In the 18 counties listed above, there were, in 1964, a total of 295 individual taxing units (including the county), each of which governmental unit levied and collected a separate ad valorem tax for their own use and benefit. These additional taxing units are legal entities for such special districts as school districts, cities, levee and drainage districts, hospital districts, water districts, road districts, etc. (Texas Assessment Ratios, 1965, compiled by representatives of business, industry, utilities, and railroads.) It is recognized in Texas, and taxing authority records bear this out, that in all but a very few local taxing districts, the rates and assessed valuations are, on the average, much higher than those rates and values used for county tax purposes. Based on 1962 Bureau of Census figures, there were 2,990 units of government in Texas that levied and collected a property (or ad valorem) tax. This figure does not include the special road and road improvement districts. And, since this date, we have had two sessions of the State legislature that created 223 additional special districts with taxing authority. A number have also been created by the local commissioners' courts and the Texas Water Commission, which will bring up this total. We do not have available, and I am sure it would be impossible to obtain this information in time for you to furnish your statement to the committee of the tax rates of the various cities, schools, and other special districts in the individual counties. Each taxing authority, whether county, city, school, or otherwise, in this State, sets its own rate, and own percentage of the true value of the property for taxing purposes. I hope this information will be of some help. Walter is out of town, but when he returns and if we can gather other data quickly, we will call you. Yours very truly, GILBERT SMITH. Mr. W. O. REED, Calvert House, Washington, D.C. ASSOCIATION OF AMERICAN RAILROADS, DEAR OTEY: In connection with the questions asked with respect to taxes at the hearings last Friday, I think you will be interested in and want to supply the following information: First, a table showing excessive railroad ad valorem taxes as a result of assessing railroad property at a higher proportion of value than other property. Second, a statement showing real estate and personal property taxes paid by all class I motor carriers of property engaged in intercity service for the year 1963, by States, and class I railroad tax accruals for the year 1963, by States. You will note that the source of this information is the Interstate Commerce Commission. The Interstate Commerce Commission does not report similar information for water carriers by States. However, ICC "Transport Statistics in the United States, Part 5, Carriers by Water," shows that for the year 1963 class A and B water carriers had tax accruals of $1,149,582. It should be pointed out that class I railroads represent about 98 percent of the total railroad revenue, the class I motor carrier figures do not include smaller motor carriers or private and exempt carriers which collectively represent about twice as much highway transportation measured by ton-miles as do the class I motor carriers. Class A and B water carrier figures do not include the smaller, regulated water carriers or private and exempt water transportation which collectively account for about four times as much inland water transportation as the class A and B water carriers. Making these adjustments, real estate and personal property taxes of all intercity motor carriers might be estimated at $48 million; of all water carriers, at $6 million; compared with railroad taxes of over $351 million. Sincerely yours, P. A. HOLLAR. 1 Each percent used was the highest of the 4 1961 ratios reported by the Bureau of the Census, U.S. Department of Commerce, in "Census of Governments, 1962, Taxable Property Values," vol. II, p. 94, table 13. This minimizes the extent of discrimination. 2 Or higher. * In 1963 Illinois enacted a law (senate bill 946, approved Aug. 26, 1963) requiring assessment of railroads at same percentage of full value as local property is assessed. However, a number of Illinois lines contested the 1963 assessments, claiming that arbitrarily increased values offset equalization. Source: AAR law department, statement of James N. Ogden, vice president and general counsel, Gulf, Mobile & Ohio RR. Co., before the Subcommittee on Transportation and Aeronautics of the Interstate and Foreign Commerce Committee of the House of Representatives, in support of H.R. 736 and H.R. 10169, 88th Cong., 2d sess., July 28, 1964, app. A. Source: Interstate Commerce Commission, "Transport Statistics in the United States, 1963." pt. 7, table 1-A, p. 11, for the class I motor carrier figures, and pt. 1, table 107, p. 37, for the class I rail figures. Mr. CLAUSEN. I will yield briefly, because I have some more questions, to Mr. McCarthy. Mr. MCCARTHY. Mr. Reynolds, briefly, I am from Buffalo. We have lost a great deal of our former grain business. Some of it has gone directly over the St. Lawrence Seaway from Duluth and points west to European markets, whereas it used to come to Buffalo for transshipment by rail to the Atlantic seaboard ports. Other grain has moved down the Mississippi, and actually Buffalo has lost business to ports such as Galveston. I wonder if your experience would have anything to contribute to my observation? Mr. REYNOLDS. I doubt offhand that it would. I really have not studied the situation in the Buffalo or other eastern areas. Mr. MCCARTHY. You could not confirm or deny this? Mr. REYNOLDS. That is right. Mr. McCARTHY. Thank you anyway. I yield back to my distinguished colleague. Mr. CLAUSEN. Thank you. In House Document 173, which is the President's message on recommendations relative to excise and fuel taxes, I would like to read to you, Mr. Reynolds, and have your comments on this and how it would affect this overall recommendation. It relates to inland waterways. No user charge of any kind is presently in effect on inland waterways. This is unfair to taxpayers and competing modes of transportation. We are currently spending more than $50 million a year for operating and maintaining the inland waterways and over $2 million a year for new investment. In view of these large and increasing public expenditures, equity requires that users of inland waterways begin to contribute to the cost of providing the transport network. Accordingly, I recommend a tax of 2 cents a gallon on all fuel used on the inland waterways. The proposed tax will recover a very small fraction of the operating and maintenance cost of the waterways. This is what President Johnson has said in his message. I am wondering if you could comment on this and what effect this would have in the so-called competitive position between the two forms of transportation. Mr. REYNOLDS. I thoroughly agree with the President that the waterways should pay a user charge. As it is now their right-of-way is provided free. They pay no taxes: whereas the railroads must provide their own right-of-way and pay taxes on it. They allege that waterway transportation is low cost, but in alleging that they do not take into consideration this tax-free benefit. If they considered all their costs, they would probably be as much or greater than the competing forms of transportation. So if they did pay a share of their costs, it would bring what the actual shipping public has to pay up near what the other modes cost. It would not change the overall cost. It is just a question of whether the taxpayers bear a part of the transportation cost or whether the shipper that uses the service pays for it. Mr. CLAUSEN. Would this have an effect on the tonnage shipped over the waterway? Mr. REYNOLDS. It depends on the extent of the tax. In other words, if they paid enough tax to recover all the Federal cost, it would probably result in some decline in the movement on the inland waterways. The figure that the President has recommended is so negligible that I do not think it would have any effect on the amount of traffic moving on the waterway. Mr. CLAUSEN. You anticipated my question because that is what I was going to ask you: If it would have any effect on the competition between the two forms of transportation. As the chairman has pointed out, certainly the underlying factor here is the question of the basic competition between the forms of transportation. So I was interested in that. Mr. REYNOLDS. The tax in the measure proposed by the President I do not believe would divert any traffic away from the waterways. Mr. CLAUSEN. Thank you, Mr. Chairman. Mr. WRIGHT. Are there further questions? If not, Mr. Reynolds, the committee is grateful for your time. Mr. Reed, I welcome your presence. You are always an inspiration. Mr. REYNOLDS. We are grateful for the opportunity to appear here before you. Mr. REED. You are very kind, Mr. Chairman. Thank you. Mr. WRIGHT. Our next witness is Ben H. Carpenter, Trinity River Development Conference, who appeared very briefly yesterday. I believe, Mr. Carpenter, that also we have Mr. Pierson of the North Texas Traffic Bureau who is scheduled to appear and Mr. Cecil Newsom, chairman of the Traffic Council of the Texas Grain Dealers Association. What is your pleasure? Mr. Newsom and Mr. Pierson, will you care to come forward at this time or would it be your pleasure to wait until after Mr. Carpenter's testimony? Mr. NEWSOM. I think it would be more orderly to hear Mr. Carpenter's testimony. Mr. WRIGHT. Mr. Carpenter, you may proceed. Mr. CARPENTER. Thank you very much, Mr. Chairman. STATEMENT OF BEN H. CARPENTER, REPRESENTING TRINITY RIVER DEVELOPMENT CONFERENCE-Resumed Mr. CARPENTER. I am appearing this time representing the Trinity River Development Conference. In March of this year a meeting was held in Austin, the capital of the State, attended by 700 delegates from throughout the State at which the Governor of the State was the keynote speaker, urging the adoption of a resolution which was adopted by the group, leading toward support of the request to the Congress for authorization of the comprehensive report of the Corps of Engi neers. I was selected as the spokesman for that group and requested to appear here in that manner. Before proceeding, I would say, Mr. Chairman, I am not aware of the reading habits of the members of this committee. I do not know whether they like history or biography or fiction, but having been very familiar with the documents prepared by the previous speaker, I can say you will find a fine example of pure fiction with regard to the presentation recently given by Mr. Reynolds for the railroads. We are perfectly aware of the fact that the railroads have historically opposed most waterways, and we are familiar with their opposition to this present waterway. At this time the interest of the committee and shortness of time, I have here 3 pages long of condensed 12 points that we wish to present to the committee at this time. Without going into detailed discussion of them, attached to these are documented supported signed evidence by the particular industries involved in each |