Untitled Texas Attorney General Opinion

Hon. Tom L. Hartley O$nion No. O-2637
Criminal District Attornev : Exemption from state and
Hidalgo County county taxation of land owned
Edinburg, Texas by the Regional Agricultural
Credit Corporation of Washington,
D.C., as an agency or instru-
Att : Mr. H. H. Rankin, Jr. mentality of the federal govern-
ment created under the Emergency
Relief and Construction Act of
1932, Section 201 (e) Ch. 520
47 Stat. at L. 709, 713, 12 US&A,
Dear Sir: Section 1148
We have y,our letter of August 14, 1940, in which you
ask our opinion on whether land owned by the Regional Agricul-
tural Credit Corporation of Washington, D. C., is exempt from
state and county taxes.
We believe that it is clear that the Regional Agri-
cultural Credit Corporation is an instrumentality of the United
States. It is created under authority of 12 USCA, Sectionll48,
which reads as follows:
"The Reconstruction Finance Corporation is au-
thorized to create in any of the twelve Federal land-
bank districts where it may deem the same to be de-
sirable a regional agricultural credit corporation
with a paid-up capital of not less than $3,000,000,
to be subscribed for by the Reconstruction Finance
Corporation and paid for out of the unexpended bal-
ance of the amounts allocated and made available to
the Secretary of Agriculture under section 602 of,
Title 15. Such corporations shall be managed by
officers and agents to be appointed by the Farm Credit
Administration under such rules and regulations as it
may prescribe. Such corporations are hereby author-
ized and empowered to make loans or advances to farm-
ers and stockmen, the proceeds of which are to be used
for an agricultural purpose (including crop produc-
tion) or for the raising, breeding, fattening or
marketing of livestock, to charge such rates o h inter-
est or discount thereon as in their judgment are fair
and equitable, subject to the approval of the Farm
Hon. Tom L. Hartley, page 2 (O-2637)
Credit Administration, and to rediscount with
the Reconstruction Finance Corporation and the
various Federal reserve banks and Federal in-
termediate credit banks any paper that they
acquire which is eligible for such purpose. All
expenses incurred in connection with the opera-
tion of such corporations shall be supervised and
paid by the Reconstruction Finance Corporation
under such rules and regulations as its board of
directors may prescribe.”
It will be noted that all of the stock of the Regional
Agricultural Credit Corporation is owned by the Reconstruction
Finance Corporation, which in turn is created by the act of Con-
gress 15 USCA, Section 601 and is wholly owned by the United
States of America. 15 US& Section 602. The activities of the
Regional Agricultural Credit Corporations are directed either by
the Reconstruction Finance Corporation or by the Farm Credit Ad-
ministration. It therefore follows that the Regional Agricul-
tural Credit Corporations are agencies or instrumentalities of
the United States. Keifer & Keifer vs. Reconstruction F~B.~ICQ
prporation, 306 U.S. 381, 59 S. Ct. 5 6 83 L. Ed. 784
sri ultur al Credit Cornoration vs. Siev?ar$, (North
N.~.~801.
Even though the Regional Agricultural Credit Corpora-
tion is an instrumentality of the United States, it does not
necessarily follow that its property is exempt from state or
county taxation. Congress may provide that the property of a
federal instrumentality may be taxed and “,pi ;aigVe ~vimmunity
which might otherwise exist. Balt more N I n 1 an 9. State
Tax Cm , 297 U.S. 209, 56 S&t. 417, 80 L. Ed. 586.
In this connection, it is our opinion that Section 4
of llrticle 7150, Vernon’s Annotated Civil Statutes, which exempts
from taxation “all property . . . of the United States. . . ” was
intended to exempt only property owned directly by the United
States or property of a federal Instrumentality where no consent
has been given to its taxation, and was not intended to exempt
property of a federal instrumentality where consent to its taxa-
tion has been given by Congress. The property in question here
does not come under the provisions of Article 5248 Vernon’s
Annotated Civil Statutes, which exempts property oi the United
States used for certain purposes set out in Article 5242, which
are not involved here.
In our opinion Congress has consented to the non-dis-
criminatory taxation of i and belonging to Regional Agricultural
Credit Corporations. We reach this conclusion, first, because
Congress has expressly consented to the taxation of the land of
Hon. Tom L. Hartley, page'3 (o-263?), , '
Reconstruction Finance Corporation and, second,;because by
clear implication, the,same consen E is extended~to the taxa-
tion of the land..of Regional Agricultural Cred~it Corporations.
Congress, in 15 USCA, Section 610, provided generally
that the property of the Reconstruction Finance Corporation
should be exempt from state and county taxation;but expressly
consented to the taxation of its real p'roperty in the following
language:
'1. . . except that any r,eal property of the
corporation shall~be subject to State, Territorial,
County, municipal or local taxation to,the same.
extent according to its value as other real property
is taxed. Jan. 22, 1932, C. 8, g 10, 47 Stat. 9."
Congress, however, has made no express provision as to
the taxation of the property of Regional Agricultural Credit
Corporations. The question is therefore presented as to whether
Congress intended that'the' same liab'ility to taxation of their
real property should apply to Regional Agricultural Credit Cor-
porations as to Reconstruction Finance Corporation.
We believe that the history of the legislation relat-
ing to Reconstruct,ion Finance Corporation and Regional Agricul-
tural Credit Corporations, 'indicates the legislative intent. By
the act of January 22, 1932 -47Stat. 5, 15 USCA 601, et seq.,
Congress created i?econstruc$ion Finance Corporation, and by Sec-
tion 10 of this 'act (15 USCA, Section 6101, It was provided that
the real property of Reconstruction Finance Corporation could be
taxed as quoted above. Section 2 of this act (15 USCA, Section
602) provided that of the $500,000 000 appropriated to the Re-
construction Finance Corporation, ~5Q,OOO,OOOwas allocated to
the Secretary of Agriculture for the ~purpose of making loans or
advances to farmers. By the act of ,July 21, 1932, co 520, 47
Stat. 709, certain sections of the statute relatingto Reoonstruc-
tion Finance Corporation were amended; and by Section 201~ (e) of
this act (15 USCA, Sect~ion~1148, quoted above) Reconstruction
Finance Corporation was authorized to create Regional Agricultural
Credit Corporations for the purpose o,f administering its funds
allocated. to the Se,cretary of Agriculture.
Itis reasonable to' assume that fin providing in, a single
section'of the statute for,the creation of Regional Agricultural
Credit Corporations asa means of facilitating the performance
of the functions of Ae.construction Finance Corporation, Congress
assumed that the .exempti:ons and liabilities of Reconstruotion
Finance Corporation would? flow to th.e Regional Agricultural Credit
Corporations so created and wholly owned by Reconstruction Finance
Hon. Tom L. Hartley, page 4 (O-2637)
Corporation. In connection with the liability of Regional Agri-
cultural Credit Corporations to suit, the Supreme Court of the
United States said in the case of Keifer & Keifer vs. Recon
, 306 U.S. 381, 59 s.ct. 516,~ 83
“Reconstruction is the parent of Regional. When
creating it, Congress gave Reconstruction various
general corporate powers including authority ‘to sue
and be sued to complain and to defend in any court
of competen $ Juri;di;“,;onAt stLat; o; f ,e$e;ali 1 l$ Jan-
uary 22, 1932
U.S.C.A. B 601. When liter C&gsesi authr&ed Re-
construction to create these Regional Agricultural
Credit Corporations, it did so by outlining in a sin-
gle section of a comprehensive statute the broad
scope of this added power for Reconstruction. (July
21 1932) 47 Stat. at L. 709, 713 chap. 520, 12
U.4.C.A. S 1148. Congress naturally assumed that
the general corporate powers to which it had given
particularity in the original s~tatute establishing
Reconstruction would flow automatically to the Re-
gionals from the source of their being.”
We believe that the reasoning of the Supreme Court
quoted above is applicable to the situation presented here.
Having determined that real property directly owned by Recon-
struction Finance Corporation should be subject to taxation as
other real property, Congress had no reason for exempting from
taxation property owned by a corporation which is created and
wholly owned by Reconstruct ion Finance Corporation.
We further believe that this conclusion is supported
by a general Congressional policy to permit the taxation of real
property belonging to similar federal instrumentalities. Con-
sidering only corporations exercising closely similar functions,
we find that as to the following corporations Congress ‘has per-
mitted local taxation of real property: Federal Intermediate
Credit Banks, 12 USCA Sections 1111, 931; Federal Land Banks
and Joint Stock Land Banks, 12 USCA Section 933; National’ Agri-
cultural Credit Corporations, 12 US&A, Sections 1261 548; Pro-
ductlon Credit Corporations, Production Credit Assoc 1atlons,
Central Bank for Cooperatives and Regional Banks for Coopera-
tives 12 U.S.C.A. Section 1138 (c); Federal Farm Mortgage Cor-
porations, 12 U.S.E.A., Section 1020 (f); National Mortgage
Associations, 12 USCA, Section 1722. As the Supreme Court said
in the case of ifer & Keifer vs. Reco t uction Finance Cot-
poratiqp, 306 U%. 391, 59 S. Ct. 516, 8yLtEd. 784 , 791:
Hon. Tom L. Hartley, page 5 (O-2637)
To imply for Regionals a unique legal
positi&‘c:mpared with those corporations to whose
purposes Regional is so closely allied, is to in-
fer Congressional idiosyncrasy. There is a much
more sensible explanation for the failure of Con-
gress to bring Regional by express terms within its
emphatic practice not to confer sovereign immunity
upon these government corporations. Congress had a
right to assume that the characteristic energies for
corporate enterprise with which a few months pre-
viously it had endowed Reconstruct ion would now
radiate through Reconstruction to Regional.”
For the reasons stated, we are of the opinion that
land owned by the Regional Agricultural Credit Corporation of
Washington D. C., is subject to state and county taxes to the
same exten E according to its value as other real property is
taxed.
Yours very truly,
ATTORNEY
GENERAL
OF TEXAS
By /s/ James P. Hart
James P. Hart, Assistant
APPROVED:OCT 18, 1940
/s/ Gerald C. Mann
ATTORNEY GENERAL
OF TEXAS
This opinion considered and approved in limited conference.
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