N.Y. Rapid Transit Law § 90: Commission to prepare plan

§ 90. Commission to prepare plan. a. The commission after making the

necessary studies and investigations shall prepare a plan for the relief

of the emergency which is hereby declared to exist, and for the

improvement of transit in any such city. Such plan shall contain

provisions which in the judgment of the commission, will accomplish as

nearly as may be the following purposes:

1. The acquisition and unification, under public ownership or control,

of railroads by purchase and direct conveyance or transfer, or by lease,

recapture, assignment of lease, modification or extinguishment of

existing contract or by contracts for equipment, maintenance and

operation or maintenance and operation, by or under supervision of a

board of transportation, or partly by one of such methods and partly by

one or more of the others, so that service thereon may be increased,

extended and improved to the fullest extent possible,

2. The receipt as soon as practicable by the city of net revenues from

the operation of the railroads which will be applicable to the payment

of interest and amortization charges on corporate stock or bonds of the

city after deduction of all expenses of maintenance and operation,

reserves for depreciation and otherwise, interest and amortization

charges and other deductions as may be provided in a plan or in any

contract or lease made in pursuance of its provisions, and

3. The assuring to the people of the city the continued operation of

the railroads at the present or lowest possible fares consistent with

their safe and economical operation and the performance by the board of

its obligations under any plan and under any lease or contract made in

pursuance of its provisions.

In case a plan or any amendment thereof or supplement thereto or

separate plan adopted with the approval of the board of estimate of the

city as provided in this article, shall include any street surface

railroads, it may also include any stage coach or omnibus lines,

together with the plant, property and equipment thereof, owned or

operated in conjunction with, or as a part of the same system as, such

street surface railroads.

b. The commission shall include in the plan appropriate provision for

the protection of tort creditors; and shall provide for the continuance

in original or modified form of any existing plan or provision of

railroad companies for employees' pension and sick benefit relief, but

such continuance shall in no manner or form impair the actuarial status

or benefits of employees who are members of the New York city employees'

retirement system. Without limiting the authority and discretion of the

commission, it may consider the incorporation in the plan of provisions

whereby the title to such railroads as are not already owned by the city

and whose ownership thereby is deemed by the commission to be desirable

may be vested in the city and whereby rights under existing contracts

for the construction, equipment and operation of rapid transit railroads

already owned by the city may be acquired by the city. Such title and/or

such rights may be vested in the city directly or may first pass through

an intervening corporation and then to the city, either free and clear

of liens and encumbrances or subject to specified liens and

encumbrances, in return for a lease or leases by the city of such

railroads and of any other railroads owned by it and such other or

additional considerations as the commission may determine with the

approval of the board of estimate. In the event of the incorporation of

such provisions in the plan the commission shall outline an arrangement

whereby outstanding securities of the railroad companies may be retired

by application of the amounts paid by the city for the railroads

acquired and whereby such securities may be amortized or otherwise paid.

Any railroad company included in the plan, with the consent of the

holders of record of at least two-thirds of its outstanding shares of

stock entitled to vote thereon, given as provided in section one hundred

forty-eight of the railroad law, may transfer and convey its property,

appurtenances and franchises, or any part thereof, to the city and/or

such intervening corporation as provided in the plan, subject, however,

to the rights of appraisal of the shares of any dissenting stockholder

as provided in section one hundred sixty-one of the railroad law. Any

railroad company included in a plan whose entire outstanding capital

stock or whose railroad facilities are acquired by the city as provided

therein may be dissolved without judicial proceeding in the same manner

as provided in and subject to the same provisions as contained in

section one hundred five of the stock corporation law with respect to

the dissolution of stock corporations, and upon filing the certificate

of dissolution in the office of the secretary of state, titles to and

ownership of the railroad, franchises, properties and assets of such

railroad company shall pass to and vest in the city. The certificate of

dissolution of any such railroad company shall bear endorsed thereon, in

addition to the consent of the state tax commission, the approval and

consent of the commission to the filing of such certificate.

c. In connection with the preparation of any plan the commission shall

cause a valuation to be made of the railroads, properties and interests

therein, including leases and leasehold interests and outstanding

contracts the assignment to or cancellation of which by the city may be

deemed advisable but excluding franchises and going value, of the

railroad company or railroad companies it proposes to include therein.

Any such valuation including the value of contracts acquired may be in

such detail and include such elements of cost or value and be made in

such manner as the commission from time to time may determine and

prescribe, with due regard to the past, present and estimated

prospective earnings of such railroads, properties and interests at the

rate of fare that the railroad company prior to April twenty-seventh,

nineteen hundred twenty-one was entitled to charge under the provisions

of the contracts or franchises under which such properties are operated

or held or of any lawful order then in force fixing or regulating rates

of fare, or under existing law, and in view of the competition of other

lines and with due regard to all other pertinent facts and conditions;

but such valuation shall not in any case exceed the fair reproduction

cost of such properties less depreciation, and, in the case of leasehold

interests and contracts to be assigned, acquired or cancelled, the fair

value of any such leaseholds and contracts. Any such valuation as

finally determined by the commission may be the basis for the inclusion

of such railroads, properties, contracts and interests in the plan and

for fixing the allowances and returns on account thereof under the plan

and under any leases or contracts made in pursuance of its provisions.

d. In connection with the preparation of the plan the commission may

include in the plan provision for railroads operating between a point

within the city and a point without the city and connecting railroads

whose lines stop at or near the city line. The plan may also include, in

addition to and in conjunction with the railroad of a railroad company

included therein, a railroad owned by the city and/or a railroad leased

or to be leased by the city from the owner or lessee of such railroad.