Application for review of the foregoing will be received by the department within 10 days of this date. Such appliaction must be in writing and shall be filed with the department of revenue (railroad property tax division) at its Chicago Office, 160 North La Salle Street, Chicago, Ill. Provisions of the statute and the rules of practice and procedure adopted by the department of revenue shall govern the preparation and filing of such applications. STATE OF ILLINOIS DEPARTMENT OF REVENUE. CHICAGO, ILL., December 28, 1964. [From 1965 Illinois Revised Statutes] CHAPTER 120-REVENUE 561. Method of determining fair cash value and eqalized assessed value.] § 80. The Department shall assess all property owned or used by railroad companies operating within this State, as of April first annually, except property found by the Department to be non-carrier real estate as hereinbefore defined. In assessing the property of any railroad company, the Department shall first determine the fair cash value of such property. The Department shall, in determining the fair cash value of the property assessed by it, value all the property of any railroad company as a unit, but shall make due allowance for any non-carrier real estate. For the purpose of determining the fair cash value of the property of any railroad company the Department shall take into consideration the actual or market value of the shares of stock outstanding, the actual or market value of all bonds outstanding and all other indebtedness as shall be applicable, for operating the road, provided, in determining the market value of any such stock or indebtedness the Department shall consider quotations for the next preceding five years; the net earnings of the company during the five calendar years preceding the assessment date; and such other information as the Department may consider as bearing on the fair cash value of the property: Provided that the facts hereinbefore named shall not be conclusive upon the Department in determining the fair cash value of the property of a railroad company. The assessment by the Department shall include capital stock and all other property of railroad companies except such property as is found by the Department to be non-carrier real estate af hereinbefore defined: Provided that only so much of the intangible personality of foreign corporations as has a business situs in Illinois shall be included and so much of the intangible personalty of domestic corporations as has a business situs in other states shall not be included. The Department shall determine the equalized assessed value of the property of every railroad company, other than non-carrier real estate, by applying to its determination of the fair cash value of such property of every railroad company an equalization factor, which factor shall be the statewide average ratio of the equalized assessed value of locally assessed property to the full, fair cash value of such locally assessed property. As amended by act approved Aug. 26, 1963. L. 1963, p. 3422. Mr. SPRINGER. Now, these legals which cover every single railroad in the State of Illinois, and I guess there are some 30 or 40, sets up the fair cash valuation and the original assessment. That has to be published, so that any objector, any taxing body that objects to it, has notice that this has been equalized. Mr. OGDEN. Yes, sir. Mr. SPRINGER. Now, I take it that you don't want this without notice in due form, do you; that is, to any possible objector? Mr. OGDEN. No, sir. We would like to know. We have no objection to any degree of publication about any facet of our assessment in anything. Mr. SPRINGER. So that if there is a tax objection, they do have a notification of that. Mr. OGDEN. That is all right with us. Mr. SPRINGER. Now, I think the point that you were trying to get over, as I understood it, to Mr. Moss a moment ago, is that at the present time under these recent decisions since the Browning case, you do have a remedy. The remedy is to go into the Federal court; that is true, isn't it? That is what you said a moment ago? Mr. OGDEN. That is right. Mr. SPRINGER. But that remedy is based on the fact that you first have to prove that there is no remedy in the State court in which you bring this action? Mr. OGDEN. That is right. Mr. SPRINGER. So what you are seeking here is a shortcut method of coming immediately to the Federal court to register your objection? Mr. OGDEN. That is right. Mr. SPRINGER. And to seek relief? Mr. OGDEN. Yes, sir. Mr. SPRINGER. In effect you are not getting additional relief. What you are in effect getting is getting your relief directly in the Federal court in the first instance, based on this set of facts? Mr. OGDEN. If we felt we have a case; yes. Mr. SPRINGER. Actually, you wouldn't get any different result finally, would you, by going to the Federal court and going through all of this meandering that you have in the background to get into Federal court-you couldn't possibly get any different result than you do under this law, could you, in the end? Mr. OGDEN. Yes, sir; there would be a little different result. This law is directed only at the claimed excess. Under current Federal procedure, if we could get into Federal court, we would at least have to have some agreement or else attack the entire assessment. That is the Moses Lake case. Mr. SPRINGER. I was not going into that. I used to sit as a judge on these cases 6 weeks in the spring, and every railroad came in and made their objections and we had to hear this thing every year. What you are trying to do is to be able to wind up in one proceeding in the Federal court, isn't that right? Mr. OGDEN. Yes: if we needed it. Mr. SPRINGER. I don't want this committee to get an idea that somewhere along the line you are going to get a better deal under this law than you do at the present time. An equalized assessment could be any different if decided in the Federal court and decide under this method. Mr. OGDEN. That is quite true. Mr. SPRINGER. Thank you. The CHAIRMAN. Mr. Kornegay, do you have any questions? Mr. KORNEGAY. Thank you, Mr. Chairman. Mr. Ogden, I am sorry I was not here to hear your initial statement. I want to say that I am very proud to see that my State of North Carolina does not participate in this alleged discrimination practice. Thank you, Mr. Chairman. The CHAIRMAN. Mr. Broyhill, do you have a question? Mr. BROYHILL. I want to second what my colleague from North Carolina has said. The CHAIRMAN. Mr. Van Deerlin. Mr. VAN DEERLIN. I wonder whether this is an exclusive list of States, or whether you just chose the worst examples? Mr. OGDEN. Mr. Van Deerlin, we really didn't intend to be exclusive at all. Actually, we tried to explain that rather carefully, both from the standpoint of pointing out the nonexclusiveness, and also in trying to explain that we really don't intend this as a blacklist at all, if you want to call it that. It is not intended and that is not the purpose of this list. The purpose of it is to come to the Congress and to you gentlemen with something of substance. We are not here to talk idly about what might happen, but we bring forward this only as a showing of general-as I used the expression-pattern or practice, to go back over the years and bring it forward and show that this is not peculiar today. It was brought to public attention by this very committee in 1944 in the report on carrier taxation. It was only brought forward in terms of lists such as we have now when we had the benefit of the Bureau of the Census reports on the level of assessments. That was in 1957, based on 1956. It was the first time in the United States that there was a reliable or uniform yardstick against which to compare assessments. It was a very fine work that was done by the Bureau. I understand their purpose is to repeat this every 5 years. They made one study I think for the year 1956, and the next one was for 1961, and I presume that there will be another for 1966 and so on. It is a wonderful service for all taxpayers, and tax collectors, because I have found when States and tax administrators calm their emotions in this area and look at it objectively, they realize that tax equalization is a fine thing for their own economy and it is a good thing to try and encourage business to come into your State if you have a sound fiscal program and everybody is treated equally. It is just a good healthy atmosphere in which to work. When emotions are left to one side and looked at realistically, it is a good thing. In that connection, the Bureau of the Census ought to receive the commendation that it deserves. Mr. NELSEN. Mr. Chairman, I just wish to thank Mr. Ogden for the fine statement. I would, however, like to say that perhaps with the appearance of some disagreement with my colleague from California, I would expect Mr. Ogden to appear here presenting the problems of the industry he represents, and if Safeway has a problem, they in turn could present their case. However, in concurrence with what Mr. Rogers of Texas has stated, if there is discrimination in any other part of our economy, we would be glad to listen to it. Thank you for your statement. The CHAIRMAN. Mr. Pickle, do you have a question? Mr. PICKLE. Mr. Ogden, I want to make reference to appendix A which is included in your report. Can you tell me if the railroad properties are assessed in the same ratio as the other public utilities of the various States? Mr. OGDEN. Generally speaking, yes, sir; so far as I know. I do not have precise information on that, of course, but I would think generally, yes. Mr. PICKLE. Specifically, what I am trying to drive at is the percentage of other taxation as against the railroads. Is it roughly the same as it would be against other common carriers such as trucklines and that type of problem? Mr. OGDEN. As to trucklines, they have very little fixed property. As far as I know, I have not heard or been advised of any problem of theirs in this regard. Their rolling stock is assessed on a sort of a bluebook basis, and I don't believe they have any real problem. Mr. PICKLE. What would be a better example, a comparative example of tax levied against a railroad, as against other common carriers? If trucking would not be a proper comparison, what would be? Mr. OGDEN. I think pipelines would be as good as any, and they are, of course, covered by the bill. Mr. PICKLE. On appendix A, you show in column 3 a percentage of the value of the railroad property, assessed in 1964, and then you follow that in column 5 with the percentage of which all others are assessed. Now, when you list "all others," do you include in that all other common carriers as well as general property such as farms and ranches and homesteads? Mr. OGDEN. Mr. Pickle, it is intended by the "all other" column, column 4, to include only locally assessed property as distinguished from State centrally assessed property. Mr. PICKLE. In column 4, then, you have lifted out taxes of other common carriers? Mr. OGDEN. That is right. Mr. PICKLE. And it is just property taxes that individuals primarily pay; that is, stores and so on? Mr. OGDEN. That is right. Mr. PICKLE. Now, as to the percentage of difference, your chart in column 4 does not show it, but I figure it would be about 24 percent, and your last column is 51 percent. In other words, you are saying then that taxes levied against railroads is at least twice what it is against all others? Mr. OGDEN. That is correct, in this list. Mr. PICKLE. Are you saying then that you think railroads or pipelines or any other common carriers should be assessed on the same basis as a man's homestead, or a farmer's farm? Mr. OGDEN. When they are subject to the same taxes; yes, sir. Mr. OGDEN. Yes; the same ad valorem tax rates, if they would be applied against railroad property and against the farm that is on the side of the railroad track, then I think that the proportion of value at which each is assessed should be the same. Mr. PICKLE. Then you make no distinction between that which is commercial property and that which would be farmland? Mr. OGDEN. No, sir; because I relate it all to value, Mr. Pickle. Whether it is a commercial property or whether it is farmland, it has a value. Whatever its value is, a certain portion of it is assessed, say half of it, or say 50 percent. If it is worth $10,000, it is assessed at $5,000. That is half of the value. If half of the value of a farm is going to be assessed, then half of the value of the railroad ought to be assessed, if they are both subject to the same taxes. Mr. PICKLE. I think you have a good point in the argument that you have presented. Traditionally, we have local communities or States which have just simply taxed those entities which are of interstate character or commercial character or public utility character. We have a big overall problem of leveling this off and finding equalization. I hope we can find such a level, and I appreciate your testimony. Let me ask you one other question that is for information purposes. When you read Major General Doyle's statement, did I understand you to say that he felt that in time all right-of-way properties would be leveled at the same ratios as all other property? Was your phrase "right-of-way"? Mr. OGDEN. The only time that he said "time" I believe was when he said Mr. Rogers' bill seems adequate for the purpose and is probably the most that could be achieved at this time. He did allude to one of two recommendations that were made in his report to the Senate Committee on Commerce, the so-called Doyle report. In that report, he made a double-barreled recommendation. One was that certain carrier property be entirely exempt, and in the alternative he suggested this very bill. He said this would be a way to get at it. In his letter now he says he thinks that this bill is perhaps the most we could do at this time. Mr. PICKLE. I can read that in the report, and I thank you for that additional statement. That is all, Mr. Chairman. Mr. ROGERS of Texas (presiding). Dr. Carter, do you have a statement? Mr. CARTER. I just want to welcome the members of the railroad industry from Kentucky here, and it seems to me that it should be an entirely reasonable bill and I see nothing wrong with it. Mr. FARNSLEY. Thank you, Mr. Chairman. Mr. Ogden, as you know, I introduced one of these bills and I am for you. I want the record to show that from the time I left the Kentucky Legislature until I was mayor, I was counsel for the Kentucky Railroad Association and I received $25 a month. I was very proud and grateful. I couldn't ride on the commuter lines on the Central or the Panama Limited or the Broadway Limited or things like that, but I was well paid. However, I wasn't well enough paid to tell them how to run the railroad. Now today I am well paid by the Government to tell you how to run your railroad. The railroad and the Government are in the same fix. Everybody tells us how to run the Government and everybody tells you how to run the railroad. Your objectives are too limited and you're thinking in 19th-century middle-class terms. As you realize, the middle class pays the taxes. Of course, very properly we try to help the poor people but you |