D.C. City Council legislation that would prohibit the payment of fees to surrogate mothers and sperm bank donors would endanger the existence of alternatives for infertile couples, witnesses said yesterday during a hearing.

About 50 people squeezed into a small council meeting room for the hearing held by council member John Ray (D-At Large), chairman of the council's Consumer and Regulatory Affairs Committee and sponsor of two bills that would, for the first time, allow the District government to regulate surrogate parenting and artificial insemination.

Under one bill, surrogates -- women who bear children for infertile couples -- would be prohibited from receiving payment and would be required along with their husbands to sign an agreement relinquishing any rights to the unborn children. The natural father and his wife would be required to assume responsibilities for the child, regardless of the child's condition at birth.

The bill regulating donations to sperm banks would prohibit any payments to persons who donate sperm for artificial insemination, a process by which a woman is inseminated with the sperm from an anonymous donor.

The bill also would require the donors to undergo medical tests for sexually and genetically transmitted diseases, restrict donors to persons under the age of 60 and limit donors to providing semen for only one recipient. The latter restriction, Ray said, would prevent one man from fathering numerous children and creating the risk of intermarriage.

Representatives for medical centers, the Gay Activists Alliance and the American Civil Liberties Union raised numerous objections to both bills.

Frederick J. Frensilli, the medical director for the Washington Fertility Study Center, which operates a sperm bank, testified that his center pays donors $30 and that without the fee the center would not get donors. Frensilli and other center representatives said the center tries to meet the needs of 150 to 400 couples a year but is forced to reject between 75 percent and 80 percent of its sperm donors because they fail to meet the center's requirements.

Matthew L. Myers, an attorney for Surrogate Motherhood Inc., based in Columbia, Md., told the council panel that couples who use the organization pay between $18,000 and $22,000 to have a child. That fee includes $10,000 for the surrogate mother. By eliminating the fee to the mother, Ray's bill would force a childless couple to turn to a friend or relative, Myers said.

The ACLU and Gay Activists Alliance argued that Ray's bills would impose burdensome restrictions that would limit child-bearing alternatives for married couples. At the same time, they argued that single people and homosexual couples would face a special hardship.

Ray's committee must decide whether to amend the bills and send them to the full council for a vote.