Court Opinion

ID: 9677996
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:08:26.230599+00
Date Added: 2024-06-11T18:17:00.361485
License: Public Domain

JONES, District Judge
(dissenting).
I agree that property held by the United States, and employed by it in the execution of its constitutional powers and functions, may be held exempt from State taxation; but I think that in holding this property in the name of an instrumentality of the United States, for the use of special or selected classes of people, or specially selected groups, and with the intention to lease, and leasing it, to a State-created proprietary agency, is not such a governmental function or purpose as to permit its exemption from State, County or Municipal taxation. In such circumstances as presented here, I am of the opinion that the lands were not acquired and are not held for a governmental function or purpose within the right of constitutional sovereignty. I think title and use both are essential in testing the right to tax exemption of property held by the sovereign. If title only is the test, constitutional limitations are without meaning.
It will be noted that Mr. Justice Gray, in writing the opinion for the court in Van Brocklin v. State of Tennessee, 117 U.S. 151, 6 S.Ct. 670, 29 L.Ed. 845, (relied upon so strongly by the Housing Authority), repeatedly and consistently refers to tax exemption of property of the United States used for governmental functions or purposes. In that case, the property was acquired and held by the United States to enforce and liquidate a tax lien, and this it seems to me was in furtherance of the governmental function of protecting and preserving its revenues. Thus, as I think, property held by the United States, or by an instrumentality of the Federal government, only may be exempt from taxation by a State, County or City in which the property is situated, where the property is devoted to or used for a governmental function or purpose.
No matter how desirable slum clearance and low-cost housing may be, it is not in my opinion such a Federal function as to permit exemption of the property used therefor from State taxation. On the contrary, it consistently has been held that the power of the States to protect the lives, health and property of their citizens, and to preserve good order and public morals, is a power originally and always belonging to the States and not surrendered by them to the general government. Cooley, Principles of Constitutional Law. If the Federal government may acquire and hold property free from State taxation and devote it to any use or purpose not related to governmental functions, there is no limitation of Federal power over State sovereignty. Such right is not implicit in Federal sovereignty, nor is it express or to be implied in the provisions of the Federal Constitution. I think the property involved in this case is subject to the taxes assessed.
Considering the matter from another aspect, what has been done to impair State sovereignty, simply stated, is this: the Federal government has acquired this property and holds it through its agency, the Housing Authority, for the purpose of furnishing low-cost housing to special groups or classes of inhabitants. This certainly is a private use of the land. The State, County and City furnish benefits and services to these residents just as they furnish services, facilities and benefits to other residents. Thus to require the State to give services and protection to this property, and deprive it of its revenues to be used for such purposes, without making any substantial or adequate provision to compensate for such loss of revenues, seems to me to be contrary to all sense of Federal or Constitutional right, — a dangerous denial of State sovereignty.