B-4607, JULY 19, 1939, 19 COMP. GEN. 72

B-4607: Jul 19, 1939

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ARE BROAD ENOUGH TO EMBRACE A TAX IN THE NATURE OF AN ASSESSMENT AGAINST SUCH PROPERTY FOR ITS PROPORTIONATE SHARE OF THE COST OF IMPROVEMENT OF AN ABUTTING HIGHWAY. TO THE EXTENT THAT SUCH FUNDS ARE SO RECEIVED THE GRANT APPLICABLE TO SUCH PROJECT SHALL BE REDUCED. PRIOR TO THE PAYMENT OF THE COST OF SAME BY PARTIES WHOSE PROPERTY WAS BENEFITED THEREBY. THIS PROJECT WAS ORIGINALLY ACQUIRED BY THE HOUSING DIVISION OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS AND WAS TRANSFERRED TO THE UNITED STATES HOUSING AUTHORITY BY EXECUTIVE ORDER NO. 7732. THE PROJECT IS BOUNDED ON THE WEST BY A STREET OR HIGHWAY KNOWN AS DIXIE HIGHWAY. AS A RESULT OF WHICH THE HIGHWAY WAS GREATLY IMPROVED.

B-4607, JULY 19, 1939, 19 COMP. GEN. 72

LOW RENT HOUSING PROJECT - CITY ASSESSMENTS FOR IMPROVEMENT OF ABUTTING HIGHWAY - GOVERNMENT LIABILITY THE PROVISIONS OF SECTION 13 (C) OF THE UNITED STATES HOUSING ACT OF 1937, 50 STAT. 895, EVIDENCING AN INTENT ON THE PART OF THE CONGRESS TO, IN EFFECT, PERMIT A WAIVER BY THE HOUSING AUTHORITY OF THE IMMUNITY WHICH WOULD OTHERWISE EXIST AS TO THE TAXATION OF ITS REAL PROPERTY BY A STATE OR POLITICAL SUBDIVISION THEREOF, ARE BROAD ENOUGH TO EMBRACE A TAX IN THE NATURE OF AN ASSESSMENT AGAINST SUCH PROPERTY FOR ITS PROPORTIONATE SHARE OF THE COST OF IMPROVEMENT OF AN ABUTTING HIGHWAY. THE TERMS OF A FEDERAL-CITY LOAN AND GRANT AGREEMENT THAT "IF THE BORROWER SHALL RECEIVE ANY FUNDS (OTHER THAN THOSE RECEIVED UNDER THIS AGREEMENT) DIRECTLY OR INDIRECTLY FROM THE GOVERNMENT, OR ANY AGENCY PROJECT, TO THE EXTENT THAT SUCH FUNDS ARE SO RECEIVED THE GRANT APPLICABLE TO SUCH PROJECT SHALL BE REDUCED," MAY BE CONSIDERED AS INTENDED TO COVER ONLY ADDITIONAL FUNDS FOR USE IN CONNECTION WITH THE FINANCING OF THE CONSTRUCTION OF THE STREET PROJECTS INVOLVED, PRIOR TO THE PAYMENT OF THE COST OF SAME BY PARTIES WHOSE PROPERTY WAS BENEFITED THEREBY, AND NOT AMOUNTS DETERMINED BY A GOVERNMENT AGENCY UNDER ITS STATUTORY AUTHORITY THAT SHOULD BE PAID ALONG WITH OTHER PROPERTY OWNERS AS COMPENSATION FOR THE BENEFITS CONFERRED UPON THEIR PROPERTY AS THE RESULT OF THE CONSTRUCTION OF THE PROJECT.

COMPTROLLER GENERAL BROWN TO THE ADMINISTRATOR, UNITED STATES HOUSING AUTHORITY, JULY 193, 1939:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER DATED JUNE 27, 1939, AS FOLLOWS:

A QUESTION HAS ARISEN AS TO THE PROPRIETY OF MAKING A PAYMENT TO THE CITY OF LOUISVILLE FOR THE IMPROVEMENT OF A STREET ABUTTING ON THE LOW RENT HOUSING PROJECT OWNED BY THE UNITED STATES HOUSING AUTHORITY, KNOWN AS THE LA SALLE PLACE PROJECT H-2502.

THIS PROJECT WAS ORIGINALLY ACQUIRED BY THE HOUSING DIVISION OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS AND WAS TRANSFERRED TO THE UNITED STATES HOUSING AUTHORITY BY EXECUTIVE ORDER NO. 7732, EFFECTIVE NOVEMBER 1, 1937. THE PROJECT IS BOUNDED ON THE WEST BY A STREET OR HIGHWAY KNOWN AS DIXIE HIGHWAY. IN THE LATTER PART OF 1938 THE CITY OF LOUISVILLE IMPROVED THIS HIGHWAY BY WIDENING IT SUBSTANTIALLY, PAVING IT, PUTTING IN CURBS AND GUTTERS AND CONSTRUCTING BOULEVARDS, AS A RESULT OF WHICH THE HIGHWAY WAS GREATLY IMPROVED.

IT APPEARS THAT AS OF JANUARY 30, 1935, A LOAN AND GRANT AGREEMENT WAS ENTERED INTO BETWEEN THE CITY OF LOUISVILLE AND THE UNITED STATES, ACTING THROUGH THE PUBLIC WORKS ADMINISTRATION, BY WHICH THE UNITED STATES GOVERNMENT AGREED TO FINANCE THE PAVING AND IMPROVING OF A LARGE NUMBER OF STREETS IN THE CITY OF LOUISVILLE BY WAY OF GIVING A 30-PERCENT GRANT TO THE CITY AND LOANING THE BALANCE OF THE COST OF THE VARIOUS STREET IMPROVEMENTS TO THE CITY. THIS WAS KNOWN AS P.W.A. DOCKET NO. 8990. ONE OF THE STREETS INCLUDED IN THIS AGREEMENT WAS THE DIXIE HIGHWAY DESCRIBED IN THE AGREEMENT AS PROJECT NO. 160. THE AGREEMENT CONTAINED THE FOLLOWING PROVISION:

"SECTION 17. OTHER FINANCIAL AID FROM THE GOVERNMENT.--- IF THE BORROWER SHALL RECEIVE ANY FUNDS (OTHER THAN THOSE RECEIVED UNDER THIS AGREEMENT) DIRECTLY OR INDIRECTLY FROM THE GOVERNMENT, OR ANY AGENCY OR INSTRUMENTALITY THEREOF, TO AID IN FINANCING THE CONSTRUCTION OF ANY PROJECT, TO THE EXTENT THAT SUCH FUNDS ARE SO RECEIVED THE GRANT APPLICABLE TO SUCH PROJECT SHALL BE REDUCED.'

IN JANUARY 1939, THE CITY OF LOUISVILLE ADVISED THE UNITED STATES HOUSING AUTHORITY THAT IT PROPOSED TO LEVY TWO ASSESSMENTS AGAINST THE PROPERTY OWNED BY THE UNITED STATES HOUSING AUTHORITY FOR ITS PROPORTIONATE SHARE OF THE COST OF SUCH IMPROVEMENT. THE CITY ESTIMATED THAT BASED UPON THE PROPORTIONATE SIZE OF THE VARIOUS TRACTS OF LAND ABUTTING DIXIE HIGHWAY, THE GROSS BENEFIT TO THE HOUSING PROJECT, BASED UPON ACTUAL COSTS, WOULD BE THE SUM OF $17,742.23. INASMUCH AS THE CITY HAD RECEIVED A 30-PERCENT GRANT FROM THE UNITED STATES, THE ACTUAL AMOUNT OF THE PROPOSED TWO ASSESSMENTS WAS THE SUM OF $12,419.56. THIS AMOUNT, BECAUSE OF THE CITY'S METHOD OF COMPUTING THE VALUE AND AREA OF THE PROPERTY, WAS DIVIDED INTO TWO PROPOSED ASSESSMENTS, ONE IN THE AMOUNT OF $1,341.12 AND THE OTHER IN THE AMOUNT OF $11,078.44.

THE CITY WAS ADVISED THAT THE PROPERTY, BEING OWNED BY THE UNITED STATES HOUSING AUTHORITY, WHICH IS AN AGENCY AND INSTRUMENTALITY OF THE UNITED STATES, WAS NOT SUBJECT TO A LIEN FOR SPECIAL ASSESSMENTS BUT THAT IT MIGHT BE POSSIBLE FOR THE UNITED STATES HOUSING AUTHORITY TO ENTER INTO AN AGREEMENT WITH THE CITY TO PAY TO THE CITY THE VALUE OF THE IMPROVEMENT. SECTION 13 (C) OF THE UNITED STATES HOUSING ACT OF 1937 SPECIFICALLY EMPOWERS THE UNITED STATES HOUSING AUTHORITY TO ENTER INTO AGREEMENTS TO PAY ANNUAL SUMS IN LIEU OF TAXES TO ANY STATE OR POLITICAL SUBDIVISION THEREOF WITH RESPECT TO ANY REAL ESTATE OWNED BY THE AUTHORITY.

THE CITY WAS LATER ADVISED THAT BECAUSE OF THE PROVISIONS OF SECTION 17 OF THE LOAN AND GRANT AGREEMENT ABOVE QUOTED IT WAS CONSIDERED VERY DOUBTFUL WHETHER THE UNITED STATES HOUSING AUTHORITY WOULD BE AUTHORIZED TO ENTER INTO ANY SUCH AGREEMENT WITH THE CITY TO PAY THAT AMOUNT OF MONEY FOR THE IMPROVEMENT.

ON MAY 1, 1939, MR. H. A. GRAY, ASSISTANT ADMINISTRATOR OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS, ADDRESSED A LETTER TO THE UNITED STATES HOUSING AUTHORITY WITH RESPECT TO THIS MATTER. HIS LETTER IN PART STATES AS FOLLOWS:

"WE HAVE CAREFULLY CONSIDERED THE CONTENT OF YOUR LETTER OF APRIL 5, 1939, ADDRESSED TO MR. JOHN R. LINDSAY, DIRECTOR, DEPARTMENT OF PUBLIC FINANCE, LOUISVILLE, KENTUCKY. IT IS OUR OPINION THAT THE PROVISIONS OF SECTION 17 OF THE LOSS AND GRANT AGREEMENT ENTERED INTO AS OF JANUARY 30, 1935, BETWEEN THE CITY OF LOUISVILLE AND THE UNITED STATES OF AMERICA, DO NOT DETER THE UNITED STATES HOUSING AUTHORITY FROM MAKING ANY AGREEMENT IT CHOOSES TO COMPENSATE THE CITY OF LOUISVILLE, IN LIEU OF PAYING THE SPECIAL ASSESSMENTS WHICH THE CITY DESIRES TO LEVY AGAINST THE PROPERTY OF THE AUTHORITY.

"ALTHOUGH THE LANGUAGE OF SECTION 17 IS COMPREHENSIVE, IT IS OUR OPINION THAT IT DOES NOT APPLY TO CIRCUMSTANCES SUCH AS ARE PRESENTED IN THIS INSTANCE. THE INTENT OF SECTION 17 IS TO PREVENT ANY DUAL OR MULTIPLE ALLOTMENT OF FEDERAL FUNDS FOR THE SOLE PURPOSE OF FINANCING THE CONSTRUCTION OF THE PARTICULAR PROJECT DESCRIBED IN THE LOAN AND GRANT AGREEMENT. THIS SECTION TAKES NO COGNIZANCE OF FUNDS PAID BY THE FEDERAL GOVERNMENT, OR ANY AGENCY THEREOF, IN CONSIDERATION FOR DIRECT BENEFITS WHICH IT DERIVES FROM THE PROJECT. ANY MONIES WHICH THE AUTHORITY MIGHT PAY TO THE CITY IN THE CIRCUMSTANCES SET FORTH IN YOUR LETTER, WOULD BE PAID IN RECOGNITION OF, AND IN RETURN FOR BENEFITS ACCRUING TO THE PROPERTY OF THE AUTHORITY BECAUSE OF THE HIGHWAY IMPROVEMENT AND WOULD NOT REPRESENT AN APPLICATION OF FEDERAL FUNDS FOR THE SOLE PURPOSE OF AIDING THE APPLICANT IN FINANCING THE CONSTRUCTION OF THE PROJECT.'

IT IS OUR OPINION THAT THE IMPROVEMENT OF DIXIE HIGHWAY HAS AIDED THE LASALLE PLACE PROJECT AND HAS ENHANCED THE VALUE OF THE PROPERTY BELONGING TO THE UNITED STATES HOUSING AUTHORITY. THEREFORE, IF THERE IS NO OBJECTION OTHERWISE, THE UNITED STATES HOUSING AUTHORITY IS WILLING TO ENTER INTO AN AGREEMENT WITH THE CITY OF LOUISVILLE TO PAY TO THE CITY ITS PROPORTIONATE SHARE OF THE COST OF THIS IMPROVEMENT AFTER DEDUCTING 30 PERCENT THEREOF REPRESENTED BY THE AMOUNT OF THE GRANT MADE BY THE UNITED STATES, THE NET AMOUNT OF WHICH PAYMENT WOULD BE THE AMOUNT OF THE TWO PROPOSED ASSESSMENTS.

WILL YOU KINDLY ADVISE ME WHETHER IN THE CIRCUMSTANCES THERE IS ANY OBJECTION TO THE UNITED STATES HOUSING AUTHORITY ENTERING INTO SUCH AN AGREEMENT WITH THE CITY OF LOUISVILLE AND MAKING SUCH PAYMENT.

SECTION 13 (C) OF THE UNITED STATES HOUSING ACT OF 1937, 50 STAT. 895 (42 U.S.C. 1413 (C) (, PROVIDES:

THE AUTHORITY MAY ENTER INTO AGREEMENTS TO PAY ANNUAL SUMS IN LIEU OF TAXES TO ANY STATE OR POLITICAL SUBDIVISION THEREOF WITH RESPECT TO ANY REAL PROPERTY OWNED BY THE AUTHORITY. 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 THEREBY.

ALTHOUGH THE LANGUAGE OF SECTION 17 OF THE LOAN AND GRANT AGREEMENT OF JANUARY 30, 1935, QUOTED BY YOU, IS NOT ENTIRELY FELICITOUS I CONCUR IN THE VIEW RECENTLY EXPRESSED BY THE ASSISTANT ADMINISTRATIVE OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS THAT ITS PURPOSE WAS TO PREVENT A DUAL OR MULTIPLE ALLOTMENT OF FEDERAL FUNDS IN CONNECTION WITH THE CONSTRUCTION OF A PROJECT INCLUDED IN THE AGREEMENT. IN OTHER WORDS, IT APPEARS THAT THIS SECTION OF THE AGREEMENT WAS INTENDED TO APPREHEND ONLY SUCH ADDITIONAL FUNDS AS MIGHT BE RECEIVED BY THE CITY OF LOUISVILLE FROM THE GOVERNMENT OR AN AGENCY OR INSTRUMENTALITY THEREOF, FOR USE IN CONNECTION WITH THE FINANCING OF THE CONSTRUCTION OF A PROJECT SUCH AS THE ONE HERE INVOLVED, PRIOR TO THE PAYMENT OF THE COST OF THE SAME BY THE PARTIES WHOSE PROPERTY WAS BENEFITED THEREBY, AND THAT THE REDUCTIVE PROVISION OF THIS SECTION SHOULD NOT BE INTERPRETED TO INCLUDE PAYMENT MADE BY AN INSTRUMENTALITY OR AGENCY OF THE GOVERNMENT ALONG WITH OTHER PROPERTY OWNERS AS COMPENSATION FOR THE BENEFITS CONFERRED UPON THEIR PROPERTY AS THE RESULT OF THE CONSTRUCTION OF THE PROJECT.

FURTHERMORE, IT APPEARS THAT THE PROVISIONS OF SECTION 13 (C) OF THE UNITED STATES HOUSING ACT OF 1937, SUPRA, EVIDENCE AN INTENT ON THE PART OF THE CONGRESS TO, IN EFFECT, PERMIT A WAIVER BY YOUR AUTHORITY OF THE IMMUNITY WHICH WOULD OTHERWISE EXIST AS TO THE TAXATION OF ITS REAL PROPERTY BY A STATE OR POLITICAL SUBDIVISION THEREOF, AND THE LANGUAGE OF THE STATUTE SEEMS SUFFICIENTLY BROAD TO EMBRACE A TAX IN THE NATURE OF THE ONE HERE INVOLVED.

ACCORDINGLY, YOU ARE ADVISED THAT THIS OFFICE IS NOT REQUIRED TO OBJECT TO THE EXECUTION OF AN AGREEMENT WITH THE CITY OF LOUISVILLE PROVIDING FOR THE PAYMENT OF THE SUMS MENTIONED IN YOUR LETTER IN ACCORDANCE WITH THE PROVISIONS OF SAID STATUTE.