B-181627, JAN 24, 1975

B-181627, JAN 24, 1975

1. WHERE EMPLOYEE TRANSFERRED EFFECTIVE OCTOBER 30, 1969, AND HE SOLD FORMER RESIDENCE MARCH 13, 1971, AND PURCHASED NEW RESIDENCE OCTOBER 29, 1971, HIS CLAIM FOR REIMBURSEMENT OF EXPENSES INCURRED IN CONNECTION WITH TRANSFER WAS PROPERLY DISALLOWED SINCE UNDER STATUTORY REGULATIONS THEN APPLICABLE, REIMBURSEMENT WAS NOT ALLOWABLE WHEN SETTLEMENT DID NOT OCCUR WITHIN 1-YEAR TIME LIMITATION, AND SUCH TIME LIMITATION COULD NOT BE EXTENDED ABSENT DELAY BECAUSE OF LITIGATION, OR EXECUTION OF SALE OR PURCHASE CONTRACT WITHIN INITIAL 1-YEAR PERIOD. 2. CLAIM FOR REIMBURSEMENT OF EXPENSES RELATING TO FEDERAL EMPLOYEE'S SALE OF FORMER RESIDENCE AND PURCHASE OF NEW RESIDENCE IN CONNECTION WITH CHANGE IN OFFICIAL STATIONS IS GOVERNED BY REGULATIONS IN EFFECT AT TIME CIRCUMSTANCES RELATING TO CLAIM AROSE, AND SUBSEQUENT AMENDMENTS TO SUCH REGULATIONS MAY NOT BE APPLIED RETROACTIVELY.

FRED H. CARLEY - REIMBURSEMENT FOR REAL ESTATE EXPENSES:

THIS IS A CONSIDERATION OF AN APPEAL BY MR. FRED H. CARLEY FROM A SETTLEMENT OF OUR TRANSPORTATION AND CLAIMS DIVISION DATED NOVEMBER 1, 1973. MR. CARLEY'S APPEAL CONCERNS THAT PORTION OF THE SETTLEMENT WHICH DISALLOWED HIS CLAIM IN THE AMOUNT OF $3,253 FOR REAL ESTATE TRANSACTION EXPENSES RELATING TO THE SALE OF A FORMER RESIDENCE AND PURCHASE OF A NEW RESIDENCE INCURRED IN CONNECTION WITH HIS TRANSFER OF OFFICIAL STATIONS FROM BROOKLEY AIR FORCE BASE, ALABAMA, TO EGLIN AIR FORCE BASE, FLORIDA. THE RECORD INDICATES THAT MR. CARLEY REPORTED FOR DUTY AT HIS NEW OFFICIAL STATION ON OCTOBER 30, 1969; AND THAT THE SETTLEMENT DATES FOR HIS FORMER RESIDENCE AND HIS NEW RESIDENCE WERE MARCH 15, 1971, AND OCTOBER 29, 1971, RESPECTIVELY.

REIMBURSEMENT TO FEDERAL EMPLOYEES FOR CERTAIN EXPENSES OF THE SALE AND PURCHASE OF RESIDENCES AS A RESULT OF TRANSFERS ARE GOVERNED BY SECTION 5724AA)(4) OF TITLE 5, U.S.C. (1970), AND IMPLEMENTING STATUTORY REGULATIONS. DURING THE PERIOD IN WHICH THE CIRCUMSTANCES GIVING RISE TO MR. CARLEY'S CLAIM OCCURRED, THE APPLICABLE STATUTORY REGULATION WAS OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, REVISED AS OF JUNE 26, 1969, AND AUGUST 17, 1971. THAT VERSION OF THE CIRCULAR PROVIDES IN PART:

"SECTION 4. ALLOWANCES FOR EXPENSES INCURRED IN CONNECTION WITH RESIDENCE TRANSACTIONS

"4.1 CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES ARE PAYABLE. THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT WILL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION; PURCHASE (INCLUDING CONSTRUCTION) OF ONE DWELLING AT HIS NEW OFFICIAL STATION; OR THE SETTLEMENT OF AN UNEXPIRED LEASE INVOLVING HIS RESIDENCE OR A LOT ON WHICH A HOUSE TRAILER USED AS HIS RESIDENCE WAS LOCATED AT THE OLD OFFICIAL STATION; PROVIDED THAT:

"E. THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE (INITIAL) YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT (1) AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED OR APPROVED BY THE HEAD OF THE AGENCY OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION OR (2) AN ADDITIONAL PERIOD OF TIME NOT IN EXCESS OF ONE YEAR MAY BE AUTHORIZED OR APPROVED BY THE HEAD OF THE AGENCY OR HIS DESIGNEE WHEN HE DETERMINES THAT CIRCUMSTANCES JUSTIFYING THE EXCEPTION EXIST WHICH PRECLUDED SETTLEMENT WITHIN THE INITIAL ONE-YEAR PERIOD OF THE SALE/PURCHASE CONTRACTS OR LEASE TERMINATION ARRANGEMENT ENTERED INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE INITIAL ONE-YEAR PERIOD. THE CIRCUMSTANCES WHICH ARE DETERMINED BY THE HEAD OF THE AGENCY OR HIS DESIGNEE TO JUSTIFY THE EXCEPTION UNDER (2) ABOVE SHALL BE SET FORTH IN WRITING."

THUS, SECTION 4.1(E) AUTHORIZES REIMBURSEMENT ONLY WHERE SETTLEMENT TAKES PLACE WITHIN 1 YEAR FOLLOWING THE DATE ON WHICH AN EMPLOYEE REPORTS FOR DUTY AT HIS NEW STATION UNLESS (1) AN EXTENSION IS GRANTED BECAUSE OF DELAYS CAUSED BY LITIGATION OR (2) AN EXTENSION IS GRANTED IN APPROPRIATE CIRCUMSTANCES IN THE PRESENCE OF SALE/PURCHASE CONTRACTS ENTERED INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE INITIAL 1-YEAR PERIOD. IN MR. CARLEY'S CASE, THE SETTLEMENTS ON BOTH HIS FORMER RESIDENCE AND NEW RESIDENCE TOOK PLACE WELL BEYOND 1 YEAR FOLLOWING THE DATE ON WHICH HE REPORTED FOR DUTY AT HIS NEW STATION. THERE IS NO INDICATION IN THE RECORD THAT SETTLEMENT WAS DELAYED BY LITIGATION; NOR IS THERE ANY INDICATION THAT A SALE OR PURCHASE CONTRACT WAS ENTERED INTO WITHIN THE INITIAL YEAR WITH RESPECT TO EITHER RESIDENCE. ON THE CONTRARY, MR. CARLEY STATES THAT THE DELAYS IN SELLING HIS FORMER RESIDENCE AND PURCHASING A NEW RESIDENCE RESULTED FROM THE CLOSING OF BROOKLEY AIR FORCE BASE AND THE DEFLATED REAL ESTATE MARKET PREVAILING IN MOBILE, ALABAMA, IN THE VICINTIY OF HIS OLD STATION AT THAT TIME.

OUR DECISIONS HAVE CONSISTENTLY HELD THAT FAILURE TO MEET THE TIME LIMITATION PRESCRIBED IN CIRCULAR NO. A-56 FOR EXECUTION OF REAL ESTATE TRANSACTIONS REQUIRES DISALLOWANCE OF A CLAIM FOR REIMBURSEMENT OF EXPENSES INCURRED IN SUCH TRANSACTIONS. SEE B-174315, NOVEMBER 15, 1971; B-174929, MARCH 16, 1972; B-176586, MARCH 12, 1973; B-179240, AUGUST 27, 1973 (ALL OF WHICH APPLY THE SAME SUBSTANTIVE PROVISION OF CIRCULAR NO. A- 56 QUOTED ABOVE). AS NOTED PREVIOUSLY, DURING THE PERIOD IN QUESTION, SECTION 4.1(E) OF CIRCULAR NO. A-56 BY ITS TERMS REQUIRED THAT SALE AND PURCHASE CONTRACTS BE ENTERED INTO WITHIN 1 YEAR OF THE EFFECTIVE DATE OF TRANSFER AS A CONDITION PRECEDENT TO THE GRANTING OF A TIME EXTENSION. SINCE THIS REGULATION WAS ISSUED PURSUANT TO 5 U.S.C. SEC. 5724A IT HAS THE FORCE AND EFFECT OF LAW AND CANNOT BE MODIFIED BY THIS OFFICE OR BY THE AGENCY CONCERNED. THIS IS TRUE REGARDLESS OF THE PARTICULAR CIRCUMSTANCES WHICH CAUSED DELAYS IN THE EFFECTUATION OF SALES AND PURCHASES.

THE REGULATION GOVERNING THE TIME LIMITATION FOR THE REIMBURSEMENT OF REAL ESTATE TRANSACTION EXPENSES WAS AMENDED ON OCTOBER 28, 1972. THE AMENDED REGULATION, WHICH IS CURRENTLY SET FORTH IN THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7), PARAGRAPH 2-6.1E (MAY 1973), PROVIDES THAT THE HEAD OF AN AGENCY MAY EXTEND THE TIME LIMITATION BY AN ADDITIONAL PERIOD OF TIME, NOT TO EXCEED 1 YEAR. UNDER THE NEW REGULATION MR. CARLEY WOULD PROBABLY HAVE BEEN ABLE TO SECURE A TIME EXTENSION. HOWEVER, THE LATEST TRANSACTION ENTERED INTO BY MR. CARLEY TOOK PLACE WELL BEFORE THE NEW AMENDMENT AND THE AMENDMENT MAY NOT BE APPLIED RETROACTIVELY. B-179240, AUGUST 27, 1973, SUPRA. IT IS THUS INAPPLICABLE TO HIS CASE.

FOR THE REASONS STATED ABOVE, DISALLOWANCE OF MR. CARLEY'S CLAIM FOR REIMBURSEMENT OF REAL ESTATE TRANSACTION EXPENSES WAS PROPER, AND IS, THEREFORE, SUSTAINED.