§ 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.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 16USC831l]
TITLE 16--CONSERVATION
CHAPTER 12A--TENNESSEE VALLEY AUTHORITY
Sec. 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.
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\1\ So in original. Probably should be capitalized.
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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.
(May 18, 1933, ch. 32, Sec. 13, 48 Stat. 66; June 26, 1940, ch. 432,
Sec. 39, 54 Stat. 626.)
Amendments
1940--Act June 26, 1940, amended section generally.
Section Referred to in Other Sections
This section is referred to in sections 460lll-13, 831n-4 of this
title; title 20 section 7702.
