The city must still furnish to this plant, which is located in the heart of its industrial section, the same protection and facilities as it affords to the other industries in the community which are contributing their share of the city expenses. It seems to us only just, right, and proper that the Federal Government should contribute to the expense of local government where it owns income-producing property. The city of New Castle certainly cannot be criticized for donating to the war effort the most valuable piece of ground, for industrial purposes, that is located within the city, and for doing so under an agreement with an agency of the Federal Government that that property would contribute to the expense of maintaining the city, nor should the city be penalized for its action. I, therefore, feel that S. 888, or similar legislation should be passed, in that it will contribute some relief to communities such as ours, who have relied on the laws and contracts that were in effect at the time our cities dealt with the Reconstruction Finance Corporation, and, certainly, the Federal Government should feel some moral obligation in such circumstances. It seems only fair to me that if it is necessary for the Government to enter into the field of private industry, it should do so as a fair competitor with those local industries which are supporting the local governments. You gentlemen are well aware of the tax problem that faces the Federal Government, and, therefore, I trust that you will be sympathetic with the analogous problem that faces local government. Respectfully submitted. Hon. JOHN L. MCCLELLAN, Chairman, Committee on Government Operations, United States Senate, Washington, D. C. DEAR SENATOR MCCLELLAN: Thank you for sending me a notice of the hearing scheduled for Monday, July 25, 1955, on bills relating to payments in lieu of taxes. It is my understanding that this hearing will be of a preliminary nature, primarily to obtain the testimony of representatives of the National Association of County Officials, now meeting in Richmond, Va.; and that full hearings probably will be deferred until the next session of the 84th Congress. As a sponsor of one of the bills on this subject before your committee, hope that full hearings will be held at the very earliest practicable date; and would appreciate very much if notice could be given well in advance. I would like to be able to notify officials of communities in my State who are vitally interested in the proposed legislation. With kind personal regards, I am PRESCOTT BUSH, United States Senator. UNITED STATES SENATE, COMMITTEE ON APPROPRIATIONS, Hon. JOHN L. MCCLELLAN, Chairman, Government Operations Committee, United States Senate, Washington, D. C. DEAR CHAIRMAN MCCLELLAN: I am enclosing communication and copy of resolution adopted by the St. Paul City Council. I would appreciate it being incorporated in the hearings on S. 1566 when they are held. Sincerely yours, EDWARD J. THYE, United States Senator. Hon. EDWARD J. THYE, United States Senate, Washington, D. C. MAY 4, 1955. DEAR SENATOR THYE: This will acknowledge receipt of your letter of April 26, 1955, with which you enclosed a communication from Mr. Joseph R. Okoneski, city clerk of the city of St. Paul, with reference to his interest in S. 1566, to establish a general policy and procedures with respect to payments to State and local governments on account of Federal real property and tangible personal prop erty, and for other purposes. Action on this bill, along with a number of other related proposals, has been held up by the committee on the recommendations of the Director of the Bureau of the Budget and other interested Federal agencies, pending the submission of the report of the Commission on Intergovernmental Relations which has undertaken a special study of the problems involved in relationship to payments of taxes or in lieu of taxes on Federal property taken out of local taxation. . The committee has had similar proposals under consideration during the past two Congresses, and I assure you will give careful consideration to all such bills with a view to recommending appropriate legislation to the Senate as soon as all the facts are available. In accordance with your request, I shall be glad to have the communication and resolution adopted by the St. Paul City Council made a part of the record of any hearings that are held on S. 1566. With kind regards, I am JOHN L. MCCLELLAN, Chairman. CITY OF ST. PAUL, MINN., April 21, 1955. Hon. EDWARD J. THYE, United States Senator, Senate Office Building, Washington, D. C. DEAR SENATOR THYE: We respectfully call to your attention the enclosed copy of a resolution, council file 172807, adopted by the St. Paul City Council today, recommending passage by the Senate of S. 1566 with reference to payment by the United States Government to State and local governments, as more fully described in the resolution. Your assistance in this matter will be greatly appreciated. STATE OF MINNESOTA, County of Ramsey, City of St. Paul, ss.: JOSEPH R. OKONESKI, City Clerk. I, Joseph R. Okoneski, city clerk of the city of St. Paul, Minn., do hereby certify that I have compared the attached copy of council file No. 172807 as adopted by the city council April 21, 1955, and approved by the mayor April 21, 1955, with the original thereof on file in my office. I further certify that said copy is a true and correct copy of said original and the whole thereof. Witness my hand and the seal of the city of St. Paul, Minn., this 21st day of April A. D. 1955. [SEAL] JOSEPH R. OKONESKI, City Clerk. Council File No. 172807 CITY OF ST. PAUL, OFFICE OF THE CITY CLERK, COUNCIL RESOLUTION-GENERAL FORM Presented by Commissioner Severin A. Mortinson Resolved by the City Council of the City of St. Paul, Minn., That it hereby heartily approves and recommends for passage by the Honorable the Senate of the United States of America that certain legislation incorporated in S. 1566, a bill introduced by the Honorable Hubert Humphrey, of the State of Minnesota, and other coauthors, namely, the Honorable Senator Kuchel, of California, and the Honorable Senator Goldwater, from Arizona, which bill would provide for payment to State and local governments: First. Regular ad valorem taxes on properties owned by the Federal Government but leased to private users or sold to them under conditional sales contracts. Second. Annual payments determined by each Federal property-owning agency on the basis of an application from the affected State or local government and in conformity with governmentwide standards and procedure for properties in each class. This would be the most common type of payment under the bill. Third. Transition payments on a declining basis over a 10-year period. Fourth. Special payments in unusual situations where a taxing jurisdiction can demonstrate that Federal activities are imposing a local hardship for which other aid is available from the Federal Government. Fifth. Special assessment for local improvements, substantially the same as for private property; and be it further Resolved, That the city clerk is hereby directed to send certified copies of this resolution to the Honorable United States Senators from Minnesota; and be it further Resolved, That the city clerk is directed to send certified copies of this resolution to the Members of the House delegation of the House of Representatives from the State of Minnesota ; and be it further Resolved, That the city clerk is hereby directed to send a certified copy of this resolution to the chairman of the Senate Committee on Government Operations. Councilmen : Yeas: Gibbons, Halvorson, Holland, Marzitelli, Mortinson, Peterson, Mr. President, Dillon, 7 in favor. Nays: 0, against. Adopted by the council April 21, 1955. JOSEPH E. DILLON, Mayor. Senator HUMPHREY. The first witness will be Senator Barry Goldwater, of Arizona. Senator Goldwater, we are very happy to have you here. You have a long interest in this proposed legislation, and I am proud to be a cosponsor with you of one of the bills before us, S. 1566. Do you want to proceed? STATEMENT OF HON. BARRY GOLDWATER, A UNITED STATES SENATOR FROM THE STATE OF ARIZONA Senator GOLDWATER. Thank you very much, Mr. Chairman. I sincerely appreciate the opportunity of being able to appear before the Committee on Government Operations today on this highly important problem of payments in lieu of taxes on Federal property. This is definitely a problem which, if solved, might eliminate the need for much of the Federal-aid legislation which Congress is obliged to consider each session. Mr. Chairman, I should like to pay particular respect to you and your usual foresight in preparing this legislation, and also to compliment my colleague from California in joining with both of us in furthering this legislation. I can assure you, coming from a State that is practically owned by the Federal Government, that this kind of relief must be forthcoming soon. Mr. Chairman, being a native Arizonian and a full-fledged westerner, I like to try to approach such problems bluntly and directly. Therefore, I want to assure this distinguished committee that, although I am a cosponsor of S. 1566, which is being considered here today, I am not married to any particular piece of legislation on payments in lieu of taxes. I merely want to see this injustice remedied. Personally, I would prefer placing all commercially used properties on the tax rolls for district taxation by the school district, city, county, State, or other governmental unit. However, it appears to be the opinion of experts in this field that the so-called in-lieu payments are a better course; so I offer my wholehearted support and assistance to all efforts toward bringing about such legislation. My office has done some research on this problem to show how it affects our people. In the field of school taxation alone, school districts in the United States claim 105.6 million acres of land under Public Laws 815 and 874 for assistance to federally affected areas. They get some payments under these laws, but the total amounts only to an average of 2.9 mills an acre, compared to an average annual tax of 15.6 for privately owned land. If this Federal land were taxed at the average annual rate, it would yield nearly $350 million to the schools of America-Mr. Chairman, I am going to submit a table for the record that will show a different figure from this, but my staff has obtained this figure of $350 million just last week from the Department of Health, Education, and Welfare, and it is an up-to-date one. The one I will submit for the record was the latest total compilation of these taxes. This figure is many times more than is now being received by these schools through the token, but essential, payments under Public Laws 815 and 874. If the full figures were available, I am sure that the total acreage taken off the tax rolls by the Federal Government would far exceed 105 million. In my own State of Arizona alone, the latest available figures show that more than 29 million acres, with an estimated taxable valuation of more than $518 million, which would yield nearly $10 million yearly in taxes, have been taken off the tax rolls by the Federal Government. This includes defense facilities, Indian reservations, national parks, reclamation projects, and Federal office buildings. The total for the entire United States for property taken off the tax rolls by the Federal Government is nearly $20 billion of taxable valuation, which would yield more than $300 million annually in taxes. Naturally, certain safeguards must be provided in any legislation to accomplish such a worthwhile objective as this. But the major objective must be kept in mind-that commercially used properties should not be left off the tax rolls or free from the major share of taxation or other payments while privately owned properties are taxed to the limit. You are all familiar with the report by the Commission on Intergovernmental Relations and the Study Committee report on Payments in Lieu of Taxes and Shared Revenues. Therefore, I will not go into detail on these, except to say I agree fully with the Commission's recommendation that the National Government inaugurate a system of payments in lieu of property taxes to State and local governments. Many letters come to my office each year, Mr. Chairman, saying in effect that if Federal lands or commercial properties operating on taxfree Federal lands would pay taxes or lieu amounts, school districts and local tax problems would be greatly eased. That is a very true sample, Mr. Chairman, as I am sure you well know. And I should bear a straightforward message to all of us in the Congress of the United States to come up with an equitable solution to this problem so that the people of this great Nation can continue to progress without having to seek Federal aid and permission from Washington every time they want to make a move. We have a chance to solve many problems with one piece of legislation, so I hope this committee will give this matter its fullest consideration with the object of approving during this Congress a measure of the type presently before you. Mr. Chairman, at this point I should like to ask permission to insert in the record a table which is the latest available complete compilation showing the estimated amount of eligible Federal property claimed by section 3 applicants, the amount that this property would yield if taxable at the average local rate, the number and acreage of such property, its estimated taxable value, gross entitlements, and tax rates. Senator HUMPHREY. Is that under Public Laws 815 and 874? Senator GOLDWATER. Yes, Mr. Chairman. I would also like to submit at this point in the record a list of federally owned properties in the State of Arizona that applicants claim under Public Laws 874 and 815. This list is complete through the 1954 fiscal year. Senator HUMPHREY. They will be incorporated at this point in the record. (The documents referred to are as follows:) |