Evening star., 1939-08-06

it be graduated downward over a
period of years to 5 per cent. Due
to the expanding gross revenues of
the T. V. A. from the same service
area and without any expansion of
its market area, the declining per-
centages are estimated to yield sub
Stantially a constant amount until
l949. After that date the amount
payable to the States under the
constant per cent would increase
in proportion to revenue expansions.
The inclosed statistical tables
show that the total estimated an
nual payments to the States will be
approximately $1,000 900. The per-
centages of gross proceeds from
power sales provide about 81 100 900
of this annual payment. The re-
naming 100000 is added because
Of proviso that the minimum an
nual payment shall be equal to the
former State and local ad valorem
property taxes levied on property
acquired from utility companies and
on that share of the purchased res
ervoir lands properly allocated to
power"
Formula Important Feature"
Continuing, DR.. Morgans letter
stated:
An important feature of this rec
commended bill is a formula for the
ALLEGATION among the several States
of the total payment set aside by
T. V. A: for tax equivalents. This
formula gives equal weight to (a)
T. V. A. power property investment
in the State and (b) T. V. A. power
revenues derived in the State. Esti-
mates OF the percentage distribu-
ton by States of power sales and
power property are given in the
accompanying tables for the fiscal
years beginning July u 1904.
The minimum payment of $4,000
year to each State means that
prior to an ALLEGATION of properties
in process of construction in North
Carolina (Hiwassee) and Kentucky
tGilbertsville, now known as the
Kentucky DAM these States will
receive some revenue in recognition
of the tax problem which certain
OF their counties in the reservoirs
will experience.
The payments to the States un-
der the proposed bill are less than
the total of State and local taxes
formerly collected on the purchased
property and operations of privately
owned utilities and private land
owners. We consider the 10 per cent
payment for the first year to be
fair State and local tax equivalent.
Since the power program of the
Authority is comforting valuable
benefits in the area and is produc-
ing and marketing a volume of
power greatly in excess of the oper-
ations that could have been ex-
pected under private ownership, it
appears equitable that a portion of
this tax equivalent be retained by
the Authority for the Federal Treas
ury. The report required on Janu-
airy l, 1945, should indicate whether
or not the allowance for such bene-
fits conforms to sound and desirable
fiscal policy.
State Action Expected.
"The only subject dealt with in
this recommended draft of bill is
the Federal Governments contribu-
ton on property which it owns; the
contribution to the State and local
subdivisions by municipalities and
other public agencies owning their
own electric facilities is, of course,
not included in these computations
nor covered by this proposed bill
We have reason to believe that the
States-certainly the State of Ten
nessee, which is more extensively
affected-will enact State legisla-
ton providing for such payments
by municipalities to the State and
other local agencies"
Senator Norris and Representative
Sparkman also prepared a joint
statement in which they said the bill
is tentative ir nature, and not in
tended for immediate consideration
1t was introduced now, they said,
for the purpose of inviting criticism
and discussion from all interested