Opinion of the Court. 362 U.S. as he had the statutory power to do, to lease the property to appellant's predecessor. The real property, however, remained in the account of the United States, not the Reconstruction Finance Corporation. As the Supreme Court of California recognized, the general rule is "that lands owned by the United States of America or its instrumentalities are immune from state and local taxation." We think that the land here was "owned" by the United States. We believe that California overlooks the fact that, while the 1949 lease was formally made in the name of both the United States and the Reconstruction Finance Corporation, as lessors, it recited on its face that the property was "surplus property of the Government of the United States" and subject to the Surplus Property Act of 1944. Furthermore, this lease noted that the property had "been assigned to War Assets Administration for disposal," and that "the Department of Air Force has determined that the use of the leased premises by the Lessee herein is necessary for the production of military equipment for the National Defense." Moreover, the property had been occupied by the War Assets Administration during the two years immediately preceding its lease. The appellees' contention seems to be that, since the lease was in the name of the Reconstruction Finance Corporation as well as the United States, the land was "property of the Corporation." We hardly think such a conclusion inevitable. We believe that the appropriate test would turn on practical ownership of the property rather than the naked legal title. This is the more necessary with respect to public property where the record title may often be in a government agency or department-or, for that matter, in an official of the Government-rather than in the name of the United States. Here the Reconstruction Finance Corporation had no proprietary interest in the property, no possession or control thereof, was performing none of 628 Opinion of the Court. its functions with regard thereto, and could receive none of the income or future benefits therefrom. Even though it held the record title, such holding, under the circumstances here, could be only for the benefit of the United States. All of the incidents of beneficial ownership ended by the express mandate of the statute when the property was declared surplus and transferred to another agency for disposition. When confronted with the same issue as presented by the instant case, the Court of Claims reached a conclusion directly contrary to that of the Supreme Court of California. Board of County Comm'rs of Sedgwick County v. United States, 123 Ct. Cl. 304, 105 F. Supp. 995. The Court of Claims there noted that, after the declaration of surplus, the Reconstruction Finance Corporation had no "physical possession, control, or custody of the property. It had neither the use nor the right to use the property." The court went on to conclude that "[t]here is no indication that Congress intended to waive immunity from taxation under these circumstances." 123 Ct. Cl., at 324, 105 F. Supp., at 1001. We agree with the Court of Claims "that the cloak of immunity descended upon the property [when it was declared surplus] and no tax liability for the property could arise thereafter." 123 Ct. Cl., at 324, 105 F. Supp., at 1002. Since the crucial element is the intent of Congress, it is important to note the enactment of a 1955 statute providing the States relief from the effects of federal immunity. 40 U. S. C. §§ 521-524. The congressional declaration of purpose in that statute "recognizes that the transfer of real property having a taxable status from the Reconstruction Finance Corporation . . . to another Government department has often operated to remove such property from the tax rolls . . . "Transfer" was defined to include "a transfer of custody and control of, or accountability for the care and handling of," the prop Opinion of the Court. 362 U.S. erty, as well as "transfer of legal title." The statute goes on to provide for certain payments in lieu of taxes where such a transfer occurs. The relevance of this statute lies in a congressional sanction of the rule of the Sedgwick County case, construing the waiver provision. We cannot say that Congress in 1932 intended to waive the tax exemption on "real property of the Corporation" after the Corporation found the property surplus to its needs and responsibilities and transferred it to another agency, for management and disposition as United States property. To say that the Government's land remained taxable merely because no formal deed was executed transferring title, either to itself or any of its designated agencies, would but make a local tollgate of a technicality. Nor can we agree that the short administrative practice claimed here continued the waiver in effect. Even if the responsible agency had permitted the paper title to the Government's property to remain in the Reconstruction Finance Corporation for the sole purpose of allowing it to be taxed, the congressional mandate in the Surplus Property Act of 1944 could not be overridden. As to such matters, any adjustments between the federal and the local governments are strictly legislative ones for the Congress, United States v. City of Detroit, 355 U. S. 466, 474 (1958), and not within the discretion of the executive agencies. The judgment is therefore reversed and the cause remanded for further proceedings not inconsistent with this opinion. Reversed and remanded. MR. JUSTICE BLACK and MR. JUSTICE DOUGLAS dissent. 362 U.S. May 23, 1960. WILLIAMS v. LAVALLEE, WARDEN. APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT. SIMS MOTOR TRANSPORT LINES, INC., APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS. No. 823. Decided May 23, 1960. 183 F. Supp. 113, affirmed. Harold T. Halfpenny and Mary Shaw for appellant. Solicitor General Rankin, Acting Assistant Attorney General Bicks, Richard A. Solomon, Henry Geller and Robert W. Ginnane for the United States and the Interstate Commerce Commission. Roland Rice and Franklin R. Overmyer for Holland Motor Express, Inc., et al. PER CURIAM. The motions of Holland Motor Express, Inc., et al., for leave to be named parties appellee and for leave to file a motion to affirm are granted. The motions to affirm are granted and the judgment is affirmed. |