revenue, this would increase the tax burden on remaining properties. Simi- 

 larly, acquisition of town properties at anything less than replacement cost 

 would contribute to a further increase in property taxes if the town re- 

 placed them. Indirect effects on town operating costs are difficult to appraise. 

 On the one hand, services to the reservoir area would be eliminated. On 

 the other hand, existing services, such as school bus routes, might be in- 

 creased in scope to go around the reservoir area. 



Typical of the present realization of the need for aid to towns affected by 

 Hood control projects is the following action recommended to the 1955 

 session of the New Hampshire General Court : 



"On or before the first day of October of each year, the State Treasurer 

 shall pay to each town and city in which any land or interest is acquired 

 hereunder by the United States a sum equal to the taxes which would have 

 been assessed against said lands or interest therein in such town if the same 

 had been included in the list of taxable property for such year, at the 

 assessed valuation of the same as determined for the tax year 1939, for 

 a period of eighteen years next ensuing the year said lands or interest 

 therein become exempt from taxation, less any amount paid or due that 

 town for that year by or from the United States or any agency thereof be- 

 cause of loss of taxable valuation. . ."^ 



In the same report- a draft of an act authorizing an interstate compact 

 for flood control on the Merrimack River recommended that: 



"Article V — The Commonwealth of Massachusetts agrees to reimburse 

 the State of New Hampshire seventy percent of the amount of taxes lost 

 (to its political sub-divisions) by reason of acquisition and ownership by 

 ttie United States of lands, rights or other property therein for the flood 

 control dams and reservoirs at Franklin Falls, Blackwater and West Peter- 

 borough, and for construction in the future of any flood control dam and 

 reservoir specified in Article IV, and also for any other flood control dam 

 and reservoir hereafter constructed by the United States in the Merrimack 

 River Valley. . ." 



Flood control compacts are subject to ratification in Congress after the 

 state legislatures approve them. In the Connecticut River Basin. New Hamp- 

 shire has entered into compact with Vermont. Massachusetts, and Connecti- 

 cut. New Hampshire tax losses resulting from ownership or future land 

 acquisition for flood control by the federal government would be reimbursed 

 by Massachusetts, at 50 percent and by Connecticut, at 40 percent. Payment 

 is for non-speculative economic losses.'^ 



These acts show recognition of the need for reimbursing towns for loss 

 of the taxable base, and also that such reimbursement should be shared by 

 all states benefiting from such flood control projects. These measures go a 

 long way toward meeting the standard that the government should avoid 

 impairment of the finances of state and local governments when it acquires 

 land for reservoir use.'' The closer to offsetting the reduction in taxes and 



1 "An Act Relative to Reimbursement of Towns and Cities for Land Taken by The 

 United States for Flood Control". Report to the 1955 session of the General Court 

 by the Legislative Council and the Timber Tax Study Committee, State of New 

 Hampshire, submitted December, 1954, p. 127-128. 



2 Ibid, p. 106. 



3 New Hampshire Water, op. cit., p. 6. 



■^ Kansas Agr. Exp. Sta. Circ. 293, op. cit., p. 4. 



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