by such acquisition. Such arrangements shall include, without being limited to, such provisions as may be necessary for (a) the preservation of rights, privileges, and benefits (including continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise; (b) the continuation of collective bargaining rights; (c) the protection of individual employees against a worsening of their positions with respect to their employment; (d) assurances of employment to employees of acquired railroad companies and priority of reemployment of employees terminated or laid off; and (e) paid training or retraining programs. Such arrangements shall include provisions protecting individual employees against a worsening of their positions with respect to their employment which shall in no event provide benefits less than those established pursuant to section 5 (2) (f) of the Act of February 4, 1887 (24 Stat. 379), as amended. The contract for the granting of any such assistance shall specify the terms and conditions of the protective arrangements.

"ARTICLE XI

"This compact shall become effective ninety (90) days after the date of adoption thereof by the last signatory to adopt such compact.

"ARTICLE XII

"This compact may be amended from time to time with the consent of all of the signatories and the Congress of the United States.

"ARTICLE XIII

"Each of the signatories pledges to each of the other signatories faithful cooperation in the promotion of passenger rail transportation within the District and, in furtherance thereof, agrees to extract any necessary legislation to achieve the objectives of this compact.

"ARTICLE XIV

"1. If any part or provision of this compact or the application thereof to any person or circumstances be adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision or application directly involved in the controversy in which such judgment shall have been rendered and shall not affect or impair the validity of the remainder of this compact or the application thereof to other persons or circumstances and the signatories hereby declare that they would have entered into this compact or the remainder thereof had the invalidity of such provision or application thereof been apparent.

"2. In accordance with the ordinary rules for construction of interstate compacts, this compact shall be liberally construed to eliminate the evils described therein and to effectuate the purposes thereof.

"ARTICLE XV

"Other States may join this compact on the same terms and under the same obligations as set forth in the preceding articles of this compact with the consent of all of the signatories and the Congress of the United States."

TITLE III-FEDERAL BOND GUARANTY

DEFINITIONS

SEC. 301. For the purposes of this title

(1) The term "Secretary" means the Secretary of Commerce.

(2) The term "Commission" means the Interstate Commerce Commission. (3) The term "authority" means the Northeast Rail Authority established pursuant to the Northeast Rail Authority compact.

(4) The term "additions and betterments or other capital expenditures" means expenditures for the acquisition or construction of property used in transportation service, chargeable to the road, property, or equipment investment accounts, in the uniform system of accounts prescribed by the Commission.

(5) The term "expenditures for maintenance of property" means expenditures for labor, materials, and other costs incurred in maintaining, repairing, mod

ernizing, or renewing equipment, road, or property used in transportation service chargeable to operating expenses in accordance with the uniform system of accounts prescribed by the Commission.

GUARANTY AUTHORITY

SEC. 302. (a) In order to carry out the purposes decleared in section 201 of this Act, the Secretary may, after consultation with and consideration of the views and recommendations of the Commission and upon terms and conditions prescribed by him and consistent with the provisions of this title, guarantee any bonds (including other evidences of indebtedness) which are issued by the authority for the purpose of financing or refinancing (1) additions and betterments or other capital expenditures, or to reimburse the authority for expenditures made from its own funds for such additions and betterments or other capital expenditures, or (2) expenditures for the maintenance of property. (b) The aggregate principal amount of all guaranties pursuant to this title shall not exceed $500 million.

LIMITATIONS

SEC. 303. No guaranty shall be made pursuant to this title

(1) if in the judgment of the Secretary the bonds involved are at a rate of interest which is unreasonably high; or

(2) if the terms of such bonds permit redemption more than fifteen years after the date thereof.

MODIFICATION AUTHORITY

SEC. 304. The Secretary may constent to the modification of the provisions as to rate of interest, time of payment of interest or principal, security, if any, or other terms and conditions of any bonds which he has guaranteed pursuant to this title, or the renewal or extension of any such bonds, whenever the Secretary shall determine it to be equitable to do so.

PAYMENT ON GUARANTY

SEC. 305. (a) Any payment required to be made as a consequence of any guaranty pursuant to this title shall be made by the Secretary of the Treasury from funds hereby authorized to be appropriated in such amounts as may be necessary for the purpose of carrying out the provisions of this title.

(b) In the event of any default on any bonds guaranteed pursuant to this title, and payment in accordance with the guaranty by the United States, the Attorney General shall take such action as may be appropriate to recover the amount of such payment, with interest, from the authority.

GUARANTY FEE

SEC. 306. The Secretary shall prescribe and collect a guaranty fee in connection with any guaranty pursuant to this title. Such fees shall not exceed such amounts as the Secretary estimates to be necessary to cover the administrative costs of carrying out the provisions of this title. Sums realized from such fees shall be deposited in the Treasury as miscellaneous receipts.

FEDERAL REPRESENTATIVE ON AUTHORITY AND OTHER ASSISTANCE FOR SECRETARY

SEC. 307. (a) In order to more effectively carry out his functions pursuant to this title, the Secretary may appoint a Federal representative to the authority as authorized in article III of the northeast rail authority compact.

(b) To permit the Secretary to make use of such other expert advice and services as he may require in carrying out the provisions of this title, he may use available services and facilities of other departments, agencies, and instrumentalities of the Government, with their consent and on a reimbursable basis where necessary.

(c) Departments, agencies, and instrumentalities of the Government shall exercise their powers, duties, and functions in such manner as will assist in carrying out the objectives of this Act.

S. 348-A SECTION-BY-SECTION ANALYSIS

(Introduced by Senator Claiborne Pell, Democrat, of Rhode Island,
January 7, 1965)

TITLE I-SHORT TITLE AND STATEMENT OF FINDINGS AND DECLARATIONS OF POLICY

Sections 101 and 102

These sections provide that the act may be cited as the "Northeast Rail Authority Act of 1965" and state a congressional finding that the preservation and proper maintenance of passenger rail transportation in the northeastern seaboard region is necessary to the national defense and to the general welfare of the Nation, and to the area involved. Congress declares it a continuing policy and responsibility of the Federal Government to encourage the State governments to enter into a compact to create a Northeast Rail Authority.

Section 201

TITLE II-NORTHEAST RAIL AUTHORITY COMPACT

This section grants the consent and approval of Congress to the States of Massachusetts, Rhode Island, Connecticut and New York to negotiate and enter into the Northeast Rail Authority Compact for the purpose of creating a multistate authority to own, lease or otherwise acquire the right to operate a passenger rail transportation system within the Northeastern States. The section then goes on to set forth the provisions of the compact in 15 articles as follows:

Articles 1 and 2: These articles create a northeast rail district embracing the area of the four States, and create the Northeast Rail Authority as a corporate body having the right and authority to own, lease or otherwise acquire the right to operate a passenger rail transportation system within the district.

Article 3: This article states that the authority shall consist of four commissioners, one each appointed by the Governors of the participating states, to serve for a term of 4 years. It also provides that a Federal representative (to be appointed pursuant to title III of this same act) shall have the power of veto on any matter relating to the issue and sale of bonds or other indebtedness guaranteed by the Federal Government pursuant to said title III. The article fixes the compensation of commissioners at the rate of $100 per day. It also provides for the appointment of an executive director, to be compensated at the rate of $30,000 per annum, and such other personnel as may be necessary.

Article 4: States that no action may be taken by the authority unless a majority of the commissioners concur, but permits the authority to delegate duties. Article 5: Lists the powers of the authority, including the power to operate faciilties or enter into agreements with other parties for the operation of passenger transportation services; the power to set fares and tariffs for the services it renders; the power to acquire property by purchase, lease or condemnation, and other powers normally vested in such bodies.

Article 6: Directs the authority, insofar as possible, to set fares and tariffs at such levels that the revenues of the authority may be reasonably expected to cover costs of operating and maintenance. However, the authority is not required to operate any portion of its facilities without loss, but may set fares on the basis of all its facilities considered as a whole.

Article 7: Provides that in any years in which the operating revenues of the authority, shall be inadequate to cover the operating expenses of the authority, the net deficit shall be borne by each of the signatories in the proportion which the number of passenger miles traveled within each State on railroads owned, leased or otherwise operated by the authority, bears to the total number of passenger miles traveled on railroads owned, leased or otherwise operated by the authority within the entire district. Provides that the authority shall annually submit to the States a budget of requirements for the next ensuing year, and that such budget shall also set forth the percentage by which each signatory shall bear its share of the deficit, if any. The signatories agree to appropriate their porportion of the budget as set forth in this article and to pay such appropriation to the authority.

This article also provides that at such time as the annual revenues of the authority exceed its annual expenses, the commissioners may at their discretion make partial reimbursement of any payments made by the States pursuant to this article, at a prudent rate and in the same ratio as set forth in this article. Article 8: Provides that the authority may sell bonds, notes and other evidences of indebtedness in an amount not exceeding $500 million to finance its

operations. Provides that such bonds and other indebtedness shall be legal investments and shall be at all times free of taxation by the signatories.

Article 9: Provides that, except in years when the expenses of the authority exceed revenues, the authority may make payments to the States and local gov. ernments in lieu of property taxes upon property within the district which was subject to such taxes before acquisition by the authority.

Article 10: Provides that in the acquisition of any transportation facilities in the district, the authority shall make arrangements to protect the interests of employees affected by such acquisition.

Articles 11, 12, 13: Provides that the compact shall become effective 90 days after the date of adoption; that it may be amended with the consent of all signatories and the Congress. Pledges cooperation between the signatory states.

Article 14: Provides that a judgment by any competent court rendering a portion of this compact invalid shall not affect or impair the validity of the remainder of the compact, and expresses the intention that the compact be liberally construed.

Article 15: Provides that other States may join this compact on the same terms and under the same obligations as have been set forth in the preceding articles, with the consent of all the signatories and of the Congress.

Section 301

TITLE III-FEDERAL BOND GUARANTY

Defines terms. "Additions and betterments or other capital expenditures" means expeditures for the acquisition or construction of property used in transportation service, chargeable to the road, property, or equipment investment accounts. "Expenditures for maintenance of property" means expenditures for labor, materials and other costs incurred in maintaining, repairing, modernizing or renewing equipment, road or property used in transportation service.

Section 302

Authorizes the Secretary of Commerce to guarantee bonds and other evidence of indebtedness of the authority in principal amount not exceeding $500 million issued by the authority for the purpose of financing or refinancing additions and betterments and other capital expenditures and expenditures for maintenance of property. Such guarantees are to be made upon terms and conditons prescribed by the Secretary of Commerce after consultation with the Interstate Commerce Commission.

Section 308

States that no guarantee shall be made if in the judgment of the Secretary the bonds or other indebtedness carry a rate of interest which is unreasonably high or if the terms of such bonds permit redemption more than 15 years after date of issuance.

Section 304

Permits the Secretary to consent to modifications as to rate of interest, time of payment or other terms and conditions of bonds which he has guaranteed, whenever he shall determine it to be equitable to do so.

Section 305

Provides that any payment required as a consequence of any guarantee under this act shall be made by the Secretary of the Treasury from funds authorized In the event of any to be appropriated to carry out the provisions of this act.

default of bonds guaranteed pursuant to this title and payment in accordance with this title, the Attorney General is empowered to recover the amount of such payment, with interest, from the authority.

Section 306

Authorizes the Secretary to prescribe and collect a guarantee fee to cover the administrative costs of extending guarantees pursuant to this title. Section 307

Authorizes the Secretary of Commerce to appoint a Federal representative to the authority, as provided in article III of the Northeast Rail Authority Compact, and permits the Secretary to use the advice and services of other departments and agencies of the Government as he may require.

Senator PASTORE. The third bill, S. 1234, was introduced by Senator Javits of New York on February 23, 1965. This bill would grant the

46-135-65- -2

consent of Congress to the States of New York and Connecticut to enter into a compact to create a two-State authority, which other States may join, to operate the New Haven commuter service. The bill would also provide a Federal matching grant incentive to the States.

Senator Javits intends to propose an amendment to S. 1234 which would limit the duration of the Federal matching grant to a period of 2 years after the proposed authority becomes operational.

Without objection, a copy of S. 1234, an analysis of its provision, and the proposed amendment thereto, will be printed at this point in the record.

(The bill follows:)

[S. 1234, 89th Cong., 1st sess.]

A BILL To encourage the preservation and development of a modern and efficient passenger rail transportation service in the northeastern seaboard area by granting the consent and approval of Congress to the States of New York and Connecticut to negotiate and enter into a compact to create their own New York-Connecticut Rail Authority, and by guaranteeing certain bonds of, and furnishing certain assistance to, such authority Be is enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I-SHORT TITLE AND STATEMENT OF FINDINGS AND

DECLARATION OF POLICY

SHORT TITLE

SEC. 101. This Act may be cited as the "New York-Connecticut Rail Authority Act of 1965".

STATEMENT OF FINDINGS AND DECLARATION OF POLICY

SEC. 102. The Congress finds that it is necessary to the national defense and to the general welfare of the Nation as well as that of the area involved that passenger and commuter-rail transportation be preserved and properly maintained within the northeastern seaboard area. The Congress therefore declares that it is the continuing policy and responsibility of the Federal Government to encourage the State governments to enter into a compact to create their own New York-Connecticut Rail Authority to own, or lease, and operate such a system. TITLE II—NEW YORK-CONNECTICUT RAIL AUTHORITY COMPACT

CONSENT AND APPROVAL OF COMPACT

SEC. 201. The consent and approval of Congress is hereby given to the States of New York and Connecticut to negotiate and enter into the New York-Connecticut rail authority compact for the purpose of creating a New York-Connecticut Rail Authority to own, or lease, and operate a passenger or commuter rail transportation system within such States. Such compact shall be as follows:

"NEW YORK-CONNECTICUT RAIL AUTHORITY COMPACT

"The states of New York and Connecticut hereinafter collectively referred to as signatories, any one of them being referred to as a signatory, do hereby covenant and agree as follows:

"ARTICLE I

"There is hereby created the New York-Connecticut Rail District, hereinafter referred to as 'District', which shall embrace the states of New York and Connecticut.

"ARTICLE II

"The signatories hereby create the New York-Connecticut Rail Authority, hereinafter referred to as the 'Authority', which shall be a body corporate and politic, having the powers and jurisdiction hereinafter enumerated, and such other and additional powers and duties as may be conferred upon it by the legis