The commission is of the opinion that immediate improvements in the matter of the assessment of railroads in North Dakota must come through careful administration and the application of more scientific methods in arriving at values and it has at this time no recommendations to make regarding changes in methods of assessment although it much regrets that the constitution is in such shape as to prevent a distribution of the railroad taxes upon a more fair and scientific basis. In view of our unfortunate method of distribution of railroad tax, we believe that the gross earnings tax system as applied to railroads is worthy of careful investigation and study with reference to conditions in North Dakota. In addition to placing upon them the duty of assessing railroads, the law makes it the duty of the state board of equalization to assess express companies, freight line companies, sleeping car companies, dining car companies, telegraph and telephone companies and car equipment companies. The law provides that the board shall assess them on the actual value of their property and franchises. Except for the possible limitation contained in Section 1503 in the Code of 1905, herein before discussed and criticised, the state board is free to adopt whatever methods it sees fit in arriving at the value of the franchises of these corporations. In practice, the state board has, in making the assessment, been compelled to rely largely upon information furnished by representatives of the corporations assessed. Sleeping car companies have not been separately assessed in this state, for the reason that the principal lines of railroad either own and operate their own sleeping cars or have what is practically a partnership arrangement with the Pullman Company in the operation of sleeping cars. Here, as elsewhere, information upon which to base the assessment is what is needed above all things. 4. ASSESSMENT OF LIGHT, HEAT AND POWER Light, Heat and Power Companies have in the past been assessed by the local assessors, and the assessments made have proved in a number of instances unsatisfactory. It is believed that much is to be gained by adopting a uniform method in the assessment of these companies. The laws of 1911 place the duty of assessing these corporations upon the tax commission. 5. TAXATION OF FOREIGN INSURANCE COMPANIES. Section 4475 of the Revised Code of 1905 provides that, "Every Insurance Company doing business in this state, except joint stock and mutual companies organized under the laws of this state, shall at the time of making the annual statement of business done, as required by law, pay to the Commissioner of Insurance 22 per cent of the gross amount of premiums received in this state during the preceding year." Under this law the insurance department collected $105,106.54 for 1911. In addition. to this tax upon the gross premiums of foreign companies doing business in North Dakota the following fees and licenses are collected from both foreign and domestic companies doing business in the state: Filing Articles of Incorporation.. Filing Annual Statements Certificate of Authority and Certified Copy thereof. For every copy of any paper filed in the Insurance Department, per folio.. For affixing the official seal and certifying. For each Abstract for Publication Service Fees $ 25.00 10.00 2.00 .20 1.00 2.00 2.00 On fraternal companies a charge of $15.00 for filing the annual statement is made in lieu of all other assessment. Where other states or foreign countries require fees in excess of those charged in this state, companies chartered by that state or foreign country, doing business in this state, are subject to the same fees charged in the state where they were chartered. The method of taxing insurance companies upon the gross domestic premiums is one that is generally favored; consequently it prevails in forty-one states. The convenience with which it may be applied makes it a very popular method. CHAPTER VIII. ASSESSMENT AT FULL VALUE OR PERCENTAGE OF FULL VALUE. It is a matter of universal knowledge in this state that the law provides for the assessment of all property at full value. It is equally well known that in practice the law has been neglected from the beginning and that all assessments have been made upon a percentage basis. In fact, so general has been the custom of violating the law in this respect that the occasional assessor who abides by his oath and attempts to make the assessment at full value is promptly converted to the existing methods or is routed from the field. There is no fixed percentage basis, the 'percentage varying in different localities, with different assessors in the same locality and for various classes of property. While we believe it would be best to require that the assessment be made at full value according to law, yet we do not regard this as absolutely essential to procure a just and equitable assessment, since it is quite as easy to assess at any easy percentage, say fifty per cent of the full value, as it is at full value. This then, is the situation. The law requires assessment at full value; established practice causes assessments to be made at varying percentages of full value; the whole matter being of no vital importance from an administrative point of view-the essential thing being the necessity of having the law and the practice conform. IS IT POSSIBLE TO PROVIDE FOR ASSESSMENT ONA PERCENTAGE BASIS UNDER THE NORTH DAKOTA CONSTITUTION? Section 176 of the constitution provides that "laws shall be passed taxing by uniform rule all property according to its true value in money." This provision is clearly intended to establish a rule of taxation whereby every taxable species of property should share the burden of taxation with every other taxable species of property according to their respective money values. This rule of uniformity is complied with so long as the tax rate applied to each is the same and so long as the rate is figured on the same ratio of value. Thus, if two articles of property worth five hundred and one thousand dollars, respectively, were assessed at two hundred fifty and five hundred dollars, respectively, and the same rate of taxation were levied on the two, they would be assessed "by uniform rule * * * * * according to 'their' true value in money." It would seem to be possible then for the legislature to fix any basis, which, in its discretion, would seem wise, so long as all property would be assessed by uniform rule, according to its value, and, that it is not essential that the assessment should be at full value. If the law and the practice then are to be made to conform, it is well to consider whether the law should be changed so as to provide for assessment on a percentage basis, thus recognizing, in a measure, the existing practice; or whether it would be well to attempt to raise the assessment to full value as now provided by law. PRACTICAL ADVANTAGE OF PROVIDING FOR As before stated, it has long been the practice in this state to assess on a percentage basis, consequently the aggregate assessed valuation of taxing districts, of counties and of the state represents but a fraction of the full value of the property situated therein. Debt limits, maximum levies, salaries of officers and educational and special taxes have been provided for on the basis of the partial valuation. Every improvement in the administration of our revenue system brings us back to the necessity of having the assessment upon a higher basis than it is now. This would disturb in a measure, the legislative balance already provided between valuation and debt limits, maximum levies, salaries, etc. It is highly important that this disturbance should be as slight as possible and the tax commission hereinafter suggests a method which they . believe will preserve the existing status as nearly as may be pending the readjustment upon a higher level of valuation. As a matter of administration, however, it is important whether the valuation fixed as an assessment basis be the full value or a percentage thereof. If assessments continue to be made by township assessors as now the fixed habits of the assessors, together with the difficulty of obtaining concerted action on their part, would be a serious obstacle in the way of raising the assessment to the full value basis. On the other hand if the legislature should prescribe the basis at fifty per cent it would not be a difficult matter to procure an assessment upon that basis. If, however, the recommendations of the tax commission relative to the establishment of the county assessor plan are adopted it will make little or no difference from an administrative standpoint whether the assessment is made upon the basis of fifty per cent of full value or at full value. We believe that the centralization of authority over county assessments, under the county asses |