A subsidy may be the answer, but it raises the question of whether Congress shouldn't consider going a step farther and put the company under public ownership.

D.C. Transit is the largest privately owned bus system in the country. But it may be asked what would be left of private enterprise when all element of risk is removed? The subsidy proposal before us would, in effect, underwrite the company's costs and guarantee the stockholders a 5.2-percent return on gross operating revenues.

The other major test of private enterprise is the amount of investment and the committee will be inquiring into that subject as well. For its part, public ownership is no panacea. There would be the problem of obtaining funds to acquire the system and a subsidy might well be required to maintain reasonable fares in the face of high operating costs.

The purpose of this hearing is to clarify the facts, and to hear all sides on this issue. We have a large number of witnesses to hear from, so I would appreciate it if those who testify would keep their statements and answers brief and to the point.

Parenthetically, I might add, almost every witness has submitted his statement in advance. So I will ask each witness rather than read the entire prepared statement, some of which have been presented to the House committees going into these matters, that they capsulize it and speak extemporaneously.

In connection with these hearings, for the record, I now submit (1) copies of S. 1813 and S. 1814 as introduced in the Senate; (2) copy of the staff memorandum; and (3) copy of the D.C. Transit franchise. (The documents follow :)

91ST CONGRESS 1ST SESSION

S. 1813

IN THE SENATE OF THE UNITED STATES

APRIL 15, 1969

Mr. TYDINGS (by request) introduced the following bill; which was read twice and referred to the Committee on the District of Columbia

A BILL

To provide public assistance to mass transit bus companies in the District of Columbia, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That, whenever the Washington Metropolitan Area Transit 4 Commission (hereinafter the Commission) shall determine 5 that a just and reasonable fare for regular route transporta6 tion within the District of Columbia would exceed 25 cents, 7 the Commission shall certify to the Commissioner of the Dis8 trict of Columbia with respect to each calendar month com9 mencing with July 1969 and ending June 1972, all in10 clusive, an amount which is the difference between all fares 11 (including reduced-rate school fares) paid during such cal

3

1 Commission. The Commission may decline to make certifica2 tions for any carrier if, at any time, it finds that substantial

3 progress is not being made in the implementation of the plan of that carrier.

4

5 SEC. 4. Section 2 of the Act entitled "An Act to pro6 vide for the regulation of fares for the transportation of 7 schoolchildren in the District of Columbia", approved Au8 gust 9, 1955 (D.C. Code, sec. 44-214a), as amended, is 9 repealed.

2

1 endar month to any carrier for regular route transportation 2 solely within the District of Columbia and the amount which 3 would have been paid for regular route transportation solely 4 within the District of Columbia during that month at the 5 rate determined by the Commission to be just and reason6able. The certification of the Commission shall be made for 7 each month as soon as practicable following the end thereof. 8 The Commissioner of the District of Columbia, upon receiv9 ing the certification of the Commission, shall pay to the 10 carrier the amount certified. Amounts paid by the Commis11 sioner pursuant to this Act shall not be considered as income 12 for Federal or District of Columbia income tax purposes.

13

SEC. 2. Any carrier receiving funds pursuant to this 14 Act shall, in the expenditure of those funds, give priority 15 to meeting obligations to employee retirement and health 16 and welfare programs.

17

SEC. 3. The Commission shall not make any certifica18 tion under this Act unless the carrier to which public as19 sistance payments would be made pursuant to that certifica20 tion has submitted for the approval of the Commission a

comprehensive plan for the improvement of transportation services by that carrier within the District of Columbia

and a program for the implementation of that plan. There

after such plans and programs shall be submitted annually

for the approval of the Commission, at a time fixed by the

91ST CONGRESS 1ST SESSION

S. 1814

IN THE SENATE OF THE UNITED STATES

APRIL 15, 1969

Mr. TYDINGS (by request) introduced the following bill; which was read twice and referred to the Committee on the District of Columbia

A BILL

To provide for public ownership of the mass transit bus system operated by D.C. Transit System, Incorporated; to authorize interim financial assistance for the company pending public acquisition of its bus transit facilities; and for other purposes.

1

Be it enacted by the Senate and House of Representa

2 tives of the United States of America in Congress assembled,

3

4

SHORT TITLE

SECTION 1. This Act may be cited as "District of Colum

5 bia Transit Act of 1969".

6

7

STATEMENT OF FINDINGS AND PURPOSES

SEC. 2. The Congress finds that (1) an adequate and 8 economically sound transportation system or systems, includ9 ing bus and rail rapid transit, serving the Washington metro