Opinion ID: 578700
Heading Depth: 2
Heading Rank: 3

Heading: Applying the Definition of Political Subdivision to TLTG

Text: 23 TLTG argues that the cases discussed above should not be read to create a strict legal formula for determining whether an entity is a political subdivision. We agree that the case law may not have enumerated an exhaustive list of sovereign powers, but we do read the cases to require either the delegation of one or more of the three traditional sovereign powers discussed in Shamberg, or some other recognized sovereign power. We find that TLTG does not maintain any of the sovereign powers discussed in Shamberg, nor any other recognized sovereign power. 24 TLTG concedes that it does not possess the power of eminent domain, the power to levy or collect taxes, or the power to issue government bonds. (Appellant's Br. at 11). TLTG argues, however, that its power to establish, regulate, and distribute curricula to the school districts constitutes sovereign police power. (Appellant's Br. at 24). The limited authority that TLTG is authorized to exercise regarding the content of public school curriculum, does not constitute police power. See Philadelphia Nt'l Bank v. United States, 666 F.2d 834 (3rd Cir.1981), cert. denied, 457 U.S. 1105, 102 S.Ct. 2904, 73 L.Ed.2d 1314 (1982). 25 TLTG also contends that, although it does not possess the power to tax, its power to collect funds from its member school districts for membership dues and operating deficits constitutes a sovereign assessment power. TLTG intimates that while this power is not equivalent to the power to tax, it is a recognized sovereign power. As support for this theory, TLTG cites the 1914 Attorney General Opinion discussed above. TLTG contends that the assessment power of the irrigation districts at issue in the 1914 Attorney General Opinion was different from a taxing power, but yet was recognized as a sovereign power by the Attorney General. (Appellant's Reply Br. at 10). We disagree. The Attorney General considered the assessment powers of the irrigation district to be the equivalent of taxing powers. 30 Op.Atty.Gen. 252 (As indicated by the term 'special assessment districts,' these divisions are given the power of taxation--perhaps the most important power possessed by the State.). We reject TLTG's argument that the Attorney General did not consider a delegation of taxing power critical to its finding that the irrigation district was a political subdivision. Furthermore, we do not find merit in TLTG's assertion that its power to collect funding from its members constitutes a sovereign power. 26 We agree with the Commissioner and the Tax Court that TLTG has not been delegated any sovereign powers. Without the authority to exercise sovereign power, TLTG cannot constitute a political subdivision. See 26 C.F.R. § 1.103-1(b).