B-12425, OCTOBER 23, 1940, 20 COMP. GEN. 206

B-12425, OCTOBER 23, 1940, 20 COMP. GEN. 206

TAXES - MUNICIPAL - WATER SERVICE - GOVERNMENT LIABILITY A MUNICIPALITY MAY NOT BE PAID A WATER CHARGE ON PREMISES OWNED BY THE UNITED STATES WHICH IS CLAIMED, NOT ON THE BASIS OF WATER CONSUMPTION AS ESTABLISHED BY METER MEASUREMENT, BUT ON THE BASIS OF A FLAT CHARGE IN THE NATURE OF A TAX.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CITY OF NEW YORK, OCTOBER 23, 1940:

REFERENCE IS MADE TO YOUR LETTER OF MAY 23, 1940, REQUESTING REVIEW OF SETTLEMENT DATED MAY 6, 1940, WHICH DISALLOWED YOUR CLAIM FOR $17.25, ALLEGED TO BE DUE AS A WATER CHARGE FOR THE YEAR 1919 ON THE PREMISES LOCATED AT 172 PEARL STREET, BOROUGH OF BROOKLYN, NEW YORK, DESCRIBED AS SECTION 1, BLOCK 86, LOT 18, SAID PREMISES HAVING BEEN ACQUIRED BY THE UNITED STATES UNDER DEED DATED JUNE 12, 1918, AS A SITE FOR A NAVAL MEDICAL SUPPLY GARAGE AND STORAGE WAREHOUSE.

IT IS STATED IN YOUR LETTER THAT THE RULES AND REGULATIONS OF THE DEPARTMENT OF WATER SUPPLY, GAS AND ELECTRICITY PROVIDE AS FOLLOWS:

* * * WHERE THE CHARGE FOR WATER IS BASED ON FRONTAGE AND THE NUMBER AND NATURE OF WATER APPLIANCES, IT IS OF NO MOMENT WHETHER WATER IS USED OR NOT. THE DETERMINING FACTOR IS THAT THE BUILDING IS CONNECTED WITH THE CITY WATER SUPPLY SYSTEM AND WATER IS AVAILABLE FOR USE TO WHICH IT WOULD NATURALLY BE PUT. SUCH A CHARGE IS IN THE NATURE OF A TAX AND CONSTITUTES A LIEN UPON THE PROPERTY. THIS LIEN ATTACHES FROM THE DATE OF THE ENTRY OF THE CHARGE. THE CHARGE IS FIXED AS OF CONDITIONS EXISTING ON JANUARY 1 AND IS VALID FOR THE ENTIRE YEAR IRRESPECTIVE OF WHETHER WATER IS USED OR NOT. IF ANY CHANGE TAKES PLACE DURING THE YEAR INVOLVING A REDUCTION OR CANCELLATION OF THE CHARGE, THE CANCELLATION IS ONLY EFFECTIVE AS OF JANUARY 1 OF THE SUCCEEDING YEAR.

YOU STATE FURTHER THAT AS THE IMPROVEMENT WAS IN EXISTENCE ON JANUARY 1, 1919, THE AMOUNT WAS A PROPER CHARGE AGAINST THE PREMISES AND REMAINS A LIEN AGAINST SAID PREMISES IN ACCORDANCE WITH SECTION 473 OF THE NEW YORK CITY CHARTER, QUOTED IN YOUR LETTER AS FOLLOWS:

ALL UNIFORM ANNUAL CHARGES * * * SHALL BECOME A CHARGE AND LIEN UPON THE LAND AND BUILDINGS WHERE THE WATER WAS CONSUMED OR SUPPLIED * * *. ALSO, YOU STATE THAT SECTION 475 OF THE CHARTER COVERING THE INSTALLATION OF METERS PROVIDES AS FOLLOWS:

NOTHING HEREIN CONTAINED SHALL BE CONSTRUED SO AS TO REMIT OR PREVENT THE DUE COLLECTION OF ARREARAGES OR CHARGES FOR WATER CONSUMPTION HERETOFORE INCURRED, NOR INTERFERE WITH THE PROPER LIENS THEREOF.

THE EVIDENCE SHOWS THAT THE BUILDING LOCATED ON THE SITE AT THE TIME THE UNITED STATES ACQUIRED TITLE THERETO WAS DEMOLISHED ON OR ABOUT SEPTEMBER 1, 1919, AND PRESUMABLY THE PREMISES REMAINED VACANT THEREAFTER UNTIL SOMETIME IN THE YEAR 1920, IT BEING STATED IN YOUR LETTER THAT A WATER METER WAS INSTALLED ON APRIL 1, 1920, IN THE NEW BUILDING ERECTED ON THE SITE. THERE IS NOTHING IN THE RECORD SHOWING ANY REQUEST FOR WATER ON THE SITE OR ANY USE THEREOF BY THE GOVERNMENT DURING THE YEAR 1919, THE PERIOD COVERED BY YOUR CLAIM, AND IT APPEARS ADMITTED THAT NO CLAIM FOR SUCH PERIOD WAS FILED UNTIL OCTOBER 29, 1931, OR OVER 12 YEARS AFTER THE DATE YOU STATE THAT THE CHARGE BECAME A LIEN ON THE PREMISES.

IN THE CASE OF NEW YORK UNIVERSITY V. AMERICAN BOOK CO., 90 N.E. 819, INVOLVING WATER CHARGES UNDER THE NEW YORK CITY CHARTER, IT IS STATED BY THE COURT OF APPEALS OF NEW YORK, IN PART AS FOLLOWS:

THE CITY OF NEW YORK UNDER THE CHARTER ( LAWS 1901, C. 466, SEC. 473) IS AUTHORIZED TO ADOPT EITHER OF TWO DISTINCT METHODS OF COMPENSATING OR REIMBURSING ITSELF FOR FURNISHING WATER TO ITS INHABITANTS. THE FIRST IS BY THE EXERCISE OF THE POWER OF TAXATION; THE SECOND, BY SALE. BY THE SECTION CITED THE BOARD OF ALDERMEN IS AUTHORIZED TO ESTABLISH A UNIFORM SCALE OF RATES AND CHARGES FOR SUPPLYING WATER TO DIFFERENT CLASSES OF BUILDINGS IN THE CITY WITH REFERENCE TO THEIR DIMENSIONS, VALUE, EXPOSURE, USE, ETC. THE RATES SO IMPOSED MUST BE PAID REGARDLESS OF THE QUANTITY OF WATER USED, OR WHETHER ANY WATER IS USED. SUCH A RATE IS A TAX ( REMSEN V. WHEELER, 105 N.Y. 573, 12 N.E. 564; MATTER OF TRUSTEES OF UNION COLLEGE, 129 N.Y. 308, 29 N.E. 460), AND THE OBLIGATION TO PAY IT IS CREATED BY THE EXERCISE OF THE TAXING POWER OF THE LOCAL AUTHORITIES. THE SAME SECTION IT IS ALSO PROVIDED THAT NO CHARGE SHALL BE MADE AGAINST ANY BUILDING IN WHICH A WATER METER SHALL HAVE BEEN PLACED AS PROVIDED BY THE CHARTER. BY SECTION 475 THE COMMISSIONER OF WATER SUPPLY IS AUTHORIZED TO PLACE METERS IN CERTAIN CLASSES OF BUILDINGS, AND THE CHARGE MADE DEPENDS SOLELY UPON THE QUANTITY OF WATER USED. IN THIS CLASS OF CASES THERE IS MERELY A VOLUNTARY PURCHASE BY THE CONSUMER FROM THE CITY OF SUCH QUANTITY OF WATER AS HE CHOOSES TO BUY ( SILKMAN V. BD. OF WATER COMMISSIONERS, 152 N.Y. 327, 46 N.E. 612, 37 L.R.A. 827), * * * ( ITALICS SUPPLIED.)

THE CLAIM IN THE PRESENT CASE IS ASSERTED, NOT ON THE BASIS OF WATER CONSUMPTION AS ESTABLISHED BY METER MEASUREMENT, BUT ON THE BASIS OF A FLAT CHARGE IN THE NATURE OF A TAX. AS SUCH, IT MAY NOT BE COLLECTED FROM THE UNITED STATES, IT BEING WELL SETTLED THAT THE FEDERAL GOVERNMENT OR ITS ACTIVITIES MAY NOT BE TAXED BY A MUNICIPALITY (15 COMP. GEN. 295; ID. 380; AND 17 ID. 223.)

ACCORDINGLY, FOR THE FOREGOING REASONS IN ADDITION TO THE REASONS STATED IN THE SETTLEMENT SAID SETTLEMENT MUST BE, AND IS, SUSTAINED.