CONGRESSIONAL RECORD - HOUSE

BOARD OF COMMISSIONERS OF

SEDGWICK COUNTY, KANS.-VETO

MESSAGE FROM THE PRESIDENT

OF THE UNITED STATES (H. DOC.

NO. 410)

The SPEAKER pro tempore laid before the House the following veto message from the President of the United

States:

To the House of Representatives:

I am returning without my approval

H. R. 1835, for the relief of the Board

of Commissioners of Sedgwick County,

Kans.

This bill would have the United States

accept as a binding obligation and agree

to pay to Sedgwick County, Kans., $259,-

925.09 as the unpaid balance of taxes for

the tax year 1947 against certain real

property formerly owned by the Reconstruction Finance Corporation. This

payment is contingent upon enactment

by the Kansas Legislature of a law authorizing and directing acceptance of

this amount as payment in full and as a

release and forgiveness of all interest,

penalties, liens, and charges connected

with the taxes.

The property in question was acquired

in 1942 by the Defense Plants Corporation, a wholly owned subsidiary of the

Reconstruction Finance Corporation.

Effective July 1, 1945, the Defense Plants

Corporation was liquidated, and the

property involved was transferred to the

Reconstruction Finance Corporation.

Subsequently, the Reconstruction Finance Corporation declared the property

surplus, and on April 16, 1947, the War

Assets Administration accepted responsibility and authority for the property. On

February 25, 1948, the War Assets Administrator, acting on behalf of the Reconstruction Finance Corporation, deeded the property to the United States, and

custody and accountability was thereupon transferred to the Department of

the Air Force, which has retained jurisdiction ever since.

The Federal Government is constitutionally immune from taxation by States

upon property owned by the United

States. The Congress may waive that

immunity, and by general legislation it

did so on real property of the Reconstruction Finance Corporation. With

respect to the property involved here,

however, the Reconstruction Finance

Corporation took the position that the

laws of Kansas themselves exempted the

property from taxation. To settle this

and other issues, the Congress enacted

Public Law 5, 82d Congress, which gave

the Court of Claims jurisdiction to determine the claim of Sedgwick County for

taxes on this property for the tax years

1944, 1945, 1946, and 1947. Under this

authority the Court of Claims, by decision dated July 15, 1952, determined that

there was liability for taxes for the years

1944, 1945, and 1946, but not for the year

1947. The court considered separately

the question of taxes for the year 1947.

It concluded, in reliance upon decisions

of the Kansas Supreme Court, that there

was no 1947 tax due prior to the effective

date of levy, which under the law then

applicable was November 1. Since the

transfer from the Reconstruction Finance Corporation to the War Assets Administration took place in April, no tax

could become due for 1947 because the

constitutional immunity had revived

upon the date of the transfer, April 16.

The transfer of the property from the

War Assets Administration to the Department of the Air Force in February

1948 has continued the tax immunity.

However, as an interim measure, the

Congress last year enacted legislation

(Public Law 388, 84th Cong., approved

August 12, 1955) which is designed specifically to furnish temporary relief for

the calendar years 1955 through 1958 for

taxing authorities which have suffered

an unexpected loss of revenue as a result

of the Court of Claims decision in the

Sedgwick County case. The Government is now making payments under that

legislation, and I am informed that

Sedgwick County has already filed its application for payment in lieu of taxes for

the year 1955.

In the light of the foregoing facts, I

believe that in considering this bill, which

relates exclusively to the year 1947, I

must also consider whether a claim for

taxes for that year can be differentiated

from a claim for the succeeding years up

to 1955. The record in the case says that

the Government applied for tax immunity for 1948 and subsequent years.

Any such application has no bearing on

the constitutional immunity. Therefore, I find no basis of distinction. I believe that to approve this bill would be

a precedent for approving legislation for

the other years, should claim be made. I

also believe that to approve a bill for one

piece of property, for one particular taxing jurisdiction, and for one particular

year, would be to discriminate against

other jurisdictions which are known to

be similarly situated because of transfers

of property from the Reconstruction

Finance Corporation or because of the

Sedgwick County decision.

Furthermore, I believe that approval

of H. R. 1835 would be contrary to the

principles pertaining to payments in lieu

of taxation which this administration

has recommended to the Congress following study of the report of the Commission on Intergovernmental Relations.

That Commission recommended "that

the National Government inaugurate a

broad system of payments in lieu of

property taxes to State and local governments," with particular reference to

commercial and industrial property.

After careful consideration of this general recommendation, I came to the conclusion that the magnitude and complexity of the problem is such that only

a strictly limited program would be

warranted at this time. Accordingly, it

was recommended that any legislation

should be restricted in application to

communities which are able to demonstrate financial hardship directly attributable to Federal removal of real

property from the tax rolls. It was

further suggested by the administration

that this limited program be applied

prospectively and then only to properties

removed from the local tax rolls subsequent to June 30, 1950.

In addition to these general objections to the bill, I believe that the contingency proviso also is objectionable.

Approval of any such provision, In my

judgment, would imply acceptance of

the principle that the United States

Government is not immune from interest and other penalties. Federal immunity in these respects does not depend upon State law.

Fairness of treatment, and the same

treatment for all similarly situated State

and local taxing jurisdictions, must be

the rule in any proposal for adjustment

or imposition of tax liability upon the

United States. Of course, we must also

strive to relieve the hardship which may

result from unnecessary inflexibility in

the law. However, I believe that the enactment of individual, piecemeal bills

does not serve the long-run best interests

of either local jurisdictions or the Federal Government.' If statutory relief is

to be granted, the legislation authorizing

such relief should be limited as I have

indicated and should be of general applicability.

For these reasons, I return H. R. 1835

without my approval.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, May 22, 1956.

The SPEAKER pro tempore. The objections of the President will be spread

at large upon the Journal.

Mr. WALTER. Mr. Speaker, I move

that the bill and message be referred to

the Committee on the Judiciary and

ordered printed.

The motion was agreed to.

NATIONAL SCHOLARSHIP PROGRAM

Mr. ASHLEY. Mr. Speaker, I ask

unanimous consent to extend my remarks at this point in the RECORD.

The SPEAKER. Is there objection to

the request of the gentleman from

Ohio?

There was no objection.

Mr. ASHLEY. Mr. Speaker, I am today introducing a bill designed to help

meet two of the most critical problems

facing our Nation today: The growing

shortages in the teaching and science

professions.

Today, as we cross the threshold into

the nuclear era, we must face the fact

that our future strength as a nation rests

with the children who are now being

educated and who will be educated in the

next generation.

Recent magazine and newspaper articles have focused attention on the critical shortage of teachers, but I seriously

doubt if the real implications of this

scarcity have been realized. When

schools opened in September 1955, the

United States Office of Education estimated that there was a shortage of more

than 140,000 teachers. The projected

figures over the next 10 years give us

even greater cause to stop and thinkand act. The Ford Foundation has

pointed out that to maintain the present

teacher-student ratio, teaching staffs

will have to be increased in the next 10

years more than they have increased

over the past 35 years. Colleges and

universities will have to add more teachers in the next 15 years than in all previous United States history combined. We

will need 1,906,889 new teachers by 1965

1956 8755