carried to the State board of tax appeals. After this, appeals may be taken to the State district courts or taxpayers may file an original action in the State district courts. The decisions of the district courts may be appealed to the State Supreme Court of Kansas.

The Supreme Court of the State of Kansas in a 1963 decision dealing with discriminatory assessments stated clearly this State's views upon such practices by holding as follows:

Uniformity of taxation does not permit a systematic, arbitrary, or intentional valuation of the property of one or a few taxpayers at a substantially higher valuation than that placed on other property within the same taxing district.

It might be added that the principle of this language was clearly followed by the Supreme Court of Kansas in a case involving a specific railroad operating in Kansas upon their charge that their property was assessed at an arbitrary and discriminatory amount in relation to other property in the State of Kansas.

Thus, we would submit to the committee for their consideration, that adequate tribunals now exist for the determination of any and all questions concerning alleged discriminatory taxation practices and that such tribunals fairly and equitably decide these issues.

In regard to the premise that interstate carriers are assessed at a higher ratio than all other property, we would caution the committee against accepting at face value all information presented to the committee purporting to support that such discrimination does exist or that it exists in the degree indicated.

It is acknowledged that through the history of the property tax, there have been problems of unequal assessments. These problems have come about due to the diversified nature of tax administration, changing values and technical problems of determining sale, market, or true value. However, in recent years taxing officials in the several States and, of course, I am limiting my remarks to the State of Kansas particularly, have made marked progress in the techniques of assessing and in achieving uniformity. In some States, this progress has just recently showed visible results.

Kansas State tax officials were instrumental in the passage of the 1963 legislation requiring that all property be assessed for tax purposes at 30 percent of the full value. While this legislation applies to all property, the real problems were with real estate assessments. As of this writing, 3 years after the passage of the legislation, 97 of the 105 counties of the State have either completed an appraisal of each parcel of real estate in the county or are in the appraisal process. When the appraisal program is completed in a county, the property is placed on the tax rolls at 30 percent of the full appraised value.

By law in the State of Kansas, personal property assessed values must conform to values prescribed by the State property tax department. These values which are determined annually with the cooperation of various industries and economic groups, are printed in catalog form and furnished to each assessing official. This has resulted in personal property being assessed at an extremely high degree of uniformity at 30 percent of full value.

For a number of years, the State property valuation department in assessing railroads, pipelines, electric power, telephone and telegraph companies has been striving to arrive at a 30-percent ratio for these companies and this goal has largely been achieved.

In assessing interstate carriers and utilities, the department in Kansas has used established methods of determining values, utilizing the standard approach as developed by the National Association of Tax Administrators.

Also, Kansas officials actively participate in utility assessing seminars sponsored by the Midwestern Association of Tax Administrators so as to continually improve assessing techniques.

We agree with and endorse the statement and position taken by Mr. Charles F. Conlon, executive secretary of the National Association of Tax Administrators, in a letter dated August 13, 1964, addressed to the Honorable John Williams, chairman of the Subcommittee on Transportation and Aeronautics, in which Mr. Conlon ably describes the efforts of State taxing officials in achieving equalization of assessments of all property and the potential adverse effect this legislation may have on taxing subdivisions of the State which are heavily dependent on property tax revenue for financing their operations.

If this legislation were to pass, it could greatly increase the caseload in an already overcrowded docket of Federal courts so that it could be a number of years before cases were decided. With the injunction feature of this proposed legislation, anticipated tax revenue of local taxing districts could be impounded for such a duration that it could result in a chaotic financial situation for such districts.

It is respectfully suggested that, before action is taken on this matter, full consideration be given to the potential impact upon local taxing districts and that the committee consider the progress States are making toward the elimination of discrimination in assessments.

Therefore, Mr. Chairman and members of this committee, we request that the record of this proceeding show that the State of Kansas is opposed to the enactment of H.R. 4972.

The CHAIRMAN. Mr. McDowell, we thank you for coming to the committee with your views.

We also want to thank the Governor. I assume that the Governor's statement will be in the record.

Mr. McDOWELL. Yes, sir.

(The following letter was received from Governor Avery, of Kansas, stating his views :)

Hon. HARLEY O. STAGGERS,

THE STATE OF KANSAS, Topeka, Kans., February 25, 1966.

Chairman, Committee on Interstate and Foreign Commerce,
House of Representatives, Washington, D.C.

DEAR MR. STAGGERS: This is in reference to H.R. 4972 which is before the committee for consideration.

First and foremost let us emphasize that tax officials of the State of Kansas are not opposed to legislation requiring that all property be assessed for tax purposes at the same ratio of full value. Therefore, in principal Kansas is not opposed to subsection 1 of section 25(a). We do, however, have some question as to whether this legislation is either necessary or desirable. We do have particular objections to subsection 2 as being neither necessary or desirable. The premises on which this proposed legislation is based appears to be1. That property of interstate carriers is assessed for purposes of property tax at a higher rate of true market value than other property, and;

2. That adequate judicial remedies are not now available to interstate carriers through State appeal boards or State courts.

Since the main objection is centered on subsection 2 of the proposed legislation, we shall first discuss pertinent Kansas statutory provisions as well as

the judicial remedies now available to any taxpayer including interstate carriers.

Kansas statutes enacted in 1963 require that all property be assessed for taxation purposes at 30 percent of full value. The statutes also provide that any assessor, whether on a county level or on the State level or the State board of tax appeals or any other person responsible for determining assessed valuations, shall be subject to a criminal penalty if they shall fail or refuse to assess any and all property at 30 percent of full value.

Railroad, pipeline, electric power, telephone, and telegraph companies operating in more than one county in Kansas are assessed by the State property valuation department. Any of these companies have the statutory right to appeal their assessments first to the director of property valuation, and from the director's decision appeal may be carried to the State board of tax appeals. After this, appeals may be taken to the State district courts or taxpayers may file an original action in the State district courts. The decision of the district courts may be appealed to the State Supreme Court of Kansas.

The Supreme Court of the State of Kansas in a 1963 decision dealing with discriminatory assessments stated clearly this State's views upon such practices by holding as follows:

"Uniformity of taxation does not permit a systematic, arbitrary or intentional valuation of the property of one or a few taxpayers at a substantially higher valuation than that placed on other property within the same taxing district."

It might be added that the principle of this language was clearly followed by the Supreme Court of Kansas in a case involving a specific railroad operating in Kansas upon their charge that their property was assessed at an arbitrary and discriminatory amount in relation to other property in the State of Kansas.

Thus, we would submit to the committee for their consideration that adequate tribunals now exist for the determination of any and all questions concerning alleged discriminatory taxation practices and that such tribunals fairly and equitably decide these issues.

In regard to the premise that interstate carriers are assessed at a higher ratio than all other property, we would caution the committee against accepting at face value all information presented to the committee purporting to support that such discrimination does exist or that it exists in the degree indicated.

It is acknowledged that through the history of the property tax, there have been problems of unequal assessments. These problems have come about due to the diversified nature of tax administration, changing values and technical problems of determining sale, market, or true value. However, in recent years taxing officials in the several States have made marked progress in the techniques of assessing and in achieving uniformity. In some States, this progress has just recently showed visible results.

Kansas State tax officials were instrumental in the passage of the 1963 legislation requiring that all property be assessed for tax purposes at 30 percent of the full value. While this legislation applies to all property, the real problems were with real estate assessments.

As of this writing, 3 years after the passage of the legislation, 97 of the 105 counties of the State have either completed an appraisal of each parcel of real estate in the county or are in the appraisal process. When the appraisal program is completed in a county, the property is placed on the tax rolls at 30 percent of the full appraised value.

By law, personal property assessed values must conform to values prescribed by the State property tax department. These values which are determined annually with the cooperation of various industries and economic groups, are printed in catalog form and furnished to each assessing official. This has resulted in personal property being assessed at an extremely high degree of uniformity at 30 percent of full value.

For a number of years, the State property valuation department, in assessing railroads, pipelines, electric power, telephone, and telegraph companies, has been striving to arrive at a 30-percent ratio for these companies and this goal has largely been achieved.

In assessing interstate carriers and utilities, the department has used established methods of determining values, utilizing the standard approach as developed by the National Association of Tax Administrators. Also, Kansas officials actively participate in utility assessing seminars sponsored by the Midwestern Association of Tax Administrators so as to continually improve assessing techniques.

We agree with and endorse the statement and position taken by Mr. Charles F. Conlon, executive secretary of the National Association of Tax Administrators, in a letter dated August 13, 1964, addressed to the Honorable John Williams, chairman of the Subcommittee on Transportation and Aeronautics, in which Mr. Conlon ably describes the efforts of State taxing officials in achieving equalization of assessments of all property and the potential adverse effect this legislation may have on taxing subdivisions of the State which are heavily dependent on property tax revenue for financing their operations.

If this legislation were to pass, it could greatly increase the caseload in an already overcrowded docket of Federal courts so that it could be a number of years before cases were decided. With the injunction feature of this proposed legislation, anticipated tax revenues of local taxing districts could be impounded for such a duration that it could result in a chaotic financial situation for such districts.

It is respectfully suggested that before action is taken on this matter, full consideration be given to the potential impact upon local taxing districts and that the committee consider the progress States are making toward the elimination of discrimination in assessments.

Respectfully submitted for the committee's consideration.

Yours very truly,

The CHAIRMAN. Mr. Rogers.

WM. H. AVERY, Governor.

Mr. ROGERS of Texas. Mr. McDowell, I wish you would extend my personal regards to the Governor, Mr. Avery, on your return-although I am in disagreement with him on the conclusion.

Mr. McDOWELL. I will convey these sentiments.

Mr. ROGERS of Texas. So far as Kansas is concerned you take the position that, by State law, violation of which would create a situation where criminal penalties could be invoked, 30 percent of the market value is the fixed percentage at which all property regardless of who owns it has to be assessed.

The only question in your mind or in the Governor's mind would be with regard to the amount or value that was fixed by the State board. Mr. McDOWELL. Mr. Rogers, maybe I did not clearly get into it enough in my statement, but our constitution in Kansas requires the legislature shall provide for a uniform and equal rate of assessment and taxation except mineral products.

The legislature in carrying out the mandate set the rate at 30 percent of what we call justifiable value. The assessors cannot even agree on this term. It would be full value or market value.

Mr. ROGERS of Texas. Your State board fixes it at the market value. Mr. McDOWELL. Well, our State board of equalization will hear an appeal but we have our taxing

Mr. ROGERS of Texas. Who fixes the market value?

Mr. McDOWELL. In the assessment of the interstate carriers this is done by the property valuation department using the recognized methods of valuing property. Of course, information is submitted by the industry on this. Then this valuation is determined and 30 percent is applied.

Mr. ROGERS of Texas. Now valuation that is determined, in order for you to get into court on this I presume you would abide by the procedures of the Administrative Procedures Act and require a showing that arbitrariness or capriciousness prevailed in order to upset the valuation board.

Mr. MCDOWELL. Yes. In Kansas by State law we do require this showing to be made.

Mr. ROGERS of Texas. Let me say this.

So far as Kansas is concerned then, you feel that you are all right, the people are treated fairly. If a showing is made that in a number of other States the same thing does not exist don't you think that people who are being discriminated against ought to have a forum to get some kind of correction of their ills?

Mr. McDOWELL. Again you understand my position; I am testifying for Kansas.

I would say that if the situation would exist among any property owners and not just interstate carriers where they were not assessed uniformly, then certainly relief is needed.

But again I question, and again I am sorry to keep locating myself back into Kansas on the specific issue, I personally feel if all the 50 States had the same setup that we have in Kansas maybe this problem would not exist.

But many other States have good State administrative remedies that possibly should be explored.

Mr. ROGERS of Texas. You tell the Governor if he has this worked out in Kansas he had better watch out, we will turn the problem over to him to sell to the other 49 States.

Thank you, Mr. Chairman.

Mr. YOUNGER. I have a statement for you to take back to the Governor. I have worked several years with him on the committee. I am very positive if he were on the committee he would be in favor of this legislation.

The CHAIRMAN. Mr. Nelsen.

Mr. NELSEN. I join with my colleague in sending greetings to Bill. Bill served on this committee with us and I have a very high regard for him. I hope you will deliver this very personal message to Bill. Tell him I took one bottom off my plow. He will know what I mean. Mr. McDOWELL. I will, Mr. Nelsen.

The CHAIRMAN. Thank you again, Mr. McDowell.

Mr. MCDOWELL. Mr. Chairman, I thank you for the time and consideration. I know the hour is growing late.

The CHAIRMAN. We are sorry if we held you up.

Mr. MCDOWELL. That is quite all right.

The CHAIRMAN. Our next witness will be Mr. William E. Peters. Is he present?

I would like to discuss this with you briefly before you start. The committee will have to go and answer a quorum call. Do you want to wait until we reconvene and proceed this evening or do you want to put the statement in the record as given?

We will come back if you want us to come back.

STATEMENT OF WILLIAM E. PETERS, STATE TAX ATTORNEY, LINCOLN, NEBR.

Mr. PETERS. I would like to abide by the convenience of the committee.

I will put my statement in the record with one request, if I may be so bold, that for the committee's benefit on the request of the committee to the industry representatives who are proponents of this bill, when the industry representatives tabulate the States wherein they do not feel they have received due process or adequate State remedy that they also will advise the committee of what action they have taken