tions and letters which I would like to submit for the record, but not read at this time, in order to conserve your valuable time. May I submit them? Mrs. ST. GEORGE. Without objection, the documents will be made a part of the record at this point. Mr. HAMILTON. Thank you. (The documents referred to are as follows:) Hon. KATHARINE ST. GEORGE, 240 Old House Office Building, Washington 25, D. C. JULY 14, 1953. On behalf of the National Association of Assessing Officers, composed of State and local government tax officials for every State, I respectfully urge that you and your committee give most favorable consideration to H. R. 5605. This measure is badly needed to check the ever growing list of properties which ought to be remain taxable but enjoy immunity from local government property taxes solely because of Federal ownership. ALBERT W. NOONAN, Executive Director, National Association of Assessing Officers. Mrs. KATHARINE ST. GEORGE, JULY 16, 1953. Congresswoman, 240 Old House Office Building. Washington, D. C. We are informed that a special subcommittee has been composed to hold hearings beginning July 20 on H. R. bill 5605 to amend the Federal Property Administrative Services Act of 1949. This bill appears to stipulate that transfers of real property from certain Government corporations to other Government agencies shall not operate to remove such real property from local tax rolls. A favorable report of your special subcommittee and ultimate passage by the Congress is deemed to be important to local governmental units in order to preserve ratables as presently and in the future to be asessed upon which the revenue structure of local units is dependent in some measure to balance annual budget appropriations. Since the Municipal Finance Officers' Association is interested in improved methods of public finance you are respectfully advised that we believe that favorable approval of H. R. 5605 would conform to association policy. We shall not present witnesses at hearings on this bill. Respectfully submitted; thank you. Mrs. KATHARINE ST. GEORGE, JOSEPH F. CLARK, Executive Director. JULY 16, 1953. Room 240, Old House Office Building, Washington, D. C.: Enactment of H. R. 5605 will eliminate serious inequity now existing taxwise for States and local government. Strongly urge favorable consideration. Letter follows. CHARLES F. CONLON, Executive Secretary, National Association of Tax Administrators. Hon. KATHARINE ST. GEORGE, JULY 16, 1953. House Office Building, Washington, D. C.: The New Jersey State League of Municipalities heartily endorses H. R. 5605 which provides for the amendment of the Federal Property and Administrative Services Act to provide that transfers of real property from certain Government corporations to other Government agencies_shall not operate to remove such real property from local property-tax rolls. Urge your support of this bill when it comes up for consideration. Respectfully, JAMES J. SMITH, Executive Director, New Jersey State League of Municipalities. CONFERENCE OF MAYORS AND OTHER MUNICIPAL Hon. KATHARINE ST. GEORGE, Room 240, New House Office Building, Washington, D. C.: The cities and villages of New York State take this means of urging favorable consideration of H. R. 5605 which provides that transfers of real property from one Federal agency to another shall not operate to remove such property from local tax rolls. Taxes lost by the tax-dodging practice this bill seeks to correct seriously affect the finances of several cities and villages in New York, all of which operate under strict constitutional tax limits. If permitted to continue more cities will be harmed as industrial properties are transferred to escape local taxes even though operations are continued unchanged. This bill, we believe, presents an opportunity to Congress to correct one aspect of the pay-inlieu problem before it becomes firmly established and thus strengthen local finances. We earnestly request favorable action on the bill both in committee and on the floor. MORGAN STRONG, Executive Secretary, New York State Conference of Mayors. LEAGUE OF CALIFORNIA CITIES, Hon. CLARE E. HOFFMAN, Chairman, House Committee on Government Operations, Room 1501, New House Office Building, Washington 25, D. C. DEAR CONGRESSMAN HOFFMAN: On behalf of the cities of California, we respectfully urge that you schedule hearings on H. R. 5605 by Mr. Hillelson at the earliest possible time in order that it may be considered by the House prior to adjournment. This bill deals with one relatively small aspect of the very large problem of local tax exemption of federally owned properties. While we have been urging the Congress for years to address itself to the larger question, we have been reluctantly obliged to concede that it is a problem of tremendous scope with many ramifications. Here, however, we are confronted with a problem which is not only of manageable proportions but, even more importantly, here the problem to which the bill is addressed really represents calculated deliberate abuse of Federal tax exemption by transferring Federal properties from one classification to another for the purpose of achieving exemption from local taxation. We respectfully submit that there is no moral or ethical difference between deliberate tax evasion by a Federal agency and tax evasion by a private citizen. While the amount of money involved in this measure is not great in our State, we hold it to be a matter of great importance as a matter of principle, and we therefore urge your favorable consideration of the request that the bill be scheduled for early hearing and, we trust, favorable committee and House action. Sincerely, Mrs. KATHARINE ST. GEORGE, RICHARD GRAVES, JULY 16, 1953. Room 240, Old House Office Building, Washington, D. C. DEAR MRS. ST. GEORGE: I regret that a long-standing previous engagement prevents me from attending the hearings on H. R. 5605 to amend the Federal Property and Administrative Services Act of 1949 so as to provide that transfers of real property from one Government agency to another shall not operate to remove these properties from local-tax rolls. The National Association of Tax Administrators, an official organization of State tax commissioners and revenue department heads, has through its committee on payments in lieu of taxes maintained a great interest in this subject, and its position is fully outlined in the report commencing on page 41 of the enclosure. This position is approved and endorsed by resolution No. 1 on page 67 of the enclosure. Specifically with respect to real estate held by Federal lending agencies and that held by the Reconstruction Finance Corporation and its subsidiaries, our committee not only approved the continuance of the application of local tax laws to these types of properties, but also recommended that Congress give favorable consideration to similar treatment for other real-estate holdings of the Federal Government, especially those of an industrial and commercial character. The passage of H. R. 5605 will be an important step in eliminating some of the revenue squeezes which now exist because federally owned property of substantial value, and requiring at least a normal amount of local public services, is exempt from State and local taxes. Sincerely, CHARLES F. CONLON, Re H. R. 5606. MUNICIPAL FINANCE OFFICERS ASSOCIATION Mrs. KATHARINE ST. GEORGE, M. C., 240 Old House Office Building, Washington 25, D. C, DEAR MRS. ST. GEORGE: Enclosed is a copy of my telegram dated July 16, 1953, in connection with the captioned bill designed to amend the Federal Property and Administrative Services Act of 1949. The bill, No. 5606, if approved by the special subcommittee of the House, of which you are a member, and the Congress, provides for legislation that is desirable in behalf of local governmental units inasmuch as it seeks to preserve the present position of the taxable status of Federal Government property on local tax rolls. This is described in section 701 of H. R. 5606. If this bill is not passed the status of taxable Federal property, within the meaning of the text of the bill, might be placed in an uncertain status. We are confident that the Congress is not unmindful that the financial problems of local governmental units are such that the revenue structure should not be fractured by erroneous interpretations of Federal legislation. It would appear that H. R. 5606 makes clear the intent of the Congress. The interest of this association, technical in character, arises out of the fact that one of its purposes is to *** "improve methods of public finance” * * * Therefore, our observation that the proposed legislation is desirable legislation is in keeping with association policy. It is probably not necessary to remark that failure to enact the proposed legislation might place local governmental units in a position of financial confusion so far as the taxable status of real property of Federal Government corporations and agencies is concerned, and is to be avoided. It may be observed, too, that this proposed legislation appears to fall in line with administration policy respecting intergovernmental relations which was the subject of a White House conference on March 31, 1953 and later reflected in congressional and administration attitudes by introduction and passage of S. 1515 (Taft) and H. R. 4406 (Halleck) the purpose of which was to create a Commission on Intergovernmental Relations. Hence favorable action by your special subcommittee and the Congress on passage of H. R. 5606 appears to conform to present Federal policy. I hope your views anent H. R. 5606 will be regarded as respectfully advisory and therefore helpful to the special subcommittee in its deliberations and favorable recommendation of ultimate passage by the Congress. This association will not present witnesses during the hearings before the special subcommittee beginning July 20, 1953, as it is believed the above observations will suffice. The valuable time of your subcommittee should not be further exhausted. Respectfully submitted. JOSEPH F. CLARK, Hon. JEFFREY P. HILLELSON, CITY OF KANSAS CITY, Mo.. OFFICE OF CITY MANAGER, Kansas City, Mo., July 16, 1953. House of Representatives Office Building, Washington, D. C. MY DEAR CONGRESSMAN: I want to assure you that Kansas City strongly favors your H. R. 5605, calling for the payment of property taxes by the Federal Government after it acquires taxable real property. Cities throughout the country have favored such legislation for many years for a number of very good reasons. When the Government acquires valuable taxable property, such as, for example, the Fidelity Building at Ninth and Walnut Streets in Kansas City, which building had an assessed valuation of $1,500,000 at the time it was sold, such property is no longer subject to tax assessment, and the city, the school district, and other tax units are deprived of that much assessable property. It unbalances budgets. It handicaps the various governmental units affected, because their sources of tax revenue are quite limited, whereas the Federal Government has much broader taxing powers. I am confident that when this bill is ready for a hearing, most of the cities of the United States will have representatives present to speak in its behalf, either through the American Municipal Association, 523 Transportation Building, or the National Institute of Municipal Law Officers, 730 Jackson Place, both in Washington, D. C. We are pleased that you have given your support to legislation of so constructive a character. With kindest personal regards, I am Very truly yours, L. P. COOKINGHAM, City Manager. POLICY STATEMENTS OF THE AMERICAN MUNICIPAL ASSOCIATION Payment to local government in lieu of taxes on Federal property Each year at the annual American Municipal Congress, the American Municipal Association conducts discussions and roundtables of municipal officials with a view to learning first hand of the major problems confronting local officials. Participants include representatives from cities of every size, from the smallest to the largest, from every State in the United States. These discussions are made specific in the form of resolutions and policy statements adopted by the entire congress. They are, then, an accurate and comprehensive statement of municipal thinking on the major local issues of the day on a nationwise scale. As such, they are the association's program of action. Following are the statements on payment of local taxes on Federal real property and/or pay in lieu of those taxes: 1951: Resolved, That the American Municipal Association continue to extend efforts to gain adequate Federal payments in lieu of taxes and to secure Federal payments for special assessments. Resolved, That the board of trustees and the executive director be and are hereby authorized and directed to cause legislation to be introduced in the 83d Congress and to propose amendments to all other legislation introduced, which will make effective the long-established policy of the association regarding Federal payments in lieu of taxes on Federal tax-exempt property. 1950: Resolved, That the executive committee and executive director of the American Municipal Association be and they are hereby authorized and directed to cause legislation to be introduced in the 82d Congress to make effective the long-established policy of the association regarding Federal payments in lieu of taxes on Federal tax-exempt property; be it further Resolved, That the officers of the association be authorized and directed to seek cooperation and support of the National Association of County Officials, the organizations of schools, and other local government authorities and other interested groups. 1949: Resolved, That the American Municipal Association at its 1949 conference reaffirm the resolution passed at its 1948 conference relative to payments in lieu of taxes as follows: The delegates and representatives of 10,150 municipalities of the American Municipal Association at this 26th annual conference, favor and desire the enact ment of Federal legislation authorizing the assessment and collection of local property taxes on Federal property or requiring the payment of annual sums in lieu of full taxes to municipalities by the Federal Government. The American Municipal Association will cooperate with other organizations and with the Federal Congress in formulating legislation that will remove the burdens from localities with tax-exempt properties. Within each State the organization of municipalities is urged to organize vigorous municipal support of such Federal legislation. Mr. HAMILTON. This morning you are considering H. R. 5605, a bill whose principles have the unqualified and unanimous approval of all of the most reputable organizations representing State and local government. The simple listing of these organizations is more ample and eloquent testimony for its approval than anything I can say to support and favor the passage of this bill. The principles of H. R. 5605 are supported by The American Municipal Association; The National Association of Assessing Officers; The Municipal Finance Officers Association; The National Association of County Officials; and Unanimously, then, local government in the United States appears before your subcommittee this morning to urge favorable consideration of H. R. 5605. In addition, the bill's principles are supported by Hoover Commission recommendations which state: *** every effort should be made to leave to localities and States adequate resources from which to raise the revenue to meet the duties and responsibilities of State and local governments. President Eisenhower has stated: The matter of the adequacy of fiscal resources available to the various levels of government to discharge their proper functions must be carefully explored. This statement appeared in a special message which he sent to the Congress some 3 months ago. The Republican Party platform states that there is a need for: *** reallocation of fields of taxation between Federal, State, and municipal governments so as to allow greater fiscal freedom to the States and municipalities *** to meet their obligations more efficiently. Former President Harry S. Truman made similar statements while in office, and the Democratic platform echoes the sentiments. Mr. Hillelson is to be commended for introducing a bill, so shortly after his election to the Congress, which can command such unanimous nationwide approval and support. The reason for this approval is easily understood. One of the great maxims of American governmental relationships was laid down by Chief Justice Marshall of the United States Supreme Court when he paraphrased a monumental speech of Daniel Webster in saying: "The power to tax is the power to destroy." If this be true, and it is, then surely it is also true that the lack of power to tax, or the power to prevent taxation, is also the power to destroy. Any study of the loss of local tax revenues through Federal realestate acquisitions reveals that tax exemptions, improperly applied, are a serious threat to local self-government in the United States. |