with the names of all the representatives and senators who shall have voted thereon, with the yeas and nays, before the election of senators and representatives shall be had. If a majority of all the members elected to each house, at said annual meeting, shall approve any proposition thus made, the same shall be published and submitted to the electors in the mode provided in the act of approval; and if then approved by threefifths of the electors of the state present and voting thereon in town and ward meetings, it shall become a part of the Constitution of the state.

Senator PELL. To turn now to title III of my bill, this title would commit the Federal Government, for its part, to guarantee up to $500 million of the indebtedness of the authority. The guarantee could not be provided unless the States had first agreed to participate in the compact and to share the operating deficits along general lines I have just outlined. Only with this commitment by the States can the Federal Government be protected against a continuation of massive defaults on New Haven loans such as have already been described by you, Mr. Chairman.

It should be noted that the extension of this Federal guarantee, quite aside from the contingent liability of default, is a substantial contribution to the authority concept. Guaranteed loans carry substantially lower interest rates and more liberal maturities than does normal risk financing.

Recent loan programs guaranteed or insured by the Federal Government have carried interest rates as low as 314 percent and maturities—this is important from our viewpoint-as long as 40 years.

Such terms would permit a quick modernization of the New Haven's passenger equipment through the private money market at very economic terms to the public authority. I might add that while there are many precedents for such guarantees by the Federal Government-notably in competing modes of transportation, including the financing of commercial aircraft and ships-it is far more difficult for the States to pledge their own faith and credit to such a degree, and in several instances there are specific constitutional restrictions, as we have just described.

At this time also, Mr. Chairman, I would like to refer to my own bill, S. 348 and draw to your attention two other changes I think should be made in it after further thought on my part.

Senator PASTORE. Will you wait just a minute until they furnish a copy of the bill to each of the members here.

Senator PELL. On page 15 of the bill, section 303, subparagraph 2, it says that no guarantees shall be made pursuant to this title if the terms of such bond permit redemption more than 15 years after the date thereof.

I believe that should be struck because the whole point of the Federal guarantee would be really to permit long-term bonds to be issued.

And on page 5, article IV, the point is raised that no action may be taken unless a majority of the commissioners concur therein. And then says further down in that paragraph, “three commissioners shall constitute a quorum of the authority.”

I think this was a drafting flaw in that it would then mean that two commissioners might take action, if there are only three there, and that would not be a majority of the authority. It should be made to read three commissioners can take action in behalf of the authority.

Otherwise, I would like to stand in general on the language of the bill.

Finally, with regard to Senator Ribicoff's bill S. 325 and Senator Dodd's bill S. 1289, I wish to say that I support the general concept of immediate Federal assistance until the public authority can be negotiated and be put into operation.

I particularly support the Dodd bill because it provided for a definite cutoff and phaseout of the Federal aid. Also, the committee might explore the idea that such immediate Federal assistance must be repaid if the authority is not brought into being.

I believe in essence there is a possibility of fusing the two approaches. As Senator Ribicoff pointed out, mine is a more long-range approach, and I should also add, and I would be remiss in not doing so earlier, that it is cosponsored by you, Mr. Chairman, by Senator Dodd, Senator Kennedy of Massachusetts, Senator Kennedy of New York, and Senator Ribicoff, which would indicate some support from the Senators of this area.

When I examined both the Ribicoff and Dodd bills, I must add though, that I find I support the Dodd bill a bit more because it answers the questions raised by Senator Lausche in that it provides for a definite cutoff date after a period of years.

My own thought is that period of years might well be shortened from 5 years to 3, but it provides for a cutoff date and that, I think, would answer this question. Also,

Senator PASTORE. What if you didn't get your bill, would you be for that

Senator PELL. I would, but I don't think it would give a long-term solution. This would be another shot in the arm, like loans

Senator PASTORE. You misunderstood me. Would you feel the same about this cutoff if your bill didn't pass ?

Senator PELL. It would be a very good question and I would then be guided more by my regional interests.

Actually I would welcome the addition of such a concept to title III of my bill if the committee in its wisdom thinks it might be desirable. It would be an incentive to action, and we all agree that there is now no substitute for action. Thank you.

Senator PASTORE. If your bill could pass, you would want a shutoff date. Now, what if your bill doesn't pass ?

Senator PELL. Then I would be for indefinite support, I am afraid, as a good Rhode Islander.

I think, also, here, that the committee should explore the idea that if immediate Federal assistance is given, and my bill is passed, and then the States do not move ahead on it, it would seem to me that they should explore the idea that any money coming out from under the Ribicoff bill, if it is fused into the Dodd bill, should be repaid and that one should be made a condition of the other, if there is an agreement by you and the committee on fusing the two approaches.

Another point here raised by Senator Lausche is his natural concern with regard to subsidies of transportation, or any other industry.

I think his apprehensions are well-founded and it is one of the reasons that I have tried to adopt a guarantee approach because we all know that once a subsidy is agreed to, the full amount of that subsidy is gone and we have all paid for it as taxpayers and it is down the drain.

On the other hand, if the guarantee approach is used, it means that this continuous pressure on the part of the Federal Government to increase the efficiency and economy of the operation with a hope and thought that the guarantee will not have to be used at all or, if used, not used up in its entirety.

This is the philosophy underlying my whole bill. Once you get into subsidy approach, we know the money is gone and that is that.

Senator PASTORE. In order to crystallize this, what your bill does in the main, it creates this four-State authority which will have the power to borrow up to $500 million for modernization and new equipment, which would be guaranteed by the Federal Government, but in any event, the deficit would have to be picked up by the various states under the formula you suggest.

Senator PELL. Operating deficit.

Senator PASTORE. So it wouldn't be any burden on the Federal Treasury. Is that the point you are making?

Senator PELL. That is correct. It also provides, from the States' viewpoint, that the right-of-way will not be taxed when it is operating in the red. As soon as it gets in the black, the normal taxes can be imposed again, and this provides some flexibility for the States and provides an equal contribution by all.

Senator PASTORE. Would the interest on the bonds and the amortization of the bonds be part of the operating expense?

Senator PELL. They would be considered
Senator PASTORE. That would have to be taken up by the States?

Senator PELL. That is right, considered as part of the operating expense.

Senator PASTORE. You see, I am clearing up this point of subsidization as against no subsidization. There is a responsibility in your bill in the event that the railroad was not running at a profit, and interest and amortization was due on the bonds, the States would have to pick up that burden?

Senator PELL. That is correct.
Senator PASTORE. But they could get it back when there is a profit?

Senator PELL. Exactly, and it is possible that the Federal Government might not get it back. On the other hand, with efficient operation and with modernization, there is good grounds to believe that the railroad line could be run more efficiently.

For instance, one of the problems we face now on the New Haven is of 190 cars, something like more than 100 are more than 30 years old, which increases by about 60 percent the maintenance costs of these cars and the operating costs of them.

I would also like to ask your consent, Mr. Chairman, that there be inserted in the record an article by me in the Nation entitled “Who Will Save the New Haven ?" of February 22, 1965, if I might, and that it be part of the record.

Senator PASTORE. Without objection, so ordered.
Senator PELL. Thank you.

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