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U.S. Code as of:
01/19/04
Section 831l. Financial assistance to States and local governments in lieu of taxation; apportionment; limitation on contracts for sale of power to municipalities; report to Congress
In order to render financial assistance to those States and local
governments in which the power operations of the Corporation are
carried on and in which the Corporation has acquired properties
previously subject to State and local taxation, the board is
authorized and directed to pay to said States, and the counties
therein, for each fiscal year, beginning July 1, 1940, the
following percentages of the gross proceeds derived from the sale
of power by the Corporation for the preceding fiscal year as
hereinafter provided, together with such additional amounts as may
be payable pursuant to the provisions hereinafter set forth, said
payments to constitute a charge against the power operations of the
Corporation: For the fiscal year (beginning July 1) 1940, 10 per
centum; 1941, 9 per centum; 1942, 8 per centum; 1943, 7 1/2 per
centum; 1944, 7 per centum; 1945, 6 1/2 per centum; 1946, 6 per
centum; 1947, 5 1/2 per centum; 1948 and each fiscal year
thereafter, 5 per centum. "Gross proceeds", as used in this
section, is defined as the total gross proceeds derived by the
Corporation from the sale of power for the preceding fiscal year,
excluding power used by the Corporation or sold or delivered to any
other department or agency of the Government of the United States
for any purpose other than the resale thereof. The payments herein
authorized are in lieu of taxation, and the Corporation, its
property, franchises and income, are expressly exempted from
taxation in any manner or form by any State, county, municipality,
or any subdivision or district thereof.
The payment for each fiscal year shall be apportioned among said
States in the following manner: One-half of said payment shall be
apportioned by paying to each State the percentage thereof which
the gross proceeds of the power sales by the Corporation within
said State during the preceding fiscal year bears to the total
gross proceeds from all power sales by the Corporation during the
preceding fiscal year; the remaining one-half of said payment shall
be apportioned by paying to each State the percentage thereof which
the book value of the power property held by the Corporation within
said State at the end of the preceding fiscal year bears to the
total book value of all such property held by the Corporation on
the same date. The book value of power property shall include that
portion of the investment allocated or estimated to be allocable to
power: Provided, That the minimum annual payment to each State
(including payments to counties therein) shall not be less than an
amount equal to the two-year average of the State and local ad
valorem property taxes levied against power property purchased and
operated by the Corporation in said State and against that portion
of reservoir lands related to dams constructed by or on behalf of
the United States Government and held or operated by the
Corporation and allocated or estimated to be allocable to power.
The said two-year average shall be calculated for the last two tax
years during which said property was privately owned and operated
or said land was privately owned: Provided further, That the
minimum annual payment to each State in which the Corporation owns
and operates power property (including payments to counties
therein) shall not be less than $10,000 in any case: Provided
further, That the corporation (!1) shall pay directly to the
respective counties the two-year average of county ad valorem
property taxes (including taxes levied by taxing districts within
the respective counties) upon power property and reservoir lands
allocable to power, determined as above provided, and all payments
to any such county within a State shall be deducted from the
payment otherwise due to such State under the provisions of this
section. The determination of the board of the amounts due
hereunder to the respective States and counties shall be final.
The payments above provided shall in each case be made to the
State or county in equal monthly installments beginning not later
than July 31, 1940.
Nothing herein shall be construed to limit the authority of the
Corporation in its contracts for the sale of power to
municipalities, to permit or provide for the resale of power at
rates which may include an amount to cover tax-equivalent payments
to the municipality in lieu of State, county, and municipal taxes
upon any distribution system or property owned by the municipality,
or any agency thereof, conditioned upon a proper distribution by
the municipality of any amounts collected by it in lieu of State or
county taxes upon any such distribution system or property; it
being the intention of Congress that either the municipality or the
State in which the municipality is situated shall provide for the
proper distribution to the State and county of any portion of tax
equivalent so collected by the municipality in lieu of State or
county taxes upon any such distribution system or property.
The Corporation shall, not later than January 1, 1945, submit to
the Congress a report on the operation of the provisions of this
section, including a statement of the distribution to the various
States and counties hereunder; the effect of the operation of the
provisions of this section on State and local finances; an
appraisal of the benefits of the program of the Corporation to the
States and counties receiving payments hereunder, and the effect of
such benefits in increasing taxable values within such States and
counties; and such other data, information, and recommendations as
may be pertinent to future legislation.
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