I certainly believe that this bill is another blatant example of federal government over-kill. I do not particularly agree with the bill at all and I certainly disagree strongly with the bill as it affects royalty owners and the small independent operator that gross less than $2,000,000.00 or $3,000,000.00 per year. Please advise Senator Bentsen that I appreciate his concerns on this matter and that I support his attempt to limit the coverage existing law. Sincerely, Mr. MICHAEL STERN, V. O. "BUTCH" CARDEN, Jr. BELLEVUE, TEX., July 7, 1980. Senate Finance Committee, 2229 Dirksen Senate Office Building, Washington, D.C. SIRS This is a letter in protest to the Windfall Profits Tax on crude oil, since we are a family partnership royalty owner. We have been oil royalty owners for about 55 years, and we vehemently protest this unjust tax against our royalty. From our standpoint, we consider this tax as nothing short of stealing by the Federal Government. So we ask your committee to do away with this tax immediately against the royalty land owner. Sincerely, Mr. MICHAEL STERN, Staff Director, Senate Finance Committee, W. O. HODGES, Manager. KAY'S AFFILIATED FOOD STORE, 2229 Dirksen Senate Office Building, Washington, D.C. It is my understanding that you will see that all correspondence in regard to this very unfair tax, will be considered at these hearings. I am writing for myself and for my mother, Bettie Kay of R.#1 Winona, Texas 75792, who is Eighty Nine Years of age and it is now necessary that we have someone with her twenty four hours a day due to her health condition and I would like to say that she has as her main source of income a social security check in the amount of $297.00 per month and her royalty check from Atlantic Richfield Co. from the Joy-Wright Mountain field here in East Texas. Her cheeks for this year have been as follows $328.18, 356.10, 361.01, then cut to 215.44 and 206.98 you can see that this just will not make ends meet and it is a very hard tax on small Royalty Owners. My own checks in same field have been as follows $46.89, 51.58, 50.89, then cut to 30.77 and 29.57. When this tax was passed and put into effect I feel that only a very small percent of the people in this good old USA knew what it covered and who as it implied it was a tax on the excessive profits the large oil companies have been making however when you put this tax on them they just raise the end price of their products and the small Royalty Owner has no where to pass his tax on to, but instead is required to help pay for this tax put on the major companies when we must have their products or services. I trust that you can see a way to see our side of this very unfair tax because as you have always known Large Companies and government don't pay taxes, only people pay tax and we feel this tax to be very unfair. Thanks for your consideration, I am Yours truly, VICTOR P. KAY, Jr. SNYDER, TEX., July 7, 1980. STAFF DIRECTOR, Senate Finance Committee, Room 2227 Dirksen Building, DEAR SIR: This is to register disapproval of the Windfall Profit Tax as it ap plies to the small royalty owner who is taxed out of proportion to the big oil sector. The following signatures represent area persons who respectfully request that steps be taken during the upcoming Austin, Texas meeting to alleviate this unfair situation. Very truly yours, MINNIE FALLS. [Mailgram] MICHAEL STERN, CENTURY 21 DVORKEN & ASSOCIATE, Staff Director, Senate Finance Committee, 2229 Dirksen Senate Office Building, Washington, D.C. Mr. STERN: Please bring to Senator Bentsen's attention our family's strong objection to the windfall profits tax. This so-called tax singles out a limited group of royalty owners who have no way of passing the tax on to the eventual consumer. The tax is non-productive and extremely punitive. My 92 year-old mother-in-law supports herself on a small pension from teacher retirement and her royalty check. To take $100 to $150 from her each month deprives her of over 20 percent of her income and is the difference between independent dignity and dependence upon others for her financial support. No one likes to be taxed. Americans have always paid taxes with a willingness displayed by no other nation in the world. However, this tax has been foisted upon those of us living in the oil producing States in order to pay for welfare and other programs for people in non-oil States. The Senators from New York, New Jersey, and Massachusetts, etc. would not have voted for this unfair tax if they had oil. I hope you can convince Congress to reconsider this tax especially for royalty owners. Sorry I can't be in Austin for the hearing in person. Thank you. MICHAEL STERN, HENRY J. DVORKEN. STRAWN, TEX., July 4, 1980. Staff Director, Senate Finance Committee, DEAR SIR: The windfall profits tax is nothing more than Government confiscation of private property. We want it eliminated, both for royalty owners and oil producers. Today is July 4, the day we celebrate as the day of American independence and freedom. It is unbelievable that a "law" such as the "windfall profits tax" could exist here in the United States. Abolish it! Sincerely, GLEN BALL. 1. What about DOE government suits against some of the larger companies saying they charged the public too much during the last five years due to changing regulations? 2. Some royalty owners have already been advised that if the government wins these suits, they will have to pay their proportionate share retroactive for 5 years. 3. I think they should be exempt from these suits and also on the windfall tax completely. 4. If they won't listen in the North and the East, then I think we should cut off their supply for a "strike” period or even I'm thinking of sabotage if they won't listen. 5. Thank you Senators Bentsen and Boren for your hearing. STATEMENT OF HON. JOE WYATT, JR. I wish to commend Senator Bentsen for calling this meeting and state that the nation has no greater champion in the field of energy independence than he. I would like to keep my statement short and merely have read excerpts of my comments delivered on the floor of the U.S. House of Representatives March 13, 1980, upon consideration of the Conference Committee Report on H.R. 3919. I quote from the Congressional Record: "Such legislation sets the worst type of precedent because, in effect, we are confiscating the property of citizens who are already being taxed on their income. I speak of the royalty owners who do own the minerals as well as their land. This tax will unfairly cause oil-with the same value to energy consumers-to be taxed at alarmingly different rates. This takes a ridiculously unfair situation and magnifies the discrimination. "Further, this legislation, which is deemed in so many people's minds to be punitive in regard to perceived excess oil company profits, does not accomplish this purpose. It will most seriously affect royalty owners. I stand by that statement and wish to pledge my continued support for any reduction in the Windfall Profits Tax. TESTIMONY BY LUCIUS C. GEER, CHAIRMAN, PUBLIC INFORMATION COMMITTEE, HOUSTON CHAPTER, SOCIETY OF INDEPENDENT PROFESSIONAL EARTH SCIENTISTS Senators Bentsen, Boren, and Dole, your professional staffs, visitors, royalty owners and producers: I am Lucius C. Geer, geologist and independent producer from Houston, Texas. I represent myself and am speaking for myself and the Houston Chapter of the Society of Independent Professional Earth Scientists (S.I.P.E.S.) over 100 independent oil operators strong. This society with nearly 1000 businessmen nationally, consists of the leading independent and consulting earth scientists in the country who are survivors of a once healthier independent oil industry. Our members average over 30 years of experience in their lifelong chosen professions as geologists, geophysicists and petroleum engineers. Each of these 1000 members averages drilling, or causing to be drilled, some seven exploratory wells per year. The group total comprises 57 percent of the national total and 67 percent of the total exploratory wells drilled by all independents. The Society of Independent Professional Earth Scientists (S.I.P.E.S.) welcomes the opportunity to address themselves to certain aspects of a new excise tax styled windfall profits tax, the largest single tax ever levied upon America. It was our understanding that this tax was to be placed upon “big oil companies", the national and multi-national oil companies who also refine and market. Now after the taxes' imposition one can clearly see that most of the tax burden for these large companies has been passed along as cost of product to-guess who— John Q. Public. Congress implied that they wanted to tax "big oil" but in fact taxed the public. Now consider the landowners, royalty owners and independent operators. Just how is that portion of the so called windfall profits tax paid and by whom? Having no refineries and no filling stations, the small landowners, the small royalty owner and the small independent oil operators get taxed and “biggies” don't. To each of these categories of people the tax is not only unjust but it is absolutely confiscatory. I'm certain that, by this time, everyone has heard about the Kansas farmer who had a $100 per month royalty check reduced to $250.00 by the windfall profits tax. He now, at age 71, mows lawns to provide the additional income that he needs to live. This is truly a tragic situation and it should be corrected. Next consider the landowners and royalty owners whose investments were made partially or completely to participate in the free enterprise business of commodity production ownership. Why is he singled out for this onerous excise tax? Finally consider the professional who averages five years plus at the college level and 30 years in his profession and who gets no salary for his efforts. This productive oil finder has just been given a "pay cut" of approximately 35 percent simply because he happens to be in the oil producing business. We in S.I.P.E.S. feel that domestic oil exploration is vital to the corection our severe balance of payments problem, indeed even to the short and long term survival of our nation as we now know it. Accordingly we heartily endorse legislation that would remove the windfall profits tax from the first one thousand (1,000) barrels of oil per day of production for independent operators, landowners and royalty owners. Please carefully note the effect of not doing this. Independents will be forced to drill fewer wells, thus finding less oil and correspondingly again increasing our dependence no foreign crude. STATEMENT BY KAY BROWN OF SEMINOLE, TEX. I pulled bolles for thirty-five cents a hundred to help my daddy pay this little farm that he left me a portion of the royalty. I am now 67 years old, my royalty income was less than $3.000.00 for the year of 1979, and I do not feel that I owe such an unjust tax on my depleting royalty. STATEMENT OF MELVIN BROWN OF SEMINOLE, TEX. I have worked hard many long days and nights to save up a little for my older age days. I chose royalty as one of more affordable ways to accumulate a little security and now I find my government confiscating one-third of my small check that will completely stop before I reach the age of my grandfather. I do not think the wind-fall profit tax was understood by the majority that passed the law. I appreciate Senator Bentsen efforts to change the application of the law. Any help I can be just call 915-758-5625. Hon. LLOYD BENTSEN, Austin, Tex. EDNA, TEX., July 14, 1980. DEAR SENATOR: Enclosed please find a resolution passed by the Jackson County Commissioners Court on July 14, 1980, concerning the Windfall Profit Tax and its effect that it is having on our local tax effort. It has only occurred to us what the application has done to the local budgets. We have had in actual loss of tax values approximately 30 percent. In Jackson County 75 percent of our taxable value is the oil and gas industries. Our Oil and Gas appraisers, Thomas Y. Pickett have had to include in their appraisal, a factor to compensate for the tax to the oil companies. Therefore this has reduced the tax base from what it would be at 100 percent market value. The most inequitable part of the tax provision is the amount of tax levied against the royalty owner. We were to understand that the royalty owner would share in the levy, but in proportion to the producer. In actual application we find that the royalty owner is taxed from 40-70 percent, in other words from 30-100 percent more than the producers. Further explaining the inequity of this is that he pays his regular federal tax, Windfall profit tax and again after January 1 he pays an income tax. This greatly reduces his ability to pay his local advalorem taxes to counties, school district's and other taxing entities that provide a direct service to him and local citizens. While this levy sounded good to the Congress as a way to balance the budget and slow inflation on oil, I wonder if they considered what effect it would have on grass roots government and the individual. We call upon you and the Texas delegation to use your influence to repeal this most unfair piece of legislation. Yours very truly, SAM D. SEALE, County Judge, Jackson County. RESOLUTION Whereas, the Federal Government, through action of Congress has levied by law a Special Tax known as the "Windfall Profit Tax"; and Whereas, the Windfall Profit Tax is imposed on the production and sale of oil; and Whereas, the Windfall Profit Act applies to the Producer and to the Royalty Interest; and Whereas, there is unequal application of the levy-There being a average tax on producers of much less than the royalty owner; and Whereas, the Producer of Stripper oil is taxed an average of 30 percent on the "Windfall" and 70 percent on the royalty owner; and Whereas, the owner of royalty interests will be assessed three times by the Federal Government for the same barrel of oil; and Whereas, the taxation of Windfall Profit to the royalty owner is grossly out of line from any other product that inflation has caused to increase drastically; and Whereas, the Windfall Profit Tax has had an effect of usurping local taxing agencies and depriving those agencies of much needed income to provide for their constituents; and Whereas, the Windfall Profit Tax will have the effect of reducing County Budgets; and Whereas, the royalty owner taxpayer will have much less of his royalty income to pay his local taxes; and Whereas, the loss experienced by the counties and other taxing agencies will greatly curtail services; and Whereas, the implication of the Windfall Profits Tax has no practical nor logical reason to be levied, other than to attempt to balance the Federal Budget; and Whereas, this effort has caused and will continue to cause grave hardship on local governments, individuals, school districts, and municipalities, therefore let it be Resolved, That the Commissioners Court of Jackson County meeting in Regular Session July 14, 1980 petitions the United States Congress to recognize the consequences of its acts implementing the Windfall Profit Tax, and the hardship that it has caused the citizens of this county and State of Texas and Therefore the Commissioners Court of Jackson County calls upon the Texas Senators and Representatives of the United States to rescind this unfair, unjust and capricious tax levy as quickly as possible. |