PAYMENTS OF TAXES, OR IN LIEU OF TAXES, TO STATE OR LOCAL TAXING UNITS

S. 826, S. 888, S. 1566, S. 1657, S. 2100,
S. 2377, and S. 2390

BILLS RELATING TO PAYMENTS OF TAXES, OR IN LIEU
OF TAXES, TO STATE OR LOCAL TAXING UNITS

69937

PART 1

JULY 25, 1955

Printed for the use of the Committee on Government Operations

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1956

SENATE COMMITTEE ON GOVERNMENT OPERATIONS

JOHN L. MCCLELLAN, Arkansas, Chairman

HENRY M. JACKSON, Washington
JOHN F. KENNEDY, Massachusetts
STUART SYMINGTON, Missouri
SAMUEL J. ERVIN, JR., North Carolina
HUBERT H. HUMPHREY, Minnesota
STROM THURMOND, South Carolina

JOSEPH R. MCCARTHY, Wisconsin
KARL E. MUNDT, South Dakota
MARGARET CHASE SMITH, Maine
NORRIS COTTON, New Hampshire
GEORGE H. BENDER, Ohio
THOMAS E. MARTIN, Iowa

WALTER L. REYNOLDS, Chief Clerk and Staff Director
ANN M. GRICKIS, Assistant Chief Clerk
GLENN K. SHRIVER, Professional Staff Member
ELI E. NOBLEMAN, Professional Staff Member
RICHARD J. O'MELIA, Professional Staff Member
MILES SCULL, Jr., Professional Staff Member

CONTENTS

S. 826, to provide for payments by the Federal Government to States or

local taxing units adversely affected by Federal acquisition, ownership,

or use of defense-production facilities, to provide for the taxation of

certain Federal properties, and for other purposes.

S. 888, to make temporary provision for the payment of taxes, or the

making of payments in lieu of taxes, with respect to certain real estate

held by Government corporations, or transferred by them to other

Government agencies, and for other purposes – –

S. 1566, establishing a general policy and procedures with respect to pay-

ments to State and local governments on account of Federal real prop-

erty and tangible personal property, and for other purposes..

S. 1657, to authorize the taxation of certain Federal property by State

and local tax authorities, to provide for the payment by Federal agencies

of sums in lieu of taxes with respect to certain other Federal property,

and for other purposes-

S. 2100, to prohibit agencies of the United States from entering into con-

tracts under which private contractors are constituted agents of the

United States to purchase property necessary to carry out such con-

tracts___

S. 2377, to amend the Federal Property and Administrative Services Act

of 1949 to make temporary provision for making payments in lieu of

taxes with respect to certain real property transferred by the Recon-

struction Finance Corporation and its subsidiaries to other Government

departments___.

S. 2390, to consent to the taxation of certain Federal property by State

and local tax authorities, to provide for the payment to such authorities

of sums in lieu of taxes with respect to certain other Federal property,

and for other purposes.

S. 2754, to authorize the taxation of certain Federal real property by State

and local tax authorities, and for other purposes.

Extracts from report of the Commission on Intergovernmental Relations
dealing with intergovernmental tax immunities.

Staff Memorandum No. 84-1-4, Committee on Government Operations,

relative to bill S. 826___.

Appendix A to staff memorandum No. 84-1-4, summary of major

provisions of S. 826-

Staff Memorandum No. 84-1-36, Committee on Government Operations,

Federal payments of taxes or in lieu of taxes, to State and local taxing

authorities S. 1566, S. 1657, S. 2390, and S. 2754.

Appendix A to staff memorandum No. 84-1-36, summary of findings

and recommendations of the Commission on Intergovernmental

Relations with respect to payments in lieu of taxes.

Appendix B to staff memorandum No. 84-1-36, provisions of S. 1566-

Appendix C to staff memorandum No. 84-1-36, provisions of S. 1657-

Appendix D to staff memorandum No. 84-1-36, provisions of S. 2390-

Appendix E to staff memorandum No. 84-1-36, provisions of S, 2754-

Public Law 388, 84th Congress, 1st session, to amend the Federal Property

and Administrative Services Act of 1949 to make temporary provision

for making payments in lieu of taxes with respect to certain real property

transferred by the Reconstruction Finance Corporation and its subsid-

iaries to other Government departments (appendix I).

Extracts from Report of the Study Committee on Payments in Lieu of
Taxes and Shared Revenues, Commission on Intergovernmental Rela-
tions, (appendix II)_

147

Statement of—

Page

Goldwater, Hon. Barry, a United States Senator from the State of

Arizona

104

Healy, Patrick, Jr., executive director, American Municipal Associa-

tion, Washington, D. C..

140

Kuchel, Hon. Thomas H., a United States Senator from the State of

California

113

130

MacDougall, William R., general manager, County Supervisors Asso-

ciation, representing the National Association of County Officials,

Sacramento, Calif.

Potter, Hon. Charles E., a United States Senator from the State of

Michigan_

Seegmiller, Keith L., general counsel, National Association of County

Officials, Washington, D. C...

Letters, statements, etc., submitted for the record by-

Goldwater, Hon. Barry, a United States Senator from the State of

Arizona:

126

140

Table showing estimated amount eligible Federal property

claimed by section 3 applicants would yield if taxable at average

local rate, number and acreage of such properties, estimated

taxable value, gross entitlements, and tax rates..

107

List of federally owned property in the State of Arizona located in

or near school districts that are applicants under Public Law 874

and 815 during the 1954 fiscal year

Humphrey, Hon. Hubert H., a United States Senator from the State of

Minnesota:

Letter from Hon. Edward Martin, a United States Senator from

the State of Pennsylvania, to Hon. John L. McClellan, chair-

man, Committee on Government Operations_.

Statement by Hon. Edward A. DeCarbo, mayor of the city of

New Castle, Pa.......

Letter from Hon. Prescott Bush, a United States Senator from the

State of Connecticut, to Hon. John L. McClellan, chairman,

Committee on Government Operations.

Letter from Hon. Edward J. Thye, a United States Senator from

the State of Minnesota, to Hon. John L. McClellan.......

Letter from Hon. John L. McClellan to Hon. Edward J. Thye...

Letter from Joseph R. Okoneski, city clerk, city of St. Paul, Minn.,

to Hon. Edward J. Thye, with enclosure of resolution adopted

by the St. Paul City Council recommending passage of S. 1566-

Kuchel, Hon. Thomas H., a United States Senator from the State of

California:

Table prepared by the California Board of Equalization showing

Federal real estate ownership in California, estimated assessed

values, and acreage.

Statement of Arthur C. Eddy, assessor, city and county of San

Diego, Calif

Lehman, Hon. Herbert H., a United States Senator from the State of
New York, letter and statement_-_-

MacDougall, William R., general manager, County Supervisors Asso-

ciation, representing the National Association of County Officials,

Sacramento, Calif.:

Senate Joint Resolution 20, adopted by the Legislature of the

State of California, urging enactment of legislation providing

for payments to local governments in lieu of taxes on federally

owned land.....

Resolution adopted by National Association of County Officials

at Richmond, Va., July 19, 1955..

108

100

100

102

102

103

103

122

122

142

131

133

PAYMENTS OF TAXES, OR IN LIEU OF TAXES, TO

STATES OR LOCAL TAXING UNITS

The committee met, pursuant to call, at 10: 10 a. m., in room 357, Senate Office Building, Washington, D. C., Senator Hubert H. Humphrey presiding.

Present: Senator Hubert H. Humphrey, Democrat, Minnesota; Senator Samuel J. Ervin, Jr., Democrat, North Carolina; Senator Karl E. Mundt, Republican, South Dakota; Senator Norris Cotton, Republican, New Hampshire; Senator George H. Bender, Republican, Ohio.

Present also: Walter L. Reynolds, chief clerk; Ann M. Grickis, assistant chief clerk; Eli E. Nobleman, professional staff member. Senator HUMPHREY. We will call this hearing to order.

Following the customary procedure, the acting chairman will make a brief statement and then we shall proceed to the testimony of our witnesses. The first witness this morning, following my statement, will be Senator Goldwater. We shall accommodate the Senators who are here in the first part of the meeting.

This hearing has been scheduled this morning at the direction of Senator McClellan, chairman of this committee, to consider the important and troublesome problem of Federal payment of taxes or in lieu of taxes to State and local taxing authorities, and to afford an opportunity to representatives of the National Association of County Officials to present their views on the subject. These representatives have been with us in this area at Richmond, Va., for their meeting and we have made some arrangements to have them here this morning. For a number of years, State and local taxing authorities have been seriously concerned over the increasing acquisition by the Federal Government of various types of property, which has operated to remove such property from local tax rolls. From time to time over the years, the Congress has acknowledged responsibility for reducing, to some extent, the adverse effects of these acquisitions upon local government revenues and fiscal structures by enacting numerous statutory provisions which authorize payments by certain Federal agencies or upon certain types of properties. However, the great majority of Federal agencies have no general authority to make payments on their properties. Furthermore, existing provisions of law are quite diverse and result in different treatment for similar properties of various agencies. Thus, those provisions of law which do exist fail to present any clear-cut uniform policy. On some classes of property, some agencies