B-38136, DECEMBER 4, 1943, 23 COMP. GEN. 406

B-38136: Dec 4, 1943

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AT THE TIME OF SUCH TRANSFER THERE IS IN EXISTENCE AN AGREEMENT BETWEEN THE ADMINISTRATOR AND A LOCAL TAXING AUTHORITY FOR THE PAYMENT OF AN ANNUAL SUM IN LIEU OF TAXES AS AUTHORIZED BY SECTION 306 OF THE SAID ACT. SUCH AGREEMENT IS EFFECTIVE ONLY SO LONG AS THE PROPERTY IS OPERATED AND CONTROLLED BY THE ADMINISTRATOR AND DOES NOT IMPOSE UPON THE NAVY DEPARTMENT ANY OBLIGATION TO MAKE SUCH PAYMENTS SUBSEQUENT TO THE EFFECTIVE DATE OF THE TRANSFER. 1943: I HAVE YOUR LETTER OF NOVEMBER 2. SECTION 9 OF THE AFOREMENTIONED LANHAM ACT WAS RENUMBERED AS SECTION 306 BY THE ACT OF CONGRESS APPROVED JUNE 28. UPON SUCH PROPERTY IF IT WERE NOT EXEMPT FROM TAXATION.'. UPON SUCH PROPERTY IF IT WERE NOT EXEMPT FROM TAXATION.

B-38136, DECEMBER 4, 1943, 23 COMP. GEN. 406

NATIONAL HOUSING AGENCY PROJECTS TRANSFERRED TO NAVY DEPARTMENT - PAYMENTS IN LIEU OF TAXES THE PROVISION IN SECTION 306 OF THE ACT OF OCTOBER 14, 1940, AS AMENDED, THAT THE NATIONAL HOUSING ADMINISTRATOR SHALL PAY ANNUAL SUMS IN LIEU OF TAXES TO LOCAL TAXING AUTHORITIES ON REAL PROPERTY ACQUIRED AND "HELD BY HIM," MAY NOT BE REGARDED AS AUTHORIZING OR REQUIRING THE PAYMENT BY THE SECRETARY OF THE NAVY OF AMOUNTS IN LIEU OF TAXES WITH RESPECT TO HOUSING UNITS PERMANENTLY TRANSFERRED BY THE ADMINISTRATOR TO THE NAVY DEPARTMENT PURSUANT TO SECTION 4 OF THE SAID ACT. WHERE, PURSUANT TO SECTION 4 OF THE ACT OF OCTOBER 14, 1940, AS AMENDED, THE NATIONAL HOUSING ADMINISTRATOR TRANSFERS HOUSING UNITS TO THE SECRETARY OF THE NAVY FOR THE PERMANENT USE OF THE NAVY DEPARTMENT, AND AT THE TIME OF SUCH TRANSFER THERE IS IN EXISTENCE AN AGREEMENT BETWEEN THE ADMINISTRATOR AND A LOCAL TAXING AUTHORITY FOR THE PAYMENT OF AN ANNUAL SUM IN LIEU OF TAXES AS AUTHORIZED BY SECTION 306 OF THE SAID ACT, SUCH AGREEMENT IS EFFECTIVE ONLY SO LONG AS THE PROPERTY IS OPERATED AND CONTROLLED BY THE ADMINISTRATOR AND DOES NOT IMPOSE UPON THE NAVY DEPARTMENT ANY OBLIGATION TO MAKE SUCH PAYMENTS SUBSEQUENT TO THE EFFECTIVE DATE OF THE TRANSFER.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, DECEMBER 4, 1943:

I HAVE YOUR LETTER OF NOVEMBER 2, 1943, AS FOLLOWS:

THE ACT OF CONGRESS APPROVED OCTOBER 14, 1940, PUBLIC LAW 849, 76TH CONGRESS (54 STAT. 1125), KNOWN AS THE LANHAM ACT, AUTHORIZED THE FEDERAL WORKS ADMINISTRATOR TO PROVIDE HOUSING FOR PERSONS ENGAGED IN NATIONAL DEFENSE ACTIVITIES AND THEIR FAMILIES, AND QUARTERS FOR SINGLE PERSONS SO ENGAGED, IN THOSE AREAS OR LOCALITIES IN WHICH THE PRESIDENT SHALL FIND THAT A SHORTAGE OF HOUSING EXISTS OR IMPENDS WHICH WOULD IMPEDE NATIONAL DEFENSE ACTIVITIES, AND SUCH HOUSING WOULD NOT BE PROVIDED BY PRIVATE CAPITAL WHEN NEEDED.

SECTION 9 OF THE AFOREMENTIONED LANHAM ACT WAS RENUMBERED AS SECTION 306 BY THE ACT OF CONGRESS APPROVED JUNE 28, 1941, PUBLIC LAW 137, 77TH CONGRESS (55 STAT. 361). THAT SECTION ORIGINALLY READ AS FOLLOWS:

"THE ADMINISTRATOR MAY ENTER INTO ANY AGREEMENTS TO PAY ANNUAL SUMS IN LIEU OF TAXES TO ANY STATE OR POLITICAL SUBDIVISION THEREOF, WITH RESPECT TO ANY REAL PROPERTY ACQUIRED AND HELD BY HIM UNDER THIS ACT, INCLUDING IMPROVEMENTS THEREON. THE AMOUNT SO PAID FOR ANY YEAR UPON ANY SUCH PROPERTY SHALL NOT EXCEED THE TAXES THAT WOULD BE PAID TO THE STATE OR SUBDIVISION, AS THE CASE MAY BE, UPON SUCH PROPERTY IF IT WERE NOT EXEMPT FROM TAXATION.'

THE ACT OF CONGRESS APPROVED JANUARY 21, 1942, PUBLIC LAW 409, 77TH CONGRESS (56 STAT. 11), AMENDED THE ABOVE QUOTED SEC. 306 OF THE LANHAM ACT AS AMENDED TO READ AS FOLLOWS:

"SEC. 306. THE ADMINISTRATOR SHALL PAY FROM RENTALS ANNUAL SUMS IN LIEU OF TAXES TO ANY STATE AND/OR POLITICAL SUBDIVISION THEREOF, WITH RESPECT TO ANY REAL PROPERTY ACQUIRED AND HELD BY HIM UNDER THIS ACT, INCLUDING IMPROVEMENTS THEREON. THE AMOUNT SO PAID FOR ANY YEAR UPON SUCH PROPERTY SHALL APPROXIMATE THE TAXES WHICH WOULD BE PAID TO THE STATE AND/OR SUBDIVISION AS THE CASE MAY BE, UPON SUCH PROPERTY IF IT WERE NOT EXEMPT FROM TAXATION, WITH SUCH ALLOWANCE AS MAY BE CONSIDERED BY HIM TO BE APPROPRIATE FOR EXPENDITURE BY THE GOVERNMENT FOR STREETS, UTILITIES, OR OTHER PUBLIC SERVICES TO SERVE SUCH PROPERTY.'

THE SAID ACT OF JANUARY 21, 1942, PUBLIC LAW 409, 77TH CONGRESS FURTHER AMENDED THE LANHAM ACT BY INSERTING AFTER SECTION 3 THEREOF THE FOLLOWING SECTION:

"SEC. 4. IT IS HEREBY DECLARED TO BE THE POLICY OF THIS TITLE TO FURTHER THE NATIONAL DEFENSE BY PROVIDING HOUSING IN THOSE AREAS WHERE IT CANNOT OTHERWISE BE PROVIDED BY PRIVATE ENTERPRISE WHEN NEEDED, AND THAT SUCH HOUSING MAY BE SOLD AND DISPOSED OF AS EXPEDITIOUSLY AS POSSIBLE; PROVIDED, THAT IN DISPOSING OF SAID HOUSING CONSIDERATION SHALL BE GIVEN TO ITS FULL MARKET VALUE AND SAID HOUSING OR ANY PART THEREOF SHALL NOT, UNLESS SPECIFICALLY AUTHORIZED BY CONGRESS, BE CONVEYED TO ANY PUBLIC OR PRIVATE AGENCY ORGANIZED FOR SLUM CLEARANCE OR TO PROVIDE SUBSIDIZED HOUSING FOR PERSONS OF LOW INCOME; PROVIDED FURTHER, THAT THE ADMINISTRATOR MAY, IN HIS DISCRETION, UPON THE REQUEST OF THE SECRETARIES OF WAR OR NAVY TRANSFER TO THE JURISDICTION OF THE WAR OR NAVY DEPARTMENTS, SUCH HOUSING CONSTRUCTED UNDER THE PROVISIONS OF THIS ACT AS MAY BE CONSIDERED TO BE PERMANENTLY USEFUL TO THE ARMY OR NAVY.'

BY EXECUTIVE ORDER NO. 9070 OF FEBRUARY 24, 1942, ALL FUNCTIONS, POWERS, AND DUTIES RELATING TO DEFENSE HOUSING OF THE FEDERAL WORKS ADMINISTRATOR UNDER THE ACT OF OCTOBER 14, 1940 WERE VESTED IN THE NATIONAL HOUSING AGENCY, TO BE ADMINISTERED UNDER THE DIRECTION AND SUPERVISION OF THE NATIONAL HOUSING ADMINISTRATOR.

PURSUANT TO THE AUTHORITY OF THE AFOREMENTIONED SECTION 4 OF THE LANHAM ACT AS AMENDED, THE NATIONAL HOUSING ADMINISTRATOR HAS TRANSFERRED TO THE NAVY DEPARTMENT A HOUSING PROJECT AT CHERRY POINT, NEW BERN, NORTH CAROLINA, KNOWN AS PROJECT NC-31062. THE TRANSFER READS IN PART AS FOLLOWS:

"IN VIEW OF YOUR DETERMINATION THAT THIS PROJECT IS CONSIDERED TO BE PERMANENTLY USEFUL TO THE NAVY, I HEREBY TRANSFER SUCH PROJECT TO THE JURISDICTION OF THE NAVY DEPARTMENT EFFECTIVE UPON COMPLETION OF THE PROJECT.

"THIS TRANSFER IS BEING MADE PURSUANT TO THE PROVISIONS OF SECTION 4 OF PUBLIC LAW 409, 77TH CONGRESS, SECOND SESSION, APPROVED BY THE PRESIDENT ON JANUARY 21, 1942, WHICH AMENDED THE LANHAM ACT, AND PROVIDES "THAT THE ADMINISTRATOR MAY, IN HIS DISCRETION, UPON THE REQUEST OF THE SECRETARIES OF WAR OR NAVY TRANSFER TO THE JURISDICTION OF THE WAR OR NAVY DEPARTMENTS SUCH HOUSING CONSTRUCTED UNDER THE PROVISIONS OF THIS ACT AS MAY BE CONSIDERED TO BE PERMANENTLY USEFUL TO THE ARMY OR NAVY," AND IS BEING MADE BY THE UNDERSIGNED BY VIRTUE OF THE PROVISIONS OF EXECUTIVE ORDER NO. 9070 OF FEBRUARY 24, 1942.'

THE ATTORNEY FOR CRAVEN COUNTY, NORTH CAROLINA, THE COUNTY IN WHICH THE AFOREMENTIONED PROJECT IS SITUATED, HAS MADE INQUIRY CONCERNING PAYMENT BY THE NAVY DEPARTMENT TO THE COUNTY OF A SUM IN LIEU OF TAXES ON THE PROJECT AS REQUIRED BY THE PROVISIONS OF SEC. 306 OF THE LANHAM ACT AS AMENDED BY THE ACT OF JANUARY 21, 1942, SUPRA.

IN YOUR LETTER TO THE SECRETARY OF WAR DATED FEBRUARY 9, 1943 (B 31967), IN WHICH YOU DISCUSS THE EFFECT OF A TRANSFER TO THE WAR DEPARTMENT BY THE NATIONAL HOUSING ADMINISTRATOR OF A LANHAM ACT PROJECT UNDER THE PROVISIONS OF SEC. 4 OF THE LANHAM ACT, AS AMENDED, YOU STATED:

"THERE WOULD APPEAR TO BE NO ROOM FOR DOUBT THAT IT WAS THE LEGISLATIVE INTENT THAT SUCH A TRANSFER WOULD BE NO LESS COMPLETE AND PERMANENT THAN A DISPOSITION BY THE ADMINISTRATOR OF HOUSING TO PRIVATE PARTIES * * *. MOREOVER, SINCE THE PROVISIONS OF SEC. 4 OF THE LANHAM ACT, AS AMENDED, DO NOT PURPORT TO AUTHORIZE THE TRANSFER OF THE JURISDICTION OF ANY HOUSING TO THE WAR OR NAVY DEPARTMENTS EXCEPT SUCH AS IS "CONSIDERED TO BE PERMANENTLY USEFUL TO THE ARMY OR NAVY," AND IN THE ABSENCE OF ANY STATUTORY PROVISION REQUIRING A CONTRARY CONCLUSION, THERE WOULD APPEAR TO BE A SUBSTANTIAL BASIS FOR THE VIEW THAT THE CONGRESS CONTEMPLATED THAT HOUSING TRANSFERRED PERMANENTLY TO THE WAR AND NAVY DEPARTMENTS WOULD BE OPERATED AND MAINTAINED BY SUCH DEPARTMENTS IN THE SAME MANNER AS HOUSING CONSTRUCTED ON MILITARY OR NAVAL RESERVATIONS, POSTS, OR BASES PRIOR TO THE PRESENT EMERGENCY AND THAT QUARTERS WOULD BE FURNISHED BY THE WAR AND NAVY DEPARTMENTS IN THE HOUSING SO TRANSFERRED ON THE SAME BASIS AS QUARTERS CUSTOMARILY ARE FURNISHED IN SUCH PREVIOUSLY CONSTRUCTED HOUSING- -- THAT IS TO SAY, AS PUBLIC QUARTERS TO OFFICERS AND ENLISTED MEN ENTITLED THERETO.'

IN VIEW OF THE ADVICE THUS GIVEN BY YOU TO THE SECRETARY OF WAR, THE NAVY DEPARTMENT IS DOUBTFUL OF ITS AUTHORITY TO MAKE PAYMENTS ON THIS PROJECT IN LIEU OF TAXES ACCRUING AFTER THE DATE OF ITS TRANSFER AS AFORESAID. THEREFORE, YOUR DECISION IS REQUESTED AS TO WHETHER THE SECRETARY OF THE NAVY IS REQUIRED TO MAKE PAYMENTS TO LOCAL TAXING UNITS IN LIEU OF TAXES ON PROJECTS TRANSFERRED TO THE NAVY DEPARTMENT PURSUANT TO SEC. 4 OF THE LANHAM ACT AS AMENDED. IF THE FOREGOING QUESTION IS ANSWERED IN THE NEGATIVE, WOULD THE SECRETARY OF THE NAVY BE AUTHORIZED WITHIN HIS DISCRETION TO ENTER INTO AGREEMENTS WITH LOCAL TAXING UNITS FOR THE PAYMENTS OF SUMS IN LIEU OF TAXES ON PROJECTS THAT HAVE BEEN SO TRANSFERRED TO THE NAVY DEPARTMENT?

IN CONNECTION WITH THE FOREGOING THE FOLLOWING ADDITIONAL MATTER IS SUBMITTED FOR YOUR CONSIDERATION:

ON OCTOBER 10, 1941, THE FEDERAL WORKS ADMINISTRATOR ENTERED INTO AN AGREEMENT WITH THE COUNTY OF DUVAL, FLORIDA FOR PAYMENT OF SUMS IN LIEU OF TAXES ON A CERTAIN DEFENSE HOUSING PROJECT LOCATED IN DUVAL COUNTY, BEING PROJECT NO. F1A-8055X, WHICH WAS DEVELOPED PURSUANT TO THE LANHAM ACT ( PUBLIC 849, 76TH CONGRESS). A COPY OF THAT AGREEMENT IS ENCLOSED HEREWITH.

SUBSEQUENT TO THE EXECUTION OF THE AGREEMENT TO WIT, ON MARCH 4, 1942, THE PROJECT WAS TRANSFERRED TO THE NAVY DEPARTMENT UNDER AUTHORITY OF SECTION 4 OF THE LANHAM ACT AS AMENDED BY THE ACT OF JANUARY 21, 1942.

IF, IN ANSWER TO THE FOREGOING INQUIRY, YOU SHOULD HOLD THAT PAYMENT OF SUMS IN LIEU OF TAXES IS NOT REQUIRED WITH RESPECT TO PROJECTS TRANSFERRED TO THE NAVY DEPARTMENT UNDER SECTION 4 OF THE LANHAM ACT, AS AMENDED, THEN YOUR ADVICE IS REQUESTED AS TO WHETHER IT IS INCUMBENT UPON THE NAVY DEPARTMENT TO MAKE PAYMENTS TO THE COUNTY OF DUVAL UNDER THE AFOREMENTIONED AGREEMENT IN LIEU OF TAXES WHICH HAVE ACCRUED SINCE THE DATE OF THE PERMANENT TRANSFER OF THE PROJECT TO THE NAVY DEPARTMENT.

THE TERMS OF SECTION 306 OF THE LANHAM ACT, QUOTED IN YOUR LETTER, STIPULATE FOR THE PAYMENT BY THE NATIONAL HOUSING ADMINISTRATOR OF AMOUNTS IN LIEU OF TAXES TO A STATE OR POLITICAL SUBDIVISION THEREOF "WITH RESPECT TO ANY REAL PROPERTY ACQUIRED AND HELD BY HIM" UNDER THE ACT. THE AMENDMENT OF JANUARY 21, 1942, 56 STAT. 12, WHEREBY THE NATIONAL HOUSING ADMINISTRATOR IS AUTHORIZED TO TRANSFER TO THE JURISDICTION OF THE WAR AND NAVY DEPARTMENTS SUCH HOUSING AS MAY BE CONSIDERED TO BE PERMANENTLY USEFUL TO THE ARMY OR NAVY, CONTAINS NO EXPRESS PROVISION AUTHORIZING THE WAR OR NAVY DEPARTMENTS TO MAKE SUCH PAYMENTS IN LIEU OF TAXES WITH RESPECT TO THE PROPERTY SO TRANSFERRED AND HELD BY THEM, AND THERE IS NOTHING IN THE LEGISLATIVE HISTORY OF THE MATTER TO INDICATE THAT THE CONGRESS INTENDED TO GRANT SUCH AUTHORITY. AS SUGGESTED BY THE DECISION OF FEBRUARY 9, 1943, B-31967, TO THE SECRETARY OF WAR, REFERRED BY YOU, IT APPEARS THAT THE CONGRESS INTENDED THAT THE TRANSFER OF HOUSING TO THE WAR AND NAVY DEPARTMENTS WOULD COMPLETELY DIVORCE IT FROM ANY AND ALL CONTROL AND OPERATION BY THE NATIONAL HOUSING AGENCY, AND IT NECESSARILY FOLLOWS THAT THE OBLIGATIONS AND DUTIES IMPOSED UPON THE ADMINISTRATOR BY THE ACT- -- INCLUDING THE DUTY TO PAY ANNUAL SUMS IN LIEU OF TAXES--- ARE TERMINATED SO FAR AS CONCERNS THE HOUSING TRANSFERRED TO THE JURISDICTION OF THE WAR AND NAVY DEPARTMENTS, AND DO NOT DEVOLVE UPON SAID DEPARTMENTS.

IN THAT CONNECTION, THERE IS FOR APPLICATION HERE THE WELL ESTABLISHED RULE THAT THE UNITED STATES IS NOT REQUIRED TO, AND ORDINARILY DOES NOT, PAY TAXES OR SUMS IN LIEU OF TAXES ON ITS PROPERTY, AND THE TERMS OF A STATUTE--- SUCH AS HERE INVOLVED--- PROVIDING FOR SUCH PAYMENTS UNDER CERTAIN CIRCUMSTANCES SHOULD NOT BE EXTENDED BEYOND THE PLAIN MEANING OF THE LANGUAGE USED. SEE OKLAHOMA V. BARNSDALL CORPORATION, 296 U.S. 521, HOLDING THAT A WAIVER OF THE TAX IMMUNITY OF THE SOVEREIGN IS TO BE STRICTLY CONSTRUED.

FURTHER SUPPORT IS FOUND FOR THE FOREGOING CONCLUSION WHEN THE QUESTIONS HERE PRESENTED ARE CONSIDERED IN THE LIGHT OF THE BROAD PURPOSES OF THE LANHAM ACT AS A WHOLE. SECTION 1 (B) OF THE ACT, 56 STAT. 11, PROVIDES THAT THE ADMINISTRATOR SHALL CONSTRUCT TEMPORARY UNITS WHERE HE SHALL CONSIDER "THERE IS NO REASONABLE PROSPECT OF DISPOSING OF SUCH HOUSING TO MEET A NEED EXTENDING BEYOND THE EMERGENCY.' MOREOVER, SECTION 4 OF THE ACT, QUOTED IN YOUR SUBMISSION, EXPRESSLY DESIRES THE POLICY OF THE LAW TO BE THAT "SUCH HOUSING MAY BE SOLD AND DISPOSED OF AS EXPEDITIOUSLY AS POSSIBLE," AND SECTION 301 OF THE ACT, 55 STAT. 363, PROVIDES THAT:

WHEN THE PRESIDENT SHALL HAVE DECLARED THAT THE EMERGENCY DECLARED BY HIM ON SEPTEMBER 8, 1939, HAS CEASED TO EXIST * * * PROPERTY ACQUIRED OR CONSTRUCTED UNDER THIS ACT (INCLUDING SCHOOLS AND HOSPITALS) SHALL BE DISPOSED OF AS PROMPTLY AS MAY BE ADVANTAGEOUS UNDER THE CIRCUMSTANCES AND IN THE PUBLIC INTEREST. ALSO, ATTENTION IS INVITED TO THE REPORT OF THE HOUSE COMMITTEE ON PUBLIC BUILDINGS, AND GROUNDS ON H.R. 6128 (LATER ENACTED INTO PUBLIC LAW 409, 77TH CONGRESS), WHEREIN IT WAS STATED THAT:

THE COMMITTEE REPEAT THAT THIS ACT ( LANHAM ACT) IS NOT DESIGNED AS SLUM- CLEARANCE MEASURE; IT IS NOT INTENDED THAT THE QUARTERS SO CONSTRUCTED SHOULD BE USED FOR PERMANENT LEASING OF RESIDENTIAL QUARTERS TO PERSONS OF LOW INCOME. ITS PURPOSE SPECIFICALLY IS TO PROVIDE HOUSING, WHICH IS NOT OTHERWISE AVAILABLE AND CANNOT BE PROVIDED BY PRIVATE CAPITAL, FOR PERSONS ENGAGED IN CONGESTED AREAS OF NATIONAL DEFENSE DURING THE PRESENT EMERGENCY, ON A RENTAL OR SALE BASIS, AND THAT AFTER THE EMERGENCY HAS PASSED THE HOUSES NOT PREVIOUSLY DISPOSED OF SHALL BE SOLD AND THE VALUE OF THEM, INSOFAR AS POSSIBLE, RETURNED TO THE TREASURY. (ITALICS SUPPLIED.)

THE TERMS OF THE STATUTORY PROVISIONS AND THE EXPRESSION OF PURPOSE SET FORTH IN THE COMMITTEE REPORT, ABOVE QUOTED, CLEARLY ESTABLISH A LEGISLATIVE INTENT THAT THE GOVERNMENT'S OPERATION AND CONTROL OF THE HOUSING CONSTRUCTED UNDER THE LANHAM ACT SHOULD BE LIMITED TO THE PRESENT EMERGENCY OR, IN OTHER WORDS, THAT IT SHOULD BE TEMPORARY IN NATURE. HENCE, THE ONLY LOGICAL CONCLUSION IS THAT THE WAIVER OF THE IMMUNITY OF THE UNITED STATES FROM TAXATION OF ITS REAL PROPERTY BY A STATE OR POLITICAL SUBDIVISION THEREOF, PROVIDED BY SECTION 306 OF THE ACT, WAS ENACTED BY THE CONGRESS IN CONTEMPLATION OF A LIMITED OR TEMPORARY GOVERNMENTAL CONTROL OF THE PROPERTY. ON THE OTHER HAND, IT IS EVIDENT THAT WHEN HOUSING IS TRANSFERRED TO THE NAVY DEPARTMENT UNDER THE PROVISIONS OF SECTION 4 OF THE ACT, IT THEN BECOMES A PART OF THE PROPERTY PERMANENTLY UNDER THE JURISDICTION OF THE NAVY DEPARTMENT AND, IF IT COULD BE SAID THAT PAYMENT IS REQUIRED OF SUMS IN LIEU OF TAXES WITH RESPECT TO THE PROPERTY SO TRANSFERRED, SUCH PAYMENTS NECESSARILY WOULD HAVE TO BE MADE FOR AN UNLIMITED TIME OR FOR AS LONG AS THE PROPERTY REMAINS UNDER THE JURISDICTION OF YOUR DEPARTMENT. IT NOWHERE APPEARS THAT THE CONGRESS INTENDED SUCH A RESULT. CONSEQUENTLY IT MUST BE CONCLUDED THAT YOU ARE NOT REQUIRED OR AUTHORIZED TO MAKE PAYMENTS OF AMOUNTS IN LIEU OF TAXES TO LOCAL TAXING UNITS ON HOUSING PROJECTS TRANSFERRED TO THE NAVY DEPARTMENT PURSUANT TO SECTION 4 OF THE LANHAM ACT; AND, SINCE ANY AGREEMENTS BETWEEN YOUR DEPARTMENT AND LOCAL TAXING UNITS FOR THE PAYMENT OF SUCH SUMS WOULD BE IN DEROGATION OF THE GOVERNMENT'S SOVEREIGN IMMUNITY FROM TAXATION, IT APPEARS PROPER TO HOLD THAT, IN THE ABSENCE OF EXPRESS STATUTORY AUTHORITY THEREFOR, THE MAKING OF SUCH AGREEMENTS IS NOT AUTHORIZED.

WITH REFERENCE TO THE AGREEMENT OF OCTOBER 14, 1941, ENTERED INTO BY THE FEDERAL WORKS ADMINISTRATOR WITH THE COUNTY OF DUVAL, FLORIDA; FOR THE PAYMENT OF SUMS IN LIEU OF TAXES ON A DEFENSE HOUSING PROJECT SUBSEQUENTLY TRANSFERRED TO YOUR DEPARTMENT, IT MUST BE HELD THAT THE SCOPE AND EFFECT OF THAT AGREEMENT CAN BE NO BROADER THAN THE STATUTORY AUTHORITY UNDER WHICH IT WAS MADE, TO-WIT, SECTION 306 OF THE LANHAM ACT. AS HERETOFORE POINTED OUT, THAT LAW AUTHORIZES THE PAYMENT OF SUMS IN LIEU OF TAXES BY THE ADMINISTRATOR ONLY AS TO SUCH PROPERTY AS IS "HELD BY HIM.' THEREFORE, THE GOVERNMENT'S OBLIGATION UNDER THE AGREEMENT NECESSARILY IS CONFINED TO SUCH PERIOD, ONLY, AS THE NATIONAL HOUSING ADMINISTRATOR CONTINUES TO OPERATE AND CONTROL THE PROPERTY AND THE AGREEMENT IS OF NO BINDING EFFECT AFTER THE PROPERTY IS PERMANENTLY TRANSFERRED PURSUANT TO SECTION 4 OF THE ACT. ACCORDINGLY, THE QUESTION PRESENTED IN THE FINAL PARAGRAPH OF YOUR LETTER IS ANSWERED IN THE NEGATIVE.