In most cases there is not a full trial before the State court, but only a review of the record made before the administrative body. As it is the hope of the complaining railroad that the relief desired may be obtained from the State-assessing body the record made before that agency is usually quite sketchy; this is so because if the taxpayer should indicate that an appeal was likely by making a complete record, the assessing agency would not be in a mood to grant any relief. Also, in many States the railroads do not have recourse to the courts to the extent that the assessing body is made a party to the proceeding, but instead must bring suit against the tax collecting body, such as the county, protesting the excessive taxes as a result of the discrimination in the assessment of the railroad property. This means that suit must be brought in every county of the State in which the railroad has property, which is a very time-consuming and expensive procedure. I believe the evidence is irrefutable that there exists in a great many States clear evidence of discrimination against the railroads in the way their property is assessed. The movement toward granting the railroads relief against such tax discrimination has been very slow, and in many States the movement has been so slight that it is practically imperceptible. As the State administrative bodies refuse to fulfill their duties as public servants, and they are supported in this action by the State courts, it becomes evident that the only way the railroads can be freed of this tax discrimination is by having recourse to the Federal courts, as set out in H.R. 4972. The Advisory Commission on Governmental Affairs in its report of June 1963, recognizing need for improvement in the assessing procedures in the various States, made a number of recommendations for State action to strengthen property tax administration. Subsequently, the committee drafted suggested property tax legislation for enactment in the various States. If the recommendations of the committee were carried out by the various States, it could well be that the tax discrimination problem would be substantially solved. It would be a very naive person, however, who would believe that final consideration of the Commission's recommendations could be obtained in less than a couple of decades. The fear has been expressed by some State administrators that this proposed law (H.R. 4972) would take away from the individual States the right to administer their own tax laws. Such a danger would exist only if the administrator should be negligent in performing his duty. Certainly, if the State-assessing agency assesses railroad property at the same level as all other property, the railroad would not have a cause of action in the Federal court under this proposed law. The State administrators may also say-"we are improving our valuation and equalization procedures, just give us time to finish the job." Although it is true that some of the States have shown a measure of improvement over the last 30 years, there are many States that have made no real effort to do an efficient job in the assessment of railroad property. It would be very difficult to predict accurately how many years it might be before those States would achieve any measure of equality. That finishes my statement, Mr. Chairman, I would be very happy to try to answer any questions you may have. Mr. Moss. Mr. Travis, I know from your statement that you are one of my constitutents and I welcome you to Washington. We are talking about something that we are both familiar with. Is assessment in Sacramento County uniform and equal on the basis of highest and best use? Mr. TRAVIS. The local assessment, sir, you are talking about? Mr. Moss. Yes. Mr. TRAVIS. I think it is very close to it, sir, and within recent years there has been a tremendous improvement in the assessment and I will cover all of the counties of California in that. Mr. Moss. And that effort at greater equalization has been as a result of prodding by the State, to achieve equalization between taxassessing districts; is that right? Mr. TRAVIS. That is, sir, through prodding by the State and legislation with regard to school aid has helped very much. Mr. Moss. We have a very large amount of the total budgets of local school districts, particularly, which are met through subventions from sales tax sources, so that the State of California, going back to the time when I served in the legislature, initiated efforts to improve equalization. It took quite a while to improve our own county to the point where it is today, did it not? Mr. TRAVIS. It did, sir. Mr. Moss. And just about 3 years ago, we had trouble in the county because there were some new assessments which took quite a number of years, on a block-by-block basis to reevaluate property, did it not? Mr. TRAVIS. That is right, sir. Mr. Moss. Is there equalization between the various tax assessment districts? Mr. TRAVIS. I will say "Yes." That is a general statement. You cannot get perfect, and you can't say it is all 22.1 percent or something but it is a range of reasonableness or ability of the person to do the job, because of the fact that as you point out, it takes time for an assessor to get around. He can't change every year. It is impossible, physically impossible to do that. So there are some small discrepancies within the county. Intracounty assessments are not perfect, but I feel it is very good and very close. Mr. Moss. You say within a county! Mr. TRAVIS. Yes, sir. Mr. Moss. Is it between counties? Mr. TRAVIS. The variation from the statewide average as found by the State board of equalizations within about 3 percentage points, I believe, at the present time, so that is very close. Mr. Moss. Within that percentage you can get extremes from both ends? Mr. TRAVIS. You can get from 9 to 20 percent. Mr. Moss. Or much higher? Mr. TRAVIS. There might be a point, but they don't last very long, sir, because if they publish the ratio of Sacramento County as being 23 percent and a man is higher than 23 percent, he will immediately see the assessor and see that he is reduced to 23 percent. Of course the man that is at 19 percent doesn't come in. That is why it is a continual decrease in the assessment ratio. Mr. Moss. In our State, the board of equalization is responsible for all utility property assessments; is it not? Mr. TRAVIS. That is right. Mr. Moss. It tells the county the amount of property on the rolls in that county for purposes of tax; is that correct? Mr. TRAVIS. You are talking about utility property; is that right? Mr. Moss. Yes. Mr. TRAVIS. That is right. Mr. Moss. In your statement on page 2, you said: I am very well aware of the tax discrimination against railroads due to the practice of assessing railroad property at percentages of full value much higher than most other property that is subject to the same tax rates. Would that statement be true as between a railroad and an electric utility? Mr. TRAVIS. The same thing would apply to both of them, sir. Mr. TRAVIS. That is right, in California. You are limiting this to California. Mr. Moss. In other words, the practice of assessing property in California is uniform between utilities, that is all utility property? Mr. TRAVIS. I don't want to quibble, sir. The answer to your question is "Yes" if I may amplify to this extent, that there are certain properties assessed by the State board of equalization, and I am talking about pipelines that are at a lower assessment. Mr. Moss. I recognize that there are some utility properties that are not assessed by the State board of equalization, but the significant majority of the properties are assessed by the State board of equali zation. Mr. TRAVIS. That is right. Mr. Moss. And between utilities there is uniformity then to the extent that the State has jurisdiction? Mr. TRAVIS. Generally, that is right, sir. Mr. Moss. As a matter of equity, if we are going to provide this relief, shouldn't we provide it for all utilities? Mr. TRAVIS. I can't disagree with the fact that there should be relief for the other types of utilities. Of course, they are not interstate commerce so they are not covered by this bill. Mr. Moss. Well, aren't they? Mr. TRAVIS. No. Mr. Moss. Now, I understood that Pacific Gas & Electric Co. was interstate commerce. Mr. TRAVIS. I am not a lawyer, you see. Mr. Moss. They are clearly interstate commerce. Mr. TRAVIS. Well, everything is interstate commerce, I suppose. Mr. Moss. Would you apply it to all utilities engaged in interstate commerce? Mr. TRAVIS. I believe that there should be equality in assessment between all types of property. Mr. Moss. I do, too. If we actually had that, fully equal, then as a taxpayer my taxes would probably go down, and not up, as they have been. Mr. TRAVIS. That is right. Mr. Moss. Because I have seen this block method of assessment whereby they take 10 years to go over a political subdivision, and achieve equality. By that time you have a 10-year lag between the last one and the first. So it becomes sort of a difficult circle to achieve this equality we all seek. Mr. TRAVIS. It takes time, although they are trying to do it in 4 years. Mr. Moss. Now, if we are going to be concerned over the impact upon interstate commerce as the test, why stop only with utilities? Have you seen in your experience in the State some of the newly developed industrial parks allege that they have been socked by the assessor? Mr. TRAVIS. Yes, sir. Mr. Moss. You have? Mr. Moss. So have I. Many times those tenants are clearly engaged in interstate commerce; aren't they? That impact might be upon the budget of a citizen, that discriminatory assessment or tax treatment. Where do you envision we should stop or should we prescribe a uniform Federal standard for achieving full equality in the levying of taxes? Mr. TRAVIS. Of course, the industrial park has a very quick way of getting relief, because he is in one taxing district, or one taxing jurisdiction, let us call it. He can go to the county assessor and get relief from the county assessor or the county board of equalization. Mr. Moss. You can go to the county supervisors. You know, I have done that on a number of occasions, and I have been treated with great courtesy, and perseverance and futility. Mr. TRAVIS. Well, that is the same experience of the railroads, of course. Mr. Moss. I would like to go into Federal court perhaps and get a quick answer and tie them up. Mr. TRAVIS. You can go to the superior court with it. Mr. Moss. Going to the superior court might match my resources a little better than going to the Federal court. I do thank I do thank you for your testimony, and as I said, I am pleased to welcome you here. Mr. TRAVIS. Thank you, and I hope to see you in Sacramento again soon. The CHAIRMAN. Are there any questions? Mr. DINGELL. I have been very impressed with your testimony, sir, and I think it has been very good. There are, however several questions I would like to ask you about some of the comments you made this morning. It would be fair to say, would it not, that each State has a provision for contest of its taxes and levies, the rate at which those taxes are assessed, and indeed all other questions involving the fairness and the amount of the taxes, would it not? Mr. TRAVIS. I believe that is true, sir, that there is a recourse in the State courts at the present time. Mr. DINGELL. The Constitution would require it, and the failure to include that would make the law subject to a constitutional review. Mr. TRAVIS. Right. Mr. DINGELL. These provisions are fairly similar, am I correct, in that in each instance there is a provision for, first of all, the equalization of taxes across the State from one area in the State to the other. Am I correct about that? Mr. TRAVIS. Well, the taxpayer has to go Mr. DINGELL. That is a fairly simple question. Mr. TRAVIS. There is a forum except it is not as simple in that you into one State court. can go Mr. DINGELL. I am talking in terms of general theories, and I intend to specialize as much as I can, but I am afflicted by a shortage of time. Now each State has such provision for equalizing the taxes across the confines of its boundaries, am I correct? Mr. TRAVIS. That is right. Mr. DINGELL. Now, each State also has provisions within its tax laws for assuring that taxes are levied fairly across the different kinds of industries and land uses against which ad valorem taxes are levied. Mr. TRAVIS. There is a uniformity clause in all States, I think. Mr. DINGELL. Now, you indicate that under the present practice, it will be necessary for railroads or other industries afflicted by unfair taxes within the borders of a State, in many instances, to initiate a suit in one way or another against each of the taxing authorities, which would require probably a county-by-county attack upon the taxes but also which would require a taxation or, rather, an attack upon the taxes probably more broadly, since you have county taxes and you have city taxes, and you have school board taxes, and you have all manner of taxing authorities. In Michigan we have community hospitals, and you have community schools that are entitled to levy certain percentages of taxes. So you would be afflicted under present law with the necessity of attacking these taxes. In the case of Michigan, I think there are 83 counties and I suspect there are about 1,000 school boards, and you would be afflicted with a situation of having to attack these taxes in the courts of every county in the State and probably in a number of instances, am I correct? Mr. TRAVIS. The bill doesn't call for attack on the taxes, it is an attack on the assessment. It is the county as the assessing agency, which makes the assessment for all of the multitude of taxing jurisdictions, in practically all States, and there are some exceptions. Mr. DINGELL. It would essentially require separate action. Mr. TRAVIS. It would require a very large number of separate actions, I would say that. Mr. DINGELL. That is the fairly major complaint in your statement, is it not? Mr. TRAVIS. It is one of the complaints, that is right. Mr. DINGELL. Well it was one of the main points that you raised, was it not? I know the bill, H.R. 4972 says that: The following action by any State, or subdivision or agency thereof, whether such action be taken pursuant to a constitutional provision, statute, or administrative order or practice, or otherwise, is hereby declared to constitute an unreasonable and unjust discrimination against an undue burden upon interstate commerce and is hereby forbidden and declared to be unlawful. Now, following on from that is language which would require railroads afflicted by this situation about which they complain, to enter |