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The 192nd General Court of the Commonwealth of Massachusetts

Section 22: Remedy of private mass transportation company against authority for relief from effects of authority's operations; procedures

Section 22. (a) If the authority shall operate or contract for the operation of a mass transportation service or route which is not substantially similar to a service or route previously operated by the authority or the Massachusetts Bay Transportation Authority and which is in competition with a pre-existing mass transportation service or route provided by a private company, and if such competition causes substantial economic damage to such company, the company may file a claim for relief with the authority within six months of the commencement of such new operation. The claim for relief shall state all of the facts relevant to the claimed competition and to the alleged damage suffered therefrom. Thereupon the authority shall make a prompt and full investigation of the claim. During its investigation and any subsequent arbitration the authority shall have access to the books and records of the company, including but not limited to copies of all federal and state tax returns of such company for prior years. Within 120 calendar days after the filing of the claim for relief the authority shall issue a report setting forth its findings with respect to said claim, together with a detailed statement of the facts as to the respective patronage, revenues and costs on the allegedly competing routes and, if deemed appropriate, an offer of relief. Such offer may include a proposal that the authority purchase all or a portion of the assets of such company, or that the authority grant to such company a contract pursuant to the provisions of section 3, or it may propose such other plan or alternative plans of relief as it shall deem reasonable and in the public interest. Within 90 calendar days of receipt of such report the company shall accept or reject any offer or offers of the authority or it shall make one or more counter-offers. The authority shall accept or reject any counter-offers within 30 calendar days of receipt. The authority may modify or revoke any such offer and the company may modify or revoke any such counter-offer at any time before acceptance or rejection.

(b) If the authority shall decline to make any offer to the company, or if all offers or counter-offers shall be rejected, or if the authority or the company shall fail to act with respect to such offers or counter-offers within the time prescribed herein, the matter shall be referred to a board of arbitration for final and binding adjudication. Unless the parties shall agree in writing to some other method of constituting the board of arbitration, of selecting its members and of providing for the rules of procedure by which it shall be governed, the board shall be appointed and its proceedings regulated in accordance with the provisions of the applicable sections of chapter 251. The function of the board of arbitration shall be to determine whether the operations of the authority in competition with those of the company during the period complained of have constituted a proximate cause of substantial damage to the company; to identify and designate the portion of the company's operations so damaged, such designation to include a complete list of the physical assets of the company, real and, personal fairly allocable to such portion; and to fix the fair value of such portion of the company's operations as of the time that such competition commenced. In determining such fair value the board of arbitration shall follow generally accepted accounting principles and shall place particular emphasis on capitalization of the average net income of the company for prior years, excluding, however, from such average net income any amounts received by such company under the provisions of section 25B of chapter 58, and upon an appraisal of the listed physical assets of the company valued at their cost basis less depreciation in a manner consistent with the valuation and depreciation methods employed by the company in filing federal and state income tax returns for such prior years. Under no method of valuation shall any value be placed upon franchises or good will. Within 30 calendar days after the award of the board of arbitration the company shall sell, and the authority shall purchase, the physical assets listed by the board, and the authority shall pay to the company the fair value of the portion of the company's operations as found by the board. The cost to the authority of any acquisition under this section shall be paid from the proceeds of bonds or bond anticipation notes issued as hereinafter provided. An award under this section shall be subject to the availability of such bond or note proceeds and any sale hereunder may be postponed by the agreement of the parties pending the availability of such funds.

(c) The procedure set forth in this section shall constitute the exclusive remedy of a private mass transportation company against the authority for relief from the effects of the authority's operations or activities, and no action or suit shall be brought against the authority on account of alleged damage suffered except to enforce compliance with the provisions of this section. Nothing herein shall prohibit the authority and the company from entering into an agreement in settlement of the claim for relief at any time, notwithstanding the rejection of an offer or counteroffer, the pendency of arbitration proceedings or the existence of an award. All time requirements set forth herein may be extended by the written agreement of the authority and the company. It is the intent of this section to encourage cooperation between the authority and private companies so as to provide fair and reasonable relief as speedily as possible in case of damaging competition.