Summary
Relying upon the version of the Georgia Constitution existing at that time, and a provision of the Housing Authorities Law of 1937 that provided that housing authority property was tax exempt, the Court found that "[s]ince the Housing Authority is thus a public corporation, and is using this property exclusively for a declared public and governmental purpose, and not for private or corporate benefit or income, it is in effect an instrumentality of the State, and therefore the property is exempt from taxation to the same extent as if the legal title thereto was in the State itself or in a county or city."
Summary of this case from Files v. The Hous. Auth. of DouglasOpinion
15098.
APRIL 3, 1945.
Injunction. Before Judge Crow. Calhoun superior court. December 4, 1944.
Lee Miller Jr., for plaintiffs in error.
Frank L. Forester, Spalding, Sibley Troutman, and W. K. Meadow, contra.
1. The constitution of this State provides that the General Assembly may, by law, exempt from taxation "all public property" (Code, § 2-5002), and it has been declared by statute that all such property shall be exempt. Code, § 92-201.
2. All presumptions being in favor of the constitutionality of an act of the General Assembly, it can not be lawfully set aside by the courts unless alleged conflict with the constitution is plain and palpable.
3. The provisions of section 21 of the housing act of 1937, that, "The property of an authority is declared to be public property used for essential public and governmental purposes and not for the purposes of private or corporate benefit and income, and such property and an authority shall be exempt from all taxes and special assessments of the city, the county, the State, or any political subdivision." can not be said to violate the foregoing provision of the constitution as to tax exemption, or the related constitutional provisions embodied in the Code, §§ 2-5001, 2-5005.
4. In this suit by a regional housing authority to enjoin enforcement of an execution for State and county ad valorem taxes issued against the petitioner and a described tract of land owned by it, upon the ground that the property was exempt from taxation under the constitution and laws of this State, the allegations of the petition were sufficient to show that the property was public property, and as such was exempt from taxation as claimed by the petitioner. The court did not err in overruling the demurrer to the petition.
No. 15098. APRIL 3, 1945.
The inquiry in this case is one relating to tax exemption. On November 13, 1944, Southwest Georgia Regional Housing Authority filed a suit in the superior court of Calhoun County, seeking injunction and other relief against the following named defendants: Albert Culbreth and two other persons in their official capacity as the board of tax assessors of Calhoun County, Georgia, E. E. Plowden as tax collector, and J. B. Adams as sheriff.
The petitioner complained that the tax assessors had assessed at a stated valuation a described tract of land, situated in Calhoun County and containing one acre, more or less, the property of the petitioner, for ad valorem taxes claimed to be due to the State of Georgia and Calhoun County for the year 1943; that in pursuance of this assessment, the tax collector has issued an execution against the petitioner and specially against the tract of land described; and that the sheriff had levied the tax execution on said land as the property of the petitioner, and unless restrained would advertise and sell the land to satisfy such execution. The petitioner alleged and contended that the property so assessed and levied upon is exempt from taxation under the constitution and laws of this State, and the sole object of the suit was to assert and enforce the claimed exemption. The defendants filed a general demurrer, in which they contended, among other things, that the provision of the housing act of 1937 on which the plaintiff relied for exemption was unconstitutional for reasons stated. The court overruled the demurrer, and the defendants excepted.
Stated more fully, the petition alleged substantially the following: The plaintiff is a public corporation chartered and organized under the housing-authorities act of 1937 as amended. Prior to the amendment of 1943, Calhoun County and ten other contiguous counties in southwest Georgia had organized and were functioning as county housing authorities, and had entered into certain contracts with the United States Housing Authority, under which they had constructed homes for farmers of low income. Under the terms of these loan contracts, the housing authority of Calhoun County had borrowed certain funds from the United States Housing Authority, and with a portion thereof had constructed improvements on the land in question. In April, 1943, in pursuance of the 1943 amendment of the housing-authorities law, Calhoun County Housing Authority and the authorities of the ten other counties named were consolidated into a regional housing authority, which was duly organized as a public corporation under the corporate name "Southwest Georgia Regional Housing Authority." Such regional authority has acquired all the property previously owned by the several county housing authorities, including the property levied on, and has succeeded to all the rights, powers, and immunities of such county authorities.
The tract of land described, approximately one acre in Calhoun County, which has been assessed for taxes and levied on as stated, was a part of the property acquired from the Calhoun County authority by the regional authority upon its creation. Said land was conveyed by the owner of the farm of which it formed a part to the housing authority of Calhoun County under the provisions of the housing-authority law of Georgia as amended, upon the agreement that said authority would construct upon said tract a decent, safe, and sanitary dwelling for use of said farmer or his tenant or sharecropper employed on said farm. The authority did build on said lot a modest, comfortable, and sanitary house, which was at the time of the levy occupied by a person of low income employed on the adjacent farm, and this new house had replaced a dwelling which on account of dilapidation, age, construction, and physical condition was unsafe and insanitary, detrimental to health, and unfit for human habitation, and which was demolished under the plan of operation as provided by said housing-authorities law. The acquisition of said land and the construction of the dwelling house was financed with funds loaned by the Federal Public Housing Authority to the housing authority of Calhoun County in pursuance of the United States housing act, and the housing-authorities law of Georgia. The Federal Public Housing Authority agreed to and did purchase ninety per cent, of the bonds issued by the petitioner nor its predecessor county authorities, and ten per cent. of said bonds are to be sold to the public, and said bonds are secured and to be paid by annual contributions made by said Federal Public Housing Authority and by a pledge of rents. The annual contributions from the Federal Housing Authority are made for the purpose of enabling the project to maintain its low rent character and to furnish sanitary dwelling accommodations for families of low income who otherwise would be unable to obtain such accommodations.
The property levied on is a part of the comprehensive program of approximately 648 dwellings, some of which have already been erected and others are to be erected in the eleven counties constituting the regional authority, all of which houses are rented or upon completion will be rented to farmers or their tenants or sharecroppers of low income, who otherwise would be unable to obtain safe and sanitary dwelling accommodations, and a corresponding elimination by demolition of the same number of dwelling houses which are unfit for human habitation.
All of said properties are held, owned, and operated by the petitioner strictly in accordance with the State and Federal statutes at the lowest possible rental and without profit as public property and solely for the purpose of providing safe and sanitary dwelling accommodations for families of low income and are used exclusively for essential public and governmental purposes, and by section 21 of the housing-authorities law of Georgia they are expressly made exempt from all taxes and special assessments of the county and State and its political subdivisions.
The petition alleged that the assessment and the execution were void, because the property was public property and exempt from taxation under the provisions of article 7, section 2, paragraph 2, of the Georgia constitution, and section 92-201 of the Code of Georgia, and for the further reason that the petitioner is an institution of purely public charity as defined in these laws. The substantial prayers were for injunction, cancellation, and general relief.
Southwest Georgia Regional Housing Authority filed suit against named officers of Calhoun County, seeking, among other things, to enjoin the enforcement of an execution for State and county and valorem taxes issued against the petitioner and a described tract of land owned by it, upon the ground that the property was exempt from such taxation under the constitution and laws of this State. The case involves a rural housing project as distinguished from a municipal project.
The specific contentions were, (1) the property is "public property," and (2) the petitioner is an institution of "purely public charity," both within the meaning of the constitution (Code, § 2-5002), and the statute enacted in pursuance thereof (Code, § 92-201). The petitioner also invoked the provisions of section 21 of the housing act of 1937, that: "The property of an authority is declared to be public property used for essential public and governmental purposes and not for purposes of private or corporate benefit and income, and such property and an authority shall be exempt from all taxes and special assessments of the city, the county, the State or any political subdivision."
The defendants filed a general demurrer, contending therein that the allegations of the petition did not show that the property was exempt upon either ground alleged, and attacking section 21 of the act of 1937 as violating the provision of the constitution as to tax exemption (Code, § 2-5002), and the kindred provisions of that instrument as expressed in sections 2-5001 and 2-5005.
Thus, exemption from taxation is the only question presented. We have reached the conclusion that, on the facts alleged, the property would be exempt as "public property," and in this view the question as to public charity need not be determined. Compare Williamson v. Housing Authority of Augusta, 186 Ga. 673 (8), 691 ( 199 S.E. 43). Accordingly, in the following opinion, we shall deal only with the former question. The statute itself, as an examination will show, declares the property exempt as being "Public property," and does not expressly or in terms mention "charity."
In 1937, the General Assembly passed an act to be known as the housing-authorities law. Ga. L. 1937, p. 210. Stated briefly, the declared purpose of this law was to eliminate insanitary and unsafe habitations occupied by persons of low income, and to construct in lieu thereof safe and sanitary dwellings, in the interest of the health, safety, morals and general welfare of the residents of this State. For the administration of the act, corporate bodies to be known as housing authorities were created. These corporations were authorized to finance the projects, either by pledge of income and revenue, or by mortgage on physical properties. By section 8 it was declared, "An authority shall constitute a public body corporate and politic, exercising public and essential governmental functions, and having all the powers necessary or convenient to carry out and effectuate the purpose and provisions of this act." See also sec. 4.
By section 9, it was provided that "each housing authority shall manage and operate its housing projects in an efficient manner so as to enable it to fix the rentals for dwelling accommodations at the lowest possible rates consistent with its providing decent, safe and sanitary dwelling accommodations, and that no housing authority shall construct or operate any such project for profit, or as a source of revenue to the city or the county."
In addition to the other powers granted, each authority created was specifically authorized tomorrow money or accept grants or other financial assistance from the Federal Government in aid of any housing project within its area of operation, and "to do any and all things necessary or desirable to secure the financial aid or co-operation of the Federal Government in the undertaking, construction, maintenance, or operation of any housing project by such authority." Sec. 20. During the same year, Congress passed an act creating the United States Housing Authority, and empowering it to make loans and grants to public housing agencies created by the States. 42 U.S.C.A., §§ 1401 et seq.
The Georgia act of 1937 has been several times amended. See Ga. L. 1939, p. 112; Ga. L. 1939, p. 124; Ga. L. 1943, p. 146. The amendment of 1943 provided for the consolidation of county authorities and existence of a regional authority in lieu thereof; such regional authority to be "a public body corporate and politic," and to succeed to all the rights, powers, and liabilities of the county authorities. Ga. L. 1943, p. 146, sec. 6.
The petition in this case alleged that in April, 1943, the petitioner, Southwest Georgia Regional Housing Authority, was duly organized under this amendment, and upon such organization acquired the tract of land in question from Calhoun County Housing Authority, which was one of eleven county authorities that had been consolidated. It also appeared from the allegations that, before and after the petitioner acquired this land, it had been owned and operated without profit and in strict accordance with the housing authorities law.
The constitution provides that, "The General Assembly may, by law, exempt from taxation all public property," and it has been declared by statute that all such property shall be exempt. Code, §§ 2-5002, 92-201. Property may be public property so as to come within the exemption, although the legal title is not in the State, nor in a county or municipality, provided it is "not used for purposes of private or corporate profit and income." Code, § 2-5002; Trustees of the Academy of Richmond County v. Augusta, 90 Ga. 634 ( 17 S.E. 61, 20 L.R.A. 151); Walden v. Whigham, 120 Ga. 646 ( 48 S.E. 159). "Public property, within the meaning of that clause of the constitution which authorizes the General Assembly to exempt from taxation all public property, embraces only such property as is owned by the State, or some political division thereof, and title to which is vested directly in the State, or one of its subordinate political divisions, or in some person holding exclusively for the benefit of the State, or a subordinate public corporation. Board of Trustees of Gate City Guard v. Atlanta, 113 Ga. 883 ( 39 S.E. 394, 54 L.R.A. 806)." Williamson v. Housing Authority of Augusta, 186 Ga. 673 (8), 691 (supra).
As we have seen above, the applicable statute purport to make Southwest Regional Housing Authority a public corporation, and we can not say that they are ineffectual for that purpose. Since the housing authority is thus a public corporation, and is using this property exclusively for a declared public and governmental purpose, and not for private or corporate benefit or income, it is in effect an instrumentality of the State, and therefore the property is exempt from taxation to the same extent as if the legal title thereto was in the State itself or in a county or city. Newton v. Atlanta, 189 Ga. 441 (3) ( 6 S.E.2d 61).
The allegations of the petition bring the case squarely within the provisions of section 21 of the act of 1937, declaring that the property of "an authority shall be exempt from all taxes and special assessments of the city, the county, the State or any political subdivision thereof." All presumptions being in favor of the constitutionality of an act of the General Assembly, "it can not be lawfully set aside by the courts unless the alleged conflict with the constitution is plain and palpable." Mayes v. Daniel, 186 Ga. 345 ( 198 S.E. 535). We are not prepared to hold that section 21 is unconstitutional, as contended by the defendants in their demurrer. See generally, in this connection, Emerson v. Southwest Georgia Regional Housing Authority, 196 Ga. 675 ( 27 S.E.2d 334); Cleveland v. United States, 323 U.S. 329 ( 65 Sup. Ct. 280, 89 L. ed. 270); State of Florida v. McDavid, 145 Fla. 605 ( 200 So. 100, 133 A.L.R. 360); Mallard v. Eastern Carolina Regional Housing Authority, 221 N.C. 334 ( 20 S.E.2d 281); Benjamin v. Housing Authority of Darlington County, 198 S.C. 79 ( 15 S.E.2d 737); Garrett v. Northwest Florida Regional Housing Authority, 152 Fla. 551 ( 12 So.2d 448).
The court did not err in overruling the demurrer.
Judgment affirmed. All the Justices concur, except Atkinson, J., who dissents.