(c) Paragraph (c) exempts property acquired for various land-conservation programs-land-utilization projects, the national forests, national parks and monuments, and fish and wildlife refuges. With respect to such property, however, section 104 provides for declining payments during a transition period. (d) Paragraph (d) designates and exempts from payments a list of miscellaneous properties for which exemption appears warranted on various grounds. Among the properties listed are office buildings (with exceptions), prisons, hospitals, certain aids to air and water navigation, and properties used in police and regulatory activities. For the properties exempted by paragraph (d), however, declining payments during a transition period of 10 years are provided in section 104. Section 104. Transition payments (a) Transition payments are provided for certain properties which will be exempt from continuing payments under this bill. The temporary payments will give State or local governments a definite period of time in which to adjust their finances to the removal of the property from the tax rolls or from uses which have made the property subject to revenue sharing or payments in lieu of taxes. No transition payments would be made on (1) properties which are managed or administered by a State or local government and would be exempt if owned by that government; (2) properties used or held primarily for purposes for which property under private ownership would be exempt from taxation under the constitution or laws of the State of location; (3) properties used or held primarily for services to the local public; or (4) properties which are otherwise exempt from the continuing payments and have not been subject to taxes, payments in lieu of taxes, or shared revenue payments since the cutoff date. Acquisition of property for the various land conservation programs includes exchanges by the Departments of Agriculture and Interior as well as purchases or gifts. Although exchanges may result in little or no net change in the Federal acreage, particular local governments may be adversely affected. Hence, this type of acquisition is included and transition payments might be made on properties acquired through exchange. (b) Declining payments under section 104 would be made in accordance with a schedule based upon the average taxes, payment in lieu of taxes, or shared revenue payment received by the applicant government on account of the property in the 2 years prior to the change in ownership or use which resulted in its eligibility for payments under this section. Starting at the level of the previous average payment, the transition payments decline every second year by one-fifth of that amount and cease 10 years after the change in ownership or use. Payments would not be retroactive with respect to the years in which properties were held prior to the effective date of this act. Thus, for eligible properties which have been held for 4 years as of the effective date, transition payments will be made for 6 years. (c) In the case of properties subject to revenue-sharing arrangements, e. g., national forests, payments under this section will be reduced by the amount of revenue-sharing payments made under any other statute. This arrangement is intended to integrate the provisions of this bill with existing revenue-sharing statutes without disturbing the continued application of those laws. TITLE II-CONSENT TO STATE AND LOCAL TAXATION This title grants consent to State and local governments to impose property taxes on three general classes of Federal property: (1) Property acquired by the Government to protect its financial interest in connection with loans or contracts of insurance or guaranty; (2) property which is leased or sold by conditional sales to taxable persons and is not otherwise subject to State or local taxation; and (3) by reference from section 101 (c), property subject to taxation under laws superseded by this bill with respect to which the owning agency decides (with the approval of the Commission) that taxes should continue to be paid. [Consent to State and local taxation is not a new policy. Statutes already authorize property taxes, in the same manner and to the same extent as on privately owned property, upon the federally owned property of the former Reconstruction Finance Corporation and other Federal lending agencies. The bill would, however, for the classes of properties subject to taxation, include tangible personal property with fixed location.] Section 201 provides for taxation of properties acquired by the Federal Government through foreclosure of loans or loan guaranties while held pending disposition or until put to permanent use by the Federal Government. This group will include the property acquired by the Federal lending agencies which is now subject to taxation under statutes governing these agencies. This provision will also apply to other Federal agencies which may acquire property through foreclosure but do not now have authority to pay taxes. This section provides that those foreclosed properties which remain in Federal ownership and are converted to a permanent use shall then be reclassified and become subject to payments, or become exempt, according to their permanent use. The section provides that foreclosed properties in the possession of the Federal Government shall be subjected to any special tax treatment accorded similar property in private ownership. In some taxing jurisdictions these properties while in private ownership may be exempt from property taxes or subject to special tax treatment in place of ordinary property taxes. This section would permit continuation of the same treatment while the property was held by the Federal Government pending disposition. Subsection 201 (b) provides that Federal property may not be assessed at a larger percentage of true value than is used in valuing property generally in the jurisdiction imposing the tax. If it should be necessary to withhold payment of taxes pending negotiation of the assessment, or for other reasons, the Federal Government would not be subject to penalties for late payment, nor would its property be subjected to any lien, foreclosure, or other proceedings. [It appears that such an immunity from penalties would extend to the Federal Government even if it were not expressly provided in the bill, but the saving clause is included to avoid possible controversy with local officials.] In the event, however, that payment of penalties were deemed to be to the advantage of the Federal Government under some circumstances, the subsection would permit such payment at the option of the owning agency. Section 202 permits taxation of the Federal interest in property under lease or conditional sale. The protections against overassessment and penalties appearing in section 201 are repeated in section 202. This section would not affect leasing arrangements, such as those under the Flood Control Act of 1941, which provide for sharing the lease revenues with State or local governments. Neither would it apply to leased housing properties covered by section 102 of this bill. TITLE III-CONSENT TO SPECIAL ASSESSMENTS Section 301. Properties subject to special assessments Section 301 grants consent to State and local governments to levy special assessments for local improvements on Federal real property except those properties devoted to uses which are exempt from special assessments under private ownership. [Such assessments, properly employed, are essentially land-service charges for particular improvements which enhance the value of the property.] Requirements attached to the consent are that the levy against Federal property shall be made in the same manner as against real property privately owned in the same jurisdiction, and that the Federal Government shall be accorded the same rights and privileges in approving, rejecting, or contesting local improvements as are available to owners of private property. [Consent to special assessments is not a new policy for the Federal Government. All real property of the RFC, for example, has been subject to special assessments for local improvements.] A provision similar to those in title II is included to exempt the Federal Government from penalties and proceedings against the property. TITLE IV-PAYMENTS TO LOCAL GOVERNMENTS FOR SUBSTANTIAL FINANCIAL BURDENS NOT OTHERWISE COMPENSATED This title authorizes the Commission to establish, when and if it deems desirable, a supplementary system of payments in certain types of cases. This system would be used when special circumstances surrounding the ownership and use of particular pieces of Federal property result in the imposition upon local governments of substantial financial burdens for which relief is not provided by other titles of this bill or by other statutes. Eligibility of a local government for payments under this title would not depend on the location of the Federal property within its geographic boundaries nor on the date of Federal acquisition. [Primary reliance in carrying out the purposes and policies of the act would be placed upon those titles which use the property tax as the chief basis for determining payments. Whether or not any supplementary system of payments will be required can be determined only on the basis of actual experience under this legislation. Should such a need become evident, the inclusion of title IV would provide the necessary authority.] [The types of cases which might be dealt with, if necessary, by special payments of the kind authorized in title IV include the following: [(1) Cases in which the employees on a Federal property make their residence in a neighboring community where the resulting increase in population is not accompanied by a proportionate increase in tax revenue; [(2) Cases in which there is intensified use of existing Federal property acquired before the cutoff date provided in title I, since this more intensive use of the property may create new local government problems; [(3) Cases in which special circumstances create some Federal responsibility for helping to finance local government in connection with properties otherwise exempt from payments under section 103; [(4) Cases in which payments made under titles I or II are found to be inadequate to discharge the Federal responsibility.] Subsection 401 (b) requires that, as a condition of eligibility for payments, the applicant government must make a reasonable tax effort and avail itself of any other financial assistance to which it might be entitled. This subsection contains a list of factors to be considered in arriving at equitable payments. [To promote uniformity among the owning agencies in the application of these provisions,] the Commission in its regulations is to specify or recommend the relative weights to be given to the factors. The first factor is the additional local expenditures, if any, necessary to provide services to the Federal Government, to persons living on Federal property, and to persons employed on Federal property. Several offsetting factors are also to be considered. These include the provision by the Federal Government of any services ordinarily provided by the applicant local government; also, any payments, including taxes, payments in lieu of taxes, or shared revenues made available to the applicant local government, directly or indirectly, by the Federal Government, and taxes paid directly or indirectly by persons living or employed on Federal property, or taxes paid in connection with any property, trade, business, occupation, or transaction on the Federal property. Other relevant facts may also be considered. [In title I, where the payments are more closely related to the property-tax system, the offsets which would act to reduce the size of Federal payments are for the most part limited to the value of local-type services provided by the Federal Government. Title II gives consent to the taxation of certain Federal properties in the same manner as if they were in private taxable ownership, and since a private taxpayer would not be entitled to any reduction in his tax because of direct or indirect benefits to the taxing jurisdiction attributable to the use he makes of his property, it is consistent for the Federal Government not to reduce its taxpayments by any such offsets. Under title IV, however, where any payments made to particular jurisdictions might be in excess of the taxes for which a private owner of similar property would be liable, provision is made for assessing broadly the impact of Federal property ownership and activities upon the local government concerned.] TITLE V-GENERAL PROVISIONS Section 501. Commission for payments to State and local governments on Federal real property (a) The primary administrative responsibility under this bill is lodged in the agencies holding or using Federal property. To promote a uniform interpretation and application of the governmentwide policy, the bill provides for a threemember Commission composed of the Director of the Bureau of the Budget (acting as Chairman), the Secretary of the Treasury, and the Administrator of General Services. The rules and regulations issued by this Commission would prescribe policies, standards, and procedures under which the owning agencies would carry out their functions under the bill. The Commission would prescribe forms for original and renewal applications for payments and reports to be made to the Commission by the Federal owning agencies. The Commission may review, insofar as it deems necessary, the determinations of the property-owning agencies with respect to classification of their properties and the amount of their payments, and advise or consult with them on questions of interpretation of the law and regulations with the object of promoting uniformity among the agencies. [These arrangements are intended to insure a reasonable amount of uniformity throughout the Government in the application of statutory provisions which are designed to be flexible enough to permit the use of discretion by owning agencies in arriving at equitable payments over a wide range of situations.] (b) As a basis for evaluating the operation of the legislation, provision is made for annual reports by the Commission to the President, and for a more extensive report, with recommendations, to be submitted to the President not later than 5 years after the effective date of the act for transmittal to the Congress. (c) The Commission is authorized to appoint a director who will employ, supervise, and fix the compensation of necessary personnel. Members of the Commission may make available to the Commission, on a temporary basis, staff of their respective agencies. (d) Each Federal agency is directed to carry out the rules and regulations promulgated by the Commission and may issue such orders and regulations relative to its own operations as may be desirable. Section 502. Advisory committee Section 502 provides for the establishment of a committee to advise the Commission with respect to administration of the act. The committee is to consist of not more than 20 members representing the public, Federal agencies, and national associations of State and local government officials. This advisory committee would meet at least twice annually. Members who are not Federal officers or employees would be paid $50 a day and reimbursed for necessary expenses. Section 503. Applications for payments (a) Payments under title I of this bill would be made to State and local governments only upon application made in accordance with rules issued under this title. Applications could be made by a governmental unit directly or through the office administering its tax on real property. (b) Payments under title IV, if authorized by the Commission, would be made to local governments and only upon application filed in accordance with the rules and regulations issued by the Commission. (c) Section 503 provides also that unless an application is filed each year for which there might be payments under title I or title IV, there will be no liability for that year at any subsequent time. The applications are to relate to the tax year under the property tax laws of each particular State or local government. Section 504. Determination and method of payment [The arrangements embodied in this section are designed to place responsibility for making payments in the hands of personnel best acquainted with the individual properties and in a position to take into account local laws and practices and to evaluate the service burdens imposed and the offsetting services rendered by the Federal Government.] (a) The question whether a property is subject to payments under this act or under other statutes is to be determined by its Federal ownership and use as of the first day of the tax year of the State or local government concerned. The determination and any payment under this law is to be made by the Federal agency which has jurisdiction over the property on that date. (b) Upon application by a State or local government, each agency would decide the amount of the payment, if any, under title I or title IV. Decisions on applications for payments, and any payments based upon such applications are to be made by the eighth month of the tax year to which the payments apply, or by the date fixed by State or local law for payment of taxes if that date is later. Payments may be made to the appropriate tax-collection officer in the local jurisdiction or to any other officer designated by State law. Although the payments are intended to be for the use of the applicant government, the act is not to be construed as limiting the authority of any State with respect to its local governments. (c) Payments are to be made by each Federal agency from its own appropriations or other funds available for the activities for which the property is held or used. Any overpayment is to be offset against payments otherwise due the same State or local government in subsequent years. (d) Any State or local government may apply to the Commission for a review of any determination made by an owning agency under section 504 (b), i. e., relating to a payment under title I or title IV, and such an application shall be granted. The determination by the Commission after such a review is to be the basis for the amount of payment under the act. Section 505. Applicability (a) [Inauguration of a general system of payments on account of Federal real property will involve considerable work, of course, during the first year or two of operation especially.] In order to permit adequate preparations and to spread the administrative load which the Commission and the property-owning agencies would have to carry, applications for payments under title I will not be accepted until 1 year following enactment of the bill. This would provide a period of at least 20 months between the effective date of the act and the date when the first payments would need to be made. (b) Tax payments required by this bill would not begin before the second tax year which begins after enactment of the act. (c) Any payments in lieu of taxes or any tax payments required under existing legislation would continue to be paid until payments begin under this bill. [Thus there should be neither overlapping nor gaps in integrating this general act with any existing legislation providing payments on account of Federal property.] (d) Special assessments for local improvements would be payable beginning immediately after enactment of the bill. (e) The dates for receiving applications and making payments under title IV would be fixed by the Commission if it decided to exercise its authority under that title. Section 506. Authorization for appropriations The bill provides authorization for appropriations to cover necessary expenditures by the Commission and Federal owning agencies. Section 507. Exemption from Administrative Procedure Act [Payments under title I and title IV of this bill are to be administratively determined and presumably would be governed by the Administrative Procedure Act in the absence of a specific exemption. Since these payments are to be made as a matter of grace and provision is made for a coordinating commission, as well as for a representative advisory committee, it is not necessary to subject the decisions of the Federal agencies to judicial review and the other formal procedures of the Administrative Procedure Act. It would be inappropriate to apply these procedural requirements to the consent to taxation and special assessments in titles II and III. Accordingly,] all functions performed under this bill are to be exempt from the operation of the Administrative Procedure Act, as amended, except as to the public information requirements of section 3 of that act. The applicable section specifies the kinds of rules that agencies shall state or publish, requires that appropriate matters of official record shall be made available to properly interested persons, and requires that rulings and orders either be published or otherwise made available to public inspection. Section 508. Repeal and savings provisions [The intent of this legislation is to provide a comprehensive system of payments on Federal property as a substitute for the various existing statutes applying to individual agencies. The preamble of this bill is intended to affirm the immunity to State or local taxation for all Federal property to which this bill applies except for the classes of property with respect to which immunity is waived under title II and title III. Consequently] it is necessary to repeal portions of a number of laws which affirm the immunity of the Federal Government from property taxes or which waive such immunity or provide for payments in lieu of taxes. It is also necessary to indicate the statutes under which payments are being made which will not be repealed. Subsection 508 (a) (1) contains the citations to the statutes that would be affected by repeal, and subsection 508 (a) (2) contains the citations to the revenue-sharing and other laws that would not be affected by this bill. [Certain revenue-sharing laws which apply only to public-domain lands have not been listed, since such lands are excluded by definition from the Federal property to which this bill applies.] Subsection 508 (b) repeals a section of Public Law 874, 81st Congress (20 U. S. C. 237), which provides payments in lieu of taxes to certain school districts on account of Federal property acquisitions and amends another provision of the same law. The citations to the United States Code of the statutes listed in subsection 508 (a) (1) and (2) are included here with an identification of the agencies or types of properties involved. |