TITLE II-NEW YORK-CONNECTICUT RAIL AUTHORITY COMPACT

Section 201. This section grants the consent and approval of Congress to the States of New York and Connecticut to negotiate and enter into the New YorkConnecticut Rail Authority Compact for the purpose of creating a bi-state authority to own, lease or otherwise acquire the right to operate a passenger rail transportation system within such States. The section then sets forth the provisions of the compact in 15 articles as follows:

Articles 1 and 2. These articles create a New York-Connecticut rail district embracing these two States and create a New York-Connecticut 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. The article states that the authority shall consist of four commissioners, two each to be appointed by the Governors of New York and Connecticut, each for a 4-year term. It also provides that a Federal representative 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 a day. It also provides for the appointment of an executive director, to be compensated at a rate established by the authority.

Article 4. States that no action may be taken by the authority unless a majority or more as may be provided in this compact of the commissioners concur therein, but permits the authority to delegate duties.

Article 5. Lists the powers of authority, including the power to operate facilities 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.

Article 7. Provides that the authority shall annually submit to each of the signatories a budget for operating the authority for the next ensuing year which shall include information concerning operating deficits. The allocation of such deficits shall be made in accord with a formula established by the authority. Such formula and means of payment shall be consistent with the constitution and laws of the individual States, and shall be established only by unanimous consent of the commissioners. The authority shall notify the chief executive of each signatory State as to its share, which notice shall be transmitted by the chief executive to the signatory States' legislature for its consideration and appropriate action. The States' share of such amount shall be that in excess of the Federal share established in section 307 of this act.

Subsection 2. Where annual revenues exceed costs (including the payment of indebtedness) of the authority, the authority may reimburse the Federal Government for amounts paid to the authority to cover deficits. Such reimbursement shall be made at a prudent rate and in the same ratio as deficits were borne by the varoius signatories and the Federal Government.

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. Bonds may be guaranteeed by the signatories or by the Federal Government pursuant to title III or by the signatories and the Federal Government.

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 governments 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 and 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.

Article 14. Provides that a judgment by a 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 intent that the compact be liberally construed. Article 15. Provides that other States may enter this compact on the same terms and under the same obligation as has been set forth in the preceding articles with the consent of all the signatories and of the Congress.

TITLE III-FEDERAL BOND GUARANTY

Section 301. Defines terms, including “additions and betterments or other capital expenditures" and "expenditures for maintenance of property."

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 for maintenance of property. Such guarantees are to be made upon terms and conditions prescribed by the Secretary of Commerce after consultation with the Interstate Commerce Commission.

Section 303. Provides 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. Provides the Secretary may consent to modifications as to rate of interest, time of payment, or other terms which he has guaranteed whenever he shall determine it to be equitable to do so.

Section 305. Provides that payment as required as a consequence of any guarantee under this action shall be made by the Secretary of the Treasury from funds authorized to be appropriated to carry out the provisions of this act. In the event of any default 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 administrative costs of extending guarantees under this title.

Section 307. Establishes a Federal share of the authority's operating costs in excess of revenues. As amended, the section provides that the Secretary of Commerce shall pay to the authority for each calendar year during which the authority encourage an operating deficit (revenues are exceeded by costs of operations) one-third of such deficit. This payment shall not be made for a period in excess of 2 years after the establishment of the authority. Prior to making such payments, the Secretary shall receive from the authority a comprehensive plan and/or report as to the purpose for which this amount is to be expended.

Subsection (b). The Secretary is authorized to receive any reimbursement by the authority payment pursuant to this section, and such amounts shall be covered in the Treasury as miscellaneous receipts.

Subsection (c). Provides for authorization of appropriations in such amounts as may be necessary for payments pursuant to subsection a. Section 308. Authorizes the Secretary of Commerce to appoint a Federal representative to the authority, as provided in article III of the New York-Connecticut Rail Authority Compact, and permits the Secretary to utilize the advice and services of other departments and agencies of the Government as he may require.

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

AMENDMENT

Intended to be proposed by Mr. JAVITS to S. 1234, 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, viz:

On page 18, line 8 (after the period), insert the following: "No payment shall be made pursuant to this subsection for any period beyond the termination of the second complete calendar year of operations of the authority." Senator PASTORE. The fourth bill, S. 1289, was introduced by Senator Dodd on February 25, 1965, and cosponsored by Senator Pell. It would establish a 5-year program of Federal financial assistance to

help railroads meet their commuter and passenger problems and would authorize aid to the extent of $75 million with a limit of $20 million for any one railroad during the first year of the program. This aid would be administered by the Interstate Commerce Commission.

Without objection, a copy of the bill, S. 1289, and an analysis of its provisions will be printed at this point in the record.

(The bill follows:)

[S. 1289, 89th Cong., 1st sess.]

A BILI. To amend the Interstate Commerce Act, as amended, to authorize the Interstate and improving essential passenger train services and facilities, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Railroad Passenger Train Assistance Act of 1965".

SEC. 2. The Interstate Commerce Act, as amended, is amended by inserting immediately after part V thereof the following new part:

"PART VI
"PURPOSE

"SEC. 601. It is the purpose of this part to provide financial aid to common carriers of passengers by railroad subject to this Act to assist them in preserving and improving essential passenger train services and facilities until such time as longer range plans may be formulated to effect a more lasting solution to passenger train service problems, and to encourage State and local governments and their public instrumentalities to extend tax relief and financial and other assistance toward the same end, to encourage the employment of labor, and to foster the preservation and development of a national transportation system adequate to meet the needs of the commerce of the United States, of the postal service, and of the national defense.

"DEFINITIONS

"SEC. 602. For the purposes of this part

"(a) The term 'Commission' means the Interstate Commerce Commission. "(b) The term 'expense' means expenditures for labor, materials, services, and other costs incurred in maintaining, repairing, or renewing road property used in transportation service which are chargeable to the maintenance of way and structure operating expense accounts in accordance with the uniform system of accounts for railroad companies prescribed by the Commission.

“(c) The term ‘expense', in referring to expenses directly assignable as solely related to railroad passenger service or to that portion of common expenses assignable to railroad passenger service, means expenses assignable in accordance with rules governing the separation of operating expenses, railway taxes, equipment rents, and joint facility rents, between freight service and passenger service prescribed by the Commission.

"(d) The term 'financial aid', in referring to financial aid granted by any State, municipality, or other political subdivision, or any public instrumentality thereof, means financial aid in the form of direct grants, tax relief, and expenses incurred in the maintenance of the applicant's way and structures which, if incurred by the applicant, would be an expense assignable to railroad passenger service.

66 APPLICATION FOR AID; CONDITIONS PRECEDENT TO GRANTING

"SEC. 603. In order to carry out the purpose declared in section 601, the Commission is authorized and directed to consider the application of any railroad subject to this Act for financial aid in the operation of a passenger train or trains required by the present or future public convenience and necessity. No such application shall be approved by the Commission unless it determines that (1) the continuance of passenger train operations specified in the application is required by the present or future public convenience and necessity; and (2) the granting of the aid applied for is necessary to carry out effectively the purpose of this part. The Commission shall have power to approve such applications subject to such terms and conditions as in its judgment may be required

to carry out the purposes of this part. Applications shall be under oath or affirmation and in such form as the Commission shall prescribe. A statement of the findings of the Commission under the provisions of this section shall be made a matter of public record by the Commission with respect to each application considered under the provisions of this part.

"DETERMINATION OF AMOUNT OF GRANT

"SEC. 604. (a) The maximum amount of Federal financial aid to be extended to any applicant in the first calendar year it becomes a recipient under this part shall be an amount equal to the lesser of $20,000,000, or the total of—

"(1) expenses solely related to railroad passenger service incurred by the applicant in the two preceding calendar years in the maintenance of way and structures; plus

(2) any expenses incurred in the two preceding calendar years in the maintenance of the applicant's way and structures by any State, municipality, or other political subdivision, or any public instrumentality thereof, which, if incurred by the applicant, would be an expense solely related to railroad passenger service; plus

(3) that portion of common expenses apportionable to railroad passenger services incurred by the applicant in the two preceding calendar years in the maintenance of way and structures; plus

"(4) any expenses incurred in the two preceding calendar years in the maintenance of the applicant's way and structures by any State, municipality, or other political subdivision, or any public instrumentality thereof, which, if incurred by the applicant, would be an expense apportionable to railroad passenger services.

“(b) The maximum amount of any Federal financial aid to be extended to an applicant during its second year of recipiency under this part shall be eighty per centum of the total amount determined by the Commission to be required by the applicant to continue for one year the operation of passenger train services qualifying for such aid: Provided, That the States, municipalities, or other political subdivisions, or any public instrumentalities thereof, through which the subject passenger trains are operated, provide financial aid at least equal to the difference between such maximum amount and such total amount.

"(c) In determining the maximum amount of Federal financial aid for the third, fourth, and fifth years for which an applicant receives such aid under this part, section 604(b) shall apply, except that the maximum yearly amount of such Federal financial aid to be extended to such applicant during those years shall in lieu of such 80 per centum be 70, 60, and 50 per centum, respectively. "(d) In determining the total amount to be required by the applicant to continue for one year the operation of passenger train services qualifying for such aid the Commission shall take into consideration, among other things, the expenses in maintenance of way and structures related to railroad passenger service as set out in section 604 (a) (1), (2), (3), and (4), and in addition, the needs of an applicant to maintain, rehabilitate, or replace equipment necessary for passenger service operations qualifying for grants under this part.

"DISCONTINUANCE OR CHANGE OF CERTAIN PASSENGER OPERATIONS OR SERVICE "SEC. 605. In the determination of any proposed discontinuance or change in passenger operations or services under the provisions of section 13a of this Act, the Commission shall give appropriate weight to any representations relative to the present or future public convenience and necessity which may have been made by the carrier involved under the provisions of this part and to the amount of tax relief or other assistance extended to the carrier involved by any State, municipality, or other political subdivision, or any public instrumentality thereof, which, in the judgment of the Commission is reasonably related to the purpose of this part.

"ASSISTANCE OF DEPARTMENTS OR OTHER AGENCIES

"SEC. 606. (a) To permit it to make use of such expert advice and services as it may require in carrying out the provisions of this part, the Commission may use available services and facilities of departments and other agencies and instrumentalities of the Government, with their consent and on a reimbursable

basis.

"(b) 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 part.

"ADMINISTRATIVE EXPENSES

"SEC. 607. Administrative expenses under this part shall be paid from appropriations made to the Commission for administrative expenses.

"APPROPRIATIONS

"SEC. 608. There is hereby authorized to be appropriated not to exceed $75,000,000 to carry out the purposes of this part, and any amounts so appropriated shall remain available until expended."

SECTION-BY-SECTION ANALYSIS OF S. 1289 (INTRODUCED BY SENATOR THOMAS J. DODD (WITH SENATOR CLAIBORNE PELL), TO PROVIDE A 5-YEAR PROGRAM OF FEDERAL MATCHING ASSISTANCE FOR RAILROAD PASSENGER TRAVEL)

Section 601. The purpose of the bill is to provide assistance for passenger travel by railroad, in a manner intended to encourage the individual States and communities to extend tax relief and financial and other assistance to these railroads.

The bill provides immediate and interim financial help, pending the formulation and putting into effect of a "more lasting solution" to the commuter and passenger problems of the New Haven and other railroads.

For example, the Pell (et al.) bill would give Congressional approval to a public, interstate authority for passenger travel; this is a "more lasting solu tion," as would be the possibility of the rejuvenation of the New Haven by private capital and management once the present crisis is surmounted.

Section 602. The program would be administered by the Interstate Commerce Commission.

The definition of expense follows the standard ICC prescription for expenditures for repairing, maintaining and renewing road property that are attributable to operating expense accounts.

The expenses that count, have meaning, under the bill are those solely or partly assignable to railroad passenger service.

Financial aid by the States, municipalities, and other governmental entities can be direct grants, tax relief and the meeting of expenses attributable to railroad passenger service.

Section 603. Any railroad may apply for assistance for the operation of passenger trains.

The Commission can approve only those applications where it determines that continued passenger train operations are required by "the present or future public convenience and necessity" and the granting of this assistance is necessary to carry out the purposes of this bill.

The Commission is given authority to set terms and conditions when it approves applications.

Section 604. For the first year of the program, during which there is no requirement for State or local matching assistance, the 2 preceding calendar years are used to arrive at a determination of the amount that can be given to a railroad, as follows:

(a) The expenses to a railroad of maintaining the way and structures for passenger services, both those used exclusively and in part for passenger services; and

(b) The expenses for these way and structures incurred by a State, municipality, or other political subdivision.

Only a proportionate share of way and structures expenses, in cases where these are not exclusively for passenger services, could be used.

A maximum of $20 million can be extended to any one railroad during the first year. This figure is based on the New Haven Railroad's expenses during the years 1960 and 1961, as follows: