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CONGRESS

AMENDING DISTRICT OF COLUMBIA REVENUE ACT

OF 1937

APRIL 7, 1938.-Committed to the Committee of the Whole House on the state

of the Union and ordered to be printed

Mr. Nichols, from the Committee on the District of Columbia,

submitted the following

REPORT

[To accompany H. R. 10066)

The Committee on the District of Columbia, to whom was referred the bill (H. R. 10066) to amend the District of Columbia Revenue Act of 1937, and for other purposes, having considered the same, report it back to the House with the following amendments and recommend that the amendments be agreed to and the bill do pass:

Page 6, line 19: After the word "premiums" insert the words "received for reinsurance assumed, and premiums".

Page 15, line 16: Strike out the words of that" and insert in lieu thereof the words "to real”.

Page 19, line 2: Change the semicolon after the word "transfer" to a period. Strike out the words "Prorided, however, That”; change small “t” to capital “T” in the word “the”; change the word "name" to "names"; and transpose all words from and including the word “The” line 2, to and including the word “tax”, line 8, to follow after the word "thereon" line 17.

Page 20; lines 2, 4, 6, and 15: Insert the words “of Columbia" after the word "District".

Page 24, line 20: Strike out the word “laws” and in lieu thereof insert the word “requirements”.

Page 42, line 4: Insert: insurance companies, building and loan associations, and companies, incorporated or otherwise, which guarantee the fidelity of any individual or individuals, such as bonding companies, all of which pay taxes upon gross premiums or earnings under existing laws of the District of Columbia; and railroads, express or steamship companies which report to and are subject to regulation by the Interstate Commerce Commission under the provisions of the Interstate Commerce Act of 1887, as amended.

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Page 56, line 10, strike out "14" and insert in lieu thereof “2”.

Page 57, line 22, beginning with the word "and" in said line 22, strike out entire paragraph and insert the following in lieu thereof:

Any tax paid upon gross earnings by national banks, and any other incorporated banks or trust companies, or companies which furnish abstracts of title, and savings banks, within the time prescribed by law for the payment of such tax by the taxpayer, shall be allowed as a credit against the tax imposed by this title for the taxable year for which such tax on gross earnings is paid.

Page 78, line 14, strike out the figure "1" and insert in lieu thereof 2”.

Page 97, line 3, strike out the period after the figure “30” and insert a comma and the following: "but shall not include any disbursing officer of the United States Government”.

Page 99, line 24 add: and that after June 30, 1922, where the United States is the owner of ground or the holder thereof in trust for the public, upon which improvements have been made at the joint expense of the United States and the District of Columbia, the revenues therefrom shall first be used to pay the United States 3 per centum of the full value of the ground as a ground rent, and the remainder shall be divided between them in the same proportion that each contributed to said improvements, and for such purposes the assessor for the District of Columbia shall fix the full value of the ground after he has first made oath that he will fairly and impartially appraise the same; and that after June 30, 1922, any revenue derived from any activity or source whatever, including motor-vehicle licenses, not otherwise herein disposed of, which activity or source of revenue is appropriated for by both the United States and the District of Columbia, shall be divided between the two in the same proportion that each has contributed thereto;

Page 100: Strike out the words "Spirits and" in title.

Page 100, line 13: Strike out the figure "75" and insert "50" in lieu thereof.

The bill is divided into eight sections, the first seven amending the District of Columbia Revenue Act of 1937, and the eighth adding four new titles to that act. In the administration of the District of Columbia Revenue Act of 1937 (hereinafter for convenience called “the act”) by the Commissioners and their representatives, the need for amending the act has become apparent. In most instances the amendments are of purely administrative character.

SECTION 1

Section 1 of the bill relates to title I of the act.

Paragraph (a) of Section 1 of the bill amends section 1 of title I of the act, by authorizing the examination by the assessor of the books, etc., of any person bearing upon matters required to be included in any return of personal property for taxation purposes; and making a refusal of any person to permit such examination á misdemeanor and punishable by a fine of $300. Section 1 of title I of the act reads as follows:

Sec. 1. The assessor of the District of Columbia, or any person designated by him, for the purpose of ascertaining the correctness of any return of personal property, tangible or intangible, for taxation or for the purpose of making a return where none has been made, is authorized to examine any books, papers, records, or memoranda bearing upon the matters required to be included in the return and may summon any person to appear before him and produce books, records, papers, or memoranda bearing upon the matters required to be included in the return and to give testimony or answer interrogatories under oath respecting the same, and the assessor, or assistant assessor, shall have power to administer oaths to such person or persons. Such summons may be served by any member of the Metro

politan Police Department. If any person, having been personally summoned, shall neglect or refuse to obey the summons issued as herein provided, then in that event the assessor, or any assistant assessor, may report that fact to the District Court of the United States for the District of Columbia, or one of the justices thereof, and said court or any justice thereof hereby is empowered to compel obedience to said summons to the same extent as witnesses may be compelled to obey the subpenas of that court.

And is amended to read:

Sec. 1. The assessor of the District of Columbia or any person designated by him for the purpose of ascertaining the correctness of any return of personal property, tangible or intangible, for taxation or for the purpose of making a return where none has been made, is authorized to examine any books, papers, records, or memoranda of any person bearing upon the matters required to be included in the return and may summon any person to appear before him and produce books, records, papers, or memoranda bearing upon the matters required to be included in the return and to give testimony or answer interrogatories under oath respecting the same, and the assessor, or assistant assessor, shall have power to administer oaths to such person or persons. Such summons may be served by any member of the Metropolitan Police Department. If any person, having been personally summoned, shall neglect or refuse to obey the summons issued as herein provided, then in that event the assessor, or any assistant assessor, may report that fact to the District Court of the United States for the District of Columbia, or one of the justices thereof, and said court or any justice thereof hereby is empowered to compel obedience to said summons to the same extent as witnesses may be compelled to obey the subpenas of that court. Any person in custody or control of any books, papers, records, or memoranda bearing upon the matters required to be included in such returns, who shall refuse to permit the examination by the assessor or any person designated by him of any such books, papers, records, or memoranda, or who shall obstruct or hinder the assessor or any person designated by him in the examination of any books, papers, records, or memoranda, shall upon conviction thereof be fined not more than $300. All prosecutions under this section shall be brought in the police court of the District of Columbia on information by the corporation counsel of the Districi of Columbia in the name of the District of Columbia.

Paragraph (b) of section 1 of the bill amends section 8 of title I of the act by changing the period of limitation for proceedings to collect personal property taxes from 5 years, in some instances, and 6 years in other instances, to 3 years after taxes have been assessed.

Section 8 of title I of the act reads as follows:

Sec. 8. [The taxes to which this title relates shall be assessed within four years after such taxes became due and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of five years after such taxes became due. In the case of a false or fraudulent return with intent to evade tax, or of a failure to file a return within the time required by law the tax may be assessed or a proceeding in court for the collection of such tax may be begun without assessment, at any time. Where the assessment of any tax to which this title relates has been made within such statutory period of limitation, such tax may be collected by distraint or by a proceeding in court only if begun within six years after the assessment of the tax).

And is amended to read as follows:

Sec. 8. Taxes on property reported in any return filed by a taxpayer shall be assessed within two years after the filing of such return; and such taxes may be collected by distraint or by proceeding in court within three years after the date of the assessment of such taxes. In the case of a false or incorrect return, whether in good faith or otherwise, or of a failure to file a return within the time prscribed by law or of a failure to include taxable property or assets belonging to the taxpayer in any return filed by such taxpayer, whether in good faith or otherwise, the tax may be assessed at any time, and the tax may be collected by distraint or by proceeding in court within three years after the assessment of such tax.

Paragraph (c) of section 1 of the bill amends title I of the act by adding thereto new sections 10, 11, and 12. Such new section 10 makes the refusal to file a return of personal property for taxation purposes a misdemeanor and punishable by a fine of $300. New section 11 defines the word “person.” New section 12 provides for the secrecy and publication under certain conditions of the returns required to be filed under title I of the act.

SECTION 2

Section 2 of the bill relates to title II of the act.

It amends section 6 of title II of the act by including companies which issue annuity contracts within its provisoins. Section 6 of title II of the act reads as follows:

Sec. 6. All such companies shall also pay to the collector of taxes of the District of Columbia a sum of money as taxes equal to 2 per centum of its policy and membership fees and net premium receipts on all insurance contracts on risks in the District of Columbia, said taxes to be paid before the 1st day of March of each year on the amount of income for the year ending December 31 next preceding. Such tax shall be in lieu of all other taxes except (1) taxes upon real estate, and (2) fees and charges provided for by the insurance laws of the District including amendments made to such laws by this title.

“Net premium receipts” means gross premiums received less the sum of the following:

1. Premiums returned on policies canceled or not taken.

2. [Premiums paid for reinsurance where the same are paid to companies duly licensed to do business in the District; and]

3. Dividends paid in cash or used by policyholders in payment of renewal premiums.

Nothing contained in this section or in sections 1 or 7 of this title shall apply with respect to marine insurance written within the said District and reported, taxed, and licensed under the provisions of the Act entitled, “An Act to regulate marine insurance in the District of Columbia, and for other purposes," approved March 4, 1922, as amended.

And is amended to read as follows: SEC. 6. All such companies, including companies which issue annuity contracts, shall also pay to the collector of taxes of the District of Columbia a sum of money as taxes equal to 2 per centum of their policy and membership fees and net premium receipts or consideration received on all insurance and annuity contracts on risks in the District of Columbia, said taxes to be paid before the 1st day of March of each year on the amount of such income for the year ending December 31, next preceding. Such tax shall be in lieu of all other taxes except (1) taxes upon real estate and (2) fees and charges provided for by the insurance laws of the District including amendments made to such laws by this title.

“Net premium receipts or consideration received" means gross premiums or consideration received less the sum of the following:

1. Premiums received for reinsurance assumed, and premiums or consideration returned on policies or contracts canceled or not taken.

2. Dividends paid in cash or used by the policyholders in payment of renewal premiums.

Nothing contained in this section or in section 1 or 7 of this title shall apply with respect to marine insurance written within the said District and reported, taxed, and licensed under the provisions of the Act entitled, “An Act to regulate marine insurance in the District of Columbia, and for other purposes," approved March 4, 1922, as amended.

SECTION 3

Section 3 amends title III of the act in two respects: First, by striking out in the definition of "highways" the words "protective structures in connection with highways" and substituting in lieu thereof, "retaining walls necessary to support or protect the highway”; and second, by adding a definition of the term "improvement".

Subparagraph (f) of paragraph (B) of section 2 of title III of the act reads as follows:

(f) The term "highways” includes the right-of-way of streets, avenues, and roads, bridges, viaducts, underpasses, drainage structures, guard rails, signs, signals, [and protective structures in connection with highways].

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