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Hamilton, Randy H., director of the Washington office, American
Knott, Lawson B., Jr., Corps of Engineers, representing the Depart-
Wallace, Archie O., Madison Agricultural School, Adrian, Mich.
Excerpt from speech of John H. Witherspoon, city controller of
Detroit, Mich., before the National Association of Assessing
Derounian, Hon. Steven B., a Representative in Congress from the
General Services Administration, to Congressman Steven B.
executive-director, League of California Cities, Los Angeles,
ham, city manager, city of Kansas City, Mo., July 16, 1953.-
Joseph F. Clark, executive director Municipal Finance
Officers Association of the United States and Canada,
July 16, 1953.,
Harden, Hon. Cecil M., a Representative in Congress from the State
State of Missouri: Excerpt from the Federal Property and Adminis-
Excerpt from report of Bohn Aluminum & Brass Corp., printed in
the March 13, 1953, issue of the Wall Street Journal.
Regional Office, to treasurer, city of Adrian, Mich., January
Letter from M. B. Folsom, Acting Secretary of the Treasury, to
Budget, to Congressman Clare E. Hoffman, July 17, 1953...- 55
Statement of Henry G. Waltemade, chairman, Realtors' Washing-
ington Committee of the National Association of Real Estate
Letter from John G. Adams, Acting General Counsel, Office of Secretary of
Telegram from Joseph F. Clark, executive director, Municipal Finance
Officers Association, to Hon. Katharine St. George, July 16, 1953.
Seattle, Wash., to Hon. Katharine St. George, July 17, 1953.
ference of Mayors, to Hon. Katharine St. George, July 17, 1953.
Arbor, Mich., to Hon. Clare E. Hoffman, July 24, 1953..
Aug. 10, 1953
AMENDMENTS TO THE GENERAL PROPERTY AND AD. MINISTRATIVE SERVICES ACT OF 1949 AS AMENDED
(Transfers of Real Property)
MONDAY, JULY 20, 1953
HOUSE OF REPRESENTATIVES,
Washington, D.C. The subcommittee met, pursuant to call, at 10:15 a. m., in room 1501, New House Office Building, Hon. Katharine St. George (chairman of the subcommittee) presiding.
Present: Representatives Katharine St. George and Jeffrey P. Hillelson.
Also present: Clyde W. Smith, counsel.
This special subcommittee consisting of Mr. Hillelson, Mr. Ikard, and myself as chairman is meeting to consider H. R. 5605. (H. R. 5605 is as follows:)
[H. R. 5605, 83d Cong., 1st sess.) A BILL To amend the Federal Property and Administrative Services Act of 1949 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 tax rolls Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the table of contents contained in the first section of the Federal Property and Administrative Services Act of 1949 is amended by inserting immediately below "SEC. 605. Effective date," the fol. lowing new matter.
TITLE VII–TAXATION BY LOCAL TAXING AUTHORITIES
SEC. 2. Such Actis further amended by adding at the end thereof ing new title:
TITLE VII-TAXATION BY LOCAL TAXING AUTHORITIES
DECLARATION OF POLICY
SEC. 701. The Congress recognizes that the transfer of real property having a taxable status from a Government corporation to another Government agency often operates to remove such property from the tax rolls of local taxing authorities, thereby creating an undue and unexpected burden upon such local taxing authorities and causing disruption of their operations. It is the purpose of
this title to provide that when property having a taxable status is so transferred by a Government corporation, such property shall remain subject to taxation by local taxing authorities, regardless of subsequent transfers of such property among agencies of the Federal Government.
SEC. 702. As used in this title
(a) the term “State" means the several States, Alaska, Hawaii, and the District of Columbia ;
(b) the term “real property” means land, and includes those improvements on land and interests in land which, for the purposes of taxation, are characterized as real property by the State in which the land is located ;
(c) the term “local taxing authority” means a State, county, municipality, or other subdivision of a State, county, or municipality, which subdivision has authority to levy and collect taxes upon real property ;
(d) the terms “tax” and “taxation" include special assessments;
(e) the term “Government corporation" means the Central Bank for Cooperatives and Regional Banks for Cooperatives ; Commodity Credit Corporation; Federal Farm Mortgage Corporation; Federal Home Loan banks; Federal Land Banks; Federal National Mortgage Association; Federal Savings and Loan Insurance Corporation; Production Credit Corporation; and the Reconstruction Finance Corporation; and such term includes any corporation (1) which is incorporated after the effective date of this title by or under an Act of Congress, and (2) which is owned or controlled by the Federal Government; and
(f) the term "Federal Government" includes any Government corporation.
TAXATION OF PROPERTY OF GOVERNMENT CORPORATIONS
Sec. 703. When a Government corporation is incorporated after the effective date of this title, unless specifically provided otherwise, all real property owned by such Government corporation shall be subject to taxation by local taxing authorities to the same extent according to its value as other real property.
TAXATION OF PROPERTY TRANSFERRED FROM GOVERNMENT CORPORATIONS
SEC. 704. (a) When real property which is taxable by local taxing authorities is transferred from a Government corporation to any department, agency, or other instrumentality of the Federal Government, such real property shall remain subject to taxation by local taxing authorities to the same extent according to its value as other real property is taxed, notwithstanding such transfer or any subsequent transfer of such property to a department, agency, or other instrumentality of the Federal Government. (b) In the case of any real property which
(1) was owned on or after June 22, 1948, by a Government corporation or any subsidiary thereof;
(2) was transferred prior to the effective date of this title to any department, agency, or other instrumentality of the Federal Government;
and (3) is owned by the Federal Government on the effective date of this title; such real property shall be taxable by local taxing authorities to the same extent according to its value as other real property is tax?d, notwithstanding such transfer or any subsequent transfer of such property to al department, agency, or other instrumentality of the Federal Government. No taxes shall be paid under this subsection for any period prior to the effective date of this title.
(c) No payments in lieu of taxes shall be made to any local taxing authority with respect to any real property which is subject to taxation by such local taxing authority.
SEC. 705. (a) The Federal Government shall not be subject to penalties or penalty interest nor shall its property (including rights of action) be subject to any lien, foreclosure, garnishment, or other proceedings because of its nonpayment or failure to make timely payment of taxes on real property; nor shall any subsequent purchaser be liable for such penalties or penalty interest.
(b) The Federal Government shall be exempt from any taxes on real property which is devoted to uses which would cause such real property to be exempt from taxation if it were privately owned.
EFFECTIVE DATE AND EXPIRATION OF THIS TITLE
SEC. 706. This title shall take effect on January 1, 1953, and shall expire on December 31, 1955.
Mrs. Sr. GEORGE. We have had word from Mr. Ikard that he cannot be with us this morning, but that he wants us to continue, which we are about to do.
First, I am going to call on Mr. Hillelson, the author of the bill, to read his statement.
STATEMENT OF HON. JEFFREY P. HILLELSON, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF MISSOURI
Mr. HILLELSON. Madam Chairman, H. R. 5605 is a bill that I have introduced after much study and many conferences with members of the staff of Intergovernmental Relations Subcommittee, a subcommittee of the House Government Operations Committee. Also, I have consulted with authorities in different Government agencies concerning the merit and wisdom of this bill.
This bill amends the Federal Property and Administrative Services Act of 1949 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 tax rolls providing the property has before the transfer been on local tax rolls.
In many cases where real estate has been owned by Government corporations and subject to local taxes authorized by the Federal Government to be paid by the corporations, this tax revenue to the local taxing agencies has been lost or terminated when this real property has been transferred to another Federal agency which is not authorized to pay such taxes. It has long been established that Federal property is not subject to State and local taxation without the consent of the Federal Government. However, for many years the Federal Government has given this consent under certain circumstances and, in particular, with respect to real property owned by Government corporations which Congress created or authorized. Many hundreds of war plants were established and operated under the corporate form and were authorized to pay State and local taxes on their real property to the same extent as private industry is required to pay taxes on similar real property. In most cases this afforded local taxing àuthorities much needed assistance in their tax problems.
At the end of World War II the corporations owning these properties began to dispose of them either by sale, transfer to other Federal agencies, or to the War Assets Corporation or its successor, the General Services Administration, as excess or for handling under the Industrial Reserve Act. In an effort to take care of the tax situation the War Assets Corporation, in regulations promulgated under the Surplus Property Act of 1944, made certain provisions for the payment by the disposal agency of taxes due for periods after assumption of responsibility for surplus real property. Appropriations made to carry out the Surplus Property Act of 1944 (Public Laws 785 and 862, 80th Cong., 1st and 2d sessions) provide for payment of amounts in lieu of taxes on real property declared surplus by Governmentowned corporations under that act.