nontaxable by the local authorities. This is true whether complete legal title to real property has been transferred from a Government corporation to another Government department, or whether the Government corporation retains legal title and transfers custody, control, or accountability for the real property to another Government department. Thus, the real property which has been on the State and local tax rolls by specific provisions of an act of Congress has been taken off such tax rolls by a transfer to another Government department without any break in the chain of title being held by the United States. In the view of your committee this has resulted in the imposition of an unjustifiable financial burden upon communities. The nature and use of the commercial or industrial facilities involved has not changed. The Congress has already provided that these properties should be taxed when they are held by and under the exclusive control of the Reconstruction Finance Corporation. It, therefore, appeared just and necessary that provisions be made, as in this bill, at least on a temporary basis, to make payments in lieu of taxes until a comprehensive policy with regard to payments in lieu of taxes shall have been enacted by the Congress.'
The Committee report refers to the Court of Claims case, Board of County Com'rs of Sedgwick County, Kan. v. United States, 105 F.Supp. 995, 123 Ct.Cl. 304, and a subsequent ruling by the Comptroller General. Plancor 765, New Castle, Pennsylvania, is the government designation for this property which is one of the properties referred to in the committee report.
Congress having waived the immunity of this particular property from local taxation, the point to be decided is whether that immunity continued to and including the year 1954. As the Sedgwick County case is the foundation of the rulings of the Administrator of General Services and of the Comptroller General as well as the basis for the government's argument in the instant case, it is appropriate to quote three paragraphs from the opinion in that case. Commencing at page 1001 of 105 F.Supp., the court says:
'We believe, however, that the taxes for the year 1947 fall into a different category, as a result of the declaration of the property as surplus, and the acceptance thereof by the WAA on April 16, 1947, acting presumably under the authority conferred in section 11(d) of the Surplus Property Act.
'The law did not require that the RFC execute a deed of the property upon its transfer to the control of the WAA, and the RFC continued after April 16, 1947, as the 'owning agency' within the meaning of the Surplus Property Act -- apparently as a matter of convenience to the Government and to minimize actual paper work and expense until the WAA made final disposition of the property. While a bare legal title for the use of the United States may have thus remained in the RFC from April 16, 1947, until February 25, 1948, when the property was transferred to the Department of the Air Force, nevertheless the entire responsibility for the care and handling, and disposition of the property was in the WAA during that period. United States v. Shofner Iron & Steel Works, 9 Cir., 168 F.2d 286, 287.
'The waiver of constitutional immunity from taxes of 'real property of the corporation' enacted with respect to the RFC in 1932, 47 Stat. 10, was undoubtedly intended to apply to that real property of the corporation held by it in the performance of the duties and responsibilities imposed upon it by law. But by the August 21, 1946, declaration of the property as surplus under the Surplus Property Act, 58 Stat. 765, enacted some 12 years after 47 Stat. 10, the RFC declared that the property was surplus to its 'needs and responsibilities', and by the acceptance of April 16, 1947, was divested of all control and responsibility. At no time after the acceptance by the WAA on April 16, 1947, did the RFC or any of its employees have physical possession, control, or custody of the property. It had neither the use nor the right to use the property. It could not even withdraw the declaration of surplus property without the approval of the War Assets Administrator. 32 CFR, 1946 Supp. 8301.15(b).'
The following is a brief comparison of the facts and issues in the instant case and the facts in the Sedgwick County case:
U.S. v. County
of Lawrence Sedgwick v. U.S.
District Court Court of Claims
105 F.Supp. 995
I. Complaint --
Government seeks to I. Complaint -- County sought
strike off local
tax lien on money judgment against United
nongovernment property States for tax assessed against
realty for the years 1944, '45,
'46 and '47.
II. Facts: II. Facts:
1. August, '42 --
deed to Defense 1. 1942 -- deed to Defense Plant
Plant Corp. Corp.
a. Realty/plant --
subject to tax, a. Realty/plant -- subject to
15 U.S.C.A. § 607 tax, 15 U.S.C.A. § 607
Lease to United
Engineering & Lease to Boeing -- no provision
Foundry Co. --
United to pay tax for it to pay tax
2.July, 1945 --
Defense Plant Corp. 2. July, 1945 -- Defense
-- to RFC Plant Corp. liquidated -- to RFC
-- taxable, 15 U.S. a. Realty/plant -- taxable 15
C.A. § 607 U.S.C.A. § 607
Lease to United
-- United Lease to Boeing -- no provision
obligated to pay
local tax for it to pay local tax; it did
not pay tax
4, 1947 3. April, 1947
of transfer of RFC owner
from RFC to
a. Under Sedgwick
case non-taxable, a. Authority and responsibility
but lease from
RFC required in WAA, and RFC neither physical
Engineering to possession/Control/custody
pay taxes which
it did pay or the right to use the premises
4. June 13, 1950 4. February, 1948
deed RFC to RFC to United States
a. Sedgwick holds
such a deed a. Deed by WAA for RFC
b. Taxes levied
against realty. b. Deed was subject to taxes of
Lease to United
Engineering '44 to '47
requiring it to
and it did pay
local taxes c. Custody of property turned
over to Air Force
5. April 25, 1952
a. Renewal lease
by RFC as lessor, 1. Tax assessment of the county
Engineering for made under statutory
a period of two
years, to provision allowing such tax
ending December (In the instant case the
31, 1953 statute is 72 P.S. § 5020.201)
b. United Engineering
required to and
did pay taxes
for '51 and '52.
6. December 15, 1953
deed from RFC to
U.S. recorded in Lawrence
7. July 13, 1954 2. No sums were paid in lieu
U.S. by Administrator
of GSA of taxes on this property
leases to United
for year 1954
1. For the first
that lessee pay local
taxes is deleted.
amount equal to
local taxes is
added as additional
to the United States.
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