The Secretary - On page 2, line 23, strike out the period at the end of the line and add "apportioned in two or more counties, none of which is within a city, but nothing herein contained shall interfere with special franchise taxes by state authority". Mr. Olcott - Mr. President, this is at the end of the Section 3, which is to be found on page 2 of the bill. In discussing the matter let me read the commencement of this section: "For the assessment of real property heretofore locally assessed, the legislature shall establish tax districts, none of which, unless it be a city, shall embrace more than one county." - thus preserving local assessment of taxes. Then go down to the last sentence; the Committee direction is: "The legislature may however provide for the assessment by state authorities of all the property of designated classes of public service corporations." Now, it seems to me, Mr. President, and Gentlemen of the Convention, that there is not any reason for this exception. There is not any reason why some of the larger taxpayers of a locality, operating wholly within a locality, should have their real and otherwise tangible property assessed by State authorities. Why constitute any difference between them simply because they are public service corporations from the treatment that is meted out to other large owners of real or personal property within a particular locality? The latter class are assessed by the local assessor. Is there any reason why there should be any difference with regard to public service corporations, provided their property be all in one locality? I can conceive that there might be reasons for separating the assessment of public service corporations where their property extended over a number of counties, and so, in order to accommodate that reason, if such reason there be, I have no objection, as it seems to my mind there is no objection to having the State authorities assess, provided the public service corporations operate in two or more counties, none of which is in a city; that is to say, that if they operate in one county, or outside of one city, then there may be a reason why they should be assessed by State authorities, because it might be said it is impossible to make a fair assessment in different localities of property which is really all merged in its value in one, and where it extends over more than one county. But why do it by this restriction? I am met by the Chairman of the Tax Committee, when I mentioned this Proposed Amendment to him, by his saying that this would keep the State authorities from assessing for the special franchise tax, and on that account I added the second section of my Proposed Amendment: ing herein contained shall interfere with the assessment of special franchise tax by state authorities". "Noth Now, with regard to the rest, it seems, Mr. Chairman, that this exception from the wise, proper and general principle of local taxation would never have been written into this Proposed Amendment if it had not been that the circumstance existed of the Chairman of the Taxation Committee being at the same time Chairman of the State Board of Taxation or whatever his legal title is. That is no criticism of the measure, except that it seems to me it has given Mr. Saxe a point of view of State authorities which has perhaps blinded him to the really objectionable character of this exceptional treatment of public service corporations. I may say, Mr. Chairman, that for them I hold no brief. There is not any private interest that I have that is in the least degree tied up with any public service corporation either by attorneyship or stockholding or anything else, but it seemed to me that the Constitution should treat taxpayers in a specific locality alike, whether they be corporations or private owners, and I therefore plead for this amendment. Nay, more, I have been surprised that it was not acceded to by the Chairman of the Taxation Committee, and by that Committee themselves. Of course there is not in the minds of the Committee, members of this Convention, what I am about to say, but to many of these puble service corporations it will look like stepping to the captain's office and settling, and I think on all the grounds stated that local assessments should be had there as well as elsewhere. Mr. Sharpe - Mr. President, I am opposed to this bill in the form in which it is, and my objection runs to the second section of it. In the third section, by the amendment which was made by Mr. Lincoln some time ago, it is in the power of the Legislature to create larger tax districts and as large as a county or a city, but in personal property they have not included the assessment of personal property; in that relation the second section gives the power to the Legislature, and it will undoubtedly be enforced under the persuasive eloquence of my friend, the Chairman of the Committee on Taxation, to assess personal property in every town in this State by agents sent out from Albany; and not only that, that second section makes that provide that taxes shall be levied from a central office in Albany. I think it a very unwise provision. Mr. M. Saxe - Will the gentleman kindly point to the language which says that the tax shall be levied from an office in Albany? Mr. Sharpe "The legislature shall prescribe how taxable subjects shall be assessed and provide for officers to execute laws relating to the assessment and collection of taxes " Mr. M. Saxe - Where will those officers come from? Mr. Sharpe commission. I presume they will come from the office of the gentleman's Mr. M. Saxe - But that is not what the bill says. Mr. Sharpe - In order to leave the matter where it always has been, a matter of local affair, for ninety per cent. - I think I am not overstating the proportion - of taxes, are raised for the purpose of meeting the expenditures of county, city, town, village and school purposes (and the matter of the State is a matter of equal adjustment), I have prepared some amendments to meet the objection and I move that the matter be referred to the Committee of the Whole with instructions to report forthwith with the following amend ment: Mr. Reeves - If there is any one thing that ought to be emphasized with regard to this provision, it is the necessity, the requirement of some uniformity in the assessment and taxation throughout the State. I have a letter here which comes from a prominent lawyer in this State who has been studying affairs in this particular in Franklin county. It is brief and I wish to read it: "Here is a suggestion which may or may not be of value to the Committee on Taxation. "In this part of the State, Franklin county, there is great confusion as to the taxation of railroads and, in particular, the telegraph and telephone companies. There is the local assessor, there is the county representative and there is the State Comptroller, each levying some kind of tax, local, property and franchise. The telegraph company run their lines part of the way by wires, part over property owned by private owners whose consent they have, and part over property owned by themselves. There is no uniformity in the books and records kept in the various taxing offices and in the sheets, notices and reports sent out. Some plan should be adopted which will bring regularity out of this chaos." Now, the amendment proposed by Delegate Olcott, simply puts more chaos into the plan that the Tax Committee has proposed. This first sentence in the third paragraph provides that the assessment of real property which embraces the special franchises, the real property which has heretofore been assessed, "The legislature shall establish tax districts, none of which, unless it be a city, shall embrace more than one county". That is to be in the State control and regulation and then this last sentence, "the Legislature may however provide for the assessment," Then there is this last sentence: "The legislature may, however, provide for the assessment by state authorities of all the property of designated classes of public service corporations." Then comes this amendment which says that those public service corporations must, in order to come within it, operate in two counties and not be within a city, striking at the very purpose which there is in those two sentences, to require the public service corporations throughout the State to act uniformly, under special franchises, and all the interests that they have can be put under the head of real property. We want uniformity here. We want what that letter calls for. It will not interfere with the designation of local officers, if they wish to do so, but it will give the uniformity that we want if this proposed amendment by Judge Olcott is not adopted, and it ought to be voted down. Mr. Ryder - Mr. President. The President - Mr. Ryder. Mr. Ryder - It was the aim of the Committee on Taxation to keep out of this bill all legislation, so far as possible, and I think the Committee has succeeded in doing that as well as any committee of the Convention. You will notice all through the proposed article the words "The legislature shall prescribe," "The legislature may, however, provide", etc. The object of the bill is to untie the hands of the Legislature where they are tied too tightly by the present provisions of Section 2 of Article X of the Constitution. It has been found by experimental legislation, in Westchester county, in Nassau county, and others, where reforms have been needed, where the people of the county generally and the officers of the county generally have desired reforms, that they could not get them on account of those provisions. The object of this bill is, then, to permit counties which desire an advance in the methods of assessment and collection of taxes to procure such advancement at the hands of the Legislature. The county of Westchester desired to have its town assessors assessed for all districts in the town, and its collectors to collect for all tax districts in the town. Such a law was passed and has given general satisfaction, except in one or two instances where appeals were taken to the courts, and the Court of Appeals, after the case was passed successfully in the lower courts, decided that the law was unconstitutional. This is to enable the Legislature to provide for such cases as that, where it is desired, and precautions are taken in the bill against laws which would be against the wishes of the county by providing through Mr. Lindsay's amendment that the tax district shall not be larger than the town, uniess the districts in the county vote for it by referendum. Now, another point which has been criticised is the liberty which is given to the Legislature to provide adequate means for reaching personal property. It is generally understood that real estate now bears the whole burden, or almost the whole burden, of taxation, direct taxation in the State. The burden in a few years will be too heavy for real estate to bear alone. The personal property of the State must be brought in and must be assessed. It cannot be done through local assessors. It is necessary that the Legislature should have the option of providing some way for reaching personal property outside of the local assessors. This is left entirely to the Legislature to devise means for. It is not mandatory here. Nothing is provided here, that is not now provided, except that the Legislature is permitted, in its wisdom, to make a broader and fairer tax than we have at present. Mr. Burkan - Mr. President. Mr. Burkan - Mr. President, and gentlemen, I hope that Mr. Olcott's amendment will not prevail. It is necessary that we should have a scientific and uniform system of assessing and determining the values of property of these corporations engaged in this exceptional kind of business. A great many companies operating throughout the State engaged in the same character of business will be taxed differently in different sections of the State. If this power is centralized in the hands of the Tax Commissioner in Albany, their specialists who are thoroughly familiar and acquainted with every detail of the business, its operations, they are better qualified to assess accurately and determine accurately the valuation of the properties than would be the city or local assessor. It will result in equality in assessments. It will protect the rights of the corporation as well as of the State. Now, the commissioners of corporations on taxation of the department of commerce and labor in their report recommend that in the case of these corporations, these public service corporations, that the power to assess and fix the valuations shall be subject to the State machinery instead of the local machinery, because it has been found in the States where this practice has been followed that the valuation has been more satisfactory from every point of view. We find that in the State of New Hampshire, the State assessors fix the values of steam and street railroads, express, car, telegraph and telephone companies. We find that in Ohio they have a similar provision; and in Michigan, the Constitution provides that the Legislature may provide for assessment by the State Board of Assessors of railroads, telegraph, telephone, express, car, and other companies, doing a public service business, and the property so assessed must be taxed at the average rate actually levied upon the general property in the State. So you will see, gentlemen, that other States have adopted the practice suggested by this committee and it has been found very satisfactory. It has insured a uniform and scientific method of taxing and determining the value of property, and I hope and I trust that this report will be adopted. Mr. A. E. Smith - Mr. President. The President - Mr. Smith. Mr. A. E. Smith - Mr. President, I desire to address myself to one amendment introduced by the gentleman from Ulster. Now, I very earnestly hope that that will not be adopted. I think if there is one thing in this State that requires a remedy, and a constitutional remedy, it is more power to the Legislature to be able to deal with the proper taxation and a proper assessment of taxable values and property in this State. We had better not have any personal property tax law whatever than to have it made the subject of a joke, and it is so regarded; and unless there is vested in the Legislature by the Constitution the power to clothe the State Board of Tax Commissioners with the right to assess the property of a corporation that can incorporate with its principal place of business in a certain locality as a matter of convenience, you never can get at the question of a proper valuation of personal property. Now, just what I mean I can illustrate by this situation down in my friend's county in the town of Esopus. In 1915, the population of the town of Esopus was 4,543 people. That is about as large as the election district in New York in which I live. Still, the following well-known corporations gave the town of Esopus as their principal place of business, and I will read you the amount of their capital stock and what the assessor assessed them at, the value he placed on them. The American Druggist Syndicate, capital stock $10,000,000; the local assessor in the town of Esopus, where its principal place of business is, said it was only worth $1,800. (Laughter.) A. F. Brumbacher and Company the big hardware concern, with a capital stock of $30,000, having its principal place of business in Esopus, was found to have personal property of $400. G. C. Gunther's Sons, the big fur house down on Fifth Avenue, New York, an establishment that is enjoying the protection of our fire department, our police department, our health and building departments, our lighted thoroughfares and boulevards and all our water and everything else and everybodys knows where Gunther's is - celebrated for its high class furs - is incorporated with a capital stock of $1,000,000, but up in Esopus they found they had personal property to the value of $8,000. From what I understand, that is about the price of three or four fur coats. Mr. Brackett - Mr. President, will the gentleman yield for a question? Mr. A. E. Smith - Yes. Mr. Brackett - You are not reading the list of Judge Clearwater's clients, are you? (Laughter.) Mr. A. E. Smith - I don't know about it. The Interborough Brewing Company with a capital stock of $1,000,000 - the town of Esopus is probably |