The question to be decided is whether real property declared to be surplus under the Surplus Property Act of 1944, 58 Stat. 765, but the record title to which is in the Reconstruction Finance Corporation, continues to be subject to local taxation under the exemption of § 8 of the Reconstruction Finance Corporation Act, 47 Stat. 5. The Supreme Court of California and the Supreme Court of Michigan have held that it does. The Court of Claims has reached the opposite conclusion. In view of this conflict we agreed to hear this case, but postponed consideration of the question of jurisdiction to the hearing on the merits. 361 U.S. 859, 80 S.Ct. 122, 4 L.Ed.2d 99.
On the question of jurisdiction, we believe that appellant did not make the required 'explicit and timely insistence in the state courts that a state statute, as applied, is repugnant to the federal Constitution, treaties or laws. * * * And it has long been settled that an attack upon a tax assessment or levy, such as (appellant) here made, on the ground that it infringes a taxpayer's federal rights, privileges, or immunities, will not sustain an appeal * * *.' Charleston Federal Savings & Loan Ass'n v. Alderson, 1945, 324 U.S. 182, 185, 65 S.Ct. 624, 627, 89 L.Ed. 857. The appeal is therefore dismissed. While the case is not properly here by appeal, we treat the same as a petition for certiorari under 28 U.S.C. § 2103, 28 U.S.C.A. § 2103. The petition is granted. On the merits, we conclude that the property involved is not within the waiver provision of the federal Act.
The language of § 8 of the Reconstruction Finance Corporation Act was borrowed from earlier federal legislation dealing with federal financial institutions. The congressional policy appears to have been to waive tax exemption on real property owned by government corporations whose functions were primarily financial in nature. Originally conceived for the purpose of making loans to distressed business concerns, the Reconstruction Finance Corporation was in this category. Apparently Congress was concerned that property obtained by the Corporation through its financial operations in aid of economic recovery policies would lose its taxable status. Through § 8, therefore, Congress preserved the right of state and local governmental bodies to tax property even though it came into the hands of the Corporation. Success crowned the economic efforts of the Corporation, and, as the country approached the critical period immediately preceding its entry into World War II, Congress in 1940 extended the Corporation's functions to include the stockpiling of critical supplies and the operation of plants engaged in the manufacture of war mate rial. 54 Stat. 573. It was soon apparent that large tracts of land would be necessary in this operation, and the waiver was extended to the real estate holdings of the Defense Plant Corporation, a subsidiary of the Reconstruction Finance Corporation. 55 Stat. 248.
