vehicle owners, and what share should be collected from other beneficiaries such as abutting property owners and the community generally? The need for roads and streets, entirely apart from the presence of motor vehicles, is obvious, particularly when we consider that there was a vast network of city streets and rural roads in this country long before the motor vehicle was invented. They were essential to defense, to business, and to the general health, protection, and welfare of communities and farmers. It is universally recognized that proper division of responsibility between these nonuser beneficiaries, on the one hand, and motor vehicle owners, on the other hand, should be the first consideration in attempting to determine equity. And it is a particularly important consideration when dealing with a portion of the highway system that is viewed primarily as a vital national defense network. DIVSION OF COSTS Following determination of the proper share of the cost that should be borne by motor vehicle owners as a whole, the next step is determination of how that share should be divided among different types of motor vehicles. It is generally recognized that the most logical and scientific approach to the problem of assigning highway tax responsibility among the different types of motor vehicles is the incremental method. This involves determining what highway costs would be if there were no large and heavy vehicles, and the roads were built only to the standards necessary to carry light vehicle traffic and withstand the elements. These minimum or basic costs are assigned to all vehicle groups, including the large and heavy vehicles on the basis of miles operated. The additional or incremental costs which are incurred to accommodate the large and heavy vehicles are assigned entirely to those vehicles. Thus, the large and heavy vehicles are assigned their fare share of the basic minimum road costs plus all of the additional costs incurred to make the highway adequate for their use. RECOGNIZED IN EASTMAN STUDY There is nothing new or novel about these principles. They were recognized and applied in the 1930's in an exhaustive 6-year study by the Office of the Federal Coordinator of Transportation, an agency established by Congress. This study resulted from constant complaints by the railroads that trucks were not paying a fair share of State highway costs. In fact, the study was financed by assessments against the railroads. The Federal Coordinator of Transportation was the late Joseph B. Eastman, who served 25 years as an Interstate Commerce Commissioner and, until his death, as Director of the Office of Defense Transportation during World War II. He generally was considered the country's outstanding transportation expert, and neither his integrity nor his qualifications were ever challenged. The comprehensive and thoroughly documented study of Mr. Eastman and his large trained staff of experts is known as Volume IV: Public Aids to Transportation. Applying the same principles I have outlined, the study found that, for the period covered by the study, motortrucks, particularly the large trucks, were paying more than their fair share of highway costs. FINDING NOT SURPRISING Such a finding is not surprising in view of the magnitude of truck taxes as compared with light-vehicle taxes, particularly when it is recognized that the existence of large and heavy vehicles has no special bearing on a very large portion of the total cost of administering, engineering, policing, and building the highways. To the extent that large vehicles add to the cost of highways, the chief item affected is the surface itself, and only 24 percent of the projected cost of the interstate system is for surfacing, according to the recently published report of the Bureau of Public Roads entitled "Needs of the Highway Systems, 1955–84" The following statement by former Commissioner of Public Roads MacDonald is indicative of the extent to which large vehicles might add to the cost of some highways: "We would not build roads much less than 7 inches at the edge and 6 inches in the center, no matter what kind of loads we were going to carry. "If we built thinner surfaces they would curl up like tissue paper in the rays of the sun. They would warp; the frost heave would destroy them. "So we have a certain minimum thickness of roads that it is necessary to build if there were nothing heavier than the ordinary passenger cars and farm trucks to use the road, and the whole question of the heavier buses and heavier trucks therefore begins with a certain minimum thickness of road which is necessary regardless of whether they exist or not." Since most of our best highways, designed for all traffic, are 8 or 9 inches thick, the added thickness that might be deemed the extra responsibility of large vehicles actually is not nearly as great as may be generally assumed. SUPPORTS INDUSTRY'S VIEW The trucking industry firmly believes the taxes it already is paying are adequate to cover the industry's fair share of highway costs. The unbiased and authoritative study by the Federal Coordinator of Transportation supports this view. Admittedly, the Federal Coordinator's study covered an earlier period of years, and to that extent is outdated. However, the principles applied in that study are still recognized as sound. The fact that the details are outdated does not mean that application of the same methods to today's facts would bring different results. In fact, there is reason to believe that changes in the various highway user tax structures since that time would result in findings just as favorable, if not more favorable, to the large vehicles. Earlier in this statement, I mentioned the extensive hearings held in 1950 by the Senate Committee on Interstate and Foreign Commerce. In the course of those hearings the railroads reiterated their constant complaint that motortrucks were not being required to pay their fair share of highway costs. The result was introduction by Senator Bricker, of Ohio, and Senator Johnson of Colorado of a bill (S. 2365) in the 82d Congress-a bill which would have directed the Bureau of Public Roads to make an up-to-date study of the share of highway taxes that should be paid by various classes of motor vehicles and to report back to Congress. RAILROADS OPPOSED TAX STUDY Confident that it is paying a fair share of the highway tax bill, the trucking industry, through our association, appeared and supported the bill. To the amazement of everyone concerned, the railroads, whose vigorous complaints were directly responsible for introduction of the bill, flatly opposed it. They made it clear, by their action, that they did not want to risk a new study by an objective and qualified Federal agency. The bill died. Today, as then, the trucking industry believes and contends that it is fully meeting its highway tax obligations. It still has no fear of a fair study by a qualified agency. And in the absence of such a study it believes and contends that there is no justification for singling out large trucks and buses to bear the full brunt of increased taxes. STATEMENT OF R. A. LUMPKIN, PRESIDENT, ILLINOIS CONSOLIDATED TELEPHONE CO. I am R. A. Lumpkin, president of Illinois Consolidated Telephone Co. with headquarters at Mattoon, Ill. This company operates over 40,000 telephones solely in the State of Illinois. Like some 5,000 other small telephone companies, it enjoys complete financial independence from the Bell System. Since all of the stockholders are situated in the territory served, the company can be said to be home-owned as well as independent. The independent telephone company is typical of the small-business enterprise. It faces many current problems which threaten its very existence. The end of World War II has been followed by an ever-increasing demand for telephone service. Industrial decentralization has brought about an even greater growth in the areas served by independent companies than in the metropolitan areas of Bell System operations. While the entire telephone industry has strained its every effort toward meeting this demand, the task has been particularly onerous on the smaller company. Many of these companies have experienced great difficulty in securing satisfactory and adequate financial assistance for their expansion programs. When these companies have placed their poles and wires upon public highways in order to meet service demands, they have done so with a reasonable expectation of maintaining them in that location for the natural life of the property. The prospect of Federal aid in the construction of highways suggests that many present roads will be improved by rerouting and widening. As a result, there will come about a necessity for rearrangement of telephone plant already upon such highways. To ask that the telephone utilities undertake such rearrangeents at their own expense is to place upon them a burden that will, in a great many instances, prove intolerable and become a threat to the continued existence of many small telephone company enterprises. This will be a catastrophe, not so much to the companies alone as it will be to their customers who need telephone service for daily necessities and adequate protection. It is in the interest of thousands of small telephone companies and their customers that we urge the Government not unduly to burden them with the cost of rearrangements of plant resulting from highway improvements under Federal-aid programs. We firmly believe that the legislation which your com mittee has under consideration should include substantial relief for all utilities required to move their existing plant as a result of highway improvements. Mrs. IRIS BLITCH, STATE HIGHWAY DEPARTMENT OF GEORGIA, Member of the House of Representatives, Washington, D. C. DEAR MRS. BLITCH: This acknowledges receipt of your letter of March 29. with reference to a public nearing on administration highway legislation, which starts April 18, 1955. The officials of the highway department have been in conference with the American Road Builder's Association and the American Association of State Highway Officials, and it is believed that these two organizations can best speak for the various highway departments and thereby relieve the Public Works Committee of a lot of unnecessary duplication and testimony. The majority of the questions sent out with reference to H. R. 4260 were covered in these conferences. In general you will find that the evidence submitted by the American Association of State Highway Officials and American Road Builder's Association goes into the needs of the various classifications of the roads needed, but does not make recommendation as to a definite method of financing, as it is believed that this is the prerogative of the Congress to establish. The State cannot increase its present matching funds to any great extent; otherwise taxes will have to be increased for this purpose. You are no doubt familiar with the situation in Georgia in this respect. We would not be in a position to match additional Interstate System funds on a 60-40 basis as the law now requires. We feel that the Federal Government should make the interstate funds available on at least a 90 percent basis. Very truly yours, STATE HIGHWAY BOARD OF GEORGIA, COUNTY OF WESTCHESTER, White Plains, N. Y., June 3, 1955. Hon. FRANK J. BECKER, Room 1626, House Office Building, Washington, D. C. DEAR MR. BECKER: After my statement to the House Committee on Public Works on May 25, 1955, Mr. Harold T. Garrity appeared before the committee and entered a statement in the record. So that the position of the county of Westchester may be entirely clear and no misunderstandings as to the factual situation appear in the record, I respectfully request that the following statement be placed in the record of the hearings of such committee: Mr. Garrity stated that tolls have been collected on the parkways for about 3 years. The fact is that tolls are collected by virtue of an act of the State legislature adopted in 1945 and have been collected continuously since that time. Mr. Garrity also stated that there are no outstanding parkway bonds of the county at the present time. The fact is that there are more than $20 million of bonds still remaining to be paid. Mr. Garrity stated that the toll is being used for general purposes and not for the parkway system. The fact is that the Westchester County Toll Act (Laws of New York, 1945, ch. 594, as amended) specifically provides that the tolls must be used for certain stated purposes relating to the operation of the toll stations, the operation and maintenance of the parkways, the interest and amortization of the parkway bonds and the repayment of moneys due by reason of advances made toward the construction of the parkways. There has been no deviation from the provisions of this law, and the tolls collected have been used for the purposes stated. Mr. Garrity stated that the county has spent practically nothing on maintenance of the parkways and that the tolls and the moneys received from State aid are being used for general revenue at the present time. The fact is that in our current budget the county is spending over $5,400,000 for the maintenance of parkways and county roads, policing, repairs, capital improvements, debt service and operation of the toll stations. The total amount received from tolls, other income from the parkways and State aid is over $380,000 less than the amount expended, requiring the real property of our county to be burdened by a tax levy in that amount. I may say that they figure of $5,400,000 stated as expenditures by the county for road and parkway purposes does not include overhead, general supervision, accounting, and personnel services, as well as insurance or retirement costs. If expenditures representing the latter were included in the total expenditures, the amount of $5,400,000 would be considerably larger. I should be grateful to you if the foregoing can be inserted in the record of the hearings. Sincerely yours, JAMES D. HOPKINS, Hon. GEORGE H. FALLON, House of Representatives, AMERICAN ROAD BUILDERS' ASSOCIATION, New House Office Building, Washington, D. C. DEAR CONGRESSMAN FALLON: During the recent appearance of the American Road Builders' Association before your committee, we were requested to furnish additional information on certain aspects of the appropriating authority of the Congress. Pursuant to this request, we are transmitting herewith a supplemental statement with the request that it be made a part of the record, together with our original statement. Respectfully submitted. BURTON F. MILLER, Staff Counsel. SUPPLEMENTAL STATEMENT OF AMERICAN ROAD BUILDERS' ASSOCIATION Mr. Chairman and gentlemen of the committee, the American Road Builders' Association was privileged to appear before your committee on May 25, 1955. Among the questions asked at the conclusion of our direct testimony were several relating to (1) the legal right of one Congress to enact appropriation measures of a continuing nature, thus binding subsequent Congresses; (2) the legality of an appropriation measure earmarking revenues from a given tax to a specific purpose; and (3) can Congress engage in a long-term credit financing without resorting to the legal device of corporate structure? The foregoing questions were prompted by the financing provisions of H. R. 4260 and other related legislation. The proposed legislation would set up a Federal Highway Corporation authorized to issue obligations in an amount not to exceed $21 billion, with maturities running up to 30 years. Interest rates would be determined by the Corporation with the approval of the Secretary of the Treasury. The assets of the Corporation would consist of a continuing appropriation which annually would be equal to the amounts of revenue in excess of $622,500,000 collected each fiscal year from taxes imposed by sections 4001 and 4041 of the Internal Revenue Code of 1954 on gasoline and special fuels. In addition, the Corporation would have the power to issue to the Secretary of Treasury its obligations in such amounts as may be necessary to provide for the debt service of the Corporation but not exceeding an aggregate amount of $5 billion outstanding at any time. It is further provided that the obligations of the Corporation are not guaranteed by the United States nor constitute a debt or obligation thereof. Funds thus derived would be utilized for the accelerated development of the National System of Interstate Highways and completion within a contemplated period of 10 years. Also, $600 million annually would be provided for a continuation of the present regular Federal-aid programs at current levels. While such a financial device at the Federal level (as embodied in the administration bill) is perhaps quite novel, nevertheless, there is no apparent constitutional prohibition against its employment. Similar credit devices have been frequently used by States and have repeatedly stood the test of legality. Admittedly, such State cases are not controlling as to the United States. But they do clearly delineate the legal techniques employed in earmarking specific State revenues to service bonded indebtedness. One of the most illuminating cases in point is that of Ziegler v. Witherspoon (49 N. W. 2d 318). In this case the court held that certain State revenues could be legally earmarked for servicing bonds of a special authority, the proceeds of which were used for expressway construction in a metropolitan area. For other cases in point see State v. Highway Commission (28 P 2d 770); State v. Connelly (46 P 2d 1097); Scott v. Alabama Bridge Commission (169 Southern 273); State v. Florida Improvement Commission (37 Southern 2d 443) ; State v. Jones (23 N. W. 2d 54); Watrous v. Golden Chamber of Commerce (219 P 2d 498); McLucas v. Bridge Authority (77 S. E. 2d 531); and State v. O'Brien (82 S. E. 2d 903). Article I, section 8 of the Constitution of the United States limits the taxing power of the United States "to pay the debts and provide for the common defense and general welfare of the United States." With regard to appropriations at the Federal level, the Constitution in article I, section 9, provides "no money shall be drawn from the Treasury but in consequence of appropriation made by law." No constitutional restriction relating to the continuation or duration of appropriations exists other than article I, section 8, which provides that no appropriation for the armies shall be for a longer term than 2 years. In general, Congress can lawfully enact an appropriation measure which by its very terms will be applicable for a period of years. Of equal certainty it may be said that a subsequent Congress may repeal or otherwise modify such a law. In a recent opinion as to the authority of a given Congress to bind a subsequent Congress, Mr. John Simms, Chief of the Legislative Counsel, United States Senate, said, "It seems elementary that one Congress, or one law enacted by a Congress, cannot completely foreclose action by a subsequent Congress or by a subsequent law of the same Congress. To so hold would be to say that once a policy had been enunciated by a Congress it is not susceptible to change. That is not to say, however, that a subsequent Congress is always left with an unlimited realm of action. Rights may be accrued under a law which cannot be validly divested. But the power of each Congress to enact legislation for future application cannot be eliminated by action of a prior Congress." In those cases where corporations or other such instrumentalities of the State have issued obligations which have been purchased by third persons, it has repeatedly been held that revenue measures supporting the securities in question cannot be repealed or modified in such a manner as to diminish or destroy the value of such securities. Such actions have been held to be unconstitutional as violating section 10 of article I of the Constitution prohibiting the States from enacting laws impairing the obligation of contract. It should be noted, however, that this constitutional prohibition is not applicable to the United States. However, a somewhat parallel protection is found under the due process clause of the Constitution. The question of the authority of Congress to earmark revenues for a specific purpose appears to present no real problem. A good example is the recently enacted law dedicating receipts from the duck stamp tax and certain other tax revenues to the Fish and Wild Life Service of the Department of the Interior. Similarly, revenues under the social security program are likewise earmarked. Other examples include appropriation of amounts equal to revenues derived |