It is hereby found and declared that continued operation of the interstate railroads
in the state and improvement of their service and facilities are essential to the
commerce, defense, and general welfare of the people of the state; that in the year
nineteen hundred fifty-nine at a time when the financial condition of railroads in
the state had deteriorated to the extent that the continuation of vital operations
was threatened, a partial exemption from taxation was granted railroad property in
a manner which gave increasingly greater exemptions as the rate of earnings of a railroad
system declined; that since that time major interstate railroads operating in New
York state have become bankrupt and the earnings of non-bankrupt railroads have also
declined substantially; that rail services heretofore operated by the insolvent railroads
will continue to be operated by new rail systems of railroad companies created under
or in compliance with federal statutes; that federal law requires that the property
in the new systems be taxed in a non-discriminatory manner; that in order for the
new systems to be viable the railroad property which will constitute such new systems
should be eligible for a partial exemption which reflects lack of earnings; that
railroad ceilings cannot be established for the new systems under existing formulas
without the expenditure of large sums of money to obtain cost data on system railroad
property located outside the state; that railroad ceilings established on the basis
of the ratio of the operating revenues and expenses of a railroad system will accomplish
the same policy; and, therefore, that various provisions of the railroad partial
tax exemption law applicable to interstate railroads must be changed in order to extend
the partial exemption to the new rail systems.
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