UC-NRLF HJ A? POCUMEN1S OEPT. ID 7 REPORT OF COMMITTEE TO INVESTIGATE ASSESSMENT AND TAXATION STATE OF TENNESSEE 1915 DOCUMENTS DEPT. REPORT OF COMMITTEE TO INVESTIGATE ASSESSMENT AND TAXATION STATE OF TENNESSEE 1915 NASHVILLE, TENN. McQUIDDY PRINTING CO. 1915 A 7 DEP1. REPORT OF COMMITTEE TO INVESTI- GATE ASSESSMENT AND TAXATION. To His Excellency, Governor Tom C. Rye, and to the Fifty- ninth General Assembly of Tennessee: This Committee, to investigate the question of Assessment and Taxation in the State, was appointed by the Governor in pursuance of Senate Joint Resolution No. 27, adopted on January 26, 1915, the text of which will be found in the Appendix attached to this report. The Committee assembled in Nashville on February 1, and during the period which has elapsed since that time many officials and citizens have appeared before the Committee or submitted their views in writing. Public hearings have been given to representatives of many organizations and to others, and a large number of letters on the subject of tax- ation have been received. Because of the short period of time available in which to investigate our present system of assessments in this State and consider the subject of tax- ation generally, the Committee has not been able to make as comprehensive a study of the subject as it might have desired. The Tax Commission of Virginia, which has re- cently reported to the Legislature of that State, consumed seven months on a similar investigation. A Tax Commis- sion in another neighboring State, Kentucky, was engaged in such an investigation during a period of about a year and a half. In other States a much longer time than has been available for this Committee was consumed. Realizing, therefore, that its work must be hurried, this Committee has not hesitated to take short cuts in the pur- suit of information, and has drawn liberally on the reports of Commissions of similar character in other States. We do not believe, however, it would be profitable to delay the matter of tax reform in Tennessee for a more exhaustive 581651 COMMITTEE ox TAXATION. study of the conditions in this and other States. To do so would entail a considerable expense, and would also post- pone the time when taxation might be equalized throughout the State. Moreover, the evils in our present system of tax- ation are not confined to this State, but are general to those States which have similar systems, and are well known to all the people of the State who have paid attention to the subject. MAIN DEFECTS IN PRESENT LAW. The testimony in hearings held by the Committee in Nash- ville and our correspondence with assessors, other officials, and citizens residing in all parts of the State, have strongly confirmed the opinions which were entertained by members of the Committee at the outset as to what in general were the defects of our present tax laws. Concerning them there is little controversy. As stated, all Commonwealths which levy what is known as a general property tax that is, a tax at uniform rate levied on all classes of property have had strikingly similar experiences. Yet most of the States of the American Union continue wedded to this system. It is embedded in most of the State Constitutions, as in our own. Only nine States so far have broken away from this gen- eral property system. The latest of these is Virginia, which, in pursuance of recommendations of its Tax Commission, recently has completely abandoned the general property tax and has adopted a system by which the State Government in the main will derive its revenue from different properties than do the local subdivisions. Where the segregated or separated system prevails, the State, as a rule, derives its revenues entirely from the taxation of public-service and other corporations and inheritance and various special taxes, while the taxation of real estate is resorted to only in the counties and cities. The plan differs much in detail in dif- ferent States. The chief advantage of this system is that it renders unnecessary the equalization of assessments In counties or subdivisions for the equal apportionment of State taxes. The system of taxation adopted under our first Constitu- COMMITTEE ON TAXATION. lion in 1796 was simple. There was then scarcely any per- sonal property except slaves. A specific tax on land was the principal tax, and town lots could not be taxed more than 200 acres of land. The tax on a slave was also limited to that on 200 acres. This was the system inherited^ from the parent State of North Carolina. By 1834, however, there existed much more personal property, tangible and intangible; and the Constitution of that year contained an article paving the way for the general property tax, which was finally made mandatory by the Constitution of 1870. We borrowed this tax from Europe, as did other American States ; but it is now practically obsolete abroad, being suited only to primitive economic conditions. The old general property tax, in fact, survives only in Switzerland, Australia, and the United States, in all of which it has become so defective that it has been supplemented with other taxes.' Dr. Edwin R. A. Seligman, probably the country's most eminent authority on taxation, says of this system : " The general property tax as actually administered is, beyond all doubt, one of the worst taxes known in the civi- lized world. Because of its attempt to tax intangible as well as tangible things, it sins against the cardinal rules of uni- formity, of equality, and of universality of taxation. It puts a premium on dishonesty and debauches the public con- science ; it reduces deception to a system and makes a science of knavery ; it presses hardest on those least able to pay ; it imposes double taxation on one man and grants entire im- munity to the next. In short, the general property tax is so flagrantly inequitable that its retention can be explained only through ignorance or inertia. It is the cause of such crying injustice that its alteration or its abolition must be- come the battle cry of every statesman and reformer." NEW CONSTITUTION DESIRABLE. We must necessarily state at the outset that anything like a complete and thoroughly effective reform of our tax sys- tem cannot now be obtained. When this State adopts a Constitution with a more flexible article on the subject of 5 COMMITTEE ox TAXATION. taxation, then may we consider for adoption many of the excellent provisions such as have gone into beneficial effect in States like Wisconsin, Minnesota, Ohio, Oregon, Penn- sylvania, California, Connecticut, New York, New Jersey, and Maryland, and are soon to go into effect in Virginia. Our recommendations, therefore, are largely devoted to the promotion of efficiency under the present system. We have also suggested a plan, outlined later, which we feel sure is permissible under the Constitution, and yet will bring us many of the benefits secured in other ways by the States that have wholly or partially, escaped from the toils of the gen- eral property tax. The bill we have drawn as a suggestion to the Legislature will be found in the Appendix. A CENTRAL COMMISSION. The most important of these recommendations to improve efficiency, we feel sure, is for the establishment of a perma- nent Tax Commission to have complete charge of the admin- istration of the tax laws. This recommendation, as will be seen by reference to the Appendix, is in harmony with the declarations of all the leading political parties in the State in the last political campaign, and was ably urged by the Governor in his message to the Legislature following his inauguration. Practically every person appearing before the Committee who has studied our tax system, or who now has a part in its operation, indorsed the proposal. We be- lieve that this is the first and most important step to be taken for the equalization of taxation throughout the State. Without such a commission to supervise the operation of the tax laws in Tennessee, there will continue to exist grave in- equalities, causing much complaint. The establishment of a permanent Tax Commission, which shall have among its duties also the investigation of systems of taxation in other States and the making of frequent reports to the Governor, will inevitably bring about further improvements in our tax laws, and, we believe, the adoption at some time in the near future of many of the best features of the tax systems of other States. COMMITTEE ox TAXATION. The assessment law of 1907, which is the present law, is an amendment of the assessment law of 1903, which, in turn, was an amendment of the law of 1899 and that of 1895. Amendments of more or less importance were passed in other years. The chief weakness is the lack of provision for a central board to direct the work of assessors over the State. MAKING REASSESSMENT UNNECESSARY. The two features of the present law which seem to give rise to most criticism are the inequalities in assessments and the practice of reassessment. We have come to the unanimous conclusion that the only means by which prop- erty may be equitably and adequately assessed is by secur- ing such assessment at the beginning ; and we are confident that through an improved system of making the original assessments, followed by proper equalization in the county where the assessments are made, and finally by the Tax Commission, the need of back assessments will be removed. We are recommending, therefore, that after payment oi taxes the receipt shall be a finality. The State may lose a small sum by declining to reassess property, but it now loses, we believe, much more because of the general unrest of taxpayers through the fear of back assessment, for it is a notorious fact that very little of the property of Tennessee of any class is now assessed at its actual cash value. Reassessment after the payment of taxes violates that canon of just taxation as stated by Adam Smith : " The tax each individual is bound to pay ought to be certain and not arbitrary." Capital flies from any State where there is no fixedness of taxes. It is against public policy for the tax- gatherer to harass business or industry by repeated visits. Those who commit perjury or actual fraud in evading taxe's should be prosecuted criminally, and the State should also collect civil damages from such. An efficient tax commis- sion will see that such persons are so proceeded against. They may be reached, we believe, under the general provi- sions of the law. COMMITTEE ON TAXATION. "ACTUAL CASH VALUE." Though no words in the assessment law are more fre- quently used than "actual cash value," nothing, in fact, is so rare as an actual-cash-value assessment. If any such are on the assessment rolls, it is through accident or mistake of the assessor. These officials freely admitted to this Com- mittee that, despite their official oaths, taken not only be- fore the beginning of their work, but after its completion, property, instead of being assessed as required by law, at its actual cash value, was assessed by them, in the case of indi- vidual properties, all the way from 10 to 80 per cent. In the cases of whole counties there were frequent admissions by assessors and others that the tax aggregate did not con- stitute more than 25 per cent of the value of the property in the county, and in no case did any assessor state that the tax aggregate constituted more than 60 per cent of the value. One candid official, whose conscience had worried him some- what at the wording of the oath, struck his pen through the word " cash " and returned his assessment as at the " actual tax value " of the property. WORK OF ASSESSORS. We would not have it thought that we in the slightest de- gree impugn the character of our county assessors as a class. As a rule, they are men of as high character as the average in their communities. In many counties they are paid wretchedly, and for the remuneration they receive their work may be considered good ; and, in many cases, they have rendered services of a most excellent character, showing sur- prising efficiency in view of all the conditions under which the assessment is made. It is not creditable to Tennessee that men elected to the offices of assessor, to whom are in- trusted the important duties of valuing all of the property of the taxpayers in their counties, are in many cases paid at rates not much better than are the farm hands of their counties. Under the law they are allowed only four months and twenty days in which to make their assessments. They must begin work in the dead of winter, when roads fre- 8 COMMITTEE ON TAXATION. quently are impassable. They are required to go on every piece of property, see all taxpayers and require them to fill out their schedules as provided by law. The present law has many rigorous provisions to compel the taxpayer to fill out these schedules and to require the assessor to see the taxpayer and force him to do his duty. But its provisions for many reasons are loosely observed. In many counties assessors must employ deputies to assist them, and in such cases their earnings are reduced to a minimum. The fact was brought out in the investigation before this Committee that in many counties the County Court Clerks received more for copying the tax books than did the as- sessors for their laborious work of assessment. How may we expect the property of taxpayers in Tennessee to be properly assessed until we constitute the assessor's office one of greater dignity, allow him respectable quarters at the courthouse, pay him more adequately for work which re- quires scrupulous honesty, more than ordinary capacity, and painstaking care, and give him more time in which to make the assessment? Because of the fact that assessment work is arduous and difficult and is poorly paid, too many assessors have taken the easiest way to complete their tasks and have merely copied the old books. The assessor must constantly resist the efforts of thrifty tax dodgers who dog his footsteps with pleas for reductions. It was reported to this Committee that an investigation of the assessments in several counties in one of the grand divisions of the State showed that the property of estates and of widows and or- phans, where the taxes were paid without question, were more highly assessed in proportion to value than any other classes of property. It is the general consensus of opinion that the larger property owners throughout the State do not pay on assessments as high in proportion to real values as the owners of small farms and small homes in cities. This is not due to any wilful discrimination on the part of the assessors, but because the value of smaller properties is more easily arrived at than that of larger properties, and also from the fact that the assessor has more pressure brought to bear on him by larger property owners than by [ITTEE ON small property owners, and unconsciously is influenced there- by. But the fact is lamentable, and leads to the inevitable conclusion that the assessment work of the State needs su- pervision, and that the assessors should be permitted to give more time to the assessments and be better paid there- for. The so-called " Boards of Equalizations," appointed by the County Courts and the municipalities, do not help mat- ters. They frequently prove only boards of reduction and undo good work on the part of the assessor. It is nearly always the case that considerable property interests secure representation on such boards. And the ulterior purpose for which such appointments are sought is usually made plain before the books are closed. ASSESSMENTS MUCH BELOW VALUE. It is not surprising, therefore, that, despite the advances in the values of land all over the State, which are well known to all who have investigated the subject, the tax aggregate has grown very slowly, most of the increases, as shown, be- ing in the assessments of city property. In fact, the Comp- troller's report for 1914 shows that thirty-one counties re- duced their average acreage assessment between 1913 and 1914, and that there were actually six counties which were assessed at less per acre on acreage property in 1914 than in 1879. In the ten years between 1904 and 1914 the total assessments of the State increased from $429,767,706 to 672,754,691, or 56.5 per cent. This is not an increase com- mensurate with the growth of wealth. According to the Federal census, the capital invested in manufactures in Ten- nessee was $63,141,000 in 1899 and $167,924,000 in 1909 an increase of 166 per cent. The value of farm property in 1900 was $341,202,025, and in 1910 it was $612,520,836 an increase of 79 per cent. The average acreage assessment now is less than $9. These figures speak for themselves. Our property every year is assessed on a lower basis compared to value. In addition, statements of assessors before this Commit- tee show that in many cases throughout the State the bases 10 COMMITTEE ON TAXATION. of assessment in counties adjoining one another vary be- tween 25 per cent and 60 per cent of the actual value of the property in those counties. The game of dodging a fair share of State taxes is being played all over the State, just as most individuals dodge taxes in their individual assess- ments ; and such a thing as actual-cash-value assessments in accordance with the assessment law of 1907 is practically unknown anywhere. In fact, numerous assessors testified that they dared not assess property at its actual cash value ; for, if they did, they were certain to lose their official posi- tions at the next election if, indeed, they were not before that time run out of the county. We are unable to furnish statistics as to the actual value of property in Tennessee as compared with the assessment, but from those collected by its agents the Federal Census Bureau estimates that the as- sessed value of property is about 38 per cent of the actual value of property in the State. We are inclined to the be- lief, however, from admissions made by assessors and tax- payers who have come before this Committee, that this esti- mate is much too high. One State Board of Equalization, consisting of Governor, Treasurer, and Secretary of State, equalizes the assessment made by the Railroad Commission ; and another State Board of Equalization, consisting of Comptroller, Secretary of State, and Treasurer, equalizes all other property. Both these boards have done careful and conscientious work, but it is hardly to be expected that in the limited time these offi- cials can give to taxation they can do as efficient service as could a tax commission which studies values all the year round. Nor do these boards influence the initial assessments, and the experience of all States is that unless assessments are efficiently made at the outset, the equalization will be difficult, if not impossible. In 1895 the State Board of Equal- ization was given power to raise or lower counties, but this was taken away in 1897. The power should be vested on the Tax Commission; but if assessments are made properly, it need never be exercised. 11 SOME MARKED INCONSISTENCIES. Differences in valuation of a marked nature exist in counties in the same grand division, and often between close neighbors. For instance, in Greene County the value of all farm property, as shown by the Federal census of 1910, is about five times as great as the assessment of acreage for taxation, while in Campbell County the as- sessment was nearly as much as the value of the farm property. In Hamilton County the assessment was a little more than the value of the farm property, while in Knox County it was only one-half as much. In Cumberland County the assessment was about four-fifths the value of all farm property, while in White County it was only one- fourth as much. Sumner and Bedford showed about one- fourth; Benton, one-third; Davidson, one-half; Lake showed one-half; and Lauderdale, one-third. There probably are good explanations for some of these differences, but we be- lieve a careful analysis of all these figures such as might be made by a permanent Tax Commission would be very useful in more nearly bringing about uniformity of assessment in proportion to value, and would put a stop to the very gross injustice that is now being practiced against those counties which, in reality, pay a part of the taxes of the counties that are underassessed. IN LARGER COUNTIES. In the larger counties, where assessors are more ade- quately paid and are better trained for their duties, and where they keep open office at the courthouse for the year around, assessments are more efficiently made. Further- more, by reason of the increasing costs of city and county governments, powerful influences have been brought to bear on assessors in counties containing considerable municipal- ities for higher assessments, and the result has been that these counties are assessed much more nearly at their true values than in those counties where no such influences are at work. Nevertheless, even in the urban counties the law has not 12 COMMITTEE ox TAXATION. been as carefully followed as it would be if there were State supervision; and, undoubtedly, more adequate equalization of individual pieces of property is needed, as well as the dis- covery and placing on the tax books of large amounts of city property taxable under the law which now in great measure escapes. Indeed, any complete assessment of the State will bring much more property out of hiding in cities than elsewhere. The only personal property which is at all adequately assessed in the cities is bank stocks ; but the rate on these varies all over the State, ranging from 50 to 100 per cent. This undoubtedly should be made uniform. Un- der our present tax laws, credits and securities of all kinds are held to be property as much as is real estate. Very lit- tle of this is assessed, but that which does go on the tax books is assessed at its full value. Frequently, in the case of wealthy citizens, the amount of a man's personal property is not brought to light until after his death, and his family is then humiliated by a reassessment action. As long as the total rate of taxation for all purposes in the more populous communities ranges from 21/2 to 4 1/2 per cent on the prop- erty returned for taxation, the owner of a bond bringing 4 to 5 per cent, or even of a note bringing 6 per cent, will not voluntarily submit to assessment. To do so would be to suffer confiscation of all or nearly all the income. It is a self-evident fact that if such property could by drastic laws effectively be reached, it would fly the State, frequently the owner with it. In fact, in nearly all the richer States, where this class of property exists to a much larger degree than in Tennessee, the effort to reach and assess such prop- erty has been abandoned, and a special tax at a lower rate is levied on it. In Ohio, with a system somewhat like ours, after many years of efforts to disclose this class of property, a large amount of it finally has been brought from hiding through the simple device of actual-cash-value assessments and a limited rate. In the city of Baltimore, after personal property was placed in a class by itself and taxed at a very low rate, the assessments of this class of property in eleven years increased from about $6,000,000 to about $150,900,- 13 COMMITTEE ON TAXATION. 000, and the revenue of this city from this source increased sixfold. In 1892 the percentage of our taxes collected from per- sonal, property was just about the same it is to-day 13 per cent. There has been no increase, despite the drastic laws enacted. Indeed, were such laws to be enforced, the State would be done much harm by the loss of capital. Such prop- erty, of course, should be made to bear a fair share of the burden of taxation ; and this, we believe, may be done in the manner we are suggesting elsewhere in this report. DOUBLE TAXATION. Undoubtedly, no argument can be made in defense of our laws against the charge of double taxation. The owner of real estate is taxed on the value of the property, and the mortgagee is taxed on the value of that property also. The purchaser of a piece of property is taxed on the property, and the holder of vendor's lien notes is also taxed on that property. So, also, in the case of our corporations, under the present law we levy a tax on the value of the stock, also on the bonds of the corporation, while the bonds are also taxed in the hands of the individual bondholders. It is true that none of these provisions of our present laws have been so enforced as to constitute a discrimination or injustice, except in rare instances. But the presence of such provi- sions in our statutes act so as to deter capital seeking in- vestment ; and as we are endeavoring to make our tax laws enforceable, and enforce them, as we are proposing to do all laws in the State of Tennessee, this Commission has felt that these provisions ought to be considered with the great- est care. It has been freely charged before us that a great in- dustrial corporation was driven out of the State because of being back assessed on both the value of the stock and its bonded debt, which was very large. The officials of this county farmed out the tax in a method truly medieval, agreeing that attorneys should have all over a fixed sum. The company finally settled for much less than at first de- manded; but now the smoke no longer rolls over the coke 14 CoM.HlTTKi: ON TAXATION. ovens of this formerly very important plant. No doubt, however, there were other reasons besides the harassment of back assessment and the ambiguity of our tax laws that finally induced this company to withdraw its business from Tennessee, but the fact remains that it is gone. In drawing the new bill, we have made a distinction be- tween public-service and private corporations. SWORD OF DAMOCLES. We do not join in any indiscriminate criticism of revenue agents or their attorneys who have acted conscientiously and in compliance with their duties under the law, but we think it will be well to abolish this system which has caused much just complaint. While the attainment of the ideal of cash-value assessments, we fully realize, is most difficult, nevertheless we believe that with the improved assessment system proposed in our bill it may be closely approached. To attempt any assessment otherwise than at its actual cash value is of doubtful expediency. But we should bear in mind that while a provision for actual-cash-value assess- ments is retained on the statute books and taxpayers are not assessed at their actual cash value, it leaves suspended over the head of practically every taxpayer the traditional sword of Damocles, ready to fall on the unsuspecting and unoffend- ing taxpayer at any moment. Under decisions of our Ten- nessee courts, no citizen may obtain redress on account of increased assessment, unless he is able to show that his prop- erty has been assessed at more than its cash value. It does not relieve him that other property in his county or in the State has been assessed at less than its cash value. The hold- ings of our courts have been that the only standard is the question whether or not in his own assessment the law has been violated. So it is that at the present time various offi- cials have it within their power for personal or political rea- sons to persecute any taxpayer in the State who is not fully assessed, and this includes most taxpayers. That such cases of persecution are very rare is due not to any protection contained in the law, but only to the restraint of the officials. Such instances do occur, however. One was reported to this 15 COMMITTEE ON TAXATION. Committee where an assessor, who had just applied for a job with a mining company and had not been employed, increased the assessment of that company from $109,000 to $500,000, despite the fact that other property in the same county was assessed at a ridiculously low figure and not at all in comparison with the increased assessment of the min- ing company. It was with the greatest difficulty that the attorneys of this company succeeded in having a portion of the increased assessment removed. The only true basis of assessments, in our opinion, is the actual cash value of property. This, of course, presupposes some market and a willingness of the owner to sell and the probable existence of a purchaser who would buy. It does not mean the assessment of property at inflated or fictitious values, but means the establishment of reasonable and well- sustained standards of value, considering income, increment, depreciation, possible use, etc. Such a system of assess- ments, based on actual cash values, is, we believe, absolutely essential to equalization all over the State. Furthermore, when individual property everywhere in Tennessee has been brought by the assessors, working under the instructions and guidance of the Tax Commission, to a basis approxi- mating cash values, and when the boards of equalization appointed by the Tax Commission, as provided under the law we recommend, shall have equalized this property, and when the Tax Commission itself has heard complaints and passed on them, it will then be possible for the central tax- ing body, through personal inspection or other investigation, to consider counties as a whole, and, in cases of grave in- equality, remedy such by horizontal increases or reductions of assessment, so that the whole State may be placed on ex- actly the same footing. Any other method does not com- ply with the spirit of the Constitution. ARBITER OF ALL VALUES. In order to bring all property in the State to the same basis of value, we think that it will be necessary to make the Tax Commission the final arbiter in the equalization of the value of all property in the State; and this Comi- 16 COMMITTEE ON TAXATION. mission should perform the functions of all boards of equal- ization. We do not under our proposed plan suggest a change in the methods by which the property of railroads and quasi-public corporations shall be assessed. However, we have recommended that this property, along with all other property, shall be equalized by the Tax Commission. We have not changed the manner of assessment of merchants' taxes, but have required that these assessments also shall be reported to the Tax Commission for the purpose of equaliza- tion. At the present time no provision for the equalization of the assessments for this very important class of property exists; and, indeed, the reports do not even contain the ag- gregate on which the tax is collected. ORIGIN OF COMPLAINTS. For many years there has been severe criticism of our tax laws. In 1895 a revenue commission of the Legislature made a study of the subject, with resulting reform amendments. It removed all obscurity as to the assessing of foreign cor- porations, and they had no further fears of doing business in the State. In 1897 an unjust law, compelling corporations to declare dividends, if a sufficient sum was on hand to pay 4 per cent, was repealed. In the same year it was provided that the shares of stock should not be assessed to the stock- holders. There were amendments of the tax laws in 1899 and 1903, but the statute enacted in 1907 has remained on the books ever since, the Act passed two years ago, as the result of much agitation, being vetoed by the Governor. MORE LATITUDE THAN TAKEN. As previously noted, the chief obstacle to any funda- mental change in our tax laws at the present is the inflexible article on taxation in the Constitution of 1870. However, more latitude is given under this instrument than has been taken by any Legislature since the adoption of the Consti- tution. And, as we shall indicate later, it is possible under the Constitution to make some marked departures in the future, as, for instance, in the manner of taxing stocks and 17 COMMITTEE ON TAXATION. bonds, and also in the manner and rate of taxing the prop- erty of merchants. However, most of the criticism against the present taxing system of the State, of course, is due to inefficiency in ad- ministration. Those States which have abandoned the de- centralized system of assessments, to which, with our at- tachment to local self-government, we have clung, and have adopted the commission plan we are recommending, have accomplished much along the lines of tax reform; and un- der such central supervision, efficiency is so increased that the complaint against general property tax is much less heard. MANY GOOD FEATURES TO PRESENT LAWS. Otherwise our present system of taxation in most respects is one of the most liberal that has been devised and put in operation in any American Commonwealth. We have not had time to examine all the tax laws of all the States, but as far as we have investigated we have found none which makes so many exemptions of property as the State of Ten- nessee. In no other State of which we have knowledge is the product of the soil in process of manufacture exempted, though we have not carefully investigated the laws of all the States in this respect. The framers of the Constitution thought this should apply only to the products of our own soil ; but because of a decision of the Supreme Court of the United States to the effect that we could not discriminate against the products of the soil of any of our sister States in favor of that of our own State, it has resulted that the manufacturer is required to pay no tax on any products of the soil which he has in his possession for the purpose of manufacture. And this has been held to apply also to the finished product in his warehouse. In some of our neigh- boring States infant industries are exempted from taxation for periods of from five to ten years, and there is ample reason for such exemption. But we are inclined to believe that the exemption given in Tennessee is much more of an encouragement to factories than that given in neighboring States, and more defensible in principle. Tennessee's laws 18 COMMITTEE ON TAXATION. are liberal to manufacturers, and these industries are rap- idly growing in our State. In view of our fertile soil and plenitude of agricultural products, in view also of the im- mense areas of mineral and timber lands in Tennessee, fur- nishing cheap raw materials, and in view of the available horse power and dependable labor, and with markets close at hand, Tennessee is destined to be a great manufacturing State. It is wise policy for the Legislature to encourage these industries, and this policy should not be changed, even if the State adopts a new Constitution. EXEMPTIONS FARMERS ENJOY. Besides exemptions made in favor of manufacturers, more property of the farmer probably is exempted than of any other class. Practically all the smaller farmers of the State secure exemptions on their personal property, household goods, tools, implements, stock, etc., on the farm, because of the constitutional provision which exempts $1,000 of per- sonal property in the hands of each taxpayer. None of Ten- nessee's neighboring States have any such constitutional provision or make such exemptions. In those States such property is taxed as real estate. And the Tennessee farmer thus has the advantage. He is also exempted from taxa- tion on the products of the soil in his possession, as is also his immediate vendee. And this clause has been given an elastic construction. Large values in farm products are thus kept off the assessment books by reason of these ex- emptions, and wisely so. On the prosperity of no class of our people is the general welfare of the State more depend- ent than on that of the farmer, and he should always be protected. But the $1,000 exemption of personal property, while a justifiable aid to the small farmer, undoubtedly has proved the cloak for more evasion of taxes than any other provision of our laws. In the cities millions of dollars of property, unquestionably, are withheld from taxation under the guise of this exemption. The assessor in the rural dis- tricts generally comes face to face with the owner of the classes of personal property which are found about a farm, 19 COMMITTEE ON TAXATION. and most of these are listed and the exemptions taken. In the cities property owners rarely fill out their schedules of property, and the assessor is too busy to see the individual taxpayers; so that all personal property, in the form of household and kitchen furniture, vehicles, automobiles, jew- elry, etc., largely escapes taxes. There are said to be 20,000 automobiles in the State of Tennessee, and our information is that not more than one per cent are returned for tax- ation. Also the assessor in the rural districts more often discovers the holders of notes, mortgages, etc. But in the cities the assessment of property of this class is more generally ignored. The fact is, as stated, that where the rate is from 3 to 5 per cent, the holder who lives in a city with a high tax rate cannot give it in without practical con- fiscation. If Tennessee frames another Constitution, a dis- crimination should be made between that property now ex- empted under the Constitution which is used directly or indirectly in the agriculture or industries of the State, while removing such exemption from articles of luxury not so used. Of course, as to notes and securities, an entirely dif- ferent system ought to be devised. How MERCHANTS FARE. As has been said above, the manufacturer and farmer en- joy, under the present Constitution and tax laws, .exemp- tions of great value. When we take the case of the mer- chant, however, we find that he must not only pay an ad valorem tax on his property as do other property owners, and at the same rate, but he is also compelled to pay a privi- lege tax to be permitted to do business in Tennessee. The great seal of our State presents figures of Agriculture and of Commerce, its handmaiden ; but the man who comes into the State to invest his money and enter into any class of business finds tollgates erected along almost every avenue of commerce. ^According to the Bureau of the Census of the United States Government, Tennessee collects more in privilege and ad valorem taxes from merchants and busi- nesses than any other State in the South, except Virginia. 20 COMMITTEE ON TAXATION. The system of privilege taxes is grafted into our laws and customs, and probably will not soon be changed. Some economist has said that " the best system of taxation is that which picks the most feathers from the goose with the least squawking." The merchants have not complained much, and the exigencies of our treasury make their relief re- mote; but we do suggest that when we write a new system of taxes into our organic law, we study the experience of progressive States and limit license taxes to those businesses or occupations x which it is desired to prohibit or restrict. ^ The merchant is taxed also on his stock of goods. The framers of the Constitution did not intend that he should be taxed at the same rate as the holders of other property. This is shown by the fact that the Legislature is given power to tax merchants as it may see fit. It has always, however, taxed their property, so far as the rate is con- cerned, as other property. Unquestionably, there is a large element of injustice in this; for when we consider the fact that the merchant merely holds the property in transit be- tween the producer and consumer and makes a small profit as a middleman, his ownership of the property is very dif- ferent in principle from the ownership of real estate or other fixed property. Such property as he holds is subject to large depreciation; his business is hazardous, due to cred- its, competition, changing seasons, changing styles, etc. It is essentially unfair, and, despite the holdings of the courts, economically unsound, to consider his property in a class with all other property in the State. The merchant is re- quired to file an affidavit with the County Court Clerk, giving the highest and lowest amount of his stock of goods on hand during the year. These two sums are added together and divided by two, and this arbitrarily fixed amount is taken as representing his average stock during the year, and the tax is collected on this at the same rate as on other property. The County Court Clerk is not compelled to take the mer- chant's statement, but in practice he usually does. How- ever, these statements are notorious undervaluations; and ^ in some counties the revenue agent has an office with the County Court Clerk, and when the latter has completed the 21 COMMITTEE ON TAXATION. assessment of merchants, he is ready to back assess them. Even after this process, the valuation on the stock is not the true value ; for very few merchants could do business in the State and make any profit if they were assessed on the true value of their stocks of goods. After the recent failure of one of the largest mercantile establishments in the State, the assessment was found to be one-tenth of the inventory. In fact, as the present system is operated, the larger the store, as a rule, the smaller the proportion of assessment. This inequitable arrangement causes much complaint from the smaller merchants. Indeed, under the present system they are paying a large part of the taxes due from their more successful competitors. The merchants of the State are just as honest as other taxpayers, and are as anxious, we believe, for the enactment of tax laws which may be strictly enforced without injury to any business interest. It is our opinion that the taxes of merchants should be equal- ized in some manner like those of other property owners. A. merchant ought to be visited by whatever official is given the duty of assessing his property; and when this assess- ment is made, it should be reported by the County Court Clerk to the State Tax Commission, and should be equalized there, as are the assessments of all other classes of prop- erty. STRETCHING OF EXEMPTIONS. A great deal has been said by those who appeared before this Committee as to the abuse of the exemptions of educa- tional, religious, scientific, charitable, and other institutions contained in the present law. This subject is one of much importance, and ought to be given careful consideration by the General Assembly. We do not think any marked change in the policy of the State in the fostering of such institu- tions by exemptions would be approved by the people. At the same time, it has been developed in the hearings before this Committee that the law probably goes further in the way of exemptions of all kinds than was the intention of the framers, and certainly much further than the makers of the Constitution intended. We are strongly of the opin- 22 COMMITTEE ON TAXATION. ion that, as regards educational institutions, a difference should be made between those organized under public-wel- fare charters and those that are organized and operated for profit. We believe also that whenever an exemption is al- lowed on an educational or charitable institution, such insti- tution ought to be required to make reports to the State and be placed to some extent under its jurisdiction. TAX MAPS FOR COUNTIES. The need of tax maps for every county has been forcibly brought to the attention of the Committee. Outside of the larger cities, maps are not now used by the assessors. The result is that inaccurate descriptions of property have been reported from almost all counties. It has been the custom of tax dodgers to turn in acreage property at less than the real acreage. Frequently assessors make no effort to ascertain the acreage, and give only a general description of the property. It is estimated that a large acreage in the State escapes as- sessment and taxes altogether. Some city property also es- capes. Without the use of accurate maps in assessing all the counties, property will continue to escape taxation. We believe that the State Geological Department, with the aid of county surveyors and engineering students at the Univer- sity of Tennessee, could at small expense check up photo- graphic enlargements of the maps already made by the United States Geological Survey for a number of counties, and thus prepare maps on which every plot of ground could be shown. Even without an existing map for a base, we are informed that accurate maps can be very inexpensively made. These maps should also contain representations of coal and mineral measures, timber, water power, etc. From the State or United States Agricultural Departments should be obtained soil surveys to accompany such maps or be a part of them. The possession of such maps would be of enormous value in the proper assessment and equalization of all property in the State and would not necessarily be very costly. They will, we believe, in a few years, pay for the expense of their making many fold through a better equalization of property. 23 COMMITTEE ON TAXATION. CURSE OF TITLE LITIGATION. An accurate survey of the State will also aid very much in arriving at some proper solution as to the problem of land titles. In many of the counties of Tennessee, especially those containing parts of the Walden's Ridge and Cumber- land Plateaus, development has been almost paralyzed be- cause of title litigation. Properties through all this region are depressed in value because the purchaser, who supposes he has bought land, finds that he has bought only a claim to land. Often the original grants or patents overlap three to six deep. Court dockets are crowded with these intricate and vexing land-title cases. Costs and lawyers' fees consume the substance of those so venturesome as to invest in this class of property. Worse than this, those in actual posses- sion of such wild lands are contemptuous of courts, where justice is long delayed, and often recognize no law except that of force, and many a mountain murder has been com- mitted over a title or line. Tennessee's good name is in disrepute all over the Union because many of its solemn grants issued many years ago are found to be worthless. It is useless to discuss the origin of these conditions. They exist, however, and nothing has been done to remedy them. Once the title claims in mineral and timber regions are set- tled, we believe, there will be immense development of our coal, iron-ore, and hardwood resources. Proper maps of this region would assist in the adjudication of titles. But we are also recommending other legislation on the subject, in the hope that all title claimants may be compelled to come into court within a time limit and have their differences ad- justed, after which time no redress shall be given, and that no claimant who has not paid his taxes shall be able to sus- tain his claim. In connection with this, we are also recom- mending legislation so that titles made at tax sales may be valid. UNIFORM BOOKKEEPING. Our investigations lead us to believe that there is no uni- form system of bookkeeping in the county offices of Ten- nessee. We think such a system ought to be instituted by 24 COMMITTEE ON TAXATION. the Comptroller, as authorized by law. The forms in which all our reports are issued are out of date, and, if information is desired, may be dug out only by painstaking labor. The State ought to devise and print all the forms and books used in all the offices throughout the State. Traveling auditors or collectors under the Comptroller, one for each grand di- vision of the State, are also necessary to check up the county offices and make collections for the Comptroller. Weekly settlements from the larger counties should be insisted on, and monthly settlements in all others. Frequent audits and prompt settlements will prevent the shortages, technical and otherwise, which are found too often to exist. TENNESSEE TAX COMMISSION. We strongly urge that the Tennessee Tax Commission shall be appointed by the Governor. He is 'elected by the people, and is their leader, as well as of his party. His ad- ministration stands or falls in accordance not only with his own acts, but with the acts of his subordinates. Before election he is required to make certain specific promises, as does his party. He is expected to keep these, and he needs instrumentalities in his hands to make performances possible. The full text of the tax bill providing for a commission is given in the Appendix to this report, and we refer to it here briefly. We recommend that the Tax Commission con- sist of one member from each grand division of the State, the first members to serve two, four, and six years, re- spectively, and the subsequent appointees to serve six years from the time of their appointment. We recommend that the appointee for the long term be the first chairman. In order that men of force and ability may be secured for such positions, we strongly urge that good salaries be paid. We recommend that these be at least $4,500 for the chairman and $4,000 each for the associate members annually, and, indeed, would suggest that the Legislature consider seri- ously whether or not even larger sums ought to be paid. However, in view of the high dignity of the office and the extremely important duties attaching to it, we feel sure that 25 COMMITTEE ON TAXATION. men with requisite qualifications can be secured at these fig- ures. In Ohio and Wisconsin they are paid $5,000 each and in Minnesota $4,500 each. We recommend that this Tax Commission have under its supervision the assessment and equalization of all property in the State. We do not recommend that the office of as- sessor be abolished, as we feel sure that excellent results may be obtained through the present assessors. We do recom- mend, however, that the assessors shall be placed under the complete supervision of the Tax Commission, which shall be given power to remove them for cause and appoint their successors until the first of January following the next regular county election. Under the system we are recom- mending it will be the duty of the members of the Tax Commission to travel over the State and thoroughly ac- quaint themselves with values. They will be required to appoint the boards of equalization for each county, from lists of names furnished by county chairmen and mayor? of cities, which will pass on complaints from taxpayers. We are recommending that they be given power to reassess the entire property of a county by raising or lowering the same horizontally. The system of assessment and equalization which we recommend, briefly stated, contains, among other important features, those set forth in the following para- graphs : How ASSESSMENTS ARE MADE. Property is to be assessed by the present assessors as oi January 10. The assessor and his deputies are to have from that date until September 1 in which to make assessments. Ten days prior to that date his office is to be open at the courthouse and all property owners invited to inspect his books. On the first Monday in September the Board of Equalization, of three freeholders, appointed by the Tax Commission, is to meet and examine his work. They shall pass on complaints, and shall also have the right to reassess any piece of property in the county, giving such taxpayers notice to appear and show cause why such should not be done. By October 1 the tax aggregate of the county shall be in the hands of the Tax Commission, and the month of 26 COMMITTEE ON TAXATION. October, or longer if necessary, shall be given up to an ex- amination by the Tax Commission of the assessment of the State, the hearings of complaint, etc. The decision of the Tax Commission on assessments shall be final. The Com- mission shall look into the assessments of all counties and seek to equalize them. They shall have power to summon taxpayers before them to show cause why assessments shall not be raised. On completion of assessments of each county, the assessor shall copy the books and turn same over into the hands of the County Trustee by December 1. Taxes shall be due December 1 and delinquent March 1. The present system of collecting delinquent taxes shall be followed, except with such changes as will make good the title of property bought at tax sales. REPORTS REQUIRED. From January 10 to September 1 each assessor shall be required to make a bi-weekly report to the office of the Tax Commission at Nashville of all the work done by him and deputies the previous weeks. Blanks shall be furnished him for that purpose. He shall state on such reports what pieces of property he has visited, what taxpayers he has as- sessed, what was their previous assessments, and what as- sessments he placed oji their property. The Tax Commis- sion shall carefully examine such reports and give assessors instructions as to their duties. They shall, so far as possi- ble, visit the counties of the grand divisions from which they were appointed and personally instruct the assessors in their work. They shall require that each assessor see each tax- payer personally and fill out his schedule of real and per- sonal property in accordance with the law. The Tax Com- mission shall have power to remove assessors for cause and appoint their successors to fill out their unexpired terms. No assessor shall receive pay in full for his work ex- cept upon certification by the Tax Commission that he has performed the duties, of his office in accordance with the law. The Tax Commission shall maintain an office at the Capitol at Nashville, and shall have power to employ such clerical help as is necessary. Two of the members shall 27 COMMITTEE ON TAXATION. constitute a quorum. The Commission shall elect a secre- tary at a salary of $1,500 per year, who shall keep minutes of all proceedings and perform such other duties as are delegated to him. Each member of the Commission shall be required to visit at least once a year each of the counties of his grand division. At any time a majority of the Commis- sioners sees fit, the Commissioners shall interchange grand divisions for the inspection of the counties. The Commis- sion shall report at each biennial session of the Legislature, with such facts pertaining to a study of taxation in this and other States as it may deem advisable. RECORDS OF PROBATES. We recommend that every County Court Clerk in the State be required to furnish the assessor a certified list of the deeds filed for probate, giving the description of the property and the consideration; and the assessor shall prepare a duplicate copy of such transfers, with a memoran- dum of the assessment of the same property for taxes, which shall be filed with the Tax Commission. We recommend also that the County Court Clerk be re- quired to furnish the assessor with records of mortgages reg- istered. We recommend that it no longer be required that dupli- cate tax books be made, except in counties where there are no fireproof vaults in the courthouses. INCOME TAX ON BONDS. No State, so far as we have learned, has succeeded in se- curing any considerable portion of its revenue from the tax- ation of mortgage and lien notes, bonds, and other securi- ties, when taxed as other property. Tennessee in theory taxes all these exactly as it does other property. In this way often two or three values are created out of one. Such a law, strictly enforced, would be ruinous to the State. In Connecticut, New York, New Jersey, Minnesota, and other States where the Constitution does not prohibit, large reve- nues are now derived by levying a registration tax at a low 28 COMMITTEE ox TAXATION. rate on the above class of property. New York for years sought to have such property assessed; but in that State, which probably of all others is most wealthy in such per- sonal property, the percentage borne by that property from year to year decreased. Now, however, the Empire State places a tax of one-half of one per cent on mortgages, lien notes, bonds, etc., in lieu of other taxes, and the result has proven very satisfactory from a revenue standpoint. This Committee has been very much perplexed how to reach this class of property, which undoubtedly should be taxed, but not at a confiscatory rate. We believe we have found a so- lution in recommending that taxes be levied on property designated as bonds, as permitted by the Constitution, which says that the State may " levy a tax upon incomes derived from stocks and bonds that are not taxed ad valorem."* We are advised that we may also declare securities such as lien notes and mortgages bonds in the meaning of the Constitution. We, therefore, recommend that these pay a tax of 10 per cent on their income as a method of arriving at their value ; and we also recommend that a registration tax of one-tenth of one per cent be imposed on such instruments, based on the amount secured. We feel confident that these provisions will not drive any foreign capital out of the State. And, furthermore, we believe they will have the effect of encour- aging the keeping of our OWTL capital at home and induce the purchase of such securities. They will assist the tax- payer in making an honest personal schedule, and he will be disposed to increase his holdings of this class of prop- erty in view of the method of taxation. Money will be easier, and our taxpayers will be freed of the charge of wilful eva- sion of the law. We believe that if this provision is enacted into law it will enable the State of Tennessee to sell its own bonds to its own citizens. And the same is true as to munici- pal and county bonds. The Wisconsin Tax Commission of 1912 reports : "A year's experience with the income tax serves to establish the re- freshing fact that the average taxpayer is honest and will tell the truth, provided assessors will take the trouble to ask *Art. II., Sec. 28. 20 COMMITTEE ON TAXATION. him questions and provided the rate of taxation is reason- able." We need a face-to-face assessment in Tennessee ; and -with provision for an income tax on bonds at a low rate, the holders of personal property will not run from the assessors. OTHER FORMS OF TAXES. We do not in this report discuss, except incidentally, taxes on railroads and public-service corporations which are now- assessed by the Railroad Commission, nor privilege taxes levied on insurance premiums, and telephone and telegraph and building and loan companies, nor the collateral and di- rect inheritance taxes, taxes on transfers of realty, nor poll taxes. There was some doubt as to whether the language of the resolution under which this Committee was appointed permitted our investigation of these subjects; and, in addi- tion, we have been so busy on what is generally known as the Assessment Act that we have had little time to take up the other matters. We may say, however, that it was called to our attention that the sleeping-car companies pay the State only a small privilege tax. We see no reason why such companies should not be assessed like other private car com- panies, and that all the provisions of such Acts shall be en- forced, and we are so recommending. The insurance com- panies pay into the State nearly as large a sum as the rail- roads. The tax of 21/2 per cent on their gross premiums, in view of the manner in which they fix rates, is easily shifted, and apparently there is little complaint. The inheritance tax laws also bring a considerable revenue into the State treas- ury, and are correct in principle and not burdensome in op- eration. The tax on realty transfers yields nearly as much revenue as merchants' taxes. All the aforementioned subjects are of grave importance, and should be studied with care by the Tax Commission, con- sidering the experience of this and other States, especially States like Wisconsin, Minnesota, Michigan, and others which have revised their methods of taxing railroads and public-service corporations in recent years. 30 COMMITTEE ox TAXATION. SUMMARY OF RECOMMENDATIONS. Summarized briefly, in conclusion, our recommendations are as follows : That a permanent Tax Commission of three members, one from each grand division of the State, be appointed by the Governor, to have supervision of the assessments and equal- ization of all property in the State. That the assessors do their work under the supervision of this Tax Commission, which shall have the power to re- move assessors for cause and appoint their successors until the first day of January following the next regular county election. That merchants' taxes shall be assessed by the County Court Clerks, but shall be reported to and equalized by the Tax Commission. That property now assessed by the Railroad Commission shall continue to be so assessed, but that the Tax Commis- sion shall perform the duties of the Board of Equalization for such property. That the Tax Commission shall perform the duties of the Board of Equalization for all other property. That holders of mortgage notes, lien notes, bonds, and all such securities, public or private, shall pay a State tax on their incomes from such property. Also, that a small regis- tration tax on such instruments shall be imposed. That there shall be a survey of the State, and taxes as- sessed with the aid of county maps. That a limit of time shall be given for the adjudication of every title now disputed in the courts, and payment of taxes shall be requisite to establishment of claim. That after two years the holder of property under a tax title shall not be disturbed. That after a receipt for taxes has been issued there shall be no reassessment of the property for that year or previous. That until in the judgment of the Tax Commission it is not longer necessary, there shall be annual assessments of both real and personal property for reasons shown in this report. That no assessor shall be fully paid for his work of as- 31 COMMITTEE ox TAXATION. sessment until a certificate is issued by the Tax Commis- sion that he has complied with the law. That under the Comptroller a system of checking up and collecting from delinquent officials be devised, and for the installation of uniform systems of bookkeeping. LIMITATION OF RATES. The above constitute our main recommendations for the assessment and collection of revenues. We wish to say, in conclusion, however, that we believe public policy requires that there be a limitation of the tax rate. The taxpayer would not object to higher assessments if he did not fear that the same tax rate as at present was going to be maintained. His experience has been that when assessments were in- creased the rate was not reduced. He does not trust the State Legislature, the County Court, or his municipal gov- ernment to make a reduction of the rate under a higher as- sessment. Such a large tax aggregate proves a temptation to the tax spender. This is but human nature. In our opinion, it is clearly within the power of the Legislature to limit the total tax rate for all purposes. There is now a limitation put on the tax rate of counties for county purposes. County Courts, however, levy taxes for so many special purposes that the legislative limitation is ineffective, so far as pro- tecting the taxpayer is concerned. There is no legal or other reason, however, why the Legislature should not protect the taxpayers of the State by limiting the total rate, not only for county purposes, but also for municipal purposes. The municipal charters, as a rule, do not limit the rates. We feel sure that the people of the State would withdraw every vestige of opposition to cash-value assessments and the equalization of taxes if the Legislature in providing for the operation of such a system at the same time gave some pro- tection from raids on the State, county, and municipal treas- uries. Also, there are many obvious advantages to the prop- erty owner in higher assessments and lower rates. We cannot at this time make any very accurate estimate on the total assessment of 1915 taxes, nor the needs of the 32 COMMITTEE ox TAXATION. State for the year. So if any change is made in the rate, it ought to be conditioned on the total assessment. In the State of Missouri a system of this kind is followed. When the total tax assessment reaches a certain number of hun- dred millions of dollars, the rate automatically becomes fixed at a certain figure. We now have an assessment, including merchants' taxes, of approximately seven hundred million dollars. The Legislature should fix rates of State taxes to apply when the total assessment reaches eight hundred mil- lion, nine hundred million, one billion dollars, etc., and thus provide against any considerable cost of the State govern- ment. As to limiting the tax rate for counties and municipalities, this is an even more difficult problem. Nevertheless, it is extremely important, and a solution should be found. We believe that Ohio in its tax laws points the proper course. It was provided in that State that the total amount of taxes to be levied in counties and municipalities shall not be more than a fixed per cent larger for the ensuing year than for the year in which the law went into effect. By applying this rule to counties and cities in Tennessee, and by placing the maximum increase permitted in any county and city to 6 per cent in any one year, the county and municipal authori- ties will be compelled to take the 1915 and 1916 tax aggre- gates and levy tax rates in each case which will not increase the total taxes levied and collected by such governments by more than 6 per cent. We believe this method is practical, and we strongly recommend that it be adopted. Indeed, limitation of the rates in counties and cities is more impor- tant than the State rate. Figures about to be published by the government show the total receipts of cities over 2,500 population in the State in 1913 as $12,714,846, and of the counties of the State $13,371,493. It will be seen that in both cases they exceed by about threefold the State receipts. EQUALIZATION THE PURPOSE. It will not, we feel sure, be the purpose of the Legislature to increase the burden of taxation, but rather to equalize it. 33 3 COMMITTEE ON TAXATION. But it is a fundamental axiom of taxation that a commu- nity or Commonwealth may collect a much larger fund for governmental purposes without unduly burdening the indi- vidual citizens, provided the taxes are apportioned equitably on all who are able to pay a portion of the cost of govern- ment. Ability to pay is the only true guide as to justice in taxation. Patriotism dictates submission to the tax bur- den. Every citizen should welcome the opportunity to con- tribute his little or his much in support of his government, in the knowledge that a government liberally supported con- fers manifold benefits on its citizens. Tennessee is now one of the most cheaply governed States in the Union. Only four other States, all Southern, impose a lighter burden on their taxpayers, as shown by per capita receipts and expenditures. These in Tennessee now average only about two dollars per capita annually, which is about one-half the average for the United States and considerably less than the average in Southern States. All the States bordering Tennessee, except North Carolina and Mississippi, expend larger sums per capita. Nevertheless, within ten years our receipts increased approximately from $2,600,000 to $4,600,000, the increase being constant from year to year, showing the prosperity of the State, and our expenses have increased in proportion. When we consider that in 1904 the State paid out for charities, schools, and pensions the sum of $989,609.44, and in 1914 paid out $3,075,142.45 for the same purposes, we see how the heart of our State has throbbed in unison with the great movements affecting the nation. Nor are we going to escape our obligations to do more for our heroes of the past, for our youth, the hope of the future, and for the unfortunates to whom we also wish again to open the door of opportunity. And, also, we are under ob- ligation to do much more than we have done for good roads and in aid of agriculture, mining, forestry, and for other good purposes. These demands on the State emphasize strongly the need of the equalization of our taxes and the apportionment of the burden to all the citizens in proportion to ability. This Committee has labored earnestly to suggest some 34 COMMITTEE CLN TAXATION. solution for the problem, and we have had much valued and sympathetic aid from many officials and the people gener- ally. We trust we have succeeded measurably in our diffi- cult task, and we now ask careful consideration to the re- port we submit, and to the proposed statutes we have drafted in accordance therewith. Respectfully submitted, 0. K. HOLLADAY, Chairman. A. R. GHOLSON. J. W. VANDEN. LEO GOODMAN. THAD. A. Cox. ^GEORGE F. MILTON. WALLACE McCLURE, Secretary. Nashville, Tenn., March 8, 1915. 35 COMMITTEE ON TAXATION. APPENDIX. SENATE JOINT RESOLUTION NO. 27. ( Stevens-Murray.) Be it resolved by the Senate of the Fifty-ninth General Assembly of the State of Tennessee, the House of Representatives concurring, That a committee of six be appointed by the Governor of the State of Ten- nessee, two from each grand division of the State, to investigate the question of assessment and taxation in the State and make a report in writing to the present General Assembly of the State, the result of their said investigation, and, in conjunction with the sub-committee from the Finance, Ways and Means Committee appointed by its said chairman, frame a bill or bills, same to be presented to the present General Assembly for their consideration. SECTION 2. Be it further resolved by the Senate, the House concur- ring, That the said committee so appointed by the Governor is hereby authorized and empowered to hire a secretary and a sufficient number of clerks and stenographers, who shall receive not more than six dol- lars ($6) per day for their services, to assist them in said investigation. SECTION 3. Be it further resolved, That the said committee so ap- pointed by the Governor shall not be compensated, except that their expenses while making the said investigations shall be defrayed by the State. SECTION 4. Be it further resolved. That five thousand dollars ($5,000), or so much thereof as may be necessary to defray the expenses of this said investigation, be, and the same is hereby, appropriated, same to be included in the general appropriation bill. Adopted January 26, 1915. Hu. C. ANDERSON, Speaker of the Senate. WM. P. COOPER. Speaker .of the House of Representatives. Approved January 27, 1915. TOM C. RYE, Governor. 36 COMMITTEE ON TAXATION. PROVISIONS GOVERNING TAXATION IN TEN- NESSEE'S CONSTITUTIONS. 1796. ARTICLE I., SECTION 26. All lands liable to taxation in this State, held by deed, grant, or entry, shall be taxed equal and uniform, in such manner that no one hundred acres shall be taxed higher than another, except town lots, which shall not be taxed higher than two hundred acres of land each; no freeman shall be taxed higher than one hundred acres and no slave higher than two hundred acres on each poll. ARTICLE I., SECTION 27. No article manufactured of the produce of this State shall be taxed otherwise than to pay inspection fees. 1834. ARTICLE II., SECTION 28. All lands liable to taxation, held by deed, grant, or entry ; town lots, bank stock, slaves between the ages of twelve and fifty years, and such other property as the Legislature may from time to time deem expedient, shall be taxable. All property shall be taxed according to its value, that value to be ascertained in such man- ner as the Legislature shall direct, so that the same shall be equal and uniform throughout the State. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value. But the Legislature shall have power to tax merchants, pedlars, and privileges, in such manner as they may from time to time direct. A tax on white polls shall be laid, in such man- ner and of such amount as may be prescribed by law. ARTICLE II., SECTION 29. The General Assembly shall have power to authorize the several counties and incorporated towns in this State to impose taxes for county and corporation purposes, respectively, in such manner as shall be prescribed by law; and all property shall be taxed according to its value, upon the principles established in regard to State taxation. ARTICLE IV., SECTION 1. All freemen of color shall be exempt . . . from paying a free poll tax. 1870. ARTICLE II., SECTION 28. All property real, personal, or mixed shall be taxed; but the Legislature may exempt such as may be held by the State, by counties, cities, or towns, and used exclusively for public or corporation purposes, and such as may be held and used for purposes purely religious, charitable, scientific, literary, or educational, and shall exempt one thousand dollars' worth of personal property in the hands of each taxpayer, and the direct product of the soil in the hands of the producer and his immediate vendee. All property shall be taxed accord- ing to its value, that value to be ascertained in such manner as the Legislature shall direct, so that taxes shall be equal and uniform throughout the State. No one species of property from which a tax may be collected shall be taxed higher than any other species of prop- erty of the same value; but the Legislature shall have power to tax merchants, peddlers, and privileges, in such manner as they may from time to time direct. The portion of a merchant's capital used in the 37 COMMITTEE ON TAXATION. purchase of merchandise sold by him to non-residents and sent beyonc the State shall not be taxed at a rate higher than the ad valorem tax on property. The Legislature shall have power to levy a tax on in- comes derived from stocks and bonds that are not taxed ad valorem. All male citizens of this State over the age of twenty-one years, except such persons as may b'e exempted by law on account of age or other infirmity, shall be liable to a poll tax of not less than fifty cents nor more than one dollar per annum. Nor shall any county or corporation levy a poll tax exceeding the amount levied by the State. ARTICLE II., SECTION 29. The General Assembly shall have power to authorize the several counties and incorporated towns in this State to impose taxes for county and corporation purposes, respectively, in such manner as shall be prescribed by law; and all property shall be taxed according to its value, upon the principles established in regard to State taxation. ARTICLE II., SECTION 30. No article manufactured of the produce of this State shall be taxed otherwise than to pay inspection fees. COMMITTEE ox TAXATION*. GOVERNOR RYE'S RECOMMENDATIONS CON- CERNING TAXATION, QUOTING THE DEM- OCRATIC PLATFORM PROVISIONS, IN MESSAGE TO THE LEGISLATURE, JANUARY 18, 1915. STATE TAX COMMISSION-. If the property of the State were listed for taxation at its fair market valuation, and if all the hidden personal property that never shows up on the tax lists were brought to light, the general assessment of prop- erty for the State would be increased threefold. Reasonably good laws in other States and good administration of the laws have resulted in more than double the amount of property being listed for taxation and in reductions of the tax rate. The most effective machinery for mak- ing assessments and administering the laws relating to the assessment and equalization of property values is a State Tax Commission, with broad and ample powers in matters of administration and in the em- ployment of assessors. The Democratic platform strongy expressed the policy of the party on this subject; and, as it will be the guide for a majority of this body, I am quoting it in full here as follows: " In the assessment of property, we favor a policy having for its ob- ject a fair, equitable, and just treatment of all taxpayers alike. We oppose discrimination as among the different classes of taxpayers and demand that all property real, personal, mixed be compelled to bear its proportionate part of the tax burden, subject only to those exemp- tions authorized by the Constitution of our State. Especially do we demand that personalty of every character not .otherwise exempt, in- cluding intangible corporate property, be made to bear its share of the tax levy as now required of farm lands and other classes of real prop- erty. We consider it to be no greater detriment to the public welfare to omit from the assessments landed estates of a prosperous farmer than to permit the hidden securities of thrifty capitalists and tax dodg- ers to entirely escape the tax rolls. While it must be admitted that many millions of dollars' worth of personal property annually escapes assessment in our State, it cannot be denied that there is scarcely a foot of soil that is not each year forced to yield a high tax tribute that the laws demand. We declare and instruct for the thorough modifica- tion, revision, and reconstruction of the laws of Tennessee with refer- ence to the assessment and collection of all taxes, to the end that all property in this State may, with least expense and vexation to the peo- ple, be made to bear its proper and equitable tax burden; and to this end we declare and instruct for the passage of legislation which will insure: " 1. That all taxes shall be promptly, fairly, and equally assessed; and that all taxes, so nearly as possible, be collected while currently due, without the necessity of vexatious and expensive tax litigation. " 2. That current assessments may be so thorough and fair that necessity for any back assessments shall be reduced to an absolute minimum, and shall be limited to the proper and equitable and inex- 39 >MMITTEE ON TAXATION. pensive back assessment of property which has been omitted entirely, and which, as a result of actual fraud, has been inadequately assessed. " 3. We declare in favor of the passage of an Act to the effect that after property has been regularly enlisted and assessed by the Tax As- sessor and its value fixed and passed by a County Board of Equalization, and after having passed the County Board of Equalization, such prop- erty shall not be made subject to back assessment. " 4. We favor the collection of such limited back taxes as can by the result of diligence be collected when due. The collection of such back taxes should be promptly and inexpensively made by the County Trus- tee, aided by the County Attorney or Attorney-General, and such reve- nue should be turned into the treasury. " 5. That a Tax Commission be created and empowered to make all tax assessments uniformly and thoroughly. " 6. Back tax litigation should not be expensive, vexatious, or pro- ductive of burdens to the citizens. We pledge our nominee for Gov- ernor, when elected, to appoint a commission of six competent men, two from each grand division of the State, and who will serve without compensation, to carry out the provisions of this platform with refer- ence to taxation." It will be observed that the Democratic platform pledges the ap- pointment of a commission of six competent men to serve without com- pensation, while investigating and preparing a bill creating a perma- nent Tax Commission and a complete system of laws on this subject. I will announce these appointments without delay; and in view of the fact that they are to serve without compensation, I suggest to the Gen- eral Assembly that an appropriation be made covering their actual and necessary expenses while engaged in this work. I further suggest that the Speakers of your bodies designate members of the Committees on Finance, Ways and Means to act as a sub-committee and work in con- junction with the committee which I shall appoint. By hard and faith- ful work these committees should be able to submit a bill in plenty time for full consideration before adjournment. INDEPENDENT DEMOCRATIC PLATFORM PLANK ON TAXATION, 1914. As to the fiscal affairs of the State, we favor a thorough overhaul- ing of the present system of taxation, without the bias of factionalism and without the motive of political revenge, but for the benefit of the State. REPUBLICAN PLATFORM PLANK ON TAXATION, 1914. We condemn the present back-tax system on account of its injustice to the individual, its discouraging effect *on the growth and progress of the State, and the notorious graft that has resulted from it. We congratulate the present Comptroller upon the fact that he has so far succeeded in administering this objectionable law free from any suspicion or complaint of graft. The laws of taxation in this State are in need of a thorough overhauling. We believe in making the assess- ment and equalization laws so thorough and strict that every class of assessable property in every part of the State will be made to bear its just proportion of the expenses of the government; and we also believe that when the property has been thus assessed and the assessment passed by such an equalization board, the same should be final for that year, and that the citizens should not be harassed by a back assessment 40 COMMITTEE ox TAXATION. or reassessment, except in cases where, by the omission or fraud of the property holder, equity has not been had. We favor a bi-partisan Commission on Taxation, to be appointed by the Governor of the State, whoever he may be. We indorse the course of Governor Hooper in opposing the enactment of the bill in the last Legislature which proposed to empower the Legislature to elect a Com- mission on Taxation by the usual log-rolling process. Such a law, with the kind of commission that would have been elected, would have been tenfold worse than the present system in its imposition on the taxpay- ers of the State. 41 >.U.MITTKK ON TAXATION. ORGANIZATIONS, OFFICIALS, AND CITIZENS HEARD FROM. hi In the hearings before this Committee the following organizations, officials, and other citizens presented statements: Tennessee Manufacturers' Association, through Hon. T. R. Preston and John Stagmaier, of Chattanooga, and Capt. T. F. Bonner, President, and C. C. Gilbert, Secretary, of Nashville; Board of Commerce, of Knox- ville, by John D. Caldwell; Nashville Commercial Club, by W. R. Manier, J. L. McWhorter, and Joseph Frank; Business Men's Associa- tion, of Nashville, by J. H. Allison, B. N. Curry, Joseph White, C. A. Winter, and C. L. Cornelius; Real Estate Exchange, of Nashville, by James Palmer and G. R. Gillespie; Memphis Cotton Exchange, by J. P.'Norfleet, John H. Gage, and Paul Dillard; Tennessee Highway Association, by Edward Meyer; Southern Appalachian Coal Dealers' Association, by John E. Patton, of Chattanooga, J. K. Keeney, of Cum- berland Gap, and George N. Camp, of Knoxville; Vanderbilt University, by Chancellor J. H. Kirkland, Dr. St. George L. Sioussat, and Dr. L. C. Glenn; Castle Heights School, of Lebanon, by Prof. L. L. Rice; Inter- national Pressmen's Union, by Hon. George L. Berry, of Hawkins County; Farmers' Union, by L. M. Rhodes, President, of Huntingdon: Knoxville Real Estate Exchange, by H. M. Branson. The following State officials testified before the Committee: Commissioner of Agriculture T. F. Peck; Superintendent of Banks J. L. Emerson; State Treasurer Porter Dunlap; Secretary of State R. R. Sneed ; Comptroller-elect John B. Thomason ; Comptroller G. P. Woollen ; Chairman of Railroad Commission B. A. Enloe; Railroad Commis- sioner George N. Welch; former Railroad Commissioner Frank Avent; Attorney-General Frank M. Thompson; State Geologist A. H. Purdue; State Auditor George M. Clark; Revenue Agent W. A. Owens, of East Tennessee; Revenue Agent Tom Greer, of Middle Tennessee; State Archivist G. W. Dyer. The following county and city officials appeared before the Commit- tee: Assessor Jesse Webb, of Davidson County; Commissioner of Ac- counts Lyle Andrews, of Nashville; City Attorney A. G. Ewing, of Nashville; County Court Clerk W. F. Hunt, of Davidson County; As- sistant City Assessor R. H. Anderson, of Memphis; Assessor Emil Wass- man, of Hamilton County; Assessor W. P. Trotter, of Montgomery County; Assessor J. B. Cowley, of Maury County; County Court Clerk Jesse L. Henson, of Knox County; County Judge C. Holman, of Rob- ertson County; Assessor George Stevens, of Bedford County; Mayor Hilary Howse, of Nashville; former County Judge Key, of Smith County; Assessor D. K. Reeves, of Smith County; Assessor G. B. Dillon, of Benton County; Assessor M. G. Corlett, of Williamson County; County Court Clerk W. O. Watson, of Putnam County; former Assessor J. F. Shipp, of Hamilton County; Assessor L. B. Thompson, of Wilson County; former Assessor J. M. Williams, of Davidson County. The following other citizens appeared before the Committee: Hon. W. B. Swaney, of Chattanooga; Phil S. Taylor, of Washington County; Dr. John D. Blanton, of Nashville; Judge John M. Gaut, of Nashville; Mr. Norman Farrell, Jr., of Nashville; Prof. Marvin T. Dun- 42 COMMITTEE ox TAXATION. can, of Nashville; J. M. Williams, of Nashville; Hervey Whitfield, of Clarksville; E. F. P'Pool, of Nashville; Prof. E. P. Moses, of Nashville; Maj. E. B. Stahlman, of Nashville; J. G. Jetton, of Murfreesboro ; Charles J. Haase, of Memphis; Eugene Clark, of Memphis; John Fletcher, of Nashville; A. M. Leach, of Montgomery County; Mr. Wood- ward, of Bedford County; Col. J. H. Acklen, of Nashville. In addition to the views presented in person before the Committee at the public hearings, carefully prepared statements in writing were sent in by many interested in tax reform, and also drafts of proposed bills and sections of bills, all of which proved of value. Complete general assessment bills were filed by the Tennessee Man- ufacturers' Association and by the Public Efficiency League of Knox- ville. Acts dealing with particular phases of the subject were sub- mitted by H. M. Branson, of Knoxville; Attorney-General D. J. Cald- well, of Obion County; and, in response to a request of the Committee, by Edward E. Barthell, Esq., of Nashville. The Board of Trade, of Bristol, by N. B. Remine, Secretary, and the Young Men's Good Government League, of Hamilton County, by E. E. Brown, President, forwarded resolutions to the Committee. The following have filed their views in writing with the Committee: Charles Brown, President of the Bank of Granville, Granville; J. R. Browder, of Lenoir City; Hon. G. D. Lancaster, of Chattanooga; S. M. Chambliss, of Chattanooga; Gen. D. J. Caldwell, of Union City; J. A. Millard, of Bristol; Col. Sam L. King, of 'Bristol; William Mathes, of Johnson City; H. M. Branson, of Knoxville; County Judge W. M. Pollard, of Davidson County; Trustee John Y. Peete, of Tipton County; Col. L. D. Tyson, of Knoxville; R. P. Williams, of Knoxville; B. B. C. Witt, of Ducktown; D. C. Young, of Sweetwater; J. B. Young, of Bemis; C. G. Bond, of Jackson; J. H. Birchfield, of Milligan College; W. F. Barry, of Charleston; J. D. Clement, of Benton; C. F. Dalton, President, Trades and Labor Council, Jackson; Joseph W. Deadrick, of Edge- more; W. E. Dyer, of Chattanooga; A. S. Elder, of Trenton; J. P. John- son, of Crossville; J. N. King, of Cookeville; J. W. Lillard, of Decatur; Oscar C. Myers, of Chattanooga; W. S. Nunley, of Vernon. The following County Court Clerks wrote suggestions as to improve- ments of the tax laws and gave information as to the conditions in their counties: John G. Hearing, Bradley. J. F. Cooper, Campbell. R. L. Sharp, Claiborne. J. A. Gibson, Coffee. R. L. Conyers, Crockett. T. R. Dickson, Dickson. W. J. Blevins, Fentress. E. P. Shelton, Grundy. J. G. Templin, Hamblen. J. W. Clift (Trustee), Hamilton. J. W. Page, Henderson. W. I. Dale, Henry. W. L. Downey, Hickman. D. H. Goodrich, Humphreys. George R. Loftis, Jackson. W. D. Hill, Jefferson. C. S. Carney, Lauderdale. J. R. Brewer, Lawrence. Noah Prince, McNairy. J. A. Thompson, Madison. R. M. Tillery, Meigs. 43 COMMITTEE ON TAXATION. J. H. Centon, Polk. J. A. Kemp, Smith. G. W. Williams, Stewart. Harvey Bromley, Wayne. Joseph Gessler, Warren. H. L. Coe, Wilson. The following County Assessors wrote suggestions as to improve- ments of the tax laws and gave information as to the conditions in their counties: G. B. Dillon, Benton. J. D. Sullivan, Bledsoe. H. E. McQueen, Carter. Garfield Russell, Claiborne. W. L. Flynn, Cumberland. H. L. Moore, DeKalb. J. D. Morton, Fayette. George D. Simmons, Franklin. F. M. Tidwell, Giles. O. M. Kilday, Greene. C. D. Hillis, Grundy. N. A. McMillan, Hardin. J. S. Culpepper, Henry. R. L.* Carlew, Humphreys. A. Lichlyter, Jefferson. W. S. Bunton, Johnson. C. D. McCullor, McNairy. T. H. Temple, Madison. W. A. Langley, Morgan. D. T. Cantrel, Overton. Charles R. Countiss, Putnam. Frank P. Ewton, Sequatchie. W. R. Madewell, Van Buren. S. C. Goodin, Weakley. The Committee desires to express its appreciation of the contribu- tions of all the citizens and organizations whose names have been re- corded and to any others who may have been accidentally omitted from this list; also to the press of the State for its inestimable assistance; and especially to Hon. T. R. Preston and Hon. W. B. Swaney, of Chat- tanooga; Hon. E. E. Barthell, of Nashville; Dr. John Lee Coulter, of Peabody College; and Hon. Frank M. Thompson, Attorney-General of the State. 44 COMMITTEE ox TAXATION. COST TO THE STATE OF CONDUCTING THE INVESTIGATION OF ASSESSMENT AND TAXATION. Traveling expenses of members, to date $ 409 25 Rental* of headquarters, members' hotel expenses, telephone calls, etc., to date 397 15 Publishing the Committee's report (McQuiddy Printing Co.) . . 242 21 Salary of secretary (February 1 to April 1) 200 00 Salary of stenographer (February 8 to March 10) 112 50 Incidental expenses, stamps, stationery, outside stenographic work, etc., to date 84 20 Estimated expenses not yet encountered 150 00 Total $1,595 31 March 10, 1915. COMMITTEE ON TAXATION. Consolidated statement showing principal sources of revenue of State of Ten- nessee and principal items of disbursements, 1903-04 and 1913-14. RECEIPTS 1913-14 1903-04 Trustees $3,586,810 62 $2 362 043 49 County Court Clerks 1,643,415 40 1 091 776 79 Circuit Court Clerks 115,047 90 95 283 71 Chancery Court Clerks 25,917 78 14 986 11 Other Court Clerks 19,031 23 15 366 45 State tax, railroads _ _ 672,296 73 419,136 16 State tax, street railway companies 98,298 71 State tax, insurance companies. 725,270 97 377,666 87 State tax, telephone companies _ _ 119,108 70 27,861 70 State tax, charters 109,828 72 67 127 00 State tax, other companies 67,236 48 70 879 47 Fees, coal oil inspectors 146,340 73 85 446 98 Fees, Sec'y of State and corporation reports Fees, insurance . 207,369.21 20,298 20 24,626.60 6,758 87 Maintenance of convicts _ _ 967,395 90 992,662 58 Bureau of Agriculture _ _ _ _ 129,687 11 25,696 50 School fund. __ _ 106,424 83 Insane hospitals _ _ _ _ _ _ 170,427.48 Tennessee Industrial School 59,206.62 Other State institutions. _ _ _ 24,331.86 1,627 50 Interest on deposits 38,332 61 State Banking Department 20,217.20 Miscellaneous 94,585 64 54,061 31 Total receipts . _ $9,166,870 63 $5,733,008 09 DISBURSEMENTS 1913-14 1903-04 State prosecutions $ 342,499 36 $ 336,483 78 Interest, State debt 978,626 50 1,012,876 00 Interest, school funds 546,368 74 School fund 2,819,081 10 67,477 36 Salary (judicial) 473,414 61 291,978 14 Salary (other) ______ ____ 191,719.95 112,606 19 Clerk hire 73,946 11 32 570 32 Legislative per diem, mileage, and expense Capitol expense 174,471.86 38,879 58 88,499.20 22,828 12 Supreme and Court of Appeals expense 55,275 40 15,389 38 Other principal officers' expense 54,922 60 13,853 35 Charities _ _ ______ 1,333,838.21 715,293 35 Pensions (soldiers and widows ) _ 1,628,547.29 363,791.54 Maintenance of convicts __ _ _ 811,467.29 619,093.45 Bureau of Agriculture 105,263.96 27,814.87 Sinking fund 208,000 00 601,277 00 National Guard 49,670 17 16,759 84 Mine Inspector 32,799 17 13,151 79 Geological Survey _ _ _ 31,411.68 Board of Health _ _ 32,303.44 8,135.74 Public printing 25,942 48 9,905 59 Banking Department 23,579 63 Miscellaneous 293,919 58 110,484 41 Total disbursements _ _ _ $9,779,579.97 $5,025,637.16 46 COMMITTEE ON TAXATION. i : : i-H PH rH -H 10 40 X CO rH i t 0000 X X 5 O O5'O5 OS O5 II t- J> O O O l> J> Tf< Tf< O I-H r-H X X 05 X X I-H ^-t 05 05 X * rf* O O5 O5 O5 GO GO 5 O |O O OXXXXO5O5O X JO O *) <5<&O** I-H }> 1> I-H t- I- X rH G< l> rji * GO O 1-1 S< GO * i-H i-H j( rH i-H 05 05 05 05 05 47 H g I fc M Q 0|g W rf < bis B8g u I s 6Z.8I -aaoy jo t06l -aaoy jo -ajoy II "2*0 Q s s^; 111: shou ean Ch oath to " actual t Wish copy his own bo Asse recommends th power to examine banks hidden personalty. nges hes t ommen is office. thin ged. or re ugh Clerk cha true value assessment and also that no personalty be sessor recom reduction of exempt. il- S : il? 'dO^* > c a oo O5 < W5 r* 00 o x cooo i>^6oa< co >c t- 5 "* "5 SO o co i> i i x 5 O * SO oo < 00 O5 J> CO i> CO>OO OO O O5O OO o^i>^ aTco" rn" t^oTic" so"^ S^ 80 SJ E: ^SS ^2 fc ~ig g g sss SP * ^" t^- I-H i ( SO >Q 5 QQi>0 -< . Sa> S^I i i ^H^Or-l OSOO CO GoS 5 f os so ai t> o co 5 oo i> o * i> co i> ^- %A I ^.y 11 I ii >o oo oo co oo co * so * s a * t -* >c * af co aTo" T toGsao - isOOOO OSO COi-*O*HCOl~ O 5O t- ooo'co-"" oToo o" oTccTao' co g SS52 gS a7 ^^^ ^^ at so ^ F* IM a i- < a* s 1 "H a S - * J !ii| ^ c 2 3_ *j ^ II * I i 1 1 Ijj C. S *:! f ai It \ m II i 4H ;i ! mj?g ^HiSil S2M|.= |S S ]| ^l' = o' i; u ( "I "11 Jd & 55 J2 g S i 2 8 t? 3 ~> i~ l*~ * '-= - c '' 1C ,- >3-.B o 9 -t X 5J Wl> rf- O Oi ?C C i 9 a> -4< o ;c -f- *-O SO t- " >>> r p ^ X^H c: o O -f 3iS:? SS ^ 2 g OJ 'f SO OS X O co ao if- t0 50 5 so " " ?, - so c; '-o o* >fl OS CS CO "O ^1 05 s CO SO -f * co eo CO ^ ~ 5 S i S2 SSSS2 X CO CO ".OX O* ^ * CS - X 9 -t "-O OS 'OS CO ** CO iSOr-O: t^ CO S* 5 **5fl O O O CO OS 10 LO -f c: 3 so so I I III CO cT f t> CO S CO 5 i 2 5 SO l^ f CO OS ,M ^ ^ r . "so" so" (sTi^^r i-To^ S COO OCO*O O*C' X * O l^- 'C O^ '-O O' O >* -oXt^C O^i IS i i T t oo x !"eo" i^ *-" co t~ o >* >*" eo ! r+ 00 O* X t> f SO X t- oo eo -H o' i t CO OS X i 1 i ,0 t~ I- 'V ! O OS v eo co 5 S; I ! Jt coco CO jj *j a ca <5 II Ji! <5 3 > -ajoy jo snji?^ agBj CO S5 t~ i O i i-l O i ' JO LO O X SO -Aioy jo an * 05 * * p- GO -0 t CC X t- -H X 50 '.0 Ct CS -O c 50r-l>OrH t~ OW 1- II I II I " ii S >S)8SS8l:8SSoS i^f3o--a'.-:-' 5 * cs ceo rs* ! -si OS C X t^OXCO ' "3 i O5 6O X t- OS i O X SO CO i X COO X O X CO CO J> i-i 4* * f 00 l> S>OO5-f OXCO lisiisn i50 X S *" O J> X CO I-* fr- S5 l^ ^f ^.i'?X-OOJ'-OOO?0-H'5' O5XS:OOt~fflSOCO'fO5 SO5-f050J'S0-' si g ii -VOXSOl^O5SOCOO5O SO CO 50 -f < III* 05 S< rn CN ,-H If I : = ! S*l -S -1 8 ! ! ' 8 b : a a !5 i ! ' ' AsM'ssor rcc iiiH-iids appointed assessors, etc.; clerk says supervision necessary. 1 9 "8 1 e 1 ij |l Clerk recommends a county attorney to assist the assessor before the equalization hoard and that the hoard he appointed hy a central authority, pref- erably the Governor, from a list of names sub- mitted by this attorney. Clerk recommends some other equalization pro- cedure than that of the equalization boards; also that assessments be at a fixed percentage of true value. Assessor recommends that law recmire taxpayers to come to county seat and give m their property for taxation. Assessor recommends higher assessments, lower rate. People should come to assessor. = i ! 2 o si 3 .!! o x 3 i S '? *- -? ; *c X c - 2, - i fS 2 -2 >> 2 -r. i, J^ I- 2 "2= S ^ 3*3 I 2 | - 1 ^> > 5o a o 50 i2 ' O gj 11^ -^l s -! ::: '-? X t^ r* *S2 ^o ^* t^- ' = 2 -* n' r: .;: 2522^ ll 2 v3" 5*S C5 ^ J^ *H Q* O t- s; x x r: r; * 2 SiggSS 5^5 : s::;: S$g rs >r> :S , rs n rs sill ^ ?5Sii 2 1 i^liS i 10 o 3 w t^ K X ill |5" "2 5:5?'"^ 8 |S l.-J X 1-1 '.1 O -* &IQ FH Cb at S*| m oo a ^ SSi t~ St 5* S >CO50OOCS -o r; -* t- ^ '-1 C: O: K i -* 111 c: r: t~ 5 Ci t^ x S$g X 3D ? X 5 X ?2 f ; ^- ^- ~lll~" i^ c- r: g |gi3i T S li 81| iii IsiSis '.; y 1 sills 111 111 X "fi 3* izli | Sli ^ X X c; ? ** lli isi iS '.~ _ ,~ ^* $> ^. r* 1--> 11 -V r- ^ H at *^ OQ 1-1 * w siS i"~ ^' S: X Oi V tt 111 1 li?l? sis o o c K $ * x c; -* Sil ===3 Si 5S^2i2 111 .? ilsll Sli 511 =|g v r: -f- M3 -i i> r: -v ^ V r+ -f< -t -t s ^s ? 11 ^SISJS 1SI I !$? III 2|g o o o x v r: i~ * jt ?2 = r S 2 2 5 5". -0 r: ifl t- t- x cs r; s ^ s r: -~ t- = , ^ ~. " 1-sS ^ - ^. ?.-~~~ SS3 *- c: = s* v~ "' r: i o t j j isii Si Ii5il li| | |g|g| iii o o o 111 s=i| si 8 S 15 1I ts ?> t^- i iiiss III - K " s?5 =-. "-i ^ a* * 10 i^ ^ 5' C-. -* o - "' *'**" ~+ r^ (> ! ' - : i ; ; ; : i i jiii i J 1 11 INI?! ft.6, XXzm-f.-f. M J i |_0 1 .Illl! iiJ-E'i TJ . r. x H H & c E i^i Jjjl o | 5 o_i * * a 2 ill COMMITTEE ox TAXATION. BILLS RECOMMENDED TO THE LEGIS- LATURE BY THE COMMITTEE. PROVIDING THE RATE OF TAXATION. AN ACT to provide the rate of taxation for the State of Tennessee and the counties and municipalities thereof. SECTIOX 1. Be it enacted by the General Assembly of the State of Tennessee, That the taxes on every one hundred dollars' worth of prop- erty shall be fifty cents for the year 1915 and for every subsequent year thereafter, thirty-five cents of which shall be for state purposes and fifteen cents for school purposes; provided, however, that if the total assessment of all property, including merchants' capital, shall in the year 1915 or any subsequent year be eight hundred million dollars, the tax rate for the State shall be thirty-two and one-half cents, and for schools fourteen cents, on the one hundred dollars' worth of property; if the total assessment shall be nine hundred million dollars, the tax rate for state purposes shall be thirty cents, and SECTIOX 46. Be it further enacted, That (1) Every male inhabitant between the ages of twenty-one and fifty years, except persons who are deaf, dumb, blind, or incapable of labor and of earning a livelihood, shall pay a poll tax for school purposes. Such persons as are liable to poll tax upon the tenth day of January of each year and exemption under this act shall be fixed according to the age of the person on the tenth day of January of each year. (2) The rate of taxation on every taxable poll shall be one dollar. Said poll tax shall be collected annually by the trustee, and shall be appropriated for common-school purposes in the manner prescribed by law. (3) Every taxpayer shall pay his poll tax, if liable for poll tax, at or before the time he pays his property tax. No trustee shall receive from any taxpayer his property tax and receipt him therefor until his poll tax is paid, if liable for poll tax; provided, the trustee shall not enforce this section where the taxpayer in good faith claims that he is not liable for the payment of the poll. Every trustee who violates this section or permits it to be violated by any of his deputies shall be held liable for all poll taxes that may become delinquent on account of such violation; and any collector of revenue may proceed against such trustee who shall receive from any taxpayer his property tax and receipt him therefor until his poll tax is paid, if liable for poll tax; provided, the trustee shall not enforce this section where the taxpayer in good faith claims that he is not liable for the payment of a poll. SECTION 47. Be it further enacted, That (1) The clerk of the county court shall collect all taxes on privi- leges and merchants unless otherwise provided. (2) And the county trustee shall continue to act as the collector of taxes in accordance with the provisions of sections 1 and 2 of an act approved on the twenty-fourth day of March, 1875, entitled "An act more cheaply to collect the State, county, and municipal revenue." SECTION 48. Be it further enacted. That every taxpayer shall pay his state, county, municipal, highway, school, and all his property and poll taxes to said county trustee, except when otherwise provided by law; and said taxes shall be due and payable on the. first Monday in December of each year, and shall bear interest from the first day of March following, and, in addition, a penalty of one per centum for each month the taxes are delinquent, to be added on the first day of each month, beginning with the first of March, except as otherwise provided in regard to municipal and poll taxes. SECTION 49. Be it further enacted, That (1) All taxes remaining unpaid on the first day of March of each year shall immediately be collected by the county trustee by distress and sale of any personal property liable therefor; and the tax books in the hands of said trustee and the delinquent lists to be furnished, as herein provided, to deputy trustees or constables, shall have the force and effect of a judgment and a distress warrant and an execution from a court of record authorizing him to make such distraint and sale. (2) Ten days' notice of the time and place of said sale shall be given by advertisement put up in three public places in the county, one of 85 COMMITTEE ON TAXATION. which shall be in the district where the taxpayer resides and one of which shall be at the courthouse door. (3) The officers shall in all cases have the personal property pres- ent when sold, and shall be allowed to retain, in addition to the taxes, all commissions, costs, and necessary expenses of removing and keeping the property distrained. (4) In cases where the officer cannot find personal property sufficient to satisfy said taxes, he is authorized to proceed by garnishment proc- ess, returnable before some justice of the peace on any day succeed- ing the service. The proceedings on the return of such garnishment process shall be as provided in cases of garnishment on execution, and on judgment, if upon the answer of the garnishee the judgment shall go against him, and said judgment shall be in the name of said officer. (5) On all taxes collected by the trustee, the trustee or his deputies or constables, whichever performed the services, shall have the same fees where they collect by distress or distress and sale as are aflowed for collecting executions. (6) After the taxes become delinquent, the county trustee shall have power to appoint such deputies as may be necessary for the collection of the delinquent taxes; and in such cases he shall furnish the deputy with a list of the delinquent taxpayers, with the description of the property assessed against each and the amount of taxes due from each. (7) The trustee shall keep a record of all levies made by himself or deputies and of proceedings under such levies. (8) The deputy trustees appointed to collect delinquent taxes shall be allowed all the fees and costs earned by each and accruing on such lists, and the trustee shall not be required to account for such fees and costs as a part of the emoluments of his office under the existing laws. (9) The trustee shall make out a list of all delinquent poll taxes by districts, and shall place the same in the hands of the constables in each district or a deputy trustee not later than the tenth day of April next after the year for which said poll taxes were levied; and for col- lecting such taxes the officer shall be entitled to collect as compensation a commission of ten per centum on the amount of poll tax, in addition to the commission now allowed by law for collecting executions, which commissions shall be paid by the delinquent. If it is necessary to collect such delinquent poll taxes and the aforesaid ten per centum com- mission aforesaid by distress and sale or garnishment, as hereinbefore provided in collecting taxes assessed against owners of real estate, the officer shall have the same fees as now allowed for like services. (10) All lists shall be returned by such officer on or before the first day of June, and after said date poll taxes may be paid by adding thereto the same rate of interest and penalties as are added to delin- quent real estate taxes. (11) The constable or deputy trustee shall make monthly reports to the county trustee of polls collected, and pay over to said trustee all poll taxes collected during the month after retaining the fees to which he is entitled by law. (12) On the first day of June the constable or deputy trustee shall make a final settlement of the polls in his hands for collection, and in the settlement shall be charged with the aggregate amount of polls in his hands for collection and be credited with the amount collected and accounted for, with errors, double and illegal assessments, and with such insolvent or other polls as such officer shall show could not have been collected by law after diligent effort on his part. (13) Any balance found due on such settlements may be recovered of the constable or deputy trustee and his sureties on his bond, by suit or motion, on five days' notice, in any court of record, instituted by the 86 COMMITTEE ox TAXATION. county trustee or any collector of revenue or district attorney of the state. (14) ,The constable or deputy, before entering upon the collection of the polls, shall enter into a bond, payable to the State of Tennessee, in a sum sufficient to cover the aggregate amount of polls to be col- lected, with two or more solvent sureties, and conditioned faithfully to perform the duties herein and discharge every balance found against him upon settlement with the county trustee, which said bond shall be approved by the trustee and filed for preservation in the office of the clerk of the county court. (15) Nothing in this act shall be so construed as to allow the trus- tee any fee for making out the list of delinquent taxes for either real estate or polls for the deputy trustee or constable; nor shall the trus- tee receive any fee for any services required to be performed by him under the provisions of this act, except the commissions herein allowed. (16) Nor shall any deputy or constable be entitled to any fee for any service rendered in relation to any delinquent tax in his hands for col- lection unless he collects taxes in person from the delinquent; and after delinquent taxes on property or polls have been returned by the deputy trustee or constable uncollected, said delinquent may thereafter pay the same to the trustee by paying the interest and penalty of one per centum from the date of its accrual. (17) Any trustee, revenue collector, or other officer having charge of the collection of back poll taxes who refuses to give a receipt where the tax, interest, and penalty for the preceding or other years is ten- dered by any party volunteering to pay his poll taxes, is hereby guilty of a high misdemeanor, and, upon conviction, shall be fined not less than fifty dollars nor more than one hundred dollars, at the discretion of the court. SECTION 50. Be it -further enacted, That after the first day of June of each year the trustee shall advertise all real estate upon which taxes remain due and unpaid, or which is liable for sale for other taxe%, at the door of the courthouse of the county on the first Monday in July following, and said advertisement shall be substantially in the form following to wit: " DELINQUENT TAXPAYERS, TAKE NOTICE. " On the first Monday in July next, at the courthouse door [here name county and town], I will offer for public sale all the real estate belonging to delinquent taxpayers for the year - . The following is a list of such delinquents, the district in which the property is situ- ated, and the number of acres in each tract, as follows [here insert list of delinquents, etc.] ; and if said sale is not completed on the said first Monday in. July, the same will continue from day to day until completed. (Signed) , Trustee." Such notice shall be inserted once a week for three weeks in some newspaper published in the county; and if none is published, then by posting said notice at the courthouse door for three weeks previous to said sale, the fee therefor to be paid by the county. But error in said notice shall not invalidate any sale thereunder if the land be so de- scribed as to be capable of identification. SECTION 51. Be it further enacted, That on the first Monday in July, if the taxes remain unpaid, the trustee shall proceed to sell land of each delinquent taxpayer to pay the amount of taxes due by him and all costs, interest, penalties, and charges thereon, to the highest bidder for cash; and the sale shall be continued from day to day between the hours of 10 o'clock A.M. and 4 o'clock P.M. each day until all is sold, 87 COMMITTEE ON TAXATION. and the trustee shall enter on the tax books at the place for entering date of payment the words: " Sold to - [name], - [date]." The courts shall apply the same lib- eral principles in favor of a title acquired by a purchaser at a sale for delinquent taxes as are applied to sales by execution. No failure to observe the requirements of the law with respect to assessments shall vitiate an assessment or affect the title to property sold for delinquent taxes; nor shall a failure to collect said tax by distress and sale of per- sonal property first affect said title, provided the land be so described as to be capable of identification. SECTION 52. Be it further enacted, That any one in possession of land sold for taxes under the provisions of this act shall become the tenant of the purchaser at will from and after the first day of January follow- ing the date of sale; provided, however, in cases where the tenant has, prior to the date of sale, paid his rent to a time beyond said first of January, or has, prior to date of sale, given his written obligation cov- ering a period of time beyond said first day of January, and said writ- ten obligation is legally owned or held by third parties, then the ten- ancy defined by this act shall continue without any right to collect rent on the part of the purchaser until the expiration of the time paid for or covered by such written obligation. SECTION 53. Be it further enacted, That (1) No tract, lot, or parcel of land shall be sold for less amount than the amount of taxes, interest, penalties, and costs and charges due thereon; and if no person will bid the amount of such taxes, interest, penalties, costs, and charges, the trustee shall strike the same off to the treasurer of the state, to be held in trust for the use of the state, county, and municipality, said sale. to be for the amount of said taxes, interest, penalties, costs, and charges thereon due to the state, county, and municipality. (2) The trustee shall, on or before the first Monday in September thereafter, file in the office of the clerk of the circuit court in his county a certified list of the lands so struck off by him to the state treasurer, specifying the days of the sale, the amount of the respective taxes for which said sale was made, and each item of costs thereof, which list shall be made in book form and kept by said clerk as a part of the official records of his office. The trustee shall likewise forward a certified list of said lands to the commission. (3) The list of land so filed with said clerk shall be in lieu of con- veyance, and shall vest title in said treasurer for the use aforesaid to all the lands embraced in such list as a conveyance to said treasurer would do. (4) Said list may be certified substantially as follows: " I, , trustee of County, Tennessee, do hereby certify that the foregoing is a correct list of all real estate sold by me to the state treasurer for delinquent taxes of the year . This day of - , 19 . "(Signed) , Trustee." (5) A copy each of the list so filed with the clerk shall be sent both to the commission and comptroller by the trustee, the correctness of which list shall be certified to by the said circuit court clerk. SECTION 54. Be it further enacted, That (1) Land struck off to the treasurer of the state for taxes, interest, and penalties shall not be sold again for taxes subsequently accruing until the same shall have been redeemed or purchased as provided in sections 62 and 63 of this act. 88 COMMITTEE ox TAXATION. (2) The trustee shall report such subsequently accruing taxes, in- terest, penalties, and costs to the circuit court clerk, who shall enter the amount thus reported as a charge against such land. (3) After the sale, the land shall be assessed to the party owning the right of redemption therein. (4) If any property for taxes sold and struck off to the treasurer can be rented for a sum sufficient to pay the taxes, costs, and penalties and subsequently accruing taxes within one year from taking posses- sion after deducting from such rents a commission of ten per centum, which may be allowed to any agent for services in renting such prop- erty, then the clerk may take possession of said land and have the same rented out. The net rent each month shall be credited on the amount necessary to redeem said land. (5) The clerk is hereby authorized to issue such writ of possession as may be ordered by the court to gain possession of said property at any time it may be necessary to remove any person who may deny his rights to possession or who refuses as tenant to pay rents agreed upon. SECTION 55. Be it further enacted, That (1) The trustee shall also make a list of the lands sold to individ- uals, in book form, in the same manner and at the same time as re- quired for lands struck off to the state treasurer, which he shall file with the clerk of the circuit court of his county, which shall be kept by the clerk as part of the official records of his office; but a failure to make return or record of said list or a defective list shall not affect the title. (2) The list of lands so filed shall operate to vest title in said pur- chasers, respectively, to the lands purchased in fee simple; and any purchaser at tax sale shall be entitled to receive, if he demands the same, a certificate showing his purchase, signed by said trustee. (3) The trustee shall append to said list of lands sold to individuals a certificate substantially as follows: " I, , trustee of - County, Tennessee, do hereby certify that the foregoing is a correct list of all real estate sold by me to individuals for delinquent taxes of the year - . This - - day of . "(Signed) , Trustee." SECTION 56. Be it further enacted, That (1) The lands struck off to the treasurer of the state and the lists of lands sold to individuals shall remain in the office of the clerk of the circuit court, and the owner of the land or any person for him or any creditor of such owner may redeem the same within two years from said sale by paying said clerk, regardless of the amount of said pur- chaser's bid at a said tax sale, the whole amount of the taxes for which the land was sold, with all the costs, interest, penalties, and charges consequent upon the sale, and damages or penalties at the following rate viz.: Six per centum per annum interest and a penalty of one per centum for each month from date of sale, and also all state, county, and municipal taxes that have accrued on such land since the sale, with interest thereon at the rate of six per centum per annum and one per centum per month penalty from the first of March in each year follow- ing the year for which such taxes are assessed. (2) And this interest and penalty shall accrue on subsequent taxes in favor of individual purchasers at tax sales, who may, during the month of February or after that time, pay subsequently accruing taxes. (3) And as compensation for the clerk, he shall be entitled to a com- mission of five per centum on the whole amount of the redemption 89 COMMITTEE ON TAXATION. money and a fee of fifty cents for issuing the redemption receipt, which amount shall be collected from the delinquent, which receipt shall in- clude all property redeemed by any person at one time. (4) Saving to persons under disability, whose lands may be sold for taxes, a right to redeem the same, within two years after such disabil- ity shall have been removed, from the purchaser thereof, on the terms herein prescribed, on their paying the enhanced value of the land re- sulting from any permanent improvements on the land after the expi- ration of two years from the date of sale of the land for taxes; 'pro- vided, the value of such improvements shall not exceed the rental value of the land. SECTION 57. Be it -further enacted, That (1) On any day of any term of the circuit court after the time when such lists of lands sold for taxes and struck off to the treasurer of the state or sold to individuals are filed with the clerk of said court, it shall be the duty of the court, upon motion of the trustee or any col- lector of revenue of the state or any purchaser, to enter a decree in form about as follows: THE STATE OF TENNESSEE. For uses, etc., v. Delinquent property real-, personal, and mixed assessed for taxes due the state, county, and municipalities in the county . It appearing to the satisfaction of the court that the trustee for County, in the State of Tennessee, has filed lists of sales of property in said county delinquent for taxes due thereon, for the year and years prior thereto, to the state, county, and municipalities in said county; it further appearing to the court that the treasurer, for use of the state, etc., and various individuals and corporations have become purchasers of specific portions of the property as described and set out in said list; it is, therefore, decreed by the court that such sales be confirmed, and that all rights, title, in- terest, and estate of any kind and character pertaining to said prop- erty, or any parcel or portion thereof, is hereby vested in the respective purchasers as shown by said lists, subject alone, however, to the right of redemption given by the terms of the act under which such sales were made. (2) The clerk of this court will, upon the payment of the legal fees therefor, issue to any purchasers named in said Jists a writ of posses- sion to put such purchaser in possession of the property purchased; provided, that said writ shall not issue before the expiration of two years from the date of sale, and that such writs shall be subject to the rights of tenants as heretofore defined in this act. (3) It shall also be the duty of the circuit court on any day of any term hereafter, on the motion of any purchaser named in the lists of lands sold for taxes under the provisions of chapter 1 of the acts of the fiftieth general assembly, approved April 30, 1897, or subsequent acts, on file and constituting a part of the record of such court, or upon the mo- tion of any trustee or revenue collector, to enter a decree in about the form hereinabove set out, confirming the sales of said lists, except that the writs of possession shall be decreed to issue on compliance with the provisions of section 65 of this act. (4) No writ of possession shall be issued by the clerk under this act unless the court shall have first ordered a writ of possession. (5) This provision shall apply to all sales heretofore made and hereafter to be made to individuals and to the treasurer of the state or to any company or corporation. 90 COMMITTEE ox TAXATION. (6) The respective circuit courts of this state are vested with the authority to render judgments, decrees, and order writs of possession for the purposes declared in this act. (7) The comptroller is hereby authorized to take the necessary steps to put the state in possession of said property and to dispose of the same to the best advantage to the state, either by compromise or by sale, on approval of the Governor and attorney-general. SECTION 58. Be it further enacted. That if any individual purchaser shall allow any land purchased by him to be again sold for taxes and purchased by another individual purchaser, then such subsequent indi- vidual purchaser shall acquire the superior title, and the title of the first purchaser shall become null and void as against the title and claim of such subsequent purchaser. SECTION 59. Be it further enacted. That if the purchaser of land at a tax sale shall not immediately pay the amount of his bid, the trustee shall offer the land again; and if some person will not then bid the amount of taxes, interest, costs, and charges upon it, it shall be struck off to the state treasurer as in other cases. SECTION 60. Be it further enacted. That if any land be sold for more than the amount of taxes due thereon and all costs, interest, and charges, the excess shall be paid over by said trustee to the clerk of the circuit court at the same time that he shall file with said clerk the list of land struck off to the treasurer and to individuals, -- taking his receipt for the same, and said excess to remain in the hands of said circuit court clerk until the land is redeemed or until the period of re- demption shall have expired; and if said land is redeemed, said excess shall be by the clerk paid to the bidder or purchaser, his representa- tives or assigns; and if the land be not redeemed, then the same shall be paid by said clerk to the person who owned the land at the time of the tax sale, his heirs or assigns; and the said clerk and his bondsmen, as the case may be, shall, respectively, be liable for the safe-keeping and disposition of said excess in accordance with the provisions of this act. SECTION 61. Be it further enacted. That on the payment of the re- demption money, the clerk shall, on the record of the list of lands struck off to the treasurer and the list of lands to individuals, respec- tively, write opposite the tract of land the word " Redeemed," and with the date of payment and redemption, the person redeeming, and the amount paid, so as to show the amount paid on account of taxes accrued since the sale; and the said clerk shall be liable on his official bond for any and all moneys collected under this act, and shall pay over the amount received by him on redemption to the persons entitled to re- ceive the same. SECTION 62. Be it further enacted. That (1) At any time after the sale of land for taxes, the lands, or any part thereof, struck off to the treasurer and reported to the circuit court clerk as herein provided, may be sold at private sale by said clerk to any one desiring to purchase the same for not less than the taxes, in- terest, penalties, and costs due thereon to the date of such sale; and such purchaser shall take the same, with all the rights and subject to all the redemption rights, the same as if he had become purchaser at trustee's sale. (2) After the time for the redemption of any tract of land sold for taxes shall have expired, any person shall be entitled to receive from 91 COMMITTEE ox TAXATION. the clerk of the circuit court a conveyance of the title vested in the treasurer of the state for the uses aforesaid upon the payment to said clerk of the whole amount of taxes, interest, and penalties for which the land was sold, and all costs, interest, and charges consequent upon such sale, with interest at six per centum per annum and one per centum per month penalty from date of sale upon the amount for which said land was sold, and also all state, county, and municipal taxes, interest, and penalties which shall have accrued on the land since the said sale, with interest thereon, together with five per centum on the whole amount of the purchase money and fifty cents for making the deed for com- pensation for the clerk, which conveyance shall vest in him a good and indefeasible title to said land. (3) The form of said deed shall be to the following effect: " I, , clerk of the circuit court of - County, State of Tennessee, in consideration of the sum of $ paid to me by , hereby convey to said the following-described lands, situated in said county to wit [here de- scribe the land], sold to the treasurer of the state for delinquent taxes on property assessed to - , for the year - , on the - day of , A.D. . The time of re- demption having expired, this conveyance is made pursuant to the au- thority vested in me by law. " Witness my hand and seal of said court hereunto affixed, this - day of - , A.D. . -, Clerk." (4) The deed made by the clerk as above provided shall be prima facie evidence of the facts stated in the deed. (5) The said seal of the circuit court clerk shall be a sufficient au- thentication, and entitle the same to registration without any acknowl- edgment. (6) If the clerk shall have knowledge or reason to believe that more than one person desires a deed to any tract of land, he shall notify all such persons that he will, on a certain day, sell said land to the high- est bidder; and the excess so paid shall be distributed to the state, county, and municipality in the proportion that each may be interested in the land sold. (7) A writ of possession shall be ordered by the circuit court (to which the tax sale has been certified) upon application of any purchaser under this section. SECTION 63. Be it further enacted, That (1) Any person who has purchased any real estate at a sale held by a back-tax attorney, under the provisions of chapter 120 of the acts of 1895, and who has received from said back-tax attorney a cer- tificate of purchase, as provided in said act, and from whom said real estate has not been redeemed within the time required by law, may apply to the circuit court clerk of the county in which said real estate was sold for a deed; and if it shall be made to appear to the satisfac- tion of the said clerk that said real estate has not been redeemed from the party holding the certificate of purchase, it shall be the duty of said clerk to issue to said purchaser a deed in the same manner as pro- vided in section 64 of this act. (2) The circuit court clerk shall at any time, not later than six months after the right of redemption shall have expired on any property that has been sold for taxes under this act by the trustee and struck off to the treasurer of the state and not otherwise disposed of, advertise and resell all such property under the same rule and same notice that the 92 COMMITTEE ox TAXATION. trustee sold under in the beginning, except that he shall state in his notice that the sales will be made in bar of the equity of redemption. SECTION 64. Be it further enacted. That (1) After the time for redemption of any tract of land sold for taxes to individuals shall have expired, any purchaser shall be entitled to receive from the clerk of the circuit court a conveyance of the property so purchased, upon payment to the clerk of the sum of fifty cents, which shall be the clerk's compensation for making and delivering said conveyance. (2) The form of said deed shall be, in effect, as follows: " State of Tennessee, County of - , ss. " Be it known that - , the county trustee of said county of - , did, on the - day of - , A.D. - , according to law, sell the following land, situated in said county, assessed to - , to wit [here describe the land], for the taxes assessed thereon for the year - - [if sold for other taxes, it shall be so stated], when - - became the best bidder therefor and the purchaser thereof at the sum of $ and - - cents; and the time for redemption having expired, I, - , clerk of the circuit court of said county, by vir- tue of the authority vested in me by law, hereby convey eaid land to " Witness my hand and seal of said court hereunto affixed, this day of . , Clerk." (3) Said seal of the circuit court clerk shall be sufficient authentica- tion and entitle the same to registration without acknowledgment. (4) Said conveyance, as well as the conveyance provided for in sec- tion 62, shall be an assurance of perfect title to the purchaser of said land, and no such conveyance shall be invalidated in any court except by proof that the land was not liable to sale for taxes or that the. taxes for which the land was sold had been paid before said sale; and if any part of the taxes for which said land was sold is illegal or not charged to it, but a part is chargeable, that shall not affect the sale nor invali- date the conveyance thereunder, unless it appears that before the sale the amount legally chargeable on the land was paid or tendered to the county trustee; and no other objection, either in form or substance, to the sale or the title thereunder shall avail in any controversy in- volving them. (5) No suit shall be commenced in any court of the state to invali- date any tax title to land after three years from the time said land, was sold for taxes, except in case of persons under disability, who shall have one year in which to bring suit after such disability is removed. (6) No suit shall be commenced in any court of the state to invali- date any tax title to land until the party suing shall have paid or ten- dered to the clerk of the court where the suit is brought the amount of the bid and all taxes subsequently accrued, with interest and charges as herein provided. (7) A writ of possession shall, upon application of the purchaser, included in this section, be ordered by the court to which the tax sale has been certified. (8) The circuit court clerk shall not make deed for land struck off to the treasurer or sold to individuals until the circuit court clerk shall issue a notice as hereafter provided and have served on the per- son to whom said real estate was assessed, if to be found; if not, to his agent or representative or attorney; and if no such agent or representa- tive or attorney can be found, the clerk shall make publication for four 93 COMMITTEE ox TAXATION. consecutive weeks in any newspaper published in the county where the land is situated; or in case there is no paper in said county, he shall make publication in the nearest county paper for the person or per- sons who own said lands or to whom same is listed, specifying that un- less said property owner or his agent or attorney or representative ap- pear on or before a certain day at least sixty days from the service of said notice or from the last publication and redeem said land or lands by paying all accrued taxes state, county, municipal, etc. together with interest, penalty, and costs accrued to date of redemption, that the sale of said lands to the purchaser thereof shall become absolute; and the circuit clerk shall proceed forthwith to execute a deed to said lands to the purchaser aforesaid, who will pay to said clerk the whole amount of taxes, interest, and penalties for which the land was sold, and all the costs, interest, and charges consequent upon the sale, with interest at six per centum per annum and one per centum per month penalty from date of sale upon the amount for which said land was sold; and also all state, county, and municipal taxes, interest, and pen- alties which have accrued on the land since the said sale, with interest thereon, together with five per centum on the whole amount of the purchase money, together with the costs of the notice of publication heretofore provided for and a fee of one dollar to the clerk for making the deed. But failure to give the notice required hereby shall not af- fect or render void the title. (9) FORM OF NOTICE. "As the owner [or as the agent or attorney of the owner, as the case may be] of - acres of land situated in the district of - - County, Tennessee, and bounded on the north by - , on the east by - , on the south by - , and on the west by - - [or if town lots or city property, describe by usual method of describing such property], you are hereby notified that unless you appear at my office in the courthouse in the town of - , Tennessee, on or before the - - day of - , 19 -- [giving sixty days' notice], and pay the sum of $ , state, county, and all other taxes assessed against said lands, together with all interest and costs incurred, including this notice of publication as now provided by law, your right to redeem same shall be forever barred, and deed to the same will be at once executed by me to - , the pur- chaser of said lands. " Witness my hand at office on this day of -- , 19 - . , Circuit Court Clerk." (10) The above notice may be served by any county or district of- ficer authorized to serve process. (11) The form of public notice heretofore provided for shall be suffi- cient, if a substantial compliance with the above notice; and any num- ber of property owners may be embraced in one publication, the ex- penses for the same to be prorated among them. SECTION 65. Be it further enacted, That (1) Upon the request of any person who has or may become the purchaser of any property which has been sold for taxes due thereon under the provisions of chapter 1 of the acts of the fiftieth general assembly, approved April 30, 1897, and any subsequent acts, or to whom a deed has been executed under the provisions of said acts, the clerk shall, upon the order of the court and upon payment of the legal fees thereof, issue to such purchaser a writ of possession directing the 94 COMMITTKK ON TAXATION. sheriff to put such person in possession of the property so purchased or described in such deed. (2) However, before such writ of possession is issued, the purchaser shall make out a notice to the party in possession, giving a description of the property and the fact of his purchase at tax sale, or under the provisions of said acts, the time of purchase, and stating that he will not earlier than thirty days thereafter apply to the judge of the circuit court for a writ of possession to put him in possession of said land. (3) Which notice shall be served by the sheriff or deputy sheriff or constable on the party or parties in possession; and if no one is on the premises at the time the officer is there, it shall be sufficient service to leave a copy of said notice tacked to the house or other place where it can be easily seen. The officer's return shall be sufficient evidence to the clerk that such notice has been served. (4) If the party in possession is a tenant of the original owner and has paid his rent in advance or has given his written obligation for the payment of such rents, and such written obligation is legally held or owned by third parties, such party shall have the right to become the tenant of the purchaser at tax sale without rent until the expiration of the time for which he has paid in advance, or until the expiration of his written contract. SECTION 66. Be it further enacted, That (1) It shall be the duty of the clerk of the circuit court, on or be- fore the tenth day of each month, to report and pay over to the au- thorities state, county, and municipal, respectively entitled thereto all taxes collected by him on redemption and purchases as herein pro- vided during the preceding month ; and if he fail to do so, he shall be liable on his official bond for amount collected and to a penalty thereon of one per centum per day on the amounts so held or retained. (2) Said report shall show the name assessed to, the description of the property, the amount paid in redemption, and name of party re- deeming or purchasing. (3) Whereupon the trustee and the collector of municipal taxes, if such taxes are collected separately, shall enter the fact of such re- demption or purchase on the original tax duplicate opposite the original assessment, and the further fact of redemption by owner or creditor or sale by the clerk to a purchaser. SECTION 67. Be it furtJier enacted. That (1) Any person claiming or owning an undivided interest or part in any property or any specific portion of any property assessed to another shall receive a receipt in full for his taxes on paying such por- tion of the taxes as he claims of the property or such proportion of the taxes as his quantity of the property bears to the whole quantity taxed. (2) Before issuing his receipt in full on any specific portion of such property, the trustee shall satisfy himself that the value placed en each portion is a correct relative valuation, either by agreement of the par- ties in interest or the certificate of the assessor that he has fixed the valuation of said portion. (3) This rule shall apply to all taxes, interest, penalties, and costs that have or may become a lien on any property in the hands of the trustee for collection or of the circuit court clerk for redemption from tax sale. SECTION 68. Be it further enacted, That (1) On or before the tenth day in each month the trustee shall re- port to and make settlement for all taxes collected during the preced- ing month with the comptroller of the state and with the judge or 95 COMMITTEE ON TAXATION. chairman of the county court and with the financial agent or treasurer of each municipality, and pay over to the same the amounts shown by the respective settlements to be due each. (2) The trustee shall make under oath a full and complete state- ment on the first Monday of September in each and every year of the condition of his office, setting out the aggregate amount of taxes col- lected, the amount so collected, giving state, county, and municipal taxes separately, and a full statement of the disbursements of the same and purposes for which disbursed and the amount on hand, and shall cause the same to be published in a newspaper published in said county; and if no paper is published in said county, shall cause the same to be published in the paper nearest to the county seat, to be paid for by the county. (3) Said trustee shall not be allowed any commission when he fails to make such publication; and in the event commissions are allowed when said publication is not made, any citizen and taxpayer of said county may bring suit against said trustee and his bondsmen and re- cover for the use of the state and county all commissions thus ille- gally paid or allowed. (4) Said monthly settlements so to be made to said judge or chair- man and committee of court shall be spread upon the minutes of the court and municipality, respectively, and shall specify every credit allowed said officers for errors, removals, double taxation, and such other credits as are now allowed by law, except compensation to trustee. SECTION 69. Be it further enacted, That (1) Annually, at the July term of the county court, the trustee shall present to said court a report of all insolvent and delinquent taxpayers and double assessments in his county, with the amount due from each, which report shall be verified by the affidavit of the trustee that he has made in person or by deputy a legal demand for taxes of all delinquent taxpayers found in his county by going to their places of abode or busi- ness and searching for something to seize or sell for taxes; that the tax- payers mentioned in the report have failed to pay their taxes and have no effects known to him which can be made to pay the same; and that he has made diligent inquiry as to such delinquents as have not been found and cannot find them in his county, and they have no effects known to him which can be made to pay their taxes. (2) The county court shall proceed to examine said report, and shall allow the trustee a credit for such taxes so reported insolvent or delin- quent and double assessments, as it may be satisfied remain uncollected without the default of the trustee, and no more. (3) And a list of such allowances shall be made out and certified by the clerk of the county court and transmitted to the proper authorities of the state, county, and municipality, respectively. (4) Said report shall be spread upon the minutes of the county court and of the council or other governing body of the municipality, re- spectively. (5) The county court shall not allow the trustee a credit for the insolvent list that he reports merely because he presents it duly sworn to; but the court shall examine carefully each credit claimed by the trustee and avail themselves of any information by witnesses to test the accuracy of the report, and shall not allow, the trustee credit for the taxes of any delinquent who may be ascertained to have anything in his possession or any right of action, by a sale of which the trustee would be able to make the taxes. (6) All the lists for which the court shall not allow a credit shall be charged against the trustee; and notwithstanding that the county 96 COMMITTEE ON TAXATION. court may have allowed the trustee credits, such acts shall not operate as an estoppel in the event that it should afterwards appear that such credit was improperly allowed. (7) The trustee shall retain the poll taxes included in his list of insolvencies and for which credit is allowed him as a charge against the taxpayers who have not paid the same, and at any same time he may receive payment thereof in person or through any deputy appointed hy him; and he shall distrain and sell for such taxes, where there is any probability of collecting the same in person or by deputy appointed for that purpose, any property of such poll taxpayers and sell the same for payment thereof, and all collections of poll taxes so made shall be reported by him and accounted for in his next settlement made after the collection of the same. (8) For such collections, when made by distraint or sale, he shall be entitled to the fees heretofore allowed in such cases. This section shall not be construed as in any way affecting section 49 of this act. SECTION 70. Be it further enacted. That (1) Each trustee shall, on or before the first Monday in September of each and every year, submit the statement hereinbefore provided for in case of all state revenue collected by him, to the comptroller; and in case of all county revenue collected by him, to the county judge or chairman of the county court; and for any municipality, to the mayor or proper officer of said municipality, for the purpose of making final settlement with said officer and accounting for all taxes, damages, penalties, fines, interest, and other revenue collected by him; and said trustee shall be allowed the credits herein provided for, and none other. (2) It shall be the duty of the county judge or chairman of the county court to submit a copy of this settlement, showing all debits and credits, to the county court at the following term for inspection, which shall be entered upon the minutes of the court. SECTION 71. Be it further enacted, That (1) Any and all parties intrusted with the collection and disburse- ment of public funds or revenue violating the provisions of this act, upon whom no penalty has been heretofore imposed for so doing, shall be guilty of a misdemeanor, and, upon conviction thereof, shall forfeit and pay to the state not less than fifty dollars nor more than five hun- dred dollars, which shall be placed in the treasury for the benefit of the public-school fund. (2) And where such trustee or other officer, whose duty it is to col- lect any taxes under the provisions of this act, fails to pay over and account for any and all taxes which they have collected to the proper officer, in addition to the above penalty they shall be liable to a pen- alty of one per centum per day on the same from the time the same should have been paid, none of which shall in any way be remitted after the matter is placed in the hands of the attorney; and they shall, in ad- dition, forfeit their respective offices. (3) A motion or suit lies in favor of the state, county, or municipal- ity against the trustee and his sureties on his official bonds for any moneys in his hands officially not paid over or accounted for according to law or for failure to collect. (4) The motion or suit in favor of the state may be brought in the name of the state, and shall be made or brought by the district attorney of the circuit or district where it is instituted upon direction of the comptroller or treasurer or the commission. (5) The motion or suit by the county may be brought in the name of the state, for the use of the county, by the district attorney or by counsel employed for that purpose. 97 COMMITTEE ox TAXATION. (6) A motion or suit in favor of the municipality may be brought in the name of the state, for the use of such municipality, by the mayor thereof or the city attorney. (7) In each case the counsel making the motion and conducting the suit shall be allowed fifteen per centum on the recovery as compensa- tion as hereinafter fixed, to be added to and become a part of the judg- ment. (8) The fees allowed to the counsel for the county shall be collected by the counsel for the county and reported to the county judge or chair- man. (9) The fees allowed to the city attorney shall be collected by said city attorney and reported to the mayor of the city or other chief offi- cial. (10) In case the county judge or chairman of the county court should refuse to make the motion or bring the suit hereinbefore pro- vided for after receiving the written request of any taxpayer to do so, then any taxpayer of the county may make such motion or bring suir in the name of the state for the use of the county and employ counsel to conduct the cause; but before making such motion or bringing suit, he shall obtain leave of the judge of the court in which the motion is to be made or the suit brought to do so. He shall make such application in writing, stating fully the grounds therefor, of which application the county judge or chairman of the county court shall have five days' written notice, stating time and place of application. The judge shall hear the application at chambers or in term time, and may adjudge the costs of the application against the applicant, against the county judge or chairman, or against the county as he shall deem just, and he shall enter judgment upon the record of his court accordingly. (11) No power shall exist either in the court or any other official to release any officer charged with the collection of revenue or his sure- ties from the payment of any revenue, penalties, or fees w r hich he or they may be liable for. SECTION 72. Be it further enacted, That (1) In all instances in which current municipal taxes are collected by the county trustee, the same provisions and rules for the collection of delinquent taxes that may be due to the state and county, and none other, shall prevail and obtain. (2) No distinct or independent sales by the trustee shall be made of the property upon which the ^said municipal taxes shall become delin- quent, but in respect of all municipal taxes the trustee shall sell there- for at the same time, under the same advertisement, and under all the proceedings here provided for, at the next sale thereafter to be made for delinquent state and county taxes, such next sale to be made for all taxes, except as hereinafter provided, then delinquent to the state, county, and municipality. SECTION 73. Be it further enacted, That all persons who shall buy any real estate sold under any provisions of this act for delinquent taxes which were a lien thereon, and who shall from any cause fail to get a good title or to recover possession of the realty, shall be subro- gated to all liens that secured the taxes, and all costs, penalties, fees, and interest, and shall have the right to enforce such liens by bill in chancery and sale of the property for reimbursement of the purchase money and interest thereon; and all persons who have purchased or shall hereafter purchase realty sold for taxes under chapter 1, Acts of 1897, or under chapter 435, Acts of 1899, or under chapter 602, Acts of 1907, are entitled to the same right or subrogation and the same rem- edy for its enforcement; and the chancery court shall have jurisdiction in all such cases, though the amount sued for be less than fifty dollars. COMMITTED ox TAXATION. Any person who shall purchase real estate sold for delinquent taxes from a trustee or by redemption through the circuit court clerk may sue for possession by bill in the chancery court, and may file his bill in a double aspect, seeking to recover possession; or if that relief is de- nied, then to enforce the right of subrogation as aforesaid, and the purchaser may avail himself of this remedy by bill in chancery with- out having taken any steps toward a confirmation in the circuit court or a writ of possession therefrom; or if he shall have taken any such steps, he may, nevertheless, maintain his bill as aforesaid; and in the event of his failure to recover the realty, then he shall have a lien therefrom for the amount he paid for the same, with interest and costs, and his reasonable attorney fees, to be fixed by the court, and shall be entitled to a decree for the sale of the realty to satisfy such lien; and in all such cases the chancery court shall have jurisdiction, whether the amount sued for be more or less than fifty dollars. SECTION 74. Be it further enacted. That (1) The quarterly courts, at their July term, 1915, and each year thereafter, shall elect three competent citizens, not members of the county court, county court clerk, or deputy county court clerk, who shall be known as the " revenue commissioners " of the county. One of these commissioners shall be an expert accountant, and shall be selected as such. (2) Their term of office shall begin on the first Monday in Septem- ber following their election, and they shall hold office for two years and until their successors are elected and qualified. (3) Before entering upon their duties, they shall subscribe to an oath before the clerk of the county court that they will well and truly discharge all duties that may devolve upon them by law. (4) On Tuesday before the first Monday in January, April, July, and October of each year the revenue commissioners herein provided for shall meet and critically examine the settlements of the county judge or chairman of the county court, with all the collecting officers of the county. They shall inspect the reports of those collecting officers made to said judge or chairman, and the books of said officers if necessary. They shall also carefully examine the financial report of the said judge or chairman, which is hereby required to be made quarterly and be spread in full on the minutes of the county court. They shall examine the checks and warrants on which disbursements from the treasury have been made and compare these with the books of the trustee. They shall ascertain what warrants have been drawn by said judge or chair- man during the preceding quarter, which of these have been paid, which have been registered with the trustee and remain unpaid, and how many, if any, have been either registered or paid. The revenue com- missioners in each case shall look to see that the balances as stated in the report of said judge or chairman correspond with the balances shown to be on hand by the books of the trustee and exhibit of the cash or assets which he has or should have on hand. The revenue commissioners shall report in writing at the end of each quarter the result of their investigation, and it shall be their special duty to call attention to any neglect or violation of duty which they may observe on the part of any official. (5) The revenue commissioners shall be paid for their services such compensation as may be allowed them by the quarterly courts of the respective counties, not to exceed three dollars per day for the expert accountant and two dollars per day for the other two members for the time actually engaged in the discharge of their duties; provided, that commissioners shall draw pay for such time in each quarter in any county having a population of 50,000 or over under the federal census 99 COMMITTEE ox TAXATION. of 1910 or any subsequent census, as the county court shall determine, but not for more than ten days in any county having a population of less than 50,000 and more than 25,000 by said census or any subsequent census, nor for more than five days in any other county in the state. SECTION 75. Be it further enacted. That (1) The comptroller shall appoint three revenue collectors, here- after called collectors, who shall serve under such appointment for a whole period of two years from the date upon which they take their respective oaths of office. The jurisdiction of said collectors shall be defined by the comptroller, who shall so partition the various counties of the state as to give to each, as near as practicable, a territory of equal extent. Each collector shall enter into a bond in the sum of ten thousand dollars in some solvent surety company, to be approved by some justice of the Supreme Court or some chancellor, before whom the oath of office is taken, said bond being made payable to the State of Tennessee, and conditioned on the faithful discharge of duty and for the covering into the treasury of all moneys by him collected. (2) It shall become the duty of such collectors so appointed to in- spect the records of the clerks of all courts of record in this state, of all justices of the peace, and of any other officials, ex-officials, or individ- uals charged at any time with the collection and disbursement of state or county revenue, or both, and also of any individual who has wrong- fully collected and retained any state or county revenue, for the purpose of ascertaining whether or not any such official, ex-official, or individual has properly collected, disbursed, and accounted for all state and county revenues of whatsoever nature rightfully or wrongfully coming into his hands. The comptroller shall have the power to direct such inves- tigations at any time and at such intervals as he may deem expedient in order to properly protect and guard the public revenue; but the col- lectors are authorized to proceed in such cases upon their own motion, if satisfied that an investigation should be made. Any taxpayer may re- quest an investigation of any official, ex-official, or person having to do with the collection and disbursement of state and county revenues; but it must appear that such request is made in good faith and in the in- terest of the public welfare. (3) The collectors shall have the right to enter the office of any collecting officer named, and, upon the presentation of evidence of his authority, shall have full access to any and all public records in any way pertaining to the affairs of said office for purposes of taxation, including all bank books, cashbooks, or other records pertaining to the public revenues; and for the purpose of counting the same said col- lectors, shall also have access to all cash on hand and in bank at any time until the examination is completed and all accounts properly ad- justed. It is hereby made a misdemeanor for any official to refuse to allow said collectors full and free access to all the books and records relating to his office, and any officials so refusing shall be liable to a fine of not less than one hundred dollars nor more than five hundred dollars for each refusal. The collectors are authorized to demand of any bank a statement of the accounts of any public official, ex-official, or person relating in any way to any moneys belonging to his office, consisting of state, county, school, road, highway, bridge, sinking fund, or any other public revenues, either general or special, and to person- ally inspect such records should the exigencies require. (4) It shall be the further duty of said collectors to ascertain whether or not any revenues, moneys, fees, or costs have been wrong- fully received, retained, certified, or disbursed by any collecting official 100 COMMITTEE ON TAXATION. or ex-official, and also whether or not any such official or ex-official has had in his hands for more than two years any moneys, including witness fees, officers' fees, distributive shares of estate, funds arising from land sales, or from any other source or sources. (5) It shall be the further duty of said collectors to investiprte, when necessary, all bills of costs, fees, or other items certified to the state or county for payment out of the state or county treasury. (6) Said collectors shall, by direction of the comptroller, present and obtain allowance by the courts, both state and federal, of all taxes, whether privileges or ad valorem, due the state from property or its proceeds in the hands of receivers under appointment of the court or otherwise in the custody of the law. They shall likewise bring and prosecute suits upon direction of the comptroller for all delinquent taxes due from railroads, street railroads, interurban steam and elec- tric railroads, express companies, news companies, telegraph companies, telephone companies, electric power and water power companies, or any other taxpayer who is required to pay his tax direct to the comptroller's office. (7) Said collectors, after making any collections of revenue, shall make monthly report of same under oath to the comptroller, remit- ting all state revenue to the state treasurer and all county revenue to the county judge or chairman in a report duly sworn to, the remit- tance being payable to the trustee of the county. A copy of the report to the county shall be embraced as a part of the report to the comp- troller, which report shall show in detail all items collected and to what fund, state or county, the same belong. (8) Said collectors shall also be required to examine at such stated intervals, as in the opinion of the comptroller it is deemed advisable, the reports of merchants as shown by the records of the county court clerks, and to make careful inquiry into the correctness of the same. In making such inquiries, the collectors are authorized and empow- ered to inspect merchandise stocks and demand of any merchant his stock inventories, insurance account, and all other reports or data in his possession pertaining in any way to his business as it may relate to the value of stock carried by him. In case of false statements, they shall have the power to demand of the county court clerk that a distress warrant be issued for the collection of any revenue due the state or county; but such distress warrant shall not issue until after said de- linquent merchant is cited before the clerk, and, upon a hearing of the matter, said merchant is found to be delinquent and the amount of the ad valorem tax is fixed by the clerk, together with all legal interest, penalties, and costs. (9) Said collectors shall inspect the list of privilege taxpayers as shown by the records of the several county court clerks of the state, and ascertain whether or not any person, firm, or corporation is exer- cising, or has previously exercised, any privilege without first having procured a proper license, in a proper manner, under the law. Should it appear to any collector that any person, firm, or corporation is exer- cising, or has already exercised, any privilege or privileges without first having taken out a license therefor, as required by law, he shall pro- ceed against him before the county court clerk for the collection of such license and back license in the manner prescribed for assessing merchants for delinquent ad valorem taxes due. (10) Said collectors shall inspect the inventories of deceased per- sons filed by administrators and executors and ascertain whether or not such estates are liable to assessment or back assessment, the proceed- ings in such cases to be according to the provisions of section 30 of 101 COMMITTEE ox TAXATION. this act relating to assessment of real and personal property before the county trustee. (11) The collectors shall, upon making an examination of the ac- counts of any collecting official or ex-officials, present to such official or ex-official a statement of the financial status of his office. If his ac- counts be correct, the collector shall so certify to said official and so report to the state comptroller. Should a delinquency appear in favor of either the state or county, or both, a statement showing all items of delinquency shall be presented to said official or ex-official for payment by him, together with interest and an added penalty of fifteen per centum. Should payment be declined, formal demand shall then be made upon such delinquent and his bondsmen for payment of such claim in full. Should payment then be refused, it shall become the duty of the collector promptly to report the fact to the comptroller, whose duty it shall be, in that event, to direct the district attorney to collect said delinquent moneys by suit or otherwise, the suit to be en- tered either in the circuit or chancery court in the name of the state on relation of the collector. Upon recovery being made, such revenue so collected shall be paid over to the collector, including all interest .and penalties, whose duty it shall be to report the same as if paid direct to him by said delinquent, the fifteen per centum penalty in either case to be paid into the state treasury as a part of a general fund provided for defraying the expenses in connection with such investigations and collections. (12) Whenever they have cause to think that any property or privi- lege has been omitted from taxation or has been under-assessed in the manner referred to in section 30, said collectors shall make motions before the proper officials for the assessment thereof or the correction or readjustment of the assessment thereof. (13) It shall be the duty of said collectors to make such recommen- dations to the comptroller as conditions may require regarding the di- rection to the district attorney to assist in making either the assess- ment, correction, or readjustment of any tax assessment or the collec- tion of any public revenue; and it shall be the duty of the state comp- troller to direct said district attorney, if in his opinion his services are necessary, to institute suit. (14) All merchants' and privilege taxes collected by proceedings be- gun by the said collectors shall be paid by the taxpayer direct to the county court clerk, including all interest and a penalty of fifteen per centum, whose duty it shall be to report the same to the state and county as he does his regular collections, except the penalty of fifteen per centum, which he shall pay over to the collector, who shall report the same to the comptroller, as provided. (15) The comptroller is authorized to direct a district attorney to bring proceedings for the collection of any merchants' or privilege taxes, where h.e deems it advisable and necessary, such proceedings to be in the name of the state on relation of the collector. Suits may be brought directly against any privilege taxpayer by motion in the cir- cuit court or bill in the chancery court by direction of the comptroller, whether the privilege be payable to the county court clerk or direct to the comptroller. (16) The three collectors herein provided for shall each receive a salary of twenty-five hundred dollars per annum, payable monthly upon warrant of the comptroller drawn upon the general fund appropriated for the payment of the salaries and expenses of his office. (17) The said collectors shall in no manner be entitled to retain the fifteen per centum penalties collected by them, or any portion there- of: but it shall be their duty to report such penalties to the comptroller, 102 COMMITTEE <>.\ TAXATION. remitting the same monthly to the state treasurer, whose duty it shall be to set the same aside to a special penalty account, to be used and paid out upon the official warrant of the comptroller to defray the ex- penses of expert accountants employed in making investigations under the direction of the comptroller and the said collectors, expenses inci- dent to the duties of said three collectors, c.osts, and all other actual necessary expenses properly incurred. (18) All expense accounts rendered by the collectors or those en- gaged by or through them, by and with the consent and approval of the comptroller, shall be fully itemized and sworn to before being filed with the comptroller for payment as provided. (19) Nothing contained herein shall be taken to confer on collectors of revenue the power of back assessment for municipal taxes. SECTION 76. Be it further enacted. That it shall be the duty of the comptroller to prescribe a uniform system of bookkeeping, designating the character of books, reports, receipts, and records, and the method of keeping same, in all state and county offices in the state handling state and county revenue; and it shall be the duty of all state and county officials to adopt and use said system and the kind and char- acter of books, reports, and records as designated by the comptroller; but nothing in this section is intended to give the comptroller the right to require the adoption or purchase, by said officials or by said counties, of the books or other records of any particular publisher or publishers. SECTION 77. Be it further enacted, That all laws or parts of laws upon the subject of the assessment and collection of taxes and the sale of land for taxes in conflict with the provisions of this act are hereby repealed. This repeal shall operate as to all taxes assessed under this act, but shall not operate so as to interfere with the taxes assessed prior to the passage of this act, except as hereinbefore specially other- wise provided. SECTION 78. Be it further enacted, That (1) It shall be the duty of each judge of the courts of the state hav- ing criminal jurisdiction to specially give in charge to and have the grand jury of his court specially investigate all offenses defined in this act, and inquisitorial power is given to grand juries in the premises. (2) It shall also be the duty of the respective district attorneys of this state, upon information or at the request of any reputable citizen of the state, to investigate and prosecute ex officio all the offenses de- fined in this act. SECTION 79. Be it further enacted, That each section, subdivision, and paragraph of this act is hereby declared to be a separate and inde- pendent clause from any other section, subdivision, or paragraph here- of; and the illegality or invalidity of any section or of any subdivision or of any paragraph hereof shall not affect any other section or para- graph hereof, as such other sections and paragraphs would have been enacted if any such illegal or invalid section or paragraph, if any, had been omitted or stricken out. SECTION 80. Be it further enacted, That all laws and parts of laws in conflict with this act be, and the same are hereby, repealed. SECTION 81. Be it further enacted. That this act take effect from and after its passage, the public welfare requiring it. 103 COMMITTEE ON TAXATION. TO QUIET LAND TITLES. AN ACT to quiet titles and ownership in lands, and provide for the proper taxation of claims thereon. SECTION 1. Be it enacted ~by the General Assembly of the State of Tennessee, That (1) For the purpose of taxation, all claims to land in this state or to any interest therein shall be considered, treated, and held to be legal and valid. (2) It shall be the duty of each and every owner or claimant of land or of any interest therein to pay all taxes which may hereafter be as- sessed against such land or claim thereto or against him as the owner or claimant of such land or of any interest therein, or which has been or should have been assessed for the years 1911, 1912, 1913, and 1914 against such land or claim thereto or against such owner or claimant or those under whom he holds or claims. (3) It shall be the duty of every owner or claimant of land in this state or of any interest therein, on or before the first day of June in each and every year, to file with the tax assessor for the county in which the land lies a statement so describing the land claimed that it can be identified therefrom, showing the area thereof, what interest in such land is claimed by the party filing such statement, and the source from which he claims title, in which shall be stated the name of the claimant's grantor, the date and place of registration of the deed, if held by deed; or if not so held, on what basis claimant's title rests, showing the person and instrument or facts through which the claimant holds; or if held or claimed by possession, on what basis such adverse possession is claimed; or if claimed as heir, from whom such claim is derived, and on what facts such claim is based ; and it shall be the duty of every such owner or claimant to pay all taxes which may be assessed against such land, interest therein, or claim thereto. (4) The fact that said land has been listed for taxation, or the taxes have been paid thereon by another claimant, shall not relieve against the duties herein imposed; and any such payment shall in no sense inure to the use or benefit of any claimant not holding under privity of title with the claimant by whom such taxes may have been paid. (5) If said land, or any interest claimed therein, has not been as- sessed for taxation for the years 1911, 1912, 1913, or 1914, the owner or claimant thereof shall, on or before December 1, 1915, file with the county trustee such statement as has been above prescribed, and which shall be as definite and particular as above prescribed; and the trus- tee shall assess the same as picked-up taxes for the omitted year or years at its fair cash value, and the owner or claimant shall, within thirty days thereafter, pay all such taxes as may be thus assessed, to- gether with interest thereon at the rate of six per centum per annum from the first day of March of the year following the year for which such assessment should have been made. (6) If any such owner or claimant shall fail to list the land to which he sets up a claim for assessment or taxation for the years men- tioned, on or before December 1, 1915, or shall fail to pay the taxes charged or which should have been charged against such land or inter- est therein or against him as the owner or claimant thereof upon said dates for such years, or shall fail to list such land, interest therein or 104 COMMITTEE ON TAXATION. claims thereto, for any subsequent year, on or before June 1 of such year as herein provided, or to pay the taxes thereon when the same shall become due, such owner or claimant is hereby declared to be de- linquent; and the failure on his part either to list the property to which he sets up a claim in any manner or form with the proper tax official or to pay the taxes assessed against such land or interest therein or against him as the owner or claimant thereof, shall be cause for for- feiture of his interest in such land and operate as a transfer to the State of Tennessee of all his title, interest, or claim thereto in a pro- ceeding to be instituted for that purpose as herein provided. If a cause for forfeiture as herein provided accrues, the same shall be ex- tinguished if the owner or claimant or any other party or parties de- raigning title from such owner or claimant shall, within the time and in the manner provided in this act, pay the taxes charged and which should have been charged against such land or interest therein or against such owner or claimant thereof for each* and all of said years for which he or those under whom he claims are delinquent, together with the interest and penalties provided by law for the nonpayment of taxes. (7) If any owner or claimant of any land in Tennessee fails to list the same with the trustee as above provided, or if such land shall be listed for any year or years and the taxes assessed thereon for all or any of such years shall not be paid within the time provided by law, it shall be the duty of the trustees of the various counties of the state within thirty days thereafter to give notice to the comptroller of the nonlisting of such property or the nonpayment of the taxes assessed thereon for said years; and if any such owner or claimant shall fail so to list his said claims with the county assessor as herein provided, then it shall be the duty of the assessor within thirty days thereafter to give such notice to the comptroller. (8) Upon the receipt of any such notice from the assessor or the trustee, or other satisfactory information to the effect that any land or any claim thereto has not been listed for taxation as herein provided, or that, if listed, the tax thereon has not been paid within the time provided by this act for the payment of current taxes prior to delin- quency, then and in every such case it shall be the duty of the comp- troller to institute proceedings in the name of the State of Tennessee, by himself as relator, by bill or petition, either in the circuit or in the chancery court of the county in which any portion of such land lies, for the purpose of having forfeiture of such land or of such claim thereto judiciously declared. Such petitions shall state the name of the owner or claimant of the land or interest therein, if such name be known, against whom judg- ment or forfeiture is prayed, a description of the land or claim thereto, and the years for which the same has not been listed for taxation, or, if listed, the years for which the taxes have not been paid, and the , amount of taxes due to the state and county, if the same has been as- sessed; but no error in any such allegations shall affect the validity of the proceedings. If the name of the owner or claimant of any land or of any interest therein or of the claim thereto be known, such name shall be stated in the petition; but if said name or names be unknown, then it shall be so stated in the petition; and in such cases publication shall be made for the unknown owners or claimants of said land in the manner and form now provided by law for publications for nonresi- dents in suits to which they are necessary parties, and the case shall proceed as other causes in the court in which it is pending. If, upon the hearing of any such cause, it shall be ascertained that the land or the interest therein or claim thereto, on account of which 105 COMMITTEE ox TAXATION. such proceedings argse, have been properly listed for taxation and all taxes paid thereon as required by this act and other laws of this state, the proceedings shall be dismissed as to such land, interest therein, or claim thereto; but if otherwise, then the court shall order, adjudge, or decree the year or years and the amount of state taxes and the amount of county taxes for which such forfeiture is had, and that all right, title, interest, and claim of the parties to the said cause be, and the same shall thereby immediately be and become, divested out of said parties and vested in the State of Tennessee, with the right, however, in the previous owner or claimant, or any person deraigning title or claim through such owner or claimant, to repurchase the said land or claim so divested at any time within ninety days from any such final decree upon payment to the clerk of the court for the benefit of the parties entitled thereto of all state and county taxes for which such land, inter- est therein or claim thereto, has been forfeited, together with interest and penalties thereon, as they are in this act imposed upon delinquent taxes from the date when such taxes should have been paid, and to- gether with all court costs and an added penalty of fifteen per centum on the total collection, which added penalty shall be reported to the comptroller and remitted to the treasurer of the state for the credit of the special penalty account. (9) Any party aggrieved by the final decree of any circuit or chan- cery court in any proceeding herein authorized shall have the right of appeal as in other causes. (10) All judicial proceedings instituted under the authority of this act shall be at issue, and shall be tried at the first term of court next following the service of process, either actual or constructive, any rule of court or practice applicable to other cases to the contrary notwith- standing; and all cases instituted under this act shall have priority as state revenue cases over all other cases, and shall be tried as soon as they are at issue. (11) No cost bond, appeal bond, or other bond shall be required of the state or of the comptroller when acting on behalf of the state or on behalf of the state and any county thereof in any proceedings brought, prosecuted, or defended under any provision of this act. (12) Either the original or a certified copy of the record of any pro- ceedings under which any forfeiture or sale authorized by this act may be had shall be competent evidence in any other or subsequent suit or action involving the same land or interest therein, regardless of who may be the parties to such other or subsequent suit, and shall be con- clusive evidence of all facts that may be adjudicated therein. (13) Any delinquent may at any time prior to suit pay the taxes assessed, or which should have been assessed, against the land which he claims or his interest therein, together with the interest and penal- ties provided by law, and thus cancel and extinguish the cause of for- feiture. After the institution of suit as herein provided, any delin- quent may still cancel and extinguish the cause of forfeiture by paying such taxes, interest, costs, and penalties, plus the court costs and a rea- sonable attorney's fee, in which latter case the value of the land or in- terest therein or claim thereto shall be considered and assessed at the value stated in the bill or petition. (14) If there be any adverse claimant to all or any portion of the land or interest or claim thereto which has been forfeited to the state under the provisions of this section, and if such adverse claimant, or those through whom he deraigns title, has paid taxes for the five suc- cessive years last on the lands so adversely claimed by him, such ad- verse claimant shall have the right at any time after ninety days (un- less the previous owner of such forfeited land or claim has within said 106 COMMITTEE ox TAXATION. period of ninety days repurchased the same from the state), and within one year from the judgment or decree of forfeiture, to purchase all the right, title, interest, and claim so acquired by the state, in so far as it conflicts with the land upon which he has so paid the taxes, upon pay- ment to the clerk of the court in which such proceedings were had of the court costs and all expenses of the proceedings by which such for- feiture was procured, excluding the taxes, interest and penalties there- on, but including the added penalty of fifteen per centum, which shall be credited as provided in subdivision 8 hereof. (15) The Tennessee Tax Commission is authorized to prescribe and to furnish the forms of all reports to be made by the county tax as- sessors, county trustees, clerks of court, and other persons, in pursu- ance of this section; and the information to be called for by said com- mission shall in no wise be limited to the matters specified herein, but may be as broad, comprehensive, and in such detail as said commission may see fit. The commission is also hereby authorized to prescribe the forms of deed or other instrument to be executed by the clerk of court upon the repurchase of any lands, interest therein or claim thereto, by the party whose claim may have been forfeited. The commission shall also direct what investigation, if any, shall be made by such clerks before permitting any property or claim thereto so forfeited to be purchased by any adverse claimant, as provided in subdivision 14 of this section, and the form of any deed or other instru- ment which shall be executed by the clerk of court to evidence any such purchase. (16) In any action affecting the title to real estate it shall be com- petent for any party thereto to plead that any interest, title, or claim therein sought to be set up (whether by the plaintiff or by the defend- ant) has not been listed for taxation by the party proposing to set up such interest, title, or claim, or by his privies in interest, for any two years out of a period of seven years next preceding the institution of such action; and it shall also be competent to plead that such party, or his privies in interest, have failed to pay taxes on any such interest, title, or claim for any two years out of a period of seven years next preceding the institution of such action; and either of such pleas, if sustained, shall be a complete plea in bar and in defense to the asser- tion of such interest, title, or claim. SECTION 2. Be it further enacted, That all laws and parts of laws in conflict with this act be, and the same are hereby, repealed, and that this act shall take effect from and after its passage, the public welfare requiring it. 107 COMMITTEE ON TAXATION. TO PROVIDE FOR THE ASSESSMENT OF SLEEPING CAR PROPERTY. AN ACT to amend chapter 48 of the printed acts of the General Assem- bly of the State of Tennessee for the year 1901, being entitled "An, Act providing for the assessment of taxes on railway cars used with- in this State, but owned by persons, firms, corporations, or compa- nies having their residence outside of the State," so as to extend the provisions of said act to passenger cars. SECTION 1. Be it enacted by the General Assembly of the State of Tennessee, That section 1 of chapter 48 of the printed acts of the General Assembly of the State of Tennessee for the year 1901, being entitled "An Act providing for the assessment of taxes on railway cars used within this State, but owned by persons, firms, corporations, or companies having their residence outside of the State," be amended by striking out the words " to passenger cars, nor " so that said section 1 shall read: " SECTION 1. Be it enacted by the General Assembly of the State of Tennessee, That all railway cars used in this state, but belonging to a person, firm, corporation, or company having a residence or situs out- side of this state, are and shall be subject to taxation under the provi- sions of chapter 5 of the acts of 1897 and the further provisions of this act; provided, this act shall not apply to cars owned by persons, firms, companies, or corporations operating lines of railways." SECTION 2. Be it further enacted, That this act take effect from and after its passage, the public welfare requiring it. 108 THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW AN INITIAL FINE OF 25 CENTS WILL BE ASSESSED FOR FAILURE TO RETURN THIS BOOK ON THE DATE DUE. THE PENALTY WILL INCREASE TO 5O CENTS ON THE FOURTH DAY AND TO $1.OO ON THE . SEVENTH DAY OVERDUE. LD 21-100m-8,'34 YC 3562 581651 - >' UNIVERSITY OF CALIFORNIA LIBRARY