it does, is very much to be preferred to the remedy contemplated by the proposed legislation. For this reason, we would not support the enactment of H.R. 4972 at this time.

In the time available for responding to your request, it has not been possible to bring this matter to the specific attention of the members of the Commission. In a strict sense, therefore, this report reflects only the staff's interpretation of the Commission's thinking embodied in its report on property tax reform.

Sincerely yours,

WM. G. COLMAN,
Executive Director.

The CHAIRMAN. While I understand that the principal proponents of the legislation are the railroad carriers, the bill covers all common carriers subject to the Interstate Commerce Act, and thus includes oil pipelines, motor carriers, water carriers, freight forwarders, sleeping car and express companies, and so on.

From our study and hearings over these past years, we can well appreciate that there is a vital problem involved in this legislation before us. It is my understanding that since the Transportation Act Amendments of 1958, much already has transpired in many taxing districts to show a recognition on the part of those districts of the need for mitigating in some part the burden which has been placed upon some of our common carriers, primarily the railroads.

While much has been done. I assume that the fact that we have the legislation before us is evidence that there is much yet which the carriers feel should be done. On the other hand, I can well appreciate that we have involved here an important problem involving the relative jurisdictions of the local and Federal Governments to tax. Our first witness this morning will be our colleague from Louisiana, Congressman Joe Waggonner.

Will you take the stand, please?

It is good to have you with us. You may proceed.

STATEMENT OF HON. JOE D. WAGGONNER, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA

Mr. WAGGONNER. Thank you, Mr. Chairman and members of the committee.

Let me express my appreciation for the opportunity to appear before your distinguished committee this morning to state very briefly my case with regard to these 13 proposals, one of which is mine, having to do with taxation of common carrier property.

Being from Louisiana, I perhaps realize today, a little bit better than some do, some of the problems involved in tax equalization, because the question of tax equalization is perhaps closer at hand in Louisiana today than in any other State.

Mr. Chairman and members of the committee, I introduced H.R. 7183, one of the measures presently before you, and I would like to make a few brief comments urging your favorable consideration of the

measure.

There is located in Louisiana 3,899 miles of railroad track owned in large part by 12 class I roads. These railroads provide a substantial part of Louisiana's transportation needs and have played a major role in the development of New Orleans as the major port of the South. The railroads serving Louisiana literally crisscross this Nation and, in fact, their tracks extend into 30 States. Through a system of con

nections, these major railroad companies reach every part of North America and Mexico served by railroad.

The measure presently before you is not radical in nature. In effect, it would give a common carrier subject to the Interstate Commerce Act a cause of action to recover that portion of its property taxes deemed excessive and discriminatory.

It would give a remedial cause of action to correct a practice that sorely needs correction and, for which, as a practical matter, there is none today. It is common knowledge that quite frequently railroad property and other carrier property is assessed at a higher proportion of its true value than is the property of an ordinary taxpayer. Over a period of years, this excessive tax has been passed on by the railroads to their shippers and, indeed, affects interstate and foreign

commerce.

My bill is, I believe, simple and direct in its intent. It is to prohibit any taxing district from taxing the property of a common carrier at a higher ratio to the true market value of such property than any other industry.

I would like specifically for the record to show that I do not advocate the destruction of local taxing authority, but I do not believe that it is fair, reasonable, or just for a common carrier to be taxed at a discriminatory rate and my bill will correct this discrepancy where it exists. We do have a responsibility in matters involving interstate

commerce.

As a practical matter, I believe the redress which my bill proposes can be had only in this manner and I urge your careful consideration of it.

Again, realizing that you have a number of others to testify today, gentlemen, I want to thank you for your time. I have made my remarks brief because I am aware of the fact that there are many others who wish to testify and I do not want, needlessly, to take up the committee's time..

The CHAIRMAN. Thank you, Congressman Waggonner. We appreciate the fact that you have taken the time to come to the hearings and give us the benefit of your views on your bill and the other bills before the committee.

Do you have any questions, Mr. Friedel?

Mr. FRIEDEL. I just want to compliment my colleague for his wonderful statement. You express my own sentiments word for word, so I want to thank you for coming.

Mr. WAGGONNER. Thank you, Mr. Friedel.

Mr. SPRINGER. I have no questions, Mr. Waggonner. It is an excellent job, I want to say, Mr. Chairman, in presenting this matter. Mr. JARMAN. I have no questions.

Mr. NELSEN. Mr. Chairman and Mr. Waggonner, I have introduced a similar bill to the one that you have now testified in support of. It has come to my attention that in many States great discrimination does exist in many areas in methods of tax assessments on railroad property.

With the same idea in mind that you have expressed in your very precise and exact statement here, I felt it necessary to introduce a similar bill to the one that you have introduced, with the hope that we could figure out some method of equalization that would bring into

fairplay at least taxing of property that we find hard to hang onto in the best of circumstances.

I thank the gentleman for his statement. It is a very excellent one. Mr. MURPHY. I would like to compliment my colleague on an outstanding statement and ask him just one question.

Does the State of Louisiana have a State equalization board on taxes?

Mr. WAGGONNER. If you had asked me that question 10 days ago, I could have said "Yes." Perhaps you refer to what we call the State tax commission. For over a year, there was, under the present Governor, a special committee studying equalization of taxes. They completed their study and made their recommendation to the Governor.

With some definite reservations, the Governor endorsed the report and the study and said that he would proceed to try to accomplish it with the hope that he could get the necessary cooperation of other public officials in Louisiana and the community of Louisiana as a whole.

He found that he did not have the support of the Louisiana Legislature. He polled the legislature, and he told me this himself, and he found that two-thirds of the State legislature was completely opposed to any tax equalization. He has, at least for the time being, called a

halt to it.

I think he has made a statement that tax equalization has not been forgotten in Louisiana, and it will probably remain for the courts to do what they had set out to do, but it is a controversial question in Louisiana now.

Mr. MURPHY. These roads probably run into the same situation in other States they serve?

Mr. WAGGONNER. Yes. A number of other States, I think, Kentucky and Florida have had prior experience in this field. They have had some dealings with the courts and they have, I believe, had to enact all too hasty legislation in an effort to comply with the court orders. As a result, they have made a good many mistakes in a good many areas in equalizing taxes.

Mr. MURPHY. So, in effect, the common carrier almost has a state of chaos in taxes when they serve multiple States with different taxing problems.

Mr. WAGGONNER. Yes, and I think it is common knowledge that probably the railroads have been more discriminated against as common carriers than have some of the other areas, for example, through the years.

Mr. MURPHY. It could work to their advantage in some cases?

Mr. WAGGONNER. Yes, it could, there is no question about that, and in some areas of each of the States I feel that probably it does work to their advantage.

Mr. MURPHY. Thank you very much.

Mr. WAGGONNER. But we have a responsibility in interstate commerce and that is my reason for this legislation.

The CHAIRMAN. I notice one of our colleagues, Mr. Rogers here, and I thought he might want to make some comment. Mr. Rogers, do you have any question of Mr. Waggonner of Louisiana?

Mr. ROGERS of Texas. I want to compliment Mr. Waggonner on realizing the problems that are facing a lot of these businesses and taking steps to try to correct them.

The CHAIRMAN. Thank you very much for coming and giving us the benefit of your views.

At this time I would like to have inserted in the record at its appropriate place a letter from the Governor of the State of Kansas.

(The letter referred to appears on p. 118.)

The CHAIRMAN. Our next witness will be a representative of the Association of American Railroads, Mr. James Ogden.

Mr. Ogden, you are vice president and general counsel of the Gulf, Mobile & Ohio Railroad. You may proceed, and if you will identify the gentleman who is with you, and his capacity, we would appreciate that for the record.

STATEMENT OF JAMES N. OGDEN, VICE PRESIDENT AND GENERAL COUNSEL OF THE GULF, MOBILE & OHIO RAILROAD CO., REPRESENTING THE ASSOCIATION OF AMERICAN RAILROADS; ACCOMPANIED BY WILLIAM KIMBROUGH

Mr. OGDEN. The gentleman who is with me, Mr. Chairman, is Mr. William Kimbrough, from our office in Mobile. He is here to help me or hand me a paper if it is something in his file that I don't have, in case I am asked a question where it would be needed.

The CHAIRMAN. You may proceed. We can put your prepared statement in the record or you can give a summary. If you wish to read it, you may do so.

Mr. OGDEN. I would like my prepared statement put in the record and to read parts of my statement if I may, Mr. Chairman.

The CHAIRMAN. You may do so.

Mr. OGDEN. Mr. Chairman and gentlemen, as the chairman has stated, my name is James N. Ogden. I am vice president and general counsel of the Gulf, Mobile & Ohio Railroad Co. with headquarters in Mobile, Ala.

I appear here on behalf of the Association of American Railroads. Those railroads operate 95 percent of all the railroad mileage in the United States and employ 92 percent of all railroad workers, and haul 99 percent of this country's railroad line-haul freight and passenger traffic.

It is my purpose to state the views of our industry on H.R. 4972 and the 12 identical bills before you for consideration.

Of course, the railroad industry heartily endorses and supports these bills. Since they are identical except for number and authorship, I will for convenience refer only to H.R. 4972 in the remainder of my statement.

But I wish to express the warm appreciation of our entire industry to each congressional author for his encouragement in the struggle to defend and preserve our common carrier system of transportation. As stated by the chairman, the principal purposes of this bill are to declare that a portion of certain tax assessments of common carrier property shall be unlawful as constituting an unreasonable and unjust discrimination against and an undue burden on interstate commerce,

and to provide a remedy in the Federal courts for such carriers against the collection of any tax based on such unlawful assessment.

This unlawful proportion exists only when, and to the extent that, common carrier property is assessed at a greater proportion of its true market value than the proportion at which all other property in the taxing district subject to the same levy is assessed.

I emphasize that because at the previous hearing before the subcommittee at which Mr. Friedel presided so finely, there had been introduced a letter from the Department of Justice calling attention to the possibility that it should be made clear whether the bill was directed at all of the tax or only the claimed excessive portion.

I want to make it very clear to the committee that this measure as we see it is aimed only at the claimed unlawful or discriminatory portion of the tax. The remainder of the tax would remain undisturbed.

It is not an attack on the entire tax assessment or the entire tax bill, if employed by any railroad. I wanted to make that very clear at the beginning, because there seemed to be some, maybe, fuzziness about it.

The bill deals with all common carriers of persons and property subject to the Interstate Commerce Act, but I will confine my remarks mainly to the railroad industry because I am appearing in behalf of that industry and because I believe it suffers most from the burdens which this bill seeks to remove.

As you all know, railroads require a great deal of property in order to do business. Right-of-way and rails; locomotives, cars and other equipment that operate on those rails; and stations, buildings, shops, and so forth, all are needed to conduct railroad operations.

At the close of 1964 the railroads in the United States had a total investment before depreciation of over $35.8 billion extending over and along 213,800 miles of line. This enormous property investment qualifies railroads as prime targets for the tax assessor.

Their property is easily identified and located. Cities, schools, counties, and other political subdivisions invariably attempt to include within their boundaries as much railroad property as possible and thus insure a steady income from property taxes.

For the 5 years 1960-64 the total taxpayments by all class I railroads in the United States for all State and local purposes ranged from $396 million in 1960 to $344 million in 1964.

The fact that over 80 percent of those payments went to satisfy ad valorem tax liens clearly identifies ad valorem taxes as the most important and the most burdensome of all railroad State and local taxes. The vulnerability of our industry and the desire of State and local governments for revenue have combined to create a great many tax problems. Among the more pressing and persistent of these problems are those that relate to railroad assessments.

There the problem is how to persuade the tax assessors in the several States to equalize the railroad's assessment with that of other property in the same taxing district.

True equalization requires that each parcel of property be assessed at a figure which is the same proportion of its full value as the assessment of every other parcel of property in the same taxing district is of its full value.