A-71363, MARCH 17, 1936, 15 COMP. GEN. 813

A-71363: Mar 17, 1936

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STATE FEES FOR QUALIFYING ELECTRIC HOME AND FARM AUTHORITY THE EXACTION BY A STATE OF A FEE FOR QUALIFYING ELECTRIC HOME AND FARM AUTHORITY IS UNAUTHORIZED. AS FOLLOWS: INCLOSED HEREWITH IS A FORM OF VOUCHER COVERING A FEE OF $10.00 PAYABLE TO THE SECRETARY OF STATE. IT IS WELL SETTLED LAW THAT A STATE CAN NOT TAX THE UNITED STATES OR AN AGENCY THEREOF. THEY TAKE THE POSITION THAT ELECTRIC HOME AND FARM AUTHORITY AS AN AGENCY OF THE UNITED STATES IS NOT EXEMPT FROM THE PAYMENT OF A QUALIFYING FEE ON THE SAME BASIS AS A PRIVATELY OWNED FOREIGN CORPORATION FOR PROFIT. WE DESIRE TO SUBMIT THE FOLLOWING QUESTION: WILL YOU APPROVE THE PAYMENT OF THIS VOUCHER AS A LEGITIMATE EXPENSE OF ELECTRIC HOME AND FARM AUTHORITY INCIDENT TO THE USUAL TRANSACTION OF BUSINESS WITH INDIANA UTILITIES.

A-71363, MARCH 17, 1936, 15 COMP. GEN. 813

STATE FEES FOR QUALIFYING ELECTRIC HOME AND FARM AUTHORITY THE EXACTION BY A STATE OF A FEE FOR QUALIFYING ELECTRIC HOME AND FARM AUTHORITY IS UNAUTHORIZED, AND STATE INTERFERENCE WITH THE TRANSACTION OF ITS BUSINESS SHOULD BE REPORTED TO THE ATTORNEY GENERAL OF THE UNITED STATES.

COMPTROLLER GENERAL MCCARL TO THE TREASURER, ELECTRIC HOME AND FARM AUTHORITY, MARCH 17, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF FEBRUARY 19, 1936, AS FOLLOWS:

INCLOSED HEREWITH IS A FORM OF VOUCHER COVERING A FEE OF $10.00 PAYABLE TO THE SECRETARY OF STATE, STATE OF INDIANA, FOR QUALIFYING ELECTRIC HOME AND FARM AUTHORITY AS A FOREIGN CORPORATION TO TRANSACT BUSINESS WITH THE STATE OF INDIANA.

THERE APPEARS TO BE A QUESTION AS TO THE PROPRIETY OF ELECTRIC HOME AND FARM AUTHORITY, AN AGENCY OF THE UNITED STATES, PAYING SUCH A FEE. IT IS WELL SETTLED LAW THAT A STATE CAN NOT TAX THE UNITED STATES OR AN AGENCY THEREOF. THIS FACT HAS BEEN POINTED OUT IN WRITING TO THE SECRETARY OF STATE AND THE ATTORNEY GENERAL OF THE STATE OF INDIANA. NEVERTHELESS, THEY TAKE THE POSITION THAT ELECTRIC HOME AND FARM AUTHORITY AS AN AGENCY OF THE UNITED STATES IS NOT EXEMPT FROM THE PAYMENT OF A QUALIFYING FEE ON THE SAME BASIS AS A PRIVATELY OWNED FOREIGN CORPORATION FOR PROFIT.

IN THE LIGHT OF THE FOREGOING, WE DESIRE TO SUBMIT THE FOLLOWING QUESTION: WILL YOU APPROVE THE PAYMENT OF THIS VOUCHER AS A LEGITIMATE EXPENSE OF ELECTRIC HOME AND FARM AUTHORITY INCIDENT TO THE USUAL TRANSACTION OF BUSINESS WITH INDIANA UTILITIES, DEALERS AND PURCHASERS OF ELECTRICAL EQUIPMENT IN THE EVENT IT IS PRESENTED TO YOU FOR CLEARANCE?

THE ELECTRIC HOME AND FARM AUTHORITY IS A CORPORATION ORGANIZED UNDER THE LAWS OF THE DISTRICT OF COLUMBIA, AND ALL OF ITS FUNDS WERE ADVANCED BY THE UNITED STATES OR ITS INSTRUMENTALITIES AND ARE CARRIED IN THE TREASURY OF THE UNITED STATES. IT HAS BEEN RECOGNIZED AS AN ESTABLISHED RULE SINCE THE DECISION OF THE SUPREME COURT OF THE UNITED STATES IN MCCULLOCH V. MARYLAND, 4 WHEAT. 316, THAT THE STATES ARE WITHOUT AUTHORITY TO TAX A FEDERAL CORPORATION. THERE WAS NO SPECIFIC AUTHORITY OF LAW FOR THE INCORPORATION OF THE ELECTRIC HOME AND FARM AUTHORITY, THE AUTHORITY RELIED UPON FOR ITS CREATION BEING THE PROVISION IN THE ACT OF JUNE 16, 1933, AUTHORIZING THE PRESIDENT TO ESTABLISH AGENCIES TO EFFECTUATE THE POLICY OF TITLE I OF SAID ACT, AND THE FEDERAL COURTS HAVE HELD THAT A GOVERNMENTAL BUREAU GIVEN A REVOLVING FUND AND A LARGE MEASURE OF AUTONOMY IN ACTION CANNOT BE TREATED AS A SEPARATE ENTITY WITHOUT SPECIFIC INCORPORATION BY CONGRESS. SEE NORTH DAKOTA-MONTANA WHEAT GROWERS ASSOCIATION V. UNITED STATES, 66 FED./2D) 573, CERTIORARI DENIED, 291 U.S. 672. BUT, REGARDLESS OF WHETHER THE ELECTRIC HOME AND FARM AUTHORITY MAY BE REGARDED AS A SEPARATE ENTITY, IT IS IN EITHER EVENT AN INSTRUMENTALITY OF THE UNITED STATES AND IT IS WELL SETTLED THAT NEITHER THE UNITED STATES NOR ITS INSTRUMENTALITIES MAY BE TAXED BY THE STATES WITHOUT SPECIFIC STATUTORY CONSENT FOR THAT PURPOSE.

UPON THE BASIS OF EXISTING LAW YOU ARE ADVISED THAT THE QUESTION STATED IN THE CONCLUDING PARAGRAPH OF THE ABOVE-QUOTED LETTER MUST BE ANSWERED IN THE NEGATIVE, AND IF THE STATE OF INDIANA SHOULD ATTEMPT TO INTERFERE WITH THE TRANSACTION BY THE UNITED STATES OR ITS INSTRUMENTALITY, ELECTRIC HOME AND FARM AUTHORITY, OF BUSINESS IN SAID STATE THE MATTER SHOULD BE REPORTED TO THE ATTORNEY GENERAL OF THE UNITED STATES FOR APPROPRIATE ACTION.