SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOC
66–729
2000
TRANSPORTATION EMPLOYEE FAIR TAXATION ACT OF 1999 AND CONSENT OF CONGRESS TO THE KANSAS AND MISSOURI METROPOLITAN CULTURE DISTRICT COMPACT
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
ON
H.R. 1293 and H.R. 4700
JULY 18, 2000
Page 2 PREV PAGE TOP OF DOC
Serial No. 103
Printed for the use of the Committee on the Judiciary
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR S. SMITH, Texas
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRIS CANNON, Utah
JAMES E. ROGAN, California
Page 3 PREV PAGE TOP OF DOC
LINDSEY O. GRAHAM, South Carolina
MARY BONO, California
SPENCER BACHUS, Alabama
JOE SCARBOROUGH, Florida
DAVID VITTER, Louisiana
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
TAMMY BALDWIN, Wisconsin
ANTHONY D. WEINER, New York
THOMAS E. MOONEY, SR., General Counsel-Chief of Staff
JULIAN EPSTEIN, Minority Chief Counsel and Staff Director
Page 4 PREV PAGE TOP OF DOC
Subcommittee on Commercial and Administrative Law
GEORGE W. GEKAS, Pennsylvania, Chairman
LINDSEY O. GRAHAM, South Carolina
STEVE CHABOT, Ohio
ASA HUTCHINSON, Arkansas
SPENCER BACHUS, Alabama
MARY BONO, California
JOE SCARBOROUGH, Florida
DAVID VITTER, Louisiana
JERROLD NADLER, New York
TAMMY BALDWIN, Wisconsin
MELVIN L. WATT, North Carolina
ANTHONY D. WEINER, New York
WILLIAM D. DELAHUNT, Massachusetts
RAYMOND V. SMIETANKA, Chief Counsel
SUSAN JENSEN-CONKLIN, Counsel
ROBERT N. TRACCI, Counsel
C O N T E N T S
HEARING DATE
Date 00, 2000
Page 5 PREV PAGE TOP OF DOC
TEXT OF BILLS
H.R. 1293
H.R. 4700
OPENING STATEMENT
Gekas, Hon. George W., a Representative in Congress From the State of Pennsylvania, and chairman, Subcommittee on Commercial and Administrative Law
WITNESSES
Baird, Hon. Brian, a Representative in Congress From the State of Washington
Eckardt, Captain Chris D., Shaver Transportation, Vancouver, WA
Langworthy, Audrey, Senator, Kansas State Senate
McCarthy, Hon. Karen, a Representative in Congress From the State of Missouri
Simonsen, Captain Mike, International Representative, International Organization of Masters, Mates and Pilots, ILA–AFL–CIO
Page 6 PREV PAGE TOP OF DOC
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Baird, Hon. Brian, a Representative in Congress From the State of Washington: Prepared statement
Harchenko, Elizabeth, Director, Oregon Department of Revenue, Salem, OR: Prepared statement
Langworthy, Audrey, Senator, Kansas State Senate: Prepared statement
McCarthy, Hon. Karen, a Representative in Congress From the State of Missouri: Prepared statement
Moore, Dennis, a Representative in Congress From the State of Kansas: Prepared statement
Simonsen, Captain Mike, International Representative, International Organization of Masters, Mates and Pilots, ILA–AFL–CIO: Prepared statement
Wiggins, Harry, State Senator, 10th District, Kansas City, MO: Prepared statement
TRANSPORTATION EMPLOYEE FAIR TAXATION ACT OF 1999 AND CONSENT OF CONGRESS TO THE KANSAS AND MISSOURI METROPOLITAN CULTURE DISTRICT COMPACT
Page 7 PREV PAGE TOP OF DOC
TUESDAY, JULY 18, 2000
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The subcommittee met, pursuant to call, at 10 a.m. In Room 2237 Rayburn House Office Building, Hon. George W. Gekas [chairman of the subcommittee] presiding.
Present: Representatives George W. Gekas, Steve Chabot, Spencer Bachus, Mary Bono, Joe Scarborough, Jerrold Nadler, Tammy Baldwin, and Melvin L. Watt.
Staff Present: Raymond Smietanka, chief counsel; Robert Tracci, counsel; Brie Harlow, staff assistant; Michone Johnson, minority counsel; and David Lachmann, minority professional staff member.
OPENING STATEMENT OF CHAIRMAN GEKAS
Mr. GEKAS. The committee will come to order.
The Rules of the House, as I am wont to say, provide that in the committee hearing process, a hearing shall not proceed without two members of the relevant committee accounted for as present and the record indicating that they are at their posts.
Page 8 PREV PAGE TOP OF DOC
The only thing that we have accomplished thus far is to continue the record that we have established from the very beginning that every hearing and every markup has begun on time. Now, we are constrained to recess until a second member should appear, but the record will still show that we opened the meeting on time.
You have your choice. I could recite the last act of Othello with Lodovico and Othello exchanging remarks at the end, or simply await the presence of a second member.
We will opt for the second. We are in recess.
[Recess.]
Mr. GEKAS. The time of the recess having expired, the record will indicate that the gentleman from New York, the ranking member of the minority, is present, as is the Chair, thus constituting the required quorum for proceeding with the hearing, which today has to do, as often before in our subcommittee, with interstate problems with respect to workers who live on one side of a State border, work in another State and run into a complexity of issues concerning who can tax whom at what rate and in which State and municipality, and which taxing authority has the supreme right to impose taxation, et cetera.
This one has to do with Washington and Oregon, and we have had this kind of situation appear before us on several occasions.
Just before we began the hearing, I reviewed my own little copy of the Constitution, and when we try to determine the questions of who shall tax whom, many times we have to refer to the Commerce Clause at least for the sense of knowing that it is a Federal problem and we have to deal with it.
Page 9 PREV PAGE TOP OF DOC
We have extended interstate connections in almost every phase of congressional action over the last century, and under current law, interstate water workers may be taxed in both their State of residence and where they derive 50 percent or more of their income. Because this impacts the waterway workers who live in Washington but work along the Columbia River in the Pacific Northwest. Hence, we have this hearing.
The bills that we have before us will succeed in solving this problem, and that is why we are proceeding with a hearing as to these particular issues.
We will have Members of Congress provide background for us as the hearing proceeds, and we will have other testimony presented for the record by individuals and members who could not appear here today. But beyond that, we extend the notion to everyone concerned that this hearing is practically a formality, that we are convinced that we are going to proceed with a markup on the bill, but we want to create a record upon which we can base that markup.
The gentleman from New York is recognized for an opening statement.
[The bill, H.R. 1293, follows:]
106TH CONGRESS
1ST SESSION
H. R. 1293
To amend title 46, United States Code, to provide equitable treatment with respect to State and local income taxes for certain individuals who perform duties on vessels.
Page 10 PREV PAGE TOP OF DOC
IN THE HOUSE OF REPRESENTATIVES
MARCH 25, 1999
Mr. BAIRD (for himself, Mr. BOSWELL, Mr. EVANS, Ms. LEE, Mr. LIPINSKI, Mr. MCDERMOTT, Mr. METCALF, Mr. NETHERCUTT, Mr. SHOWS, Mr. SIMPSON, Mr. STRICKLAND, Mr. TERRY, and Mr. WISE) introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committee on Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend title 46, United States Code, to provide equitable treatment with respect to State and local income taxes for certain individuals who perform duties on vessels.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ''Transportation Employee Fair Taxation Act of 1999''.
SEC. 2. EQUITABLE TREATMENT FOR INDIVIDUALS EMPLOYED ON VESSELS WITH RESPECT TO STATE AND LOCAL INCOME TAXES.
Section 11108 of title 46, United States Code, is amended—
(1) by inserting ''(a)'' before the first sentence; and
(2) by adding at the end the following:
''(b)(1) An individual described in paragraph (2) shall not be subject to the income tax laws of a State or political subdivision of a State with respect to employment or work referred to in paragraph (2), other than the State and political subdivision in which the individual resides.
Page 11 PREV PAGE TOP OF DOC
''(2) An individual referred to in paragraph (1) is—
''(A) any individual engaged on a vessel to perform assigned duties in more than one State as a pilot licensed under section 7101 of this title or licensed or authorized under the laws of a State; or
''(B) any individual who performs regularly assigned duties while engaged as a master, officer, or crewman on a vessel operating on the navigable waters of more than one State.''.
Mr. NADLER. Thank you, Mr. Chairman.
Today we consider two bills, the first introduced by our colleague from Washington, Mr. Baird, would afford Americans who work on our waterways the same protection from multiple discriminatory taxation that is already afforded to airline workers, truckers and railway workers.
I look forward to the testimony on this bill and I hope we will advance this legislation. It will right a wrong and provide relief to the people who work every day on our waterways. It is similar to bills that we have passed previously to provide relief to workers in Fort Campbell and on dams that straddle a border, and I hope all of my colleagues will give it favorable consideration.
The second, which we will both consider and mark up today, will extend an existing interstate compact between Kansas and Missouri and make some necessary modifications to it. The compact has greatly aided economic and cultural development in the Kansas City area, and I hope and trust it will receive favorable consideration by my colleagues.
Page 12 PREV PAGE TOP OF DOC
I thank you, Mr. Chairman, and I yield back.
Mr. GEKAS. I thank the gentleman, I think. I did not hear the last part of the remarks.
Mr. NADLER. I said, ''Thank you, Mr. Chairman, and I yield back.''
Mr. GEKAS. I thank you for thanking me and now I thank you.
The lady from Wisconsin is present and accounted for, and the record should so indicate. Does the lady have an opening statement?
Ms. BALDWIN. I do not.
Mr. GEKAS. Then we can proceed with the hearing.
The first witness is the Honorable Brian Baird, Representative from the Third Congressional District of Washington State. He graduated Phi Beta Kappa from the University of Utah in 1977, went on to the University of Wyoming where he obtained a Ph.D. in psychology. Congressman Baird moved to Washington State in 1980 to complete his graduate internship at the American Lake VA Medical Center.
Congressman Baird was elected to serve the Third District in 1998. He secured a seat on the House Transportation and Infrastructure Committee, where he serves on the Coast Guard and Maritime Subcommittee. He is also a member of the Small Business Committee where he serves on the Rural Enterprises, Business Opportunities and Special Small Business Problems Subcommittee.
Page 13 PREV PAGE TOP OF DOC
Congressman Baird is also a member of the Science Committee.
Congressman Baird will introduce the second member of our panel, Chris Eckardt.
Representative Baird.
STATEMENT OF HON. BRIAN BAIRD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mr. BAIRD. Thank you very much, Mr. Chairman, and Ranking Member Nadler. I very much appreciate your hosting this hearing on what is a very important matter to constituents in my district and possibly other districts in the country. I will be fairly brief because you have summarized the state of the situation well.
Our legislation, H.R. 1293, the Transportation Employee Fair Taxation Act, will correct an inequity in the law regarding the taxation of interstate transportation employees. Essentially, the bill will prohibit taxation of waterway employees, including pilots and other crew members, by States other than the one in which the employees reside. This type of protection, as you mentioned, is already afforded to railway, airline, and trucking industry employees who perform substantial amounts of work on Federal transportation routes within the boundaries of States other than those in which they live.
Interstate transportation workers including those employed by interstate railway carriers, motor carriers and air carriers were first protected from unfair taxation by multiple States in 1970. Under the 1970 law, employees could only been taxed by the State where they reside or any other State where the employee earns more than 50 percent of the compensation paid by the carrier.
Page 14 PREV PAGE TOP OF DOC
In 1990, Congress took additional steps to prohibit multiple States from taxing the income of rail and motor carrier workers. The 1990 law prevented any State other than the one where the employee resides from taxing any part of the income of the employees working for motor carriers or railways. This prohibition effectively eliminated the 50 percent rule for these classes of workers, thus allowing only the State of residence to tax the individual.
A similar limitation on a State's right to tax employees exists for interstate air carriers. Water workers, however, whose work takes them into numerous States should be treated no differently.
This is a simple matter of fairness before us today. We need to close the loophole and provide equal protection for all interstate transportation workers. My bill makes a simple amendment to section 11108 of title 46, dealing with merchant seamen protections. And I would comment that Senator Gordon in the other body has introduced similar, parallel legislation. Groups supporting the legislation include the American Waterway Operators, International Organization of Masters, Mates & Pilots, the Passenger Vessels Association, the Longshoremen, Marine Engineers Beneficial Association, and the United Transportation Union.
That is the summary of the law essentially. But if I may personalize it very briefly to share with you one personal story.
Mr. GEKAS. You may proceed.
Mr. BAIRD. In a moment I will introduce Captain Chris Eckardt, but I want to share a story that really struck me and part of why this is so important to us.
Page 15 PREV PAGE TOP OF DOC
Captain Bob Nelson is a long-time Columbia River pilot, and in 1998 he got bad news. Actually, he got a lot of bad news. Captain Nelson's wife was injured in a motor vehicle accident and a couple of months later he was diagnosed with terminal brain and lung cancer. He was given 3 months to live at the time, and in the same week he received a notice from the Oregon Department of Revenue in which he was told he would have to pay $78,000 in back taxes. Even though he had never worked in the State of Oregon, he was being billed this kind of money.
He was assessed those costs not because he lived in Oregon, but because he worked on the river. And the problems that we have alluded to—he is not alone. There are 150 workers who are impacted by this, and there is tremendous uncertainty and frustration for these folks who face back taxes.
With us today is Captain Chris Eckardt. Captain Eckardt is a constituent of mine from Vancouver. He is a native Washingtonian, a second-generation tug worker. His father is out on the Columbia and Snake Rivers today, pushing barges, as we hold this hearing right now.
Over the past 8 years, Mr. Eckardt has worked on barges and tugs that traverse the Columbia, Snake and Willamette Rivers. He has pulled about just every duty you can on the boats from cooking and cleaning to building tows. Over the course of the last few years he has worked his way up from deckhand to pilot, and I would like to introduce him now so that he can share his testimony and personal experience.
I thank the chairman and the ranking member once again.
Page 16 PREV PAGE TOP OF DOC
Mr. GEKAS. The Chair recognizes Captain Eckardt.
STATEMENT OF CAPTAIN CHRIS D. ECKARDT, SHAVER TRANSPORTATION, VANCOUVER, WA
Mr. ECKARDT. Good morning. My name is Christopher D. Eckardt. I am a captain and operate tugboats on the Columbia, Willamette and Snake Rivers. I would like to thank Congressman Brian Baird for helping me secure this opportunity to testify.
I would also like to thank Congressman Hyde and other members of the Subcommittee on Commercial and Administrative Law for granting me this opportunity. And I would also like to thank the Master Mates and Pilots Union for their support on this issue.
I started working as a deckhand on the tugboats in September 1992. My father worked on tugboats for 25 years at that time and is still employed as a captain. I obtained my captain's license in November 1996, and I am here today to request that you pass House Resolution 1293 extending the provisions of the Interstate Commerce Act to waterway workers. Currently, the Interstate Commerce Act covers motor carriers, railway workers, and their personnel engaged in interstate commerce; it protects them from double taxation.
I live in Washington State and work for Shaver Transportation, which is based on the Willamette River in Portland, Oregon. The majority of my work is done on the waterways of Washington State with a small portion being done in Idaho.
From the beginning of my employment, I have been led to believe that I was not subject to Oregon State income tax because of the Interstate Commerce Act. However, I was contacted in October 1998 by the Oregon Department of Revenue and was told I was subject to Oregon income tax. I received a notice from them that I owed over $27,500 in back taxes and penalties for calendar years 1993 through 1996.
Page 17 PREV PAGE TOP OF DOC
The Oregon Department of Revenue has no set rules for assessing tax on waterway workers who live in another State; therefore, the opinion of the caseworker assigned seems to be the current rule. The first person said all my income was subject to Oregon income tax and the next revenue agent I talked to said half of my income was subject to Oregon income tax and my bill was reduced to just over $13,000, meaning half of my work would be done in Oregon and Washington. The person now assigned to my case states nothing above the Interstate 5 bridge is subject to income tax.
And I have kept meticulous logs of all my work shifts, including where I worked, sick days, vacation days, and holidays. I calculated from these that at the most I worked 11 percent 1 year and as little as 4 percent another year in Oregon waters. These calculations were done honestly and to the best of my ability, but as the State line is in the middle of the river, it is difficult to know when you cross back and forth from one State to another. I have had to seek counsel from an attorney and hire an accountant as well to resolve this issue. The Oregon Department of Revenue has filed liens against me, even though I am working with them and have retained an accountant trying to resolve this issue.
This matter has created a great deal of distress and unrest for my wife and myself to the point we almost fear the daily mail, wondering what notice we will receive from the Oregon Department of Revenue. Many of my coworkers who live outside Oregon have received notices from the Oregon Department of Revenue claiming tax liability, but after contact with them, no further action has been taken, at least to date.
I believe the Interstate Commerce Act was passed to address this type of situation, and on behalf of my coworkers and other waterway workers and myself, I request that you include us in the Interstate Commerce Act and pass H.R. 1293.
Page 18 PREV PAGE TOP OF DOC
Thank you very much for this opportunity and for your concern on this issue.
Mr. GEKAS. We thank you very much.
The Chair has no questions to propound to this panel. The gentleman from New York is recognized for any questions he may have.
Mr. NADLER. I have no questions; I simply want to make a comment.
I want to commend Representative Baird in particular. This is an important issue that we have dealt with previously, and I applaud him for bringing this to our attention, especially in the manner in which he did it. We dealt a couple of years ago with the problem of people who worked on the hydroelectric dams across the Columbia River; and the legislation that was then drafted and passed—which we were requested to pass, we did not draft it—dealt with the hydroelectric dams on the Columbia River. Obviously, there are dams across other rivers and interstate boundaries.
The legislation that you have brought before us does not limit itself to the Columbia River, and it extends the same protection to all people who work on rivers as we have previously extended to similarly situated people who work on different kinds of interstate carriers; and I commend you for being a little broader in scope, so we do not have to do this for every different river where it comes up from time to time.
Page 19 PREV PAGE TOP OF DOC
So I just want to commend you for bringing this to our attention and for drafting this in a broader manner, and I hope we can pass this as soon as possible.
Mr. BAIRD. Thank you, Mr. Nadler.
Mr. Chairman, I have additional remarks and I ask that they may be introduced in the record as well.
Mr. GEKAS. Without objection, the testimony will be accepted for the record.
[The prepared statement of Mr. Baird follows:]
PREPARED STATEMENT OF HON. BRIAN BAIRD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mr. Chairman and members of the Subcommittee, I'm honored to be here today for this extremely important hearing. And I truly appreciate the opportunity to share my thoughts on legislation to provide tax fairness for thousands of hard-working Americans in my home state of Washington and throughout this nation who are employed by interstate water carriers.
While most interstate transportation workers are exempt from taxation by states other than that of their residence, those working on vessels operating on interstate waterways are subject to seemingly contradictory laws that are difficult to apply. Consequently, a number of employees of waterway carriers based in Oregon, but who are residents of Washington, have been sent notices seeking to collect thousands of dollars in presumably delinquent taxes for which they may not be responsible under federal law.
Page 20 PREV PAGE TOP OF DOC
And let me translate the phrase ''employees of interstate waterway carriers''—I am talking about river boat pilots; I'm talking about men and women who work on barges; and I'm talking about other hard-working boat crew members who do an honest day's work and want a fair shake when it comes to paying their taxes.
Mr. Chairman, I am deeply concerned that under current tax law, a significant number of interstate waterway employees who are employed on vessels that operate on the Columbia River, or the Snake River and many other inland waterways throughout this nation, may be unfairly taxed for their labor.
These boat pilots, officers, and other crew members legitimately work in more than one state while going about their regularly assigned duties and, in some cases, are subject to income tax filings and additional withholdings by multiple states.
The rivers that they navigate—whether it be for shipping, for transporting passengers, for tourism, or other purposes—often course through the sovereign territories of multiple states. And because of that fact, the men and women who ply their trade on these rivers are subject to taxation by several states. That is simply not fair.
When truck drivers, railway workers, and aviation employees go about their jobs—all of whom are required to conduct their work in states other than their home state—Congress has seen fit to grant them an exemption from this type of unfair taxation unless a majority of their work is performed in another state.
Page 21 PREV PAGE TOP OF DOC
Interstate transportation workers, including those employed by interstate railway carriers, motor carriers, water carriers and air carriers who were engaged in interstate commerce, were first protected from unfair taxation by multiple states in 1970.
Legislation passed by Congress (P.L. 91–569) limited the rights of states to require withholdings of income for state income tax purposes from interstate transportation employees. This legislation also prohibited states from requiring such workers to file tax returns. Under the law, the employee shall only be taxed by the state where the employee resides or any other state where the employee earned more than 50 percent of the compensation paid by the carrier. Since transportation workers often work in multiple states while conducting their regularly assigned duties such taxation was considered to be unfair and burdensome.
Unfortunately, this is not the case for interstate waterway employees; if you're a crew member on a tug boat, you can be required to pay taxes in several states. It is not the way we treat other transportation workers, and again I would say, that is simply not fair.
In 1990, Congress took additional steps to prohibit states from taxing the income of interstate rail and motor carrier workers, except the state where the employee resides. The Act (P.L. 101–322) further prevented any states, other than the one where the employee resides, from taxing any part of the income of such employees working for motor carriers or railway workers. This prohibition effectively eliminated the ''50 percent rule'' for these classes of workers, thus allowing only the state of residence to tax the individual. A similar limitation exists on states' rights to tax employees of interstate air carriers engaged in interstate transportation duties (P.L. 96–193, 94 Stat 50).
Page 22 PREV PAGE TOP OF DOC
An airline pilot, for example, is subject to taxation by the state in which that pilot resides. Period. This restriction, for all practical purposes, exempts airline employees from multiple taxation. However, interstate water carriers—bargemen, tug boat operators, river boat pilots, ferry boat operators—for some reason these people are treated differently.
The Interstate Commerce Commission Termination Act (P.L. 104–88) attempted to clarify the withholding rules applicable to interstate transportation employees. The Act reiterated that a water carrier must file income tax returns with the employee's state of residence as well as the state and locality where the individual earned more than 50 percent of the pay received by the employee. Yet, (46 USC §11108)—the Jones Act—explicitly prohibits any state from withholding wages paid to seamen on a vessel engaged in interstate trade.
The result is that waterway carrier employees engaged in interstate trade are put into a confusing position. On one hand, the Oregon Department of Revenue has interpreted this area of law to allow the taxation of this one class of transportation worker in cases where the individual earns at least 50 percent of their income in a non-residential state; at the same time, water carriers under the Jones Act are not required to withhold taxes for such employees.
Mr. Chairman, this is a mess. But it is a mess that we can do something about. Over the past 30 years, the House and the Senate have acted to address inequities in the tax code when it dealt with interstate transportation employees. I am asking my colleagues to again take action to correct this problem.
Mr. Chairman, the legislation that I have introduced, HR1293, the ''Transportation Employee Fair Taxation Act'', will correct this problem. This bill will expressly prohibit the taxation of income earned by waterway workers by states other than the one in which they reside. It will close the unfortunate loophole that says we treat all the other groups of interstate workers one way, and bargemen and river boat pilots another.
Page 23 PREV PAGE TOP OF DOC
It is not complex legislation—it's very straightforward. It's not lengthy legislation—it's a two page bill. But it is good legislation. It is needed legislation. And it is fair legislation.
Interstate waterway employees are devoted, hard-working folks who provide essential transportation services throughout our nation and pay their fair due in taxes in their home states. Additionally, the companies which employ these workers contribute significantly to the economic well-being of all the states concerned.
In a few minutes, you will hear testimony from one of my constituents and someone who has been directly affected by this mish-mash of confusing laws and regulations, Captain Chris Ekardt. Captain Ekardt will be able to give you a first-hand account of not only the financial burdens that the current confusing law places on some of our citizens, but he will also be able to tell you about the personal stress and strain that his family has undergone in the past few years.
But Mr. Chairman, there is another voice that I want to be sure is heard by this Subcommittee today, and that is the voice of another of my constituents who was suggested as a witness for today's hearing, but is simply too sick to make the long trip out to testify—Captain Robert Nelson. I want you to know his story and Captain Eckhart's story because they are indicative of the problem faced by thousands of folks just like them.
In late 1998, Captain Nelson's family got some bad news—actually, they got lots of bad news. First, Captain Nelson's wife was hit by another motorist as she was driving home. She was seriously injured and has required three surgeries over the past couple years. Then, a couple months later, Captain Nelson himself was diagnosed with terminal lung and brain cancer. Bob Nelson was given three months to live.
Page 24 PREV PAGE TOP OF DOC
That is a pretty heavy load for any family to bear, but in the midst of all these problems, the situation got even worse. One afternoon as he went to the mailbox, Captain Nelson discovered an envelope from the Oregon Depart of Revenue mixed in with his doctor bills, chemotherapy costs and his mortgage statement. It was a tax bill for $78,000, payable immediately to the State of Oregon for tax years 1991–1996.
Captain Nelson was assessed those costs not because he lived or worked in Oregon, but because he was a tug boat captain who pushed barges up and down the Columbia, Snake and Willamette Rivers for most of his life.
I would ask the members of this committee to put yourselves in that family's shoes for just a minute. To ask yourself how you would feel if, on top of worrying about your wife, your family and your own health, now you have to worry about paying taxes to a state in which you have never resided and to deal with the consequences to your credit rating and your good name if you don't comply.
Bob Nelson worked his whole life to provide for his family, and then when things were at absolute rock bottom, a confusing, unclear set of tax laws made things worse. Things like that just shouldn't happen in America. But Mr. Chairman, with your help, we can do something about that. We can make this law fair and we can make it apply equally to everyone.
I urge you to join me in this effort to ensure tax fairness for all of our citizens by taking swift action to pass this bill.
Page 25 PREV PAGE TOP OF DOC
I would be happy to answer questions from members of the subcommittee about any of this testimony. And, I want to again thank you, and members of the Subcommittee for graciously granting me this opportunity to offer my thoughts. I especially want to note the good staff work by Mr. Rob Tracci of Committee's majority staff and Mr. David Lachman of the Committee's minority staff. They have done a very good job of putting this hearing together in short order and I want to say thank you for their efforts as well.
I yield back the balance of my time.
Mr. GEKAS. Does the lady from Wisconsin have any questions?
Ms. BALDWIN. No questions.
Mr. GEKAS. We excuse this panel with our gratitude and we call to the witness table Captain Mike Simonsen.
Mr. BAIRD. Mr. Chairman, I finally would like to thank the committee staff for their excellent work. They have been of tremendous assistance on both sides, and I very much appreciate that.
Mr. GEKAS. Captain Simonsen, currently serves as the International Representative of the International Organizations of Masters, Mates & Pilots located in Linthicum Heights, Maryland. Prior to assuming this position, Captain Simonsen served as Branch Agent in Oregon and as Assistant Branch Agent in Washington State for the Pacific Maritime Region Membership Group of the MM&P.
Page 26 PREV PAGE TOP OF DOC
Captain Simonsen began his maritime career in the commercial fishing and diving industry. He then established the family name in the marine towing industry earning his captain's license and sailing for the State of Washington in the Puget Sound.
Mr. Simonsen, you may proceed under the understanding that the written testimony will be accepted as part of the record, and that we ask you to limit your oral remarks to about 5 minutes.
STATEMENT OF CAPTAIN MIKE SIMONSEN, INTERNATIONAL REPRESENTATIVE, INTERNATIONAL ORGANIZATION OF MASTERS, MATES AND PILOTS, ILA–AFL–CIO
Mr. SIMONSEN. Thank you and good morning, Mr. Chairman.
Mr. Chairman and members of the subcommittee, my name is Mike Simonsen. I am the International Representative for the International Organization of Masters, Mates & Pilots, I.L.A. AFL–CIO. The MM&P represents licensed and unlicensed personnel on United States flag commercial vessels engaged in United States foreign and domestic commerce.
The MM&P, through our Pacific Maritime Region Membership Group, represents merchant mariners employed in the harbor and ocean tugboat industry, and in the passenger ferry industry on the West Coast and in Alaska, who work aboard vessels operating in interstate and intrastate service on our Nation's rivers and waterways. On behalf of the International Organization of Masters, Mates & Pilots and, in particular, the Pacific Maritime Region Membership Group and its vice president, Captain Steve Demeroutis, it is a pleasure to appear before you this morning to express our strong support of H.R. 1293, the Transportation Employee Fair Taxation Act.
Page 27 PREV PAGE TOP OF DOC
The Marine Engineers Beneficial Association, AFL–CIO, whose membership is likewise affected by the current situation, shares the views expressed in this statement and strongly supports enactment of H.R. 1293.
As you know, this legislation was introduced by Congressman Brian Baird and has been cosponsored by a bipartisan group of 30 representatives. I am also pleased to note at the outset that the delegates to the Masters, Mates & Pilots' 78th convention, which concluded on July 12, unanimously adopted a resolution in support of H.R. 1293 and its companion bill, S. 893, because it ''will eliminate the discriminatory tax treatment of interstate water transportation workers.''
Presently, water transportation workers, such as river pilots and others employed on vessels engaged in interstate movements, are the only interstate transportation workers subject to taxation by States other than the States in which they reside. Federal laws which limit the authority of the States to collect taxes on nonresidents' income, provided the employee has regularly assigned duties in more than one State, cover rail, air, motor carrier employees. Enactment of H.R. 1293 will rectify this inequitable situation and ensure that interstate transportation workers in all modes, including those engaged in interstate water transportation, are treated similarly with respect to State taxation of their income.
Mr. Chairman, for MM&P members and for other water transportation workers, this problem has become particularly acute along the Columbia River. Our marine pilots and tow and tugboat workers employed on vessels in the Columbia River who reside in the State of Washington are being taxed by the State of Oregon. These individuals are working on boats that move cargo in and out of the States of Washington, Oregon and Idaho.
Page 28 PREV PAGE TOP OF DOC
Congress has already made sure that workers in the interstate rail, air and motor transportation industries who are carrying cargo between these same States do not have to worry about being taxed by a State other than their State of residence. Pursuant to Public Law 101–322, the Amtrak Reauthorization and Improvement Act of 1990, similarly situated workers in rail or motor transportation who reside in the State of Washington and carry cargo between Washington and Oregon cannot be taxed by the State of Oregon.
Air transportation employees are covered by a similar law codified as 48 USC sec. 40116(f). Congress enacted Public Law 101–322 and the air carrier provision due to its concern that transportation workers who regularly spend time in many States could be confronted with the duty of filing multiple State income tax returns. If States were to pursue their jurisdiction in such cases, it would certainly prove to be an extreme and undue burden for the employees.
Mr. Chairman, even when our members submit to Oregon and elect to file and pay taxes, they have to overcome substantial practical problems of calculation, allocation, and monitoring.
Mr. Chairman, you just heard from Captain Chris Eckardt about his experience in the State of Oregon. His story is not unique. For example, MM&P member Captain Robert Nelson has received a tax bill from the Oregon Department of Revenue totaling $78,000 for back taxes for the period of 1991 through 1996. He received this notice, the first notice he had ever received, in October 1998. A few weeks after he received this first notice, he received a second letter informing him that he owes taxes to the State of Oregon for 1997. Another MM&P member has been informed that he owed $10,000 to $15,000 in back taxes. These are just a few examples of what our river pilots and tug and towboat personnel are encountering.
Page 29 PREV PAGE TOP OF DOC
Also the Oregon Department of Revenue has asked interstate water transportation employers to supply records showing the amount of time their vessels spend in Oregon waters.
As I mentioned earlier, there are substantial practical problems affecting the determination of accurate taxes, including those relating to the actual amount of time an individual spends in Oregon waters. It is our understanding that absent specific records, Oregon assumes that a worker spends at least half his time in Oregon and the individual has the burden of disproving this.
Mr. Chairman, to put this in perspective, the following illustration clearly demonstrates the differences between an interstate water transportation worker and a worker in other interstate transportation modes. Assume you are the captain of a towboat and you are headed down river, exiting the State of Idaho. As you are headed downriver, you view over to your port side Interstate 84 with your trucks and whatnot traveling with commerce that you compete for generating revenue. As you look to your starboard side, you see the other State, Washington, with the rail.
All three entities can see and view one another as they are competing for commerce. All three of you perform your own regular work duties in more than one State. You all live in the State of Washington. All three of you, however—there is just one that is excluded and that is the towboat captain—have to worry about keeping accurate records of the time he spends on federally authorized channels of navigation in each State; and only one, the towboat operator, can be taxed by States or localities other than his State of residence.
Page 30 PREV PAGE TOP OF DOC
Mr. Chairman, we believe there is no rational basis for this inequitable tax policy and discriminatory tax treatment of interstate water transportation workers. We believe very strongly that all American workers in interstate transportation should be treated the same, and that the water transportation workers shouldn't be singled out and faced with a tax burden that no other interstate transportation worker has to pay.
We again wish to express our strong support for H.R. 1293 and our deep appreciation for the leadership that Congressman Brian Baird and the cosponsors of this legislation have taken in this area. We ask that H.R. 1293 be approved by your subcommittee and that it be enacted into law as soon as possible.
Thank you very much for this opportunity.
[The prepared statement of Mr. Simonsen follows:]
PREPARED STATEMENT OF CAPTAIN MIKE SIMONSEN, INTERNATIONAL REPRESENTATIVE, INTERNATIONAL ORGANIZATION OF MASTERS, MATES AND PILOTS, ILA–AFL–CIO
Mr. Chairman and Members of the Subcommittee:
My name is Mike Simonsen. I am International Representative of the International Organization of Masters, Mates & Pilots, ILA, AFL–CIO. The MM&P represents licensed and unlicensed personnel on United States-flag commercial vessels engaged in the United States foreign and domestic commerce. The MM&P, through our Pacific Maritime Region Membership Group, represents merchant mariners employed in the harbor and ocean tugboat industry and in the passenger ferry industry on the West Coast and in Alaska who work aboard vessels operating in intrastate and interstate service on our nation's rivers and waterways.
Page 31 PREV PAGE TOP OF DOC
On behalf of the International Organization of Masters, Mates & Pilots and in particular, the Pacific Maritime Region Membership Group and its Vice President, Captain Steve Demeroutis, it is a pleasure to appear before you this morning to express our strong support for H.R. 1293 ''The Transportation Employees Fair Taxation Act''. The Marine Engineers Beneficial Association, AFL–CIO, whose membership is likewise affected by the current situation, shares the views expressed in this statement and strongly supports enactment of H.R. 1293. As you know, this legislation was introduced by Congressman Brian Baird and has been cosponsored by a bipartisan group of thirty Representatives. I am also pleased to note at the outset that the Delegates to the Masters, Mates & Pilots' 78th Convention, which concluded on July 12, unanimously adopted a Resolution in support of H.R. 1293 (and its companion bill, S. 893) because it ''will eliminate the discriminatory tax treatment of interstate water transportation workers.''
Presently, water transportation workers, such as river pilots and others employed on vessels engaged in interstate movements are the only interstate transportation workers subject to taxation by states other than the states in which they reside. Federal laws which limit the authority of states to collect taxes on a nonresident's income provided the employee has regularly assigned duties in more than one state cover rail, air and motor carrier employees. Enactment of H.R. 1293 will rectify this inequitable situation and ensure that interstate transportation workers in all modes—including those engaged in interstate water transportation—are treated similarly with respect to state taxation of the their income.
Mr. Chairman, for MM&P members and for other water transportation workers, this problem has become particularly acute along the Columbia River. Our marine pilots and tow/tugboat workers employed on vessels on the Columbia River who reside in the State of Washington are being taxed by the State of Oregon. These individuals are working on boats that move cargo in and out of the States of Washington, Oregon and Idaho.
Page 32 PREV PAGE TOP OF DOC
Congress has already made sure that workers in the interstate rail, air and motor transportation industries who are carrying cargo between these same states do not have to worry about being taxed by a state other than their state of residence. Pursuant to P.L. 101–322, the Amtrak Reauthorization and Improvement Act of 1990, similarly situated workers in rail or motor transportation who reside in the State of Washington and carry cargo between Washington and Oregon cannot be taxed by the State of Oregon. Air transportation employees are covered by similar law codified at 49 U.S.C sec. 40116(f). Congress enacted P.L. 101–322 and the air carrier provision due to its concern that transportation workers who regularly spend time in many states could be confronted with the duty of filing multiple state income tax returns. If states were to pursue their jurisdiction in such cases, it would certainly prove to be an extreme and undue burden for the employees. Mr. Chairman, even when our members submit to Oregon and elect to file and pay taxes, they have to overcome substantial practical problems of calculation, allocation and monitoring.
In a few moments, Mr. Chairman, you will hear from one of the members, Captain Chris Eckardt, about his experience with the State of Oregon. His story is not unique. For example, MM&P member Captain Robert Nelson has received a tax bill from the Oregon Department of Revenue totaling $78,000 for back taxes for the period 1991–1996. He received this notice—the first notice he had ever received—in October 1998. A few weeks after he received the first notice, he received a second letter informing him that he owed taxes to the State of Oregon for 1997—this amount as well as any interest and penalties is not included in the $78,000. Another MM&P member has been informed that he owes $10,000 to $15,000 in back taxes. These are just a few examples of what our river pilots and tug and towboat personnel are encountering.
Page 33 PREV PAGE TOP OF DOC
Also, the Oregon Department of Revenue has asked interstate water transportation employers to supply records showing the amount of time their vessels spend in Oregon waters. As I mentioned earlier, there are substantial practical problems affecting the determination of accurate taxes, including those relating to the actual amount of time an individual spends in Oregon waters. It is our understanding that absent specific records, Oregon assumes that a worker spends at least half his time in Oregon and the individual has the burden of disproving this.
Mr. Chairman, to put this in perspective, the following illustration clearly demonstrates the differences between an interstate water transportation worker and a worker in other interstate transportation modes. Assume you are the captain of a towboat who lives in the State of Washington. You are navigating down the Columbia River between Washington and Oregon. From your wheelhouse you look port side and see your neighbor driving his tractor-trailer loaded with consumer goods down I–84. You look to your starboard and there is your other neighbor engineering a freight train loaded with a variety of agricultural products. All three of you perform your regular work duties in more than one state. All three of you live in the same town in Washington State. However, only one—the towboat captain—has to worry about keeping accurate records of the time he spends on the federally authorized channels of navigation in each state and only one—the towboat operator—can be taxed by states or localities other than by his state of residence.
Mr. Chairman, we believe there is no rational basis for this inequitable tax policy and discriminatory tax treatment of interstate water transportation workers. We believe very strongly that all American workers in interstate transportation should be treated the same, and that water transportation workers should not be singled out and faced with a tax burden that no other interstate transportation worker has to pay. We again wish to express our strong support for H.R. 1293 and our deep appreciation for the leadership Congressman Brian Baird and the cosponsors of his legislation have taken in this area. We ask that H.R. 1293 be approved by your Subcommittee and that it be enacted into law as soon as possible.
Page 34 PREV PAGE TOP OF DOC
Thank you.
Mr. GEKAS. We thank the gentleman for his testimony.
And as I said at the outset, it is a foregone conclusion that we will entertain a markup, that is, a completion of this bill in the very near future. Does anyone have any further questions?
The gentleman from New York.
Mr. NADLER. I just have one question, and then I want to make a comment as we conclude this bill's phase of the hearing.
The one question: As you pointed out in your testimony, we have already enacted similar legislation to cover rail, air, motor carrier employees. Now we are presumably going to cover the waterway employees. Are you aware of any other category of transportation workers that we haven't covered that we ought to think about?
Mr. SIMONSEN. No, those four entities are about it, sir.
Mr. NADLER. Thank you.
I would simply note for the record that the only communication in opposition to this bill that we have received is from the Oregon Department of Revenue which states that it disagrees with the intent of the bill, but it would rather enact the bill or enact similar legislation and intends to do so on the State level.
Page 35 PREV PAGE TOP OF DOC
[The information referred to follows:]
PREPARED STATEMENT OF ELIZABETH HARCHENKO, DIRECTOR, OREGON DEPARTMENT OF REVENUE, SALEM, OR
Chairman Gekas and Members of the Committee:
My name is Elizabeth Harchenko. I am the Director of the Oregon Department of Revenue. I am testifying regarding proposed federal legislation, H.R. 1293, which would prohibit the states from imposing an income tax on certain nonresidents working on interstate waterways.
We have considered this issue and concur with the intent of the legislation. Currently, federal law prohibits state taxation of certain nonresidents who are involved in interstate motor, rail or air transportation. Because of the similar nature of their duties, we believe it is appropriate to treat nonresident waterway workers in the same manner as other interstate transportation workers.
However, while we support the intent of this particular legislation, we are generally opposed to external mandates, believing that they impinge on Oregon's sovereign right to define its own tax system. We have developed a proposal to accomplish the goals of H.R. 1293 as it relates to nonresidents working in Oregon. We have already received approval from Governor Kitzhaber to draft the legislation to implement this concept and fully intend to submit the bill to the Oregon legislature at its next session.
Page 36 PREV PAGE TOP OF DOC
We take seriously our responsibility to establish and maintain a tax system that is fair to all citizens regardless of their state of residency. As an example, Oregon dealt with a similar concern several years ago when federal legislation was introduced to prohibit Oregon from taxing federal employees working on hydroelectric facilities spanning the Columbia River. We recognized the validity of the concerns that prompted the federal legislation and, in response, passed legislation at the state level that exempted those individuals from state income tax. Oregon recognized that, although it had the legal right to impose a tax on those individuals working in Oregon, there were valid policy reasons to provide exemptions in those cases. Further, we now realize that there are other individuals working on those facilities who, while not federal employees, also may receive limited benefit from services provided by the state of Oregon and have received approval to draft legislation that extends the exemption from tax to those individuals as well. We believe this attests to our resolve to establish and administer a fair tax system.
Historically, Congress has respected the right of the states to structure their tax system in ways that best suit the needs and desires of their citizens. We believe that the state of Oregon has demonstrated its willingness to consider issues of fairness and equity for all citizens impacted by our taxing system and to deal with them in a fair manner. Given our history and the willingness that we have shown to address these issues on our own, I encourage the subcommittee to take no action on this measure.
Thank you for the opportunity to express my concerns about this proposed legislation.
Mr. NADLER. I would point out in response that this is national in scope and does not deal only with the Columbia River. If it did, they might have an argument, but it does not, so they do not.
Page 37 PREV PAGE TOP OF DOC
Mr. SIMONSEN. Thank you again.
Mr. NADLER. Thank you.
Mr. GEKAS. Noting no further requests for recognition, we conclude this hearing with the gratitude of the members of the committee, and we excuse the witnesses if they wish to leave the premises.
Mr. GEKAS. We will now proceed with the second item on our agenda for today, a hearing on the question of H.R. 4700, a bill to grant consent to the Kansas and Missouri Metropolitan Culture Compact District, a bill which has been before this committee in previous times and which now comes before us again as a compact requiring the consent of Congress.
And we will note that the subtle differences that exist between what is before us today and what happened before this subcommittee will be explained by the witnesses that we have assembled for this purpose.
[The bill, H.R. 4700, follows:]
106TH CONGRESS
2D SESSION
H. R. 4700
To grant the consent of the Congress to the Kansas and Missouri Metropolitan Culture District Compact.
Page 38 PREV PAGE TOP OF DOC
IN THE HOUSE OF REPRESENTATIVES
JUNE 20, 2000
Ms. MCCARTHY of Missouri (for herself and Mr. MOORE) introduced the following bill; which was referred to the Committee on the Judiciary
A BILL
To grant the consent of the Congress to the Kansas and Missouri Metropolitan Culture District Compact.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. CONSENT TO COMPACT.
The Congress consents to the Kansas and Missouri Metropolitan Culture District Compact entered into between the State of Kansas and the State of Missouri. The compact reads substantially as follows:
''KANSAS AND MISSOURI METROPOLITAN CULTURE DISTRICT COMPACT
''ARTICLE I. AGREEMENT AND PLEDGE
''The states of Kansas and Missouri agree to and pledge, each to the other, faithful cooperation in the future planning and development of the metropolitan culture district, holding in high trust for the benefit of this people and of the nation, the special blessings and natural advantages thereof.
''ARTICLE II. POLICY AND PURPOSE
Page 39 PREV PAGE TOP OF DOC
''The party states, desiring by common action to fully utilize and improve their cultural facilities, coordinate the services of their cultural organizations, enhance the cultural activities of their citizens, and achieve solid financial support for such cultural facilities, organizations and activities, declare that it is the policy of each state to realize such desires on a basis of cooperation with one another, thereby serving the best interests of their citizenry and effecting economies in capital expenditures and operational costs. The purpose of this compact is to provide for the creation of a metropolitan culture district as the means to implementation of the policy herein declared with the most beneficial and economical use of human and material resources.
''ARTICLE III. DEFINITIONS
''As used in this compact, unless the context clearly requires otherwise:
''(a) 'Metropolitan culture district' means a political subdivision of the states of Kansas and Missouri which is created under and pursuant to the provisions of this compact and which is composed of the counties in the states of Kansas and Missouri which act to create or to become a part of the district in accordance with the provisions of Article IV.
''(b) 'Commission' means the governing body of the metropolitan culture district.
''(c) 'Cultural activities' means sports or activities which contribute to or enhance the aesthetic, artistic, historical, intellectual or social development or appreciation of members of the general public.
''(d) 'Cultural organizations' means nonprofit and tax exempt social, civic or community organizations and associations which are dedicated to the development, provision, operation, supervision, promotion or support of cultural activities in which members of the general public may engage or participate.
Page 40 PREV PAGE TOP OF DOC
''(e) 'Cultural facilities' means facilities operated or used for sports or participation or engagement in cultural activities by members of the general public.
''ARTICLE IV. THE DISTRICT
''(a) The counties in Kansas and Missouri eligible to create and initially compose the metropolitan culture district shall be those counties which meet one or more of the following criteria:
''(1) The county has a population in excess of 300,000, and is adjacent to the state line;
''(2) The county contains a part of a city with a population according to the most recent federal census of at least 400,000; or
''(3) The county is contiguous to any county described in provisions (1) or (2) of this subpart (a). The counties of Johnson in Kansas and Jackson in Missouri shall be sine qua non to the creation and initial composition of the district. Additional counties in Kansas and Missouri shall be eligible to become a part of the metropolitan culture district if such counties are contiguous to any one or more of the counties which compose the district and within 60 miles of the counties that are required by this article to establish the district;
''(b)(1) Whenever the governing body of any county which is eligible to create or become a part of the metropolitan culture district shall determine that creation of or participation in the district is in the best interests of the citizens of the county and that the levy of a tax to provide on a cooperative basis with another county or other counties for financial support of the district would be economically practical and cost beneficial to the citizens of the county, the governing body may adopt by majority vote a resolution authorizing the same.
''(2) Wherever a petition, signed by not less than the number of qualified electors of an eligible county equal to 5% of the number of ballots cast and counted at the last preceding gubernatorial election held in the county and requesting adoption of a resolution authorizing creation of or participation in the metropolitan culture district and the levy of a tax for the purpose of contributing to the financial support of the district, is filed with the governing body of the county, the governing body shall adopt such a resolution.
Page 41 PREV PAGE TOP OF DOC
''(3) Implementation of a resolution adopted under this subpart (b) shall be conditioned upon approval of the resolution by a majority of the qualified electors of the county voting at an election conducted for such purpose.
''(c)(1) Upon adoption of a resolution pursuant to subpart (b)(1) or subpart (b)(2), the governing body of the county shall request, within 36 months after adoption of the resolution, the county election officer to submit to the qualified electors of the county the question of whether the governing body shall be authorized to implement the resolution. The resolution shall be printed on the ballot and in the notice of election. The question shall be submitted to the electors of the county at the primary or general election next following the date of the request filed with the county election officer. If a majority of the qualified electors are opposed to implementation of the resolution authorizing creation of, or participation in, the district and the levy of a tax for financial support thereof, the same shall not be implemented. The governing body of the county may review procedures for authorization to create or become a part of the district and to levy a tax for financial support thereof at any time following rejection of the question.
''(2) The ballot for the proposition in any county shall be in substantially the following form:
''Shall a retail sales tax of XXXXXX (insert amount, not to exceed 1/4 cent) be levied and collected in Kansas and Missouri metropolitan culture district consisting of the county(ies) of XXXXXX (insert name of counties) for the support of cultural facilities and organizations within the district?
YES NO
The governing body of the county may place additional language on the ballot to describe the use or allocation of the funds.
Page 42 PREV PAGE TOP OF DOC
''(d)(1) The metropolitan culture district shall be created when implementation of a resolution authorizing the creation of the district and the levy of a tax for contribution to the financial support thereof is approved by respective majorities of the qualified electors of at least Johnson County, Kansas, and Jackson County, Missouri.
''(2) When implementation of a resolution authorizing participation in the metropolitan culture district and the levy of a tax for contribution to the financial support thereof is approved by a majority of the qualified electors of any county eligible to become a part of the district, the governing body of the county shall proceed with the performance of all things necessary and incidental to participation in the district.
''(3) Any question for the levy of a tax submitted after July 1, 2000, may be submitted to the electors of the county at the primary or general election next following the date of the request filed with the county election officer; at a special election called and held as otherwise provided by law; at an election called and held on the first Tuesday after the first Monday in February, except in Presidential election years; at an election called and held on the first Tuesday after the first Monday in March, June, August, or November; or at an election called and held on the first Tuesday in April, except that no question for a tax levy may be submitted to the electors prior to January 1, 2002.
''(4) No question shall be submitted to the electors authorizing the levy of a tax the proceeds of which will be exclusively dedicated to sports or sports facilities.
''(e) Any of the counties composing the metropolitan culture district may withdraw from the district by adoption of a resolution and approval of the resolution by a majority of the qualified electors of the county, all in the same manner provided in this Article IV for creating or becoming a part of the metropolitan culture district. The governing body of a withdrawing county shall provide for the sending of formal written notice of withdrawal from the district to the governing body of the other county or each of the other counties comprising the district. Actual withdrawal shall not take effect until 90 days after notice has been sent. A withdrawing county shall not be relieved from any obligation which such county may have assumed or incurred by reason of being a part of the district, including, but not limited to, the retirement of any outstanding bonded indebtedness of the district.
Page 43 PREV PAGE TOP OF DOC
''ARTICLE V. THE COMMISSION
''(a) The metropolitan culture district shall be governed by the metropolitan culture commission which shall be a body corporate and politic and which shall be composed of resident electors of the states of Kansas and Missouri, respectively, as follows:
''(1) A member of the governing body of each county which is a part of the district, who shall be appointed by majority vote of such governing body;
''(2) A member of the governing body of each city, with a population according to the most recent federal census of at least 50,000, located in whole or in part within each county which is a part of the district, who shall be appointed by majority vote of such governing body;
''(3) Two members of the governing body of a county with a consolidated or unified county government and city of the first class which is a part of the district, who shall be appointed by majority vote of such governing body;
''(4) A member of the arts commission of Kansas or the Kansas commission for the humanities, who shall be appointed by the governor of Kansas; and
''(5) A member of the arts commission of Missouri or the Missouri humanities council, who shall be appointed by the governor of Missouri.
To the extent possible, the gubernatorial appointees to the commission shall be residents of the district. The term of each commissioner initially appointed by a county governing body shall expire concurrently with such commissioner's tenure as a county officer or three years after the date of appointment as a commissioner, whichever occurs sooner. The term of each commissioner succeeding a commissioner initially appointed by a county governing body shall expire concurrently with such successor commissioner's tenure as a county officer or four years after the date of appointment as a commissioner, whichever occurs sooner. The term of each commissioner initially appointed by a city governing body shall expire concurrently with such commissioner's tenure as a city officer or two years after the date of appointment as a commissioner, whichever occurs sooner. The term of each commissioner succeeding a commissioner initially appointed by a city governing body shall expire concurrently with such successor commissioner's tenure as a city officer or four years after the date of appointment as a commissioner, whichever occurs sooner. The term of each commissioner appointed by the governor of Kansas or the governor of Missouri shall expire concurrently with the term of the appointing governor, the commissioner's tenure as a state officer, or four years after the date of appointment as a commissioner of the district, whichever occurs sooner. Any vacancy occurring in a commissioner position for reasons other than expiration of terms of office shall be filled for the unexpired term by appointment in the same manner that the original appointment was made. Any commissioner may be removed for cause by the appointing authority of the commissioner.
Page 44 PREV PAGE TOP OF DOC
''(b) The commission shall select annually, from its membership, a chairperson, a vice chairperson, and a treasurer. The treasurer shall be bonded in such amounts as the commission may require.
''(c) The commission may appoint such officers, agents and employees as it may require for the performance of its duties, and shall determine the qualifications and duties and fix the compensation of such officers, agents and employees.
''(d) The commission shall fix the time and place at which its meetings shall be held. Meetings shall be held within the district and shall be open to the public. Public notice shall be given of all meetings.
''(e) A majority of the commissioners from each state shall constitute, in the aggregate, a quorum for the transaction of business. No action of the commission shall be binding unless taken at a meeting at which at least a quorum is present, and unless a majority of the commissioners from each state, present at such meeting, shall vote in favor thereof. No action of the commission taken at a meeting thereof shall be binding unless the subject of such action is included in a written agenda for such meeting, the agenda and notice of meeting having been mailed to each commissioner by postage paid first-class mail at least 14 calendar days prior to the meeting.
''(f) The commissioners from each state shall be subject to the provisions of the laws of the states of Kansas and Missouri, respectively, which relate to conflicts of interest of public officers and employees. If any commissioner has a direct or indirect financial interest in any cultural facility, organization or activity supported by the district or commission or in any other business transaction of the district or commission, the commissioner shall disclose such interest in writing to the other commissioners and shall abstain from voting on any matter relating to such facility, organization or activity or to such business transaction.
Page 45 PREV PAGE TOP OF DOC
''(g) If any action at law or equity, or other legal proceeding, shall be brought against any commissioner for any act or omission arising out of the performance of duties as a commissioner, the commissioner shall be indemnified in whole and held harmless by the commission for any judgment or decree entered against the commissioner and, further, shall be defended at the cost and expense of the commission in any such proceeding.
''ARTICLE VI. POWERS AND DUTIES OF THE COMMISSION
''(a) The commission shall adopt a seal and suitable bylaws governing its management and procedure.
''(b) The commission has the power to contract and to be contracted with, and to sue and to be sued.
''(c) The commission may receive for any of its purposes and functions any contributions or moneys appropriated by counties or cities and may solicit and receive any and all donations, and grants of money, equipment, supplies, materials and services from any state or the United States or any agency thereof, or from any institution, foundation, organization, person, firm or corporation, and may utilize and dispose of the same.
''(d) Upon receipt of recommendations from the advisory committee provided in subsection (g), the commission may provide donations, contributions and grants or other support, financial or otherwise, or in aid of cultural organizations, facilities or activities in counties which are part of the district. In determining whether to provide any such support the commission shall consider the following factors:
''(1) economic impact upon the district;
''(2) cultural benefit to citizens of the district and to the general public;
Page 46 PREV PAGE TOP OF DOC
''(3) contribution to the quality of life and popular image of the district;
''(4) contribution to the geographical balance of cultural facilities and activities within and outside the district;
''(5) the breadth of popular appeal within and outside the district;
''(6) the needs of the community as identified in an objective cultural needs assessment study of the metropolitan area; and
''(7) any other factor deemed appropriate by the commission.
''(e) The commission may own and acquire by gift, purchase, lease or devise cultural facilities within the territory of the district. The commission may plan, construct, operate and maintain and contract for the operation and maintenance of cultural facilities within the territory of the district. The commission may sell, lease, or otherwise dispose of cultural facilities within the territory of the district.
''(f) At any time following five years from and after the creation of the metropolitan cultural district as provided in paragraph (1) of subsection (d) of article IV, the commission may borrow moneys for the planning, construction, equipping, operation, maintenance, repair, extension, expansion, or improvement of any cultural facility and, in that regard, the commission at such time may:
''(1) issue notes, bonds or other instruments in writing of the commission in evidence of the sum or sums to be borrowed. No notes, bonds or other instruments in writing shall be issued pursuant to this subsection until the issuance of such notes, bonds or instruments has been submitted to and approved by a majority of the qualified electors of the district voting at an election called and held thereon. Such election shall be called and held in the manner provided by law;
''(2) issue refunding notes, bonds or other instruments in writing for the purpose of refunding, extending or unifying the whole or any part of its outstanding indebtedness from time to time whether evidenced by notes, bonds or other instruments in writing. Such refunding notes, bonds or other instruments in writing shall not exceed in amount the principal of the outstanding indebtedness to be refunded and the accrued interest thereon to the date of such refunding;
Page 47 PREV PAGE TOP OF DOC
''(3) provide that all notes, bonds and other instruments in writing issued hereunder shall or may be payable, both as to principal and interest, from sales tax revenues authorized under this compact and disbursed to the district by counties comprising the district, admissions and other revenues collected from the use of any cultural facility or facilities constructed hereunder, or from any other resources of the commission, and further may be secured by a mortgage or deed of trust upon any property interest of the commission; and
''(4) prescribe the details of all notes, bonds or other instruments in writing, and of the issuance and sale thereof. The commission shall have the power to enter into covenants with the holders of such notes, bonds or other instruments in writing, not inconsistent with the powers granted herein, without further legislative authority.
''(g) The commission shall appoint an advisory committee composed of members of the general public consisting of an equal number of persons from both the states of Kansas and Missouri who have demonstrated interest, expertise, knowledge or experience in cultural organizations or activities. The advisory committee shall make recommendations annually to the commission regarding donations, contributions and grants or other support, financial or otherwise, for or in aid of cultural organizations, facilities and activities in counties which are part of the district.
''(h) The commission may provide for actual and necessary expenses of commissioners and advisory committee members incurred in the performance of their official duties.
''(i) The commission shall cause to be prepared annually a report on the operations and transactions conducted by the commission during the preceding year. The report shall be submitted to the legislatures and governors of the compacting states, to the governing bodies of the counties comprising the district, and to the governing body of each city that appoints a commissioner. The commission shall publish the annual report in the official county newspaper of each of the counties comprising the district.
Page 48 PREV PAGE TOP OF DOC
''(j) The commission has the power to apply to the congress of the United States for its consent and approval of the compact. In the absence of the consent of congress and until consent is secured, the compact is binding upon the states of Kansas and Missouri in all respects permitted by law for the two states, without the consent of congress, for the purposes enumerated and in the manner provided in the compact.
''(k) The commission has the power to perform all other necessary and incidental functions and duties and to exercise all other necessary and appropriate powers not inconsistent with the constitution or laws of the United States or of either of the states of Kansas or Missouri to effectuate the same.
''ARTICLE VII. FINANCE
''(a) The moneys necessary to finance the operation of the metropolitan culture district and the execution of the powers, duties and responsibilities of the commission shall be appropriated to the commission by the counties comprising the district. The moneys to be appropriated to the commission shall be raised by the governing bodies of the respective counties by the levy of taxes as authorized by the legislatures of the respective party states.
''(b) The commission shall not incur any indebtedness or obligation of any kind; nor shall the commission pledge the credit of either or any of the counties comprising the district or either of the states party to this compact, except as authorized in article VI. The budget of the district shall be prepared, adopted and published as provided by law for other political subdivisions of the party states. No budget shall be adopted by the commission until it has been submitted to and reviewed by the governing bodies of the counties comprising the district and the governing body of each city represented on the commission.
''(c) The commission shall keep accurate accounts of all receipts and disbursements. The receipts and disbursements of the commission shall be audited yearly by a certified or licensed public accountant and the report of the audit shall be included in and become a part of the annual report of the commission.
Page 49 PREV PAGE TOP OF DOC
''(d) The accounts of the commission shall be open at any reasonable time for inspection by duly authorized representatives of the compacting states, the counties comprising the district, the cities that appoint a commissioner, and other persons authorized by the commission.
''ARTICLE VIII. ENTRY INTO FORCE
''(a) This compact shall enter into force and become effective and binding upon the states of Kansas and Missouri when it has been entered into law by the legislatures of the respective states.
''(b) Amendments to the compact shall become effective upon enactment by the legislatures of the respective states.
''ARTICLE IX. TERMINATION
''This compact shall continue in force and remain binding upon a party state until its legislature shall have enacted a statute repealing the same and providing for the sending of formal written notice of enactment of such statute to the legislature of the other party state. Upon enactment of such a statute by the legislature of either party state, the sending of notice thereof to the other party state, and payment of any obligations which the metropolitan culture district commission may have incurred prior to the effective date of such statute, including, but not limited to, the retirement of any outstanding bonded indebtedness of the district, the agreement of the party states embodied in the compact shall be deemed fully executed, the compact shall be null and void and of no further force or effect, the metropolitan culture district shall be dissolved, and the metropolitan culture district commission shall be abolished.
''ARTICLE X. CONSTRUCTION AND SEVERABILITY
Page 50 PREV PAGE TOP OF DOC
''The provisions of this compact shall be liberally construed and shall be severable. If any phrase, clause, sentence or provision of this compact is declared to be contrary to the constitution of either of the party states or of the United States or the applicability thereof to any government, agency, person or circumstance is held invalid, the validity of the remainder of this compact and the applicability thereof to any government, agency, person or circumstance shall not be affected thereby. If this compact shall be held contrary to the constitution of either of the states party thereto, the compact shall thereby be nullified and voided and of no further force or effect.
''(a) The board of county commissioners of any county which has been authorized by a majority of the electors of the county to create or to become a part of the metropolitan culture district and to levy and collect a tax for the purpose of contributing to the financial support of the district shall adopt a resolution imposing a countywide retailers' sales tax and pledging the revenues received therefrom for such purpose. The rate of such tax shall be fixed in an amount of not more than .25%. Any county levying a retailers' sales tax under authority of this section is hereby prohibited from administering or collecting such tax locally, but shall utilize the services of the state department of revenue to administer, enforce and collect such tax. The sales tax shall be administered, enforced and collected in the same manner and by the same procedure as other countywide retailers' sales taxes are levied and collected and shall be in addition to any other sales tax authorized by law. Upon receipt of a certified copy of a resolution authorizing the levy of a countywide retailers' sales tax pursuant to this section, the state director of taxation shall cause such tax to be collected within and outside the boundaries of such county at the same time and in the same manner provided for the collection of the state retailers' sales tax. All moneys collected by the director of taxation under the provisions of this section shall be credited to the metropolitan culture district retailers' sales tax fund which fund is hereby established in the state treasury. Any refund due on any countywide retailers' sales tax collected pursuant to this section shall be paid out of the sales tax refund fund and reimbursed by the director of taxation from retailers' sales tax revenue collected pursuant to this section. All countywide retailers' sales tax revenue collected within any county pursuant to this section shall be remitted at least quarterly by the state treasurer, on instruction from the director of taxation, to the treasurer of such county.
Page 51 PREV PAGE TOP OF DOC
''(b) All revenue received by any county treasurer from a countywide retailers' sales tax imposed pursuant to this section shall be appropriated by the county to the metropolitan culture district commission within 60 days of receipt of the funds by the county for expenditure by the commission pursuant to and in accordance with the provisions of the Kansas and Missouri metropolitan culture district compact. If any such revenue remains upon nullification and voidance of the Kansas and Missouri metropolitan culture district compact, the county treasurer shall deposit such revenue to the credit of the general fund of the county.
''(c) Any countywide retailers' sales tax imposed pursuant to this section shall expire upon the date of actual withdrawal of the county from the metropolitan culture district or at any time the Kansas and Missouri metropolitan culture district compact becomes null and void and of no further force or effect. If any moneys remain in the metropolitan culture district retailers' sales tax fund upon nullification and voidance of the Kansas and Missouri metropolitan culture district compact, the state treasurer shall transfer such moneys to the county and city retailers' sales tax fund to be apportioned and remitted at the same time and in the same manner as other countywide retailers' sales tax revenues are apportioned and remitted.''.
SEC. 2. RESERVATION OF RIGHTS.
The Congress expressly deserves the right to alter, amend, or repeal this Act.
Mr. GEKAS. And so we will proceed with introduction as soon as an opening statement is completed by the gentleman from New York, Mr. Nadler.
Mr. NADLER. I have already given my opening statement. I referred to both bills in the original opening statement.
Page 52 PREV PAGE TOP OF DOC
But let me simply say that I welcome our colleague from Missouri, Representative McCarthy, here. I commend her initiative in bringing this bill. And I also, having spent 16 years in a State legislature, I am particularly pleased to welcome two State legislators from the States of Kansas and Missouri here to enlighten us on this situation here.
Mr. GEKAS. We thank the gentleman. We will begin with the introductions by saying that Congresswoman Karen McCarthy began her career in 1969 as a high school educator before being elected to the Missouri State Legislature in 1976. Ms. McCarthy obtained both her Bachelor of Science degree and Master's in Business Administration from the University of Kansas. She also earned a Master of Arts degree from the University of Missouri at Kansas City.
In 1994, Ms. McCarthy became the first woman elected the President of the National Conference of State Legislators. A year later she was elected to the U.S. House of Representatives to represent the Fifth District of Missouri.
Ms. McCarthy is a member of the Commerce Committee.
We note that Missouri State Senator Harry Wiggins is not yet present, so we will hold off on his introduction until he should appear. But we have with us Audrey H. Langworthy, a member of the Kansas State senate. She received her Bachelor's degree from the University of Kansas in 1980 and a Master's in Educational Psychology and Guidance from the State institution 2 years later. She has been a State senator since 1984 and has served as chairperson of the Assessment and Taxation Committee, vice chairman of the Education Committee and is a member of both the Public Health and Welfare and Joint Committee on State-Tribal Relations.
Page 53 PREV PAGE TOP OF DOC
We welcome the senator and we proceed now with the opening testimony of Representative McCarthy.
STATEMENT OF HON. KAREN McCARTHY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI
Ms. MCCARTHY. Thank you, Mr. Chairman, Ranking Member Nadler and Congresswoman Baldwin for this opportunity to appear before you today.
Senator Langworthy arrived yesterday from the National Conference of State Legislators' annual meeting in Chicago, where I was also in attendance to speak with regard to congressional activities as they affect the States. Senator Wiggins is attempting to arrive this morning from that same location, and we hope he will be able to join us in this testimony.
We appear before you today in support of H.R. 4700, which is legislation to grant the consent of Congress to the Kansas and Missouri Metropolitan Culture District Compact.
Mr. Chairman, in 1994, this subcommittee approved the initial compact creating this unique bistate capability of communities coming together—in this case, five counties and two States—to work together on cultural activities and to help preserve and restore historic structures. I happened to appear in support of that as a State legislator at that time, and so it is quite an honor to be back today to ask for your renewal.
And I am also quite honored to have with me Kansas Senator Audrey Langworthy. She and I have labored well over a decade on this matter, both in our respective State legislative bodies and now here at the congressional level; and I am truly pleased to have her here.
Page 54 PREV PAGE TOP OF DOC
As you know from the handouts—and I put together this morning some letters of support showing the bistate and also the bipartisan and multilevel support that this initiative has had in our communities—from those articles you see that it is necessary to extend the compact because when we initially approved it, we gave it a sunset of 2001, wisely, I think, to make sure that it was working in the best interest of the community.
And so we need to extend its life.
We also need to do that because the revenue stream that is voted on by the people in those five counties cannot continue without this reauthorization.
In addition, in our community, two entities, the City of Kansas City and the county, united to form a unified government, something that we all seek for efficiency and cost savings. But as a result, the board of the commission is skewed, no longer half from Missouri and half from Kansas, and so we need to correct that.
And lastly, in the initial compact, as we were developing the legislation, we would have allowed use of the local monies raised to enhance sports facilities. That was taken out of the initial compact.
Now times have changed, and we wish to add that language to this new extension because both communities are working together to maintain and to also create sports facilities; and this could be considered by the voters as one new use of the compact, so that is why we seek your approval.
Page 55 PREV PAGE TOP OF DOC
In the articles distributed to you, the success of the first initiative is highlighted. Union Station, which is a very historic structure and one of the greatest historic landmarks in the Midwest, has successfully been restored. It is a wonderful science museum and cultural facility supported by both States, and that is the result of the first compact. So I wanted you to see the success of your 1994 effort.
I would be glad to answer any questions.
Letters of support are hopefully before you to show the bistate and bipartisan effort that we have under way in this unique cause, and I thank you for this opportunity and also for expediting the markup.
[The prepared statement of Ms. McCarthy follows:]
PREPARED STATEMENT OF HON. KAREN MCCARTHY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI
Chairman Gekas, Ranking Member Nadler, and members of the Subcommittee, I appear before you today in support of H.R. 4700, legislation to grant the consent of the Congress to the Kansas and Missouri Metropolitan Culture District Compact, a successful project I have worked on for over a decade. I would like to thank the Chairman and Ranking Member for the opportunity to have this hearing today and the expeditious manner in which they have acted on this measure.
Today I am joined by the two distinguished State Senators who sponsored the state enabling legislation. I am proud to have worked with them during my tenure in the Missouri General Assembly and in the leadership of the National Conference of State Legislatures (NCSL) and honored to call each of them my friend. Before you hear from Kansas Republican Senator Audrey Langworthy, Chairman of the Committee on Assessment and Taxation, and Missouri Democratic Senator Harry Wiggins, Chairman of the Committee onWays and Means, I would like to provide a little background on the history of this initiative.
Page 56 PREV PAGE TOP OF DOC
In 1987 I sponsored enabling legislation in the Missouri House of Representatives to establish a bi-state cultural district for the Kansas City metropolitan area of five counties in Western Missouri and Eastern Kansas. This unique effort in our nation provides a secure source of local funding for metropolitan cooperation across state lines to restore historic structures and cultural facilities. Through the next seven years I worked closely with Senator Langworthy and colleagues in the Kansas State Legislature, Senator Wiggins and colleagues in the Missouri General Assembly, the Mid-America Regional Council, KC Consensus, civic leaders and elected officials to secure State and Federal approval. When the Bi-State Metropolitan Cultural District Compact was finally sent to the U.S. Congress for authorization in 1994, I appeared before Congress in support of passage of this Compact, along with my cosponsor, Missouri State Senator Harry Wiggins.
I am proud to seek approval of the continuation of the Kansas and Missouri Metropolitan Culture District Compact. Approval of new State and Federal legislation to extend the Compact is necessary for three reasons. First, the existing Bi-state Compact sunsets at the end of the 2001 which means the local revenue stream will end unless new legislation extends the authority. Second, the new Compact expands the cultural definition to include sports facilities important to the region. Finally, with the consolidation of the governments of the City of Kansas City, Kansas and Wyandotte County into the Unified Government, the Kansas representation on the Bi-State Board was decreased by two Board Members. Consequently, Missouri currently has an advantage of two votes. The new state laws corrects this inequity so that membership on the Board is balanced with half of the Members from each state. Now it is time for the Federal government through Congress to give approval to the Bi-State initiative.
Page 57 PREV PAGE TOP OF DOC
Over the past four years the Greater Kansas City area has seen the successes of the original Compact. It has made possible the restoration of Union Station which is one of the Midwest's greatest historic landmarks and the largest preservation project currently underway in the United States. The restoration project has been a unique example of a bi-state, private-public, local-federal partnership. Continuation of the Compact will allow the metropolitan area to further this productive alignment for successful arts and cultural initiatives in the region, and I expect more will be done in Kansas using the revenue in the next phase of the Compact.
Mr. Chairman and members of the Subcommittee, this measure is non-controversial, enjoys bi-partisan, bi-cameral, and bi-state support. I am requesting the committee support this worthwhile and successful effort by once again granting federal consent of the Kansas and Missouri Metropolitan Culture District Compact. Thank you for this expeditious hearing and mark-up. I would be happy to answer any questions.
Mr. GEKAS. Senator Langworthy.
STATEMENT OF AUDREY LANGWORTHY, SENATOR, KANSAS STATE SENATE
Ms. LANGWORTHY. Thank you, Mr. Chairman. I am State Senator Audrey Langworthy from Kansas and one of the chief cosponsors of both the original bistate and bistate II legislation which has been enacted by both the Missouri legislature and the Kansas legislature and signed by both Governors Carnahan and Graves. Thank you for promptly scheduling this hearing and allowing me and my colleague of many years to come before you in a bipartisan manner.
Page 58 PREV PAGE TOP OF DOC
This landmark legislation originally passed in 1994, and as was said, was subsequently approved by this committee and the Congress in the same year. To appreciate the significance of this cooperative effort, one has only to view our first project which was, as Karen referred to, the restoration of Kansas City's magnificent Union Station, which is second in size only to the New York Grand Central Station, and the addition of the Kansas City Museum's Science City Project.
For our bistate metropolitan area, with a long history, unfortunately, of distrust dating back to the Civil War border skirmishes, the vote to approve the Nation's first bistate sales tax signaled a new beginning in metropolitan-wide cooperation and unity. We became one in our first true cooperative venture.
What we bring before you today is a modification of the original legislation, not a new compact. One portion of the bill amends the district to redefine the cultural activities to include sports. Additionally, language is added to the compact which prohibits the revenues from a future sales tax, which has been adopted by the voters, to be used exclusively for sports or sports facilities.
A third section specifies that no election for a sales tax may be held prior to 2002, when the first bistate sales tax sunsets for the Union Station project.
And finally, as Representative McCarthy mentioned, because of the newly consolidated Wyandotte County and Kansas City, Kansas, governing body, we needed to correct the number of voting members that they could have on the commission.
Page 59 PREV PAGE TOP OF DOC
Assuming the Congress approves these changes, our next challenge as a bistate community is to present to the voters another thoughtful project that clearly spells out tangible economic and social benefits for both sides of the State line. Quite possibly, multiple projects on both sides of the State line will be brought together in a single package.
Certainly there were and are safeguards in the legislation to protect the interests of all involved. A majority from each State, from the Kansas and Missouri representatives, must approve the expenditures and can veto any spending it does not like. A bistate tax cannot go into effect without approval of voters in both Johnson County, Kansas, and Jackson County, Missouri.
And I would like to note that the original compact was approved by a more than 60 percent majority in both States. The bill itself passed the Kansas Senate by a vote of 35 to 5. This is a project which has great public support.
In summary, the changes we bring before you are merely to broaden the options to possibly bring before the voters and to ensure that the tax submitted to the voters would not occur before the sunset of the current one-eighth cent tax.
I respectfully urge your approval of these changes. Our goal is to build on this cooperation by Missouri and Kansas, two States in support of one metropolitan community to enhance the greater good and well-being of our metro citizens.
Thank you, Mr. Chairman, and I would be happy to answer questions.
Page 60 PREV PAGE TOP OF DOC
Mr. GEKAS. We thank the Senator.
[The prepared statement of Ms. Langworthy follows:]
PREPARED STATEMENT OF AUDREY LANGWORTHY, SENATOR, KANSAS STATE SENATE
Chairman, members of the Judiciary Subcommittee, I am State Senator Audrey Langworthy from Kansas and one of the chief sponsors of the Bi-State II legislation which has been enacted by both Kansas and Missouri legislatures and signed by both Governors Carnahan and Graves.
Thank you for promptly scheduling this hearing and allowing me and my colleagues to come before you today.
This landmark legislation originally passed in 1994 and was subsequently approved by Congress in the same year. To appreciate the significance of this cooperative Bi-State agreement, one only has to view the outcome of the first cooperative project—the restoration of Kansas City's magnificent Union Station (second in size only to New York City's Grand Central Station) and the addition of the Kansas City Museum's Science City Project.
For our bi-state metropolitan area, with its long history of distrust dating back to Civil War border skirmishes, the vote to approve the nation's first bi-state sales tax signaled a new beginning in metropolitan-wide cooperation and unity. We became one in our first true cooperative venture.
Page 61 PREV PAGE TOP OF DOC
What we bring before you today is a modification of the original legislation—not a new compact.
Bi-State Compact Provisions
One portion of the bill amends the Kansas and Missouri Metropolitan Culture District Compact to redefine cultural activities to include sports which ''contribute or enhance the aesthetic, artistic, historical, intellectual or social development or appreciation of members of the general public.''
Additional language is added to the compact which prohibits revenues from a future sales tax which has been adopted by voters from being used exclusively for sports or sports facilities.
Another section specifies that no election for a new sales tax may be held prior to 2002 when the first bi-state tax sunsets for the Union Station project.
Finally, the composition of the Metropolitan Culture Commission is changed to add two members of the consolidated Wyandotte County and Kansas City, Kansas governing body, who are to be appointed pursuant to a majority vote of such governing body.
Assuming Congress approves these changes, our next challenge as a bi-state community is to present to the voters another thoughtful proposal that clearly spells out tangible economic and social benefits to both sides of the state line. Quite possibly multiple projects on both sides of the state line will be brought together in one package.
Page 62 PREV PAGE TOP OF DOC
Certainly there were and are safeguards in the legislation to protect the interests of all involved. A majority from each state among the Kansas and Missouri representatives on the Bi-State Commission must approve any expenditures and can veto any spending it doesn't like. A bi-state tax cannot go into effect without approval by voters in both Johnson County, Kansas and Jackson County, Missouri. Let me note the original compact was approved by more than a 60% majority in both states, and this Bi-State II bill passed the Kansas Senate on a vote of 35–5. There is great public support for this idea.
The changes we bring before you merely broaden the options to possibly bring before the voters and ensure that an additional tax will not be submitted to the voters before the sunset of the current 1/8 cent tax. The remainder is clean-up language.
I respectfully urge your approval of these changes. Our goal is to build on this cooperation by Missouri and Kansas—two states in support of one metropolitan community to enhance the greater good and well-being of all our metro citizens.
Thank you. I am happy to answer any questions.
Mr. GEKAS. We will note for the record that if Senator Wiggins in the near future wishes to submit a statement—.
Ms. MCCARTHY. It is prepared for your approval today. I would request that it be submitted for the record, as well as that of Congressman Moore.
Congressman Moore is my counterpart on the Kansas side of the State line and was not able to be with us today; but you do have his written remarks, and I would like to ask that they become a part of the record.
Page 63 PREV PAGE TOP OF DOC
Mr. GEKAS. Without objection, all of that will be admitted to the record.
[The prepared statement of Mr. Wiggins follows:]
PREPARED STATEMENT OF HARRY WIGGINS, STATE SENATOR, 10TH DISTRICT, KANSAS CITY, MO
Mr. Chairman, I am Harry Wiggins, State Senator from the 10th District of Missouri, representing Kansas City, and the cities of Grandview and Raytown, in Jackson County.
I have been a Missouri State Senator for 26 years, having been elected in 1974, and continuously since. I appear before you today after a hurried trip from Chicago where I was attending the National Conference of State Legislators. I am honored to appear before your distinguished body, which I have only done once before in my life.
I appear today to ask your congressional approval of the Missouri-Kansas Bi-State Cultural Agreement. I am honored to appear with my Congresswoman, the Honorable Karen McCarthy, who has been my friend for over 30 years, and who shepherded the first Bi-State Cultural Compacts for me when she was a member of the Missouri House of Representatives.
I am also honored to appear before this distinguished group with a longtime friend, Senator Audrey Langworthy, of Johnson County, Kansas, who is a distinguished member of the Kansas legislature, and who has been my compatriot and the Kansas sponsor of this legislation. Senator Langworthy is a Republican and I am a Democrat, which emphasizes the bi-partisan nature of this bill. I enclose a press release issued by the President Pro Tem of the Missouri Senate and the Speaker of our House of Representatives, who are both Democrats and the President of the Kansas Senate and the Speaker of the Kansas House, who are our good friends, and who are both Republicans.
Page 64 PREV PAGE TOP OF DOC
In 1985, I was approached by a group of civic leaders on both sides of the state line asking me if I would draft a bill which would, for the first time in the history of the United States, create a bi-state compact for cultural purposes. It passed the Missouri legislature and the Kansas legislature through the help of Congresswoman McCarthy, and Senator Langworthy, and Senator Bond, the President of the Kansas Senate.
I came here before the House Judiciary Committee and described what we wanted to do, and you gave us unanimous approval for the first time in the history of our country.
The bi-state compact was approved with a sales tax increase on both sides of the state line by the voters who selected restoration of the magnificent Union Station in downtown Kansas City as the first project. The magnificent structure was rededicated last November 10th with all of us on both sides of the state line participating and celebrating. Thousands of people on both sides of the state line were present.
The bill that we bring before you today is simply a minor change which would allow the people in 2002, or after, to consider additional projects which might include sports facilities. The greater Kansas City area is very sports oriented because of the overwhelming support on both sides of the state line for the Kansas City Royals and the Kansas City Chiefs, both of whom have won world championships. In addition, there are numerous other cultural and sports activities which the people might vote upon which would be determined by the citizens committee created by the original bill.
I feel that a new project would go on the Kansas side of the state line where huge support of soccer is involved and a great citizen desire for an aquarium.
Page 65 PREV PAGE TOP OF DOC
I come here today, as I did several years ago, and this time with my colleague, Senator Langworthy and my Congresswoman, Karen McCarthy to ask you to give this simple bill congressional approval, as you did before. It is unique I would fly here from Chicago where the National Conference of State Legislatures is meeting and no other two states have ever done this. We are asking no federal money and nothing by your acquiesces with the most unique bi-state agreement ever conceived in the United States.
I know how busy your schedules are, but if you could find your way in your travels to let Senator Langworthy and I show you around Kansas City's Union Station, you would see what the first Bi-state cooperation can accomplish.
Thank you, Mr. Chairman and members of the committee for your courtesy and your time on my own behalf, and on behalf of the citizens of Greater Kansas City.
[The prepared statement of Mr. Moore follows:]
PREPARED STATEMENT OF DENNIS MOORE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS
Mr. Chairman, members of the Subcommittee, thank you for allowing me the opportunity to share my support for H.R. 4700, which would grant the consent of Congress to the Kansas and Missouri Metropolitan Cultural District Compact. I would also like to thank my friend and colleague, Congresswoman Karen McCarthy, for her leadership on this issue. Her tireless work for the Fifth District of Missouri and the people of the Kansas City metropolitan area should be commended.
Page 66 PREV PAGE TOP OF DOC
Over the past four years, we have enjoyed the successes of the original bi-state compact which was passed by Congress in 1996. This agreement is essential to a unique city with a state line running through the middle of town. Many residents work on one side of state line and reside on the other. the economy and culture of the region are vitally important to all residents of the Kansas City metropolitan area.
This compact made possible the restoration of Union State and the completion of Science City, now one of the Kansas City metropolitan area's most important cultural and education facilities. Union Station is a remarkable example of what can be accomplished when federal, state, and local governments work with private and public contributors to improve our communities.
As the existing compact is scheduled to end at the end of 2001, it is our responsibility to see to it that a new compact is approved to continue this successful venture. Furthermore, it is important to take this opportunity to correct the advantage of two votes that Missouri currently holds on the Bi-State Board, due to the consolidation of the governments of the Kansas City, Kansas and Wyandotte County, Kansas into the new Unified Government. This inequity should be resolved to preserve the balance and harmony of the Compact.
As we move into the twenty-first century, it is even more important to take steps to preserve our common history and strengthen our great community. The Bi-State Compact will enable us to take on cultural initiatives, improve education, develop transportation proposals, and improve the lives of those in the Kansas City metropolitan area.
Page 67 PREV PAGE TOP OF DOC
I support this legislation because I believe the residents of the metropolitan area should be able to decide for themselves if they want to participate in this project. I can think of no better way to decide the issue than to give the authority directly to voters on both sides of the state line.
Thank you for the opportunity to submit my testimony on this important issue. I thank the Subcommittee for holding this hearing on H.R. 4700, and I urge you to approve this legislation.
Ms. MCCARTHY. And today we have also prepared letters of support showing the bistate and bipartisan support.
Mr. GEKAS. Without objection those letters will be made a part of the record.
[The information referred to follows:]
| The Chamber, |
| Greater Kansas City Chamber of Commerce, |
| Kansas City, MO, July 17, 2000. |
Hon. KAREN MCCARTHY,
House of Representatives, Washington, DC.
DEAR REPRESENTATIVE MCCARTHY: The Greater Kansas City Chamber of Commerce has been a strong supporter of the Kansas and Missouri Metropolitan Culture District Compact since it was first proposed more than 10 years ago by a civic task force organized by Kansas City Consensus. From the very beginning, the concept of a multijurisdictional tax for common purposes in a bistate region like Greater Kansas City has had great appeal.
Page 68 PREV PAGE TOP OF DOC
The Chamber was a principal player in the passage of the bistate tax to restore Kansas City's Union Station and establish Science City at the station. The success of that project has naturally led to speculation about other regional needs that might be met through this innovative approach.
Consequently, The Chamber was a leader in the effort to expand the eligible use of bistate tax revenues through legislation in Kansas and Missouri to include sports and sports facilities as well as the cultural arts.
The Chamber continues to be an enthusiastic supporter of the bistate tax concept and urges appropriate action by the Congress to facilitate the further use of this creative multijurisdictional initiative for regional purposes.
Sincerely,
| Peter S. Levi, President. |
| Mid-American Regional Council (MARC), |
| Kansas City, MO, July 17, 2000. |
Hon. KAREN MCCARTHY,
House of Representatives, Washington, DC.
DEAR CONGRESSWOMAN MCCARTHY: This letter is to convey the support of the Mid-America Regional Council for HR 4700 to grant congressional approval for the bistate compact authorizing creation of the Metropolitan Culture District in the Kansas City area.
Page 69 PREV PAGE TOP OF DOC
As the council of governments and metropolitan planning group for Greater Kansas City, MARC has keen interest in seeing the continuance of this important mechanism to allow for voter-approved regional cooperation in funding key cultural assets. MARC has played an active role in supporting this initiative over the years, and we are eager to see this tool continue to serve our regional community. The proposed changes to the bistate compact enjoy broad public support and have already been approved by the legislatures of both Kansas and Missouri.
We appreciate your leadership in ensuring continuation of this issue so import to our metropolitan progress.
incerely,
| David A. Warm, Executive Director. |
| Overland Park Chamber of Commerce, |
| Overland Park, KS, July 17, 2000. |
Hon. HENRY J. HYDE, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
DEAR MR. CHAIRMAN: On behalf of the Overland Park Chamber of Commerce and its 1,100 members, I want to thank you for granting a timely hearing on HR 4700.
The Overland Park business community wishes to declare its support for the passage of HR 4700. Its passage will complete a legislative process that provides increased flexibility and expanded options for the Kansas City metropolitan area in future bi-state efforts.
Page 70 PREV PAGE TOP OF DOC
Citizens and businesses in both Kansas and Missouri, with the Union Station bi-state success, have demonstrated an ability to reach consensus and support for important projects. This bill, supported by both state legislatures, enhances that unique relationship.
We appreciate your support in addressing this important community issue.
Sincerely,
| Mary Birch CCE, President. |
CC:
Congresswoman Karen McCarthy
Congressman Dennis Moore
| Kansas City Area Development Council, |
| Kansas City, MO. |
Hon. KAREN MCCARTHY,
House of Representatives, Washington, DC.
DEAR CONGRESSMAN MCCARTHY: I'm writing to let you know the support of the Kansas City Area Development Council (KCADC) for HR 4700 granting congressional approval for the bistate compact that would authorize the creation of the Metropolitan Cultural District in the Kansas City area.
Page 71 PREV PAGE TOP OF DOC
KCADC, from its inception in 1976, has been a bistate organization. As you know, we serve 15 counties in both Kansas and Missouri. We approach business attraction and the growth of the economy from a bistate perspective because our community is truly one community that simply happens to be joined by a state line. Nothing could be more important to us than the approval of this legislation. The furtherance of regional coopera tion and funding key cultural assets assuming voter approval is critical to the ongoing development of our community. The fact that the legislation has received support in the legislatures of both Kansas and Missouri and would only be enacted upon a vote of the people, provides both evidence of broad support and all necessary safeguards.
We are appreciative of your leadership in this effort and ask that you will do all that is possible to encourage the approval of this legislation initially by the House Judiciary Committee and then by the full House and Senate.
Best regards,
| Robert J. Marcusse, President and CEO. |
| Johnson County, |
| Chambers Presidents Council, |
| January 4, 2000. |
To: Johnson County Commission.
Re: Bi-State Efforts
As strong supporters of the bi-state initiative to renovate Union Station and construct Science City, the chambers of commerce in Johnson County wish to commend the voters of the four counties, the Bi-State Commission, the Union Station Assistance Corporation, the Union Station Project Council and civic leaders for a job well done. This phenomenal project will serve as an excellent first effort toward future partnerships that identify, pursue and support other bi-state efforts.
Page 72 PREV PAGE TOP OF DOC
At this time, the Johnson County Chambers Presidents Council has discussed future bi-state efforts and would like to convey the following concepts to be considered as developments and ideas proceed.
We believe:
1. The current 1/8 cent bi-state sales tax for Union Station/Science City should sunset (end) as promised to the voters.
2. The bi-state tax should be used to enhance quality-of-life components that are not traditionally funded by government, such as the arts, and to preserve major community institutions.
3. The bi-state tax cannot and should not be seen or used as ''the'' solution for all the problems of the metro-plex.
4. If there is a second bi-state effort, it should include both the arts as was originally intended and consideration of efforts in Kansas. Serious consideration should be given to the renovation or construction of a building in Johnson County for an arts venue.
5. Also, consideration should be given to including sports facilities as a beneficiary of the next bi-state effort. There is no doubt that Kansas City's professional sports teams are a significant economic development component for the entire metropolitan area. The bi-state component, however, similar to Union Station, should be only one part of a larger multi-source funded effort.
Page 73 PREV PAGE TOP OF DOC
| Labor-Management Council |
| of Greater Kansas City, |
| Kansas City, MO, July 17, 2000. |
Hon. KAREN MCCARTHY,
House of Representatives, Washington, DC.
DEAR REP. MCCARTHY: The Labor-Management Council of Greater Kansas City urges support from the U.S. Congress for ''Bi-State II'' legislation. We supported passage of the revised bi-state approach in both the Missouri and Kansas legislatures, and we thank you for your support for the successful first bi-state project as well as for this effort.
As an organization comprised of more than 80 businesses, unions, nonprofits and governments from throughout the Kansas City area, the Labor-Management Council focuses on efforts that enhance the entire metropolitan community. Bi-State II will allow us the opportunity to explore and possibly implement public improvement projects that benefit citizens in both states.
The Labor-Management Council requires a unanimous vote of its Board of Directors to take a public issue position. Bi-State II's achievement of such unanimous support from our diverse leadership demonstrates its strong appeal to labor and to management, to Missourians and to Kansans, to Democrats and to Republicans, to urban and to suburban residents.
We are very pleased that Congress is appropriately considering this legislation to help address our community's needs that cross state, county and municipal lines. Passage of Bi-State II by Congress would allow us to continue our work to benefit the entire metropolitan community.
Page 74 PREV PAGE TOP OF DOC
Please feel free to share our position with your colleagues, and to contact me with any questions.
Sincerely,
| Bob Jacobi, Jr., Executive Director. |
| Jackson County, Missouri, |
| Jackson County Courthouse, |
| Kansas City, MO, July 17, 2000. |
Hon. KAREN MCCARTHY,
House of Representatives, Washington, DC.
DEAR CONGRESSWOMAN MCCARTHY: I am writing to express my support for HR4700, which would grant congressional approval for the bi-state compact authorizing creation of the Metropolitan Culture District in the Kansas City area.
Jackson County is proud of its role in the development and implementation of the successful initiative at Kansas City's Liberty Memorial, and looks forward to the opportunity to extend a bi-state solution into other long term capital needs of the entire Kansas City metropolitan area.
We appreciate your efforts in ensuring the continuation and expansion of this cooperative effort among local governments across our region.
Page 75 PREV PAGE TOP OF DOC
Sincerely,
| Katheryn J. Shields, County Executive. |
| State of Kansas, |
| Office of the Governor, |
| Topeka, KS. |
From: Don Brown, Communications Director.
Governor Graves made the following comments shortly before signing the Bi-State II legislation:
''I am extremely pleased with the success of our first Bi-State project. The Science City at Union Station, quite frankly, would not exist as we know it today without the funding from this arts and culture initiative. I am pleased to be able to sign the Bi-State II legislation into Kansas Law. This is just one step in the process, of course. I'm confident the government leaders and voters in the respective counties in and around Kansas City will make good choices as they explore another phase of this cooperative effort.''
| Missouri House of Representatives, |
| Capitol Office, |
| Jefferson City, MO, July 17, 2000. |
Hon. KAREN MCCARTHY,
Page 76 PREV PAGE TOP OF DOC
House of Representatives, Washington, DC.
DEAR CONGRESSWOMAN MCCARTHY: As the Missouri House of Representatives sponsor of the state legislation for the Metropolitan Culture District, I fully endorse HR 4700 to grant congressional approval for the Bi-State Compact.
At the end of 2001 the existing Bi-State Compact will sunset. Without new legislation to extend the Compact's authority, the local revenue stream will cease to exist. The expansion of the existing Bi-State Compact will expand the cultural definition to include sports facilities that are important to this region. The Compact has been responsible for the restoration of Kansas City's historic landmark Union Station, which is currently the largest preservation project currently underway in the United States. As a Missouri State Representative sponsor, I understand the immeasurable value of the continuance of the Compact in order for our metropolitan area to further its current productive alignment for successful arts and cultural initiatives in the Bi-State region.
Although I regret that my legislative schedule will not permit my attendance at the hearing in Washington, I appreciate your leadership and dedication to the Kansas City metropolitan area.
Sincerely,
| Thomas J. Hoppe, 46th Legislative Representative. |
[Whereupon, at 10:44 a.m., the subcommittee proceeded to other business.]
Page 77 PREV PAGE TOP OF DOC