B-15091, MAY 8, 1941, 20 COMP. GEN. 748

B-15091, MAY 8, 1941, 20 COMP. GEN. 748

STATES - INSPECTION FEES - PAYMENT BY FEDERAL GOVERNMENT THE RULE THAT THE PROPERTY OF THE UNITED STATES AND THE INSTRUMENTALITIES WHEREBY IT PERFORMS ITS PROPER GOVERNMENTAL FUNCTIONS CANNOT BE TAXED BY A STATE EXTENDS TO THE PROPERTY OF INDIANS UNDER THE CONTROL OF THE FEDERAL GOVERNMENT. A CHARGE BY A STATE, OR POLITICAL SUBDIVISION THEREOF, FOR SERVICES RENDERED IS TO BE DISTINGUISHED, FOR FEDERAL PAYMENT PURPOSES, FROM A TAX DESIGNED PRIMARILY TO RAISE REVENUE. A FEE CHARGED UNDER STATE LAW OR REGULATION FOR SERVICES RENDERED IN CONNECTION WITH INSPECTION OF LIVESTOCK IS NOT A TAX, AND, WHILE A STATE MAY NOT REQUIRE COMPLIANCE BY THE FEDERAL GOVERNMENT WITH SUCH A LAW OR REGULATION, WHERE IT IS ADMINISTRATIVELY DETERMINED THAT SUCH INSPECTION IS REQUISITE TO THE ADMINISTRATION OF FEDERAL LAWS RELATING TO INDIANS AND THEIR PROPERTY, AND WHERE THE SERVICES OF A FEDERAL VETERINARIAN ARE NOT AVAILABLE, PAYMENT OF THE INSPECTION FEE MAY BE MADE FROM THE ANNUAL APPROPRIATION " SUPPORT OF INDIANS AND ADMINISTRATION OF INDIAN PROPERTY" OR FROM THE MONEYS IN THE TRUST FUND " INDIAN MONEYS, PROCEEDS OF LABOR, AGENCIES, SCHOOLS, ETC.'

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, MAY 8, 1941:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF FEBRUARY 18, 1941, AS FOLLOWS:

IN THE COURSE OF ADMINISTERING THE AFFAIRS OF THE INDIANS, IT BECOMES NECESSARY, IN ORDER TO SECURE THE FULLEST COOPERATION OF THE STATE GOVERNMENTS WHICH IS NECESSARY AND VITAL TO THE BEST INTERESTS OF SUCH ADMINISTRATION, TO COMPLY WITH CERTAIN STATE LAWS AND REGULATIONS. EXAMPLE OF THIS IS ILLUSTRATED IN THE MATTER WHICH IS THE SUBJECT OF THIS LETTER.

DURING THE YEARS 1934 TO 1936 A LARGE NUMBER OF CATTLE, OBTAINED BY THE AGRICULTURAL ADJUSTMENT ADMINISTRATION THROUGH PURCHASES IN THE DROUGHT STRICKEN AREAS, WERE TURNED OVER TO THE INDIAN SERVICE BY THE FEDERAL SURPLUS RELIEF CORPORATION FOR ISSUE TO THE INDIANS UNDER AN AGREEMENT WHEREBY THE INDIANS WOULD REPAY TO THE GOVERNMENT AN ANIMAL OF LIKE QUALITY FOR EACH ANIMAL ISSUED. THE CATTLE WERE INSUFFICIENT IN NUMBER TO PERMIT DISTRIBUTION TO INDIANS OF ALL RESERVATIONS. A NEW SOURCE OF CREDIT, HOWEVER, WAS THUS ESTABLISHED FOR THE INDIANS WHICH IS FULLY UNDERSTOOD AND APPRECIATED BY THEM, RESULTING IN DEMANDS FOR SUCH CATTLE THROUGHOUT THE INDIAN SERVICE WHICH FAR EXCEED THE SUPPLY. IT WAS NECESSARY, THEREFORE, TO ESTABLISH THE POLICY OF TRANSFERRING A NUMBER OF THE CATTLE REPAID EACH YEAR TO THE LESS FORTUNATE RESERVATIONS. * * * SUCH TRANSFERS ARE NECESSARILY INTERSTATE, AND IN PRACTICALLY ALL SUCH CASES STATE LAWS AND REGULATIONS REQUIRE HEALTH AND BRAND INSPECTION OF LIVESTOCK THUS TRANSFERRED.

THE HEALTH AND BRAND INSPECTION IS VERY DESIRABLE FROM THE STANDPOINT OF PROTECTION OF THE INDIANS IN THE USE AND ENJOYMENT OF THEIR CATTLE. TODAY, MANY INDIANS ARE ENJOYING THE USE OF THEIR LIVESTOCK, IN DISEASE- FREE AREAS WHICH ARE SO MAINTAINED BY STATE AUTHORITIES, USUALLY IN COOPERATION WITH THE DEPARTMENT OF AGRICULTURE. STATE LAW ENFORCEMENT OFFICIALS ARE COOPERATING WITH LAW ENFORCEMENT OFFICERS OF THE INDIAN SERVICE IN THE INSPECTION OF BRANDS IN CURBING THE ILLEGAL DISPOSAL OF TRUST OR RESTRICTED LIVESTOCK AND THE APPREHENSION OF GUILTY PARTIES INVOLVED. IT IS OBVIOUS, HOWEVER, THAT MUCH CLOSER COOPERATION CAN BE OBTAINED IF COMPLIANCE WITH STATE LAWS AND REGULATIONS IS MORE CLOSELY OBSERVED, RESULTING IN INCREASED BENEFITS TO THE INDIANS IN THE USE AND ENJOYMENT OF THEIR LIVESTOCK AND TO THE GOVERNMENT IN THE ADMINISTRATION OF THE AFFAIRS OF THE INDIANS. IT SHOULD BE STATED HERE THAT THE ASSISTANCE OF FEDERAL VETERINARIANS FOR INSPECTION PURPOSES IS UTILIZED WHEREVER POSSIBLE BUT IN THE MAJORITY OF INSTANCES WHERE SUCH INSPECTION IS NEEDED, THE SERVICES OF A FEDERAL VETERINARIAN ARE NOT AVAILABLE.

IT HAS BEEN HELD THAT THERE IS NO LEGAL AUTHORITY IN A STATE TO IMPOSE A TAX OR CHARGE ON THE UNITED STATES FOR THE INSPECTION OF PROPERTY UNDER ITS CONTROL. ( NOTICE OF EXCEPTION DATED FEBRUARY 3, 1940, TO THE ACCOUNTS OF G. F. ALLEN FOR JUNE 1938, FORT APACHE AGENCY, D.O. VO. NO. 19 -78672; PREAUDIT DIFFERENCE STATEMENT DATED JUNE 10, 1937, COVERING VOUCHERS IN FAVOR OF NEW MEXICO CATTLE SANITARY BOARD, CLAIMS NO. 422715- 6; PREAUDIT DIFFERENCE STATEMENT DATED JUNE 21, 1937, COVERING VOUCHER IN FAVOR OF CLAUDE NEAFUS, CLAIM NO. 425025; NOTICE OF EXCEPTION TO ACCOUNTS OF G. F. ALLEN FOR AUGUST 1938, FLATHEAD AGENCY, ID.O. VO. NO. 18-10265.) IT APPEARS, HOWEVER, THAT THE ABOVE WAS BASED ON THE ABSENCE OF A SHOWING THAT THE CHARGE OR TAX IMPOSED WAS NECESSARY FOR ADMINISTRATIVE PURPOSES.

IT IS RESPECTFULLY REQUESTED, THEREFORE, THAT AN OPINION BE RENDERED AS TO THE APPLICABILITY, IN VIEW OF THE FOREGOING, OF (1) THE REGULARLY APPROPRIATED PUBLIC FUND " SUPPORT OF INDIANS AND ADMINISTRATION OF INDIAN PROPERTY" AND (2) MISCELLANEOUS REVENUES APPROPRIATED AS " INDIAN MONEYS, PROCEEDS OF LABOR, AGENCIES, SCHOOLS, ETC., (NAME OF AGENCY)" BY THE ACT OF MAY 17, 1926 (44 STAT. 560), FOR THE PAYMENT TO STATES OR STATE VETERINARIANS OF HEALTH AND BRAND INSPECTION FEES. IF SUCH FUNDS CANNOT BE SO UTILIZED, ANY SUGGESTION, IN VIEW OF THE DESIRABILITY OF THIS MATTER, AS TO HOW THE SITUATION MAY BE MET WILL BE APPRECIATED.

IT IS, OF COURSE, A WELL-ESTABLISHED PRINCIPLE THAT THE PROPERTY OF THE UNITED STATES AND THE INSTRUMENTALITIES WHEREBY IT PERFORMS ITS PROPER GOVERNMENTAL FUNCTIONS CANNOT BE TAXED BY A STATE AND THIS RULE EXTENDS TO THE PROPERTY OF INDIANS UNDER THE CONTROL OF THE FEDERAL GOVERNMENT. UNITED STATES V. RICKERT, 188 U.S. 432; UNITED STATES V. PEARSON, 231 FED. 270.

HOWEVER, IT WOULD APPEAR THAT AN INSPECTION FEE SUCH AS PRESCRIBED BY THE PROVISIONS OF A STATE LIVESTOCK BRAND AND HEALTH LAW OF THE TYPE TO WHICH YOU REFER IS, IN SUBSTANCE, NOTHING MORE THAN A REASONABLE CHARGE ON THE PART OF THE STATE FOR THE SERVICES RENDERED IN CONNECTION WITH THE INSPECTION CONTEMPLATED BY THE TERMS OF SUCH LAW OR REGULATION; AND IT IS CLEAR THAT A CHARGE BY A STATE, OR A POLITICAL SUBDIVISION THEREOF, FOR SERVICES RENDERED IS TO BE DISTINGUISHED FROM A TAX DESIGNED PRIMARILY TO RAISE REVENUE. THE LANGUAGE USED BY THE SUPREME COURT OF THE UNITED STATES IN ITS OPINION IN THE CASE OF PACKET COMPANY V. KEOKUK, 95 U.S. 80, SEEMS ESPECIALLY APPROPRIATE IN THIS CONNECTION. IN THAT CASE THE COURT, IN HOLDING THAT THE CITY OF KEOKUK COULD, CONSISTENTLY WITH THE CONSTITUTION OF THE UNITED STATES, CHARGE AND COLLECT A WHARFAGE FEE FROM THE OWNERS OF STEAMBOATS MOORING AND LANDING AT WHARVES CONSTRUCTED BY THE CITY ON THE BANKS OF A NAVIGABLE RIVER, SAID, IN PART:

* * * IF THE CHARGE IS CLEARLY A DUTY, A TAX, OR BURDEN, WHICH IN ITS ESSENCE IS A CONTRIBUTION CLAIMED FOR THE PRIVILEGE OF ENTERING THE PORT OF KEOKUK, OR REMAINING IN IT, OR DEPARTING FROM IT, IMPOSED, AS IT IS, BY AUTHORITY OF THE STATE, AND MEASURED BY THE CAPACITY OF THE VESSEL, IT IS DOUBTLESS EMBRACED BY THE CONSTITUTIONAL PROHIBITION OF SUCH A DUTY. BUT A CHARGE FOR SERVICES RENDERED OR FOR CONVENIENCES PROVIDED IS IN NO SENSE A TAX OR A DUTY. * * *.

ALSO, SEE TRANSPORTATION CO. V. PARKERSBURGH, 107 U.S. 691; SANDS V. MANISTEE RIVER IMPROVEMENT COMPANY, 123 U.S. 288; 24 COMP. DEC. 45; 1 COMP. GEN. 560; 4 ID. 366; 5 ID. 413; 9 ID. 41.

HENCE, SINCE A CHARGE FOR SERVICES RENDERED BY A STATE MAY NOT PROPERLY BE REGARDED AS A TAX, AND WHILE A STATE CANNOT REQUIRE THE FEDERAL GOVERNMENT TO COMPLY WITH THE PROVISIONS OF A STATE LIVESTOCK BRAND AND HEALTH LAW OR REGULATION, NO REASON IS APPARENT WHY A CHARGE REPRESENTING THE INSPECTION FEE PROVIDED THEREBY SHOULD NOT BE PAID IN A CASE WHERE THE SERVICES OF A FEDERAL VETERINARIAN ARE NOT AVAILABLE AND AN INSPECTION SUCH AS IS CONTEMPLATED BY THE LAW OR REGULATION IS MADE BY A STATE VETERINARIAN IN CONSEQUENCE OF A DETERMINATION BY YOUR DEPARTMENT THAT THE INSPECTION IS REQUISITE IN CONNECTION WITH THE ADMINISTRATION OF FEDERAL LAWS RELATING TO INDIANS AND THEIR PROPERTY.

ACCORDINGLY, YOU ARE ADVISED THAT WHEN THE RECORD IN ANY CASE SHOWS THAT AN INSPECTION WAS MADE UNDER SUCH CIRCUMSTANCES, PAYMENT OF A CHARGE REPRESENTING THE AMOUNT OF THE INSPECTION FEE PROPERLY MAY BE MADE TO A STATE OR A STATE VETERINARIAN FROM THE ANNUAL APPROPRIATION MADE UNDER THE TITLE " SUPPORT OF INDIANS AND ADMINISTRATION OF INDIAN PROPERTY" OR, IN YOUR DISCRETION, FROM THE MONEYS ON DEPOSIT IN THE TRUST FUND " INDIAN MONEYS, PROCEEDS OF LABOR, AGENCIES, SCHOOLS, TC., " BELONGING TO THE PARTICULAR AGENCY OR SCHOOL INVOLVED.