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Chapter 879 - 1st Session

S. 2576

AN ACT

All 69 Stat. 724.

To amend the joint resolution entitled "Joint resolution to authorize the merger of street-railway corporations operating in the District of Columbia, and for other purposes", approved January 14, 1933, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That it is hereby Capital Transit declared that the business of mass transportation of persons for hire Company. in the District of Columbia is clothed with a public interest and is essential to the proper functioning of the Government of the United States and the government of the District of Columbia. The continuous, uninterrupted, and proper functioning of such business in the District of Columbia is hereby declared to be essential to the welfare, health, and safety of the public, including the civilian and military personnel of the Government of the United States located in the District of Columbia and the metropolitan area of Washington. It is declared to be necessary in the public interest to repeal the franchise of the Capital Transit Company and grant the Commissioners of the District of Columbia the authority hereinafter set forth.

SEC. 2. The joint resolution entitled "Joint resolution to authorize D. C. Code 4the merger of street-railway corporations operating in the District 112; 7-131 note, of Columbia, and for other purposes", approved January 14, 1933 503, 504, 507, (47 Stat. 752), as amended, is amended by adding at the end thereof 604,611, 6128 the following section:

"SEC. 14. The charter and all rights of franchise of the Capital Transit Company created by this resolution are hereby repealed in accordance with the terms of section 13 hereof."

44-201, 214 note.

Repeal of

franchise.
47 Stat. 761.

SEC. 3. (a) The Commissioners of the District of Columbia may Authority of authorize (including authorization under such contractual agree- Commissioners. ments as may be necessary) such public transportation, during the year following the date of enactment of this Act, within the District of Columbia as may be necessary for the convenience of the public. Such transportation shall be furnished to the public at such rates and under such terms and regulations as may be recommended by the Public Utilities Commission, and approved by the Commissioners of the District of Columbia, for the purpose of providing a satisfactory system of public transportation within the District of Columbia during the year following the date of the enactment of this Act.

visions.

(b) Any contract entered into under the authority of subsection Contract pro(a) of this section with the Capital Transit Company shall provide (1) that salaries of officers of the Capital Transit Company in effect on July 1, 1955, will be continued in effect during the term of said contract;

(2) that in the event increased wages and benefits are accorded employees under such contract, appropriate increases may also be granted salaried employees other than company officers, subject to the approval of the Commissioners of the District of Columbia; and

(3) that if, at the end of the period of said contract, the operating revenues derived by such company from the operation of its properties in utility service for the convenience of the public have not been sufficient to meet the cost of operation during the period of such contract, including but not limited to depreciation and all taxes, but not including any return on investment, the District of Columbia shall pay Capital Transit Company the amount of such deficiency: Provided, That such deficiency during said

3

All 69 Stat. 725.

Maryland.

period shall be determined in accordance with the accounting practices now prescribed by the Public Utilities Commission, but the said deficiency shall not include any allowance for amortization of such company's property for obsolescence or loss to such company by reason of the termination of its franchise: Provided further, That such deficiency shall not exceed the increased labor costs approved by the Commissioners for the contract period and that this deficiency shall be further reduced by the increased income derived by such company from any fare increase which may be granted by the Public Utilities Commission as a direct offset to the increased labor costs.

SEC. 4. The Commissioners of the District of Columbia may, with the approval of the Public Service Commission of the State of Maryland, exercise any of the powers granted in this Act within the portion of the State of Maryland which is provided with public transportation by the Capital Transit Company (including subsidiaries). Potomac Elec- SEC. 5. Nothing in this Act shall affect the right of Capital Transit Company or its successors in interest to continue railroad service to the Potomac Electric Power Company as currently performed by the East Washington Railway Company, nor shall it affect its present rights with relation thereto.

tric Co.

Appropriation.

Removal of properties

ties.

SEC. 6. There are hereby authorized to be appropriated, out of any money in the Treasury to the credit the District of Columbia not otherwise appropriated, such amounts as may be necessary, if any, over and above the revenues received from operations herein provided for, to carry out the provisions of this Act.

SEC. 7. Effective as of the date of the termination of the charter and all rights of franchise of the Capital Transit Company as provided and facili- for in section 2 of this Act, such company shall, upon the order of the Commissioners of the District of Columbia, remove from the streets and highways at its own expense all of its properties and facilities and shall thereupon restore such streets and highways in accordance with the provisions of the Act of July 1, 1941 (55 Stat. 499). Separability. SEC. 8. If any provision contained in this Act be declared invalid, such invalidity shall not be deemed to affect or impair the validity of the remainder or of any other part of this Act. Approved August 14, 1955.

71-725 0-66-32

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Relating to recognition of gain or loss in certain railroad reorganizations and to amend section 108 (b) of the Internal Revenue Code of 1954.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That part IV of sub- IRC 1954, amendchapter C of chapter 1 of the Internal Revenue Code of 1954 is ments. hereby amended by adding at the end thereof the following new

section:

"SEC. 374. GAIN OR LOSS NOT_RECOGNIZED IN CERTAIN RAILROAD REORGANIZATIONS.

"(a) EXCHANGES BY CORPORATIONS.—

"(1) NONRECOGNITION OF GAIN OR LOSS.-No gain or loss shall be recognized if property of a railroad corporation, as defined in section 77 (m) of the Bankruptcy Act (49 Stat. 922; 11 U. S. C. 205), is transferred after July 31, 1955, in pursuance of an order of the court having jurisdiction of such corporation

"(A) in a receivership proceeding, or

"(B) in a proceeding under section 77 of the Bankruptcy Act,

to another railroad corporation (as defined in section 77 (m) of the Bankruptcy Act) organized or made use of to effectuate a plan of reorganization approved by the court in such proceeding, in exchange solely for stock or securities in such other railroad corporation.

(2) GAIN FROM EXCHANGES NOT SOLELY IN KIND.—If an exchange would be within the provisions of paragraph (1) if it were not for the fact that the property received in exchange consists not only of stock or securities permitted by paragraph (1) to be received without the recognition of gain, but also of other property or money, then—

"(A) if the corporation receiving such other property or money distributes it in pursuance of the plan of reorganization, no gain to the corporation shall be recognized from the exchange, but

"(B) if the corporation receiving such other property or money does not distribute it in pursuance of the plan of reorganization, the gain, if any, to the corporation shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which is not so distributed.

"(3) Loss FROM EXCHANGES NOT SOLELY IN KIND.-If an exchange would be within the provisions of paragraph (1) if it were not for the fact that the property received in exchange consists not only of property permitted by such paragraph to be received without the recognition of gain or loss, but also of other property or money, then no loss from the exchange shall be recognized.

68A Stat. 121.

26 USC 371-373.

70 Stat. 402. 70 Stat. 403.

"(b) BASIS.-If the property of a railroad corporation (as defined in section 77 (m) of the Bankruptcy Act) was acquired after July 31, 1955, in pursuance of an order of the court having jurisdiction of ⚫ such corporation

"(1) in a receivership proceeding, or

"(2) in a proceeding under section 77 of the Bankruptcy Act, and the acquiring corporation is a railroad corporation (as defined in section 77 (m) of the Bankruptcy Act) organized or made use of to effectuate a plan of reorganization approved by the court in such proceeding, the basis shall be the same as it would be in the hands

58A Stat. 116. 26 USC 357.

68A Stat. 123. 26 USC 373.

68A Stat. 32. 26 USC 108.

All 70 Stat. 403.

of the railroad corporation whose property was so acquired, increased in the amount of gain recognized under subsection (a) (2) to the transferor on such transfer.

"(c) ASSUMPTION OF LIABILITIES.-In the case of a transaction involving an assumption of a liability or the acquisition of property subject to a liability, the rules provided in section 357 shall apply." SEC. 2. Section 357 of such Code is hereby amended

(1) by deleting "or 371" wherever appearing in subsections (a) and (b) thereof, and inserting in lieu thereof "371, or 374", and

(2) by deleting from subsection (c) (2) (B) "371" and inserting in lieu thereof "371 or 374".

SEC. 3. Section 373 is hereby amended

(1) by deleting from subsection (a) "transferred in pursuance" and inserting in lieu thereof "transferred before August 1, 1955, in pursuance", and

(2) by deleting "December 31, 1938", and inserting in lieu thereof "December 31, 1938, and before August 1, 1955,

SEC. 4. The table of sections for part IV of subchapter C of chapter 1 of the Internal Revenue Code of 1954 is hereby amended by adding at the end thereof the following:

"Sec. 374. Gain or loss not recognized in certain railroad reorganizations."

SEC. 5. Section 108 (b) of the Internal Revenue Code of 1954 (relating to income of a railroad corporation from discharge of indebtedness) is hereby amended by striking out "December 31, 1955" and inserting in lieu thereof "December 31, 1957".

Approved June 29, 1956.

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To authorize the appropriation of funds for the construction of certain highwayrailroad grade separations in the District of Columbia, and for other purposes.

Fund.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, in recognition D. C. Highway of the fact that the need to bring traffic to and from the Washington- Appropriation. Baltimore Parkway and to handle such traffic requires the construction of certain highway-railroad grade separations, there is hereby authorized to be appropriated to the District of Columbia for credit to the Highway Fund, out of any money in the Treasury not otherwise appropriated, the sum of $665,000, which shall be in addition to any other amounts authorized, appropriated, accruing, or otherwise made available to the District of Columbia under any other provision of law, for the construction and maintenance in the District of Columbia of a highway-railroad grade separation underpass at a point in the southeast section of the District of Columbia in the vicinity of East Capitol Street, where the proposed extension of East Capitol Street as shown on the highway plan of the District of Columbia will cross the right-of-way of the Philadelphia, Baltimore, and Washington Railroad and the Baltimore and Ohio Railroad. Such sums as are appropriated shall remain available until expended when specifically provided in the appropriation Act.

SEC. 2. Appropriations made to carry out the purposes of this Act shall be available for construction, maintenance, and expenses incident to construction and maintenance, including planning, design, overhead, and supervision.

SEC. 3. Since the construction of East Capitol Street extended is to provide connections between the District of Columbia and the Federal Highway System, the entire cost of construction and maintenance of the grade-separation structure referred to in the preceding sections of this Act shall be borne by the District of Columbia, out of funds authorized to be appropriated by this Act and any other funds available to the District, and no contributions to such cost of construction and maintenance shall be required of any railroad whose right-of-way. is involved by such structure, except as provided in section 4 of this Act.

SEC. 4. The dedication by the railroads to the District of Columbia of the right to use as a public thoroughfare the portion of East Capitol Street extended shall not impair or affect the right of the railroads to use for railroad purposes the portion of its right-of-way so dedicated.

Approved July 19, 1956.

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