Property of Southern Tennessee Power Co. in Alabama likely to be taken over by Tennessee Valley Authority

Colbert
Lauderdale.

Total.

County

No property in municipalities.

Assessed values used as fixed by State tax commission for tax year 1938.
State tax levies applied as fixed by legislature.

County-wide and special school district levies applies as voted in each county.
Other county levies as fixed by county commissioners or other like governing body.

Birmingham Electric Co. property, used in operation, electric division, as assessed by the State tax commission, tax year 1938, both tangible and intangible, together with property-tax loss in event competitive properties should be constructed and operated by municipalities or should property be sold to Tennessee Valley Authority

Birmingham Electric Co. property used in operation, electric division, as assessed by the State tax commission, tax year 1938, both tangible and intangible, together with property-tax loss in event competitive properties should be constructed and operated by municipalities or should property be sold to Tennessee Valley Authority-Continued

1. Municipalities may levy 5 mill property tax, Constitution, section 216. Birmingham, Bessemer, and Fairfield may levy an additional 5 mills for bond service and 5 mills for special purposes authority amendment 8.

2. Electric department return, in addition to property used in operation carries various bonds and buildings not used in operation having assessed value of $383,660. Property not used in operation as returned by the company is omitted from this compilation.

3. Tools, furniture, and fixtures and material and supplies allocated between electric, street railway. steam heat, and bus departments on basis gross operating percentage. Do not have assessed value of busses hence the stated method used.

4. Intangible assessment allocated to the four departments on basis net operating revenue percentage. 5. Assessed value of intangible, tools, material, and supplies allocated to electric department broken to various taxing subdivisions on basis that assessed value of fixed property in each taxing subdivision bears to the total allocated value (items 3 and 4). Do not have gross or net opersting revenue for the separate subdivisions.

6. Bessemer and Tarrant City now constructing competitive distribution systems. High voltage transmission line is being built Bessemer to Guntersville Dam. 7. Tax computed for State and county on actual number mills levied for incorporated towns on number of mills authorized.

(Whereupon, at 12:40 p. m., the committee recessed until 2 p. m. this day.)

AFTER RECESS

The committee met, pursuant to recess, at 2 p. m., for further consideration of H. R. 7424, Hon. Andrew J. May (chairman) presiding.

The CHAIRMAN. The committee will please be in order, and Mr. Fitts, will you come around, please.

STATEMENT OF WILLIAM C. FITTS, JR., GENERAL COUNSEL, TENNESSEE VALLEY AUTHORITY, KNOXVILLE, TENN.

Mr. FITTS. Mr. Chairman, are you ready to proceed?

The CHAIRMAN. Yes; go ahead, Mr. Fitts. Let me make this suggestion, gentlemen. Let us permit Mr. Fitts to go right along until he gets through, and make notes of what we want to ask him when he concludes his statement.

Mr. FITTS. Mr. Chairman, first, I would like to attempt to clear the record on this question with respect to Bessemer and Tarrant City. From listening to the discussion this morning I got the impression that some of the members of the committee thought that by serving power to the municipal systems in Bessemer and Tarrant City the T. V. A. was violating a provision of the statute either in letter or in spirit.

Now, I want to emphatically state that there is no such violation but, that, on the contrary there would be a statutory violation if we had refused to serve those two municipalities under the circumstances of the case. Now, the facts are that 5 years ago those two towns made application for a contract to be served with T. V. A. power. At that time the application was denied on the ground that we did. not have enough power to serve them from Wilson Dam, which was the only dam in operation, and on the additional ground that it was not economically feasible for the T. V. A. to build a transmission line down to those two towns. After that, and about 3 years ago, long before any bond legislation was in Congress, and long before the acquisition of the T. E. P. properties was even seriously considered, those towns revised their applications and came to us with the proposition that they would build their own transmission line to the Guntersville Dam and take the power there and transmit over their own line to be owned and operated by Tarrant City and Bessemer, and I would like to call the attention of the committee to section 12 of the Tennessee Valley Authority Act, as passed by Congress, which provides as follows: