  Hon. Stewart W. Hellm4,n                 Opinion   No. V-I&B 1
  Grimm41 District  Attorpex
  Tar rant County                          Re:   Ad v,aIerem t4xetion QI milk-
  Fort Worth, Texas                              tary housin    unite to be con-
                                                 structed  an t maint4ined  on
                                                 Carswell   Air Force Ha&by
  Dear     sir:                                  private enterprise.

                 In your Ietter of Jutr 24, 1951, you requested       t&e opine
  ion of thie ofGee as to State an& ID& 4tl valorem        tax,ation of 4
  military    housiq   project  to be co~#kWr~!*scl on Carswell    Air Foraa
  Base in accordance       with the proviaYons of the Mititar,    Mousing
  Act.    P.L. 211, 81at C,ong. 1949, 63 Stat, 4%30, 12 U.S.’E . % 17,48.
  You later sent US a photostatic      copy of the proposed lea@ to be
  executed by the Government        and th,b lessee of the project.

                  The kase pro@tles       &tat the ,@orarmnt        will &s+&is the
  described    laad for ?S yeara to ,th.s Ie%&#r ,ta b,e ltaed for erecting,
: Inaitiainlng    aad operating     tke hou*~%q+ ,,4qiect.    Lessee    is 4o prf
  thee Covcrnment       hn annual rc@txl of $1 ii 0.00.     PraMsion io m&e
  for obtaining mor.tgsge       insursdcn Qr&r Title VIf? OX Me Natimaal
  Moustng Act. The leasee is r,@quired to leas,e all UW OS the hous-
  i,ng prajcct   to, such military    a,ad c.iv$Wibm~rsontiel     of @he &my,
  blavy, Marina Corps or Air FWcra $tnEludi nf Co~ctsment                  pontrac-
  tore’ sm,ployeee)      assigned to &@ Uit the m% itaxg &@+MG&M$QOF tn
  the axea ahere the inetallation         4, kabteal aa ~8 deei#W~eb ##ybhe
  Commanding Officer.          In the eve:nt the Commanding OfGicec &ils
  to design&e      such personnel     &bin     a steted periad. and rtpr~r other
  stated conditi,arre, the Lessee map lease b&c unit6 to pbrW?U #%w
  than said mili%ry       or civilian personnel.       Detailed px*iaio*s       clb*Qr
  laaaing 4Sreements         made by the lessee.

                   The eighth covenant     and condition    of $he &se     cbntra(;t
  raad6,     10 part, 4s fbllows:

                   “8. That the Lessee    *hall pay to the pro&r      au?
           thority, when and as the same become due ond payable,
           all taxes, assessments,     and similar      charges whitb, at
           any time during the term of this Lease,          may be taxed,
           assessed    or imposed upon the Goverpment~or         upon the
           Lessee    with respect  to or upon the leased property.        In
           the event aqy taxes, a.ssessmeat,s      o,i: similar qbarggs
           are impsed     with the consent of ~tbc Congress      of the
                                                                                                .   .
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             ;c,,
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                    eon.   St&art   W. Hellman,     Page   2 (V-1251)



                           United States ‘upon the property owned by the Gov.ern-
                           ment and included in this Lease (as ‘opposed to the
                           leasehold interest     of the Lessee    therein),   this Lease
                           shall be renegotiated      so as to accomplish,an       equit&k
                           reduction in the rental provided above, which shall,%&
                           be greater    than the difference    between the ,amoi&-&
                           such taxes, assessments        or similar    charges ,awLBb
                           amount of any taxes, assessments          or similar     ch@     8
                           *R\ich were imposed upon such Les,k%e With TW@%W              Y,
                           to his lease-hold    interest   in the leased property @f&p
                            to the granting of such consent by the Congress,@            ,$#$
                           ,United States;      c”


                                 At the expi,ration of ,the lease all fmprovemp?t~       v&a
i                   uw w ,@emise$        and at1 i,temg required   to be tW+&f$a      @   WV
                    lqa$,ee are to remain on the less,ed premises      and be tla;e lorti@:N#
                    of the.Government    without compensation.

                                                                                                        ,;




I
    X&b. Stewart   W. Hellman,    Page   9 (V-1251)



    of the leasehold   interest   woiaid be subject to tax. Art. 7173, V.CZ.S.;~
    Daugherty v. Thomp,son, 71 Te%. 192, 9 S.W. .99 (18:&J);
    1     72 T       97 12 SW      176 (1888).  Article  524&, V.C
    g’funda%ntal       kk    df iaw that lande and improvematis     &8rmm
    belonging to the United States are exempt from taxation; but it al-
    so expressly    provides as ,fpllows:
           v
             . . ‘, any portion of said lands and improvements      whkh
          is used and occupied by any person, firm, association
          of person* or corporation       in its private capacity, or
          which is being used or occupied in the conduct of any
          private business     or enterprise,    &all be subject TV taxs-
          tion by this State and its mlitical      subdiv.isio~s.”

                   The eighth covenant of the lease, previously    quoted,
    recognicds    the possibility that 10~81 taxes might ac~crue ot~ thb I&I-
    Bee’6 interest    in military housing projects.  We are of the opinfoD
    tht in the absence of a eesoion of jurisdictia      by the State such
    taco   would be vaIi#T inposed,,     91 Am. Fur. 28.0, Taxation,    0 218.

                   We will next conrrider   the effect of a ceeaisn of “acla-
    e$w, jurisdiction”   on the t-ability    of the teaeehold intered.   &tic
    ctc $a47 read~s as follows:

                  “Whenever the Unit~e4 Stafes shall acquke          &ny
          lands under IMar title, +t shall desire ,te s-&e            cot%-
          6tituMaaal juris&M4M         war such lands icllr any purpoes
          authoriied   herein,    it shall be law&L for the Goveruor,
,         in the name and la behalf of the State, to cede to the
          United States ex,cluaiva jurisdktion         over atrg land8 EO
          acquired,  when application      may be made to him fan) t&at
          purpose, which application        ohnlt be in w,rktizkg and ac-
          companied with th% pxbger evidence of subbr, acquisition,
          duly authenticated     aad recorded,     cont#&&g    or haviw
          aanexe,d thereto,    anaccurbte     description   by metes and
          bounds of the lahds sought to be ceded,          Mo such ces-
          slon shall ever be made except upon,tbe express            CM&-




                  “Property    held ondef a lease for a term 4 khr~e
          years   o,r more, ot brld uader a contract     for the par-
          chase thereof, belonging to this State, or that is exempt
          by law from taxation in the hands of the owner thereof,
          shall be considered      for all the p,urposes of taxation, as
          the property gf the gartaon sp hol&eg the same, exacgrt
          es, otherwise    special&    prw$&d    by law. . j *”
Han. 84swart      W. NeUman,       Page    4 (V-$251)



        Ha that this Stat% shall retain concurrentr jurtadict6Qn
        witlr the United States OY~P every portion of the lan&
        so ceded, 80 far, that all proceea,       Civil or criminal
        i%ruiap under the authority of this State or any elf &e
        aamts    or judicial  officer% thereof,    may be exQcut%$
        by the proper officers      of the State, upon any @e,ra,#$)
        amenable     to the same within the limits of the tan& Ld
        ucdad, in like manner and like effect as if no %ucb ce%-
        rion had taken place; and au& eon&ion            %&ad kg In*
        %erted in such instrument       of cession.”

                 This Article     constitutes     the only method of tran%f$r-
‘;;q,gg”7i,‘6”      cj;;r;3$t&on*     Cyryy     v. S,mte, 111 Tex. Grim. 264,


               Asruming        that the Uov.ernor cedes “exctuoive jctp:ip,&%-
tioa” m the United States over the lands upon which the hou%inS
pa!@@& will be cortstructed           and that such cession      is accepted,     we
U~O & the cplnion that the ceslrion would have the effect of exempt-
 ing from State and local taxation all private property rights a@
i~ere~       011 or within the bounds of ths area over wh$ch juri%die-
t&on is cad&d. This result would necessarily               flow f,rom a grant of
e~elusive jurisdiction         over land, since the State would,then lack
bhe rrquisite     jurisdiction      necessary    to the imposition     o’f any tt&~.
No ca%e% have cow&rued             the phra,%ge “canstitut&na\       juri%&t&M”
a& “axclusive       jurisdiction,”      as ugrd in Article     5247, f@& the #us*
p@ae. of a%e%%ttair&ng their effect on the State’s jurltdiction               to ta#f
pr:ivately owne,d property          on or witbin the ,confines of: the t&i %+
eaded.     The language used in these phrases            is .ptsin, unam~Q@ui:
and all-ombrae~9           and would %eem to deprive the State of all ju,ri#-
Bi’ctioa withjn the ceded area except that which Article                 5&41-kKpr#&S*
 If”,perides    shell be retained.        Furthermore,     the inelusion OS t&e
gxuv$s~o in this Ar,ticle is further indication          that the only type of
ju;s&&$&ian 40 be retained by th% State of Texqa is a Poacuhrwnt


E Artid      f,, @action 8, Clause pv,, of the Feuefal’ Ce##tu’tl$P3.,)ru*
vkfes that CQqr@ss          fhall have the power 36 exercllee         ez&+&wt
legislation     . . . over all places purchaeed by the consent of the te *
 i%lature of the state in which the s,ame shalt be, for the erection               of
.-4%,     magc%i,ne%, arserrals,    dock-yards,      and other needful buiiM-
&a&r. !’ Article      5242, V,C.S.,  (lives express     leg>%lativa con%%DEto
,&I r~+p&iitiea      of lands by the Government        for the purpaser      %;tatStti
i,n the prot’l@%m of the Federal         Consti6catton just qui&ed ar wet1 a.%
for other putpo%e%; but the Cpurt in the                    case held that &ere
wa% ,+I@cesmion of juri%ds,ction by imp&                     tbie ta~uaqa     of
&;kle      S&t, R.S. of t895 &a~w aubetiatiaUjr~amb~ied              ir Atticte
        ,
                                                                                        I




                       1,~ U. $. P. Ibis,       5 Mason, 346, fe was
       held t&at b kervat%on         in a o,esa,ioia 6f ‘aoncurrelat
       jurisdictton’   to serve state pr,out~as,            ciYi1 add srim*
        inal, in the faded plsca, &es ,4x& t%a,Tgb3 t!ke
        legisle,tion @r e8ctua&e      juris:dii$fitisn of th$, ,V
        over the cede8 place. It -1,                oper’ated’as   a condl-
        Con of the grant.     ‘ j L”

                 A,n examination     of the statutes of other states \Nhk!li
have been interpreted        as placing further qualifications          upon cessiahs
 of jurisdiction    t.hau does our ~ststute,, as we interpret        it, su6tains
 our conclusian.       The West virginfa       statute conPide.redin      Tame
                                                                          g---j=
 Draw Contracting.Go.,         302 U.S. 134 (%93Jf’j, ceded to tie          rute
~s’cbncurprnt           jun?sdiction    over lanky acquired by the Utited
States with’ the consent of the State.           The Court held that the pro-
Vision=5      to co%eugrent jurisdiction       qualified the provfsian giving
 consent and that by v,irtue of this reservation            the State retained
jurisdiction     to t&x over lands purchased          or condemned by the &Jai&#
States for navigation improvements.               A Kansas    gtatute ceded to the,
United States “exc’lusive jurisdiction”            over tke ,land wi,thin the lim-
 its of Fort Leavenworth         but euprssslv     resar,ved   the right to sesv~e
civil and criminal       process    and “the right to tax railroad,        bridge,
and other corpOraEons,          their fr.an&ise~s end property,         on said
                                 ./
Hun, Stewvt    W. Hellman,    Page   4 ,(V-12~51)
                                                                   .


Reservation.”      La-6  af Kansas,   1875, p. 95. The Court in Fort
Leavanwo,rth     Ry. V. Lowe, 114 U.S. 525 (1’885), upheld the FmOf
me State to subject the railroad      propekty to taxation.    In each of
thesecases     the State had retained    the taxing power in cession6
&ff&knt    fr,om those contemplated     by the Texas- .etatut@.


                              S,UMMARY

              The leaf,ehold interest   in a military      housing
      project   to be constructed,    mai-tained,      and operated
      by private enterprise      0~ Carswell     Air Force Base
      will be subject to State and locals taxation unless ths
      State of Texas cedes exclusive        jurisdiction    over the
      lands on which the h,ouses will be built to the United’
      States.

                                      Yours   very   tsuly,

                                       PRJCE DANIEL
                                      Attorney General
