B-159327, NOV 8, 1973, 53 COMP GEN 317

B-159327, NOV 8, 1973, 53 COMP GEN 317

PROPERTY - PRIVATE - FEDERAL FUNDS FOR IMPROVEMENTS, REPAIRS, ETC. - LIMITATION ON EXPENDITURES THE GENERAL RULE PROHIBITING THE USE OF APPROPRIATED FUNDS FOR PERMANENT IMPROVEMENTS OF PRIVATE PROPERTY (5 COMP. DEC. 478) UNLESS SPECIFICALLY AUTHORIZED BY LAW, AND THE LIMITED EXCEPTION TO THAT RULE IN SECTION 322 OF THE ECONOMY ACT (40 U.S.C. 278A) WHICH, IN EFFECT, PERMITS EXPENDITURES FOR ALTERATIONS, REPAIRS, AND IMPROVEMENTS OF RENTED PREMISES NOT IN EXCESS OF 25 PERCENT OF THE FIRST YEAR'S RENT IS FOR APPLICATION TO THE PROPOSED ALTERATION, REPAIRS, AND IMPROVEMENT OF A PERMANENT NATURE TO PREMISES RENTED FOR HOUSING FLIGHT SERVICE STATIONS AND OTHER AIR NAVIGATION FACILITIES OPERATED BY THE FEDERAL AVIATION ADMINISTRATION (FAA) IN CONNECTION WITH AIR CONTROL FACILITIES SINCE SECTION 307(B) OF THE FEDERAL AVIATION ACT CONCERNING THE ESTABLISHMENT AND OPERATION OF AIR TRAFFIC CONTROL FACILITIES DOES NOT CONSTITUTE STATUTORY AUTHORITY FOR FAA TO EFFECT PERMANENT IMPROVEMENTS TO PRIVATE PROPERTY WITHOUT REGARD TO THE LIMITATION IN 40 U.S.C. 278A.

TO THE ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION, NOVEMBER 8, 1973:

THIS REFERS TO YOUR LETTER, DATED JUNE 26, 1973, ASKING OUR ADVICE "ON THE EXTENT TO WHICH THE FEDERAL AVIATION ADMINISTRATION (FAA) MAY EXPEND APPROPRIATED FUNDS FOR REPAIRS, ALTERATIONS, AND IMPROVEMENTS TO RENTED PREMISES HOUSING FLIGHT SERVICE STATIONS AND OTHER AIR NAVIGATION FACILITIES OPERATED AT AIRPORTS BY FAA IN CONNECTION WITH ITS AIR TRAFFIC CONTROL ACTIVITIES."

YOU EXPLAIN IN THIS REGARD THAT:

UNDER THE FEDERAL AVIATION ACT OF 1958, AS AMENDED (49 U.S.C. 1301 ET SEQ.), THE FAA IS CHARGED WITH BROAD RESPONSIBILITIES FOR SAFE AND EFFICIENT AIR NAVIGATION AND AIR TRAFFIC CONTROL. TO THOSE ENDS, THE AGENCY IS AUTHORIZED IN SECTION 307(B) OF THE ACT TO ACQUIRE, ESTABLISH, IMPROVE, OPERATE, AND MAINTAIN AIR NAVIGATION FACILITIES WHEREVER NECESSARY (49 U.S.C. 1348(B)). ONE SUCH FACILITY IS THE FLIGHT SERVICE STATION (FSS) THROUGH WHICH PILOTS ARE PROVIDED PRE FLIGHT AND IN-FLIGHT SERVICES SUCH AS WEATHER BRIEFINGS, ENROUTE RADIO COMMUNICATIONS, MONITORING OF RADIO AIDS TO NAVIGATION, AND VARIOUS OTHER AIR TRAFFIC CONTROL SUPPORT ACTIVITIES. FAA HAS ESTABLISHED AND OPERATES A NATIONWIDE SYSTEM OF OVER 300 FSSS, SOME OF WHICH ARE HOUSED IN FAA-OWNED FACILITIES (E.G., CERTAIN AIR TRAFFIC CONTROL TOWERS) BUT MOST OF WHICH OCCUPY PREMISES LEASED FROM AIRPORT PROPRIETORS OR OPERATORS.

THE EFFICIENCY AND COST-EFFECTIVENESS OF THE FSS SYSTEM CURRENTLY REQUIRE UPGRADING AND THE AGENCY IS EXPLORING MAJOR IMPROVEMENTS THROUGH THE USE OF AUTOMATED SYSTEMS WHICH, IF ADOPTED, WILL ULTIMATELY NECESSITATE EXTENSIVE MODIFICATION OF FSSS SELECTED FOR INSTALLATION THROUGHOUT THE COUNTRY.

THE FIRST STEP IN IMPROVING THE FSS SYSTEM, AND OUR IMMEDIATE CONCERN IN REQUESTING YOUR ADVICE, INVOLVES THE INSTALLATION AND OPERATIONAL TESTING OF AN AUTOMATED AVIATION WEATHER AND NOTAM SYSTEM (AWANS) AT OUR FSS LOCATED AT THE FULTON COUNTY AIRPORT IN ATLANTA, GEORGIA. THIS FSS IS HOUSED IN A BUILDING OWNED BY FULTON COUNTY AND LEASED TO FAA (LEASE NO. DOTFA 6950-5112) AT AN ANNUAL RENTAL OF $24,930, THE CURRENT LEASE BEING FOR ONE YEAR WITH FAA HAVING ONE-YEAR RENEWAL OPTIONS UNTIL JUNE 30, 1989. SPACE LIMITATIONS AND ROOM CONFIGURATION RENDER THE PRESENT FSS OPERATIONS AREA OF THE BUILDING UNSUITABLE FOR INSTALLATION OF THE AWANS, AND IT WILL BE NECESSARY TO ALTER FOR THAT PURPOSE OFFICE SPACE PRESENTLY OCCUPIED BY FSS ADMINISTRATIVE PERSONNEL AND FACILITY TECHNICIANS. IT IS PLANNED TO HOUSE SUCH PERSONNEL IN GOVERNMENT-OWNED OFFICE TRAILERS DURING TESTING OF THE AWANS AND TO CONVERT THE PRESENT FSS OPERATIONS AREA INTO THE NEEDED OFFICE SPACE WHEN THE AWANS BECOMES FULLY OPERATIONAL.

WE RECOGNIZE THE GENERAL RULE PROHIBITING THE USE OF APPROPRIATED FUNDS FOR PERMANENT IMPROVEMENTS TO PRIVATE PROPERTY (5 COMP. DEC. 478) UNLESS SPECIFICALLY AUTHORIZED BY LAW, AND THE LIMITED EXCEPTION TO THAT RULE IN SECTION 322 OF THE ECONOMY ACT (40 U.S.C. 278A) WHICH, IN EFFECT, PERMITS EXPENDITURES FOR ALTERATIONS, REPAIRS, AND IMPROVEMENT OF RENTED PREMISES NOT IN EXCESS OF 25 PERCENT OF THE FIRST YEAR'S RENT. PROPOSED ALTERATIONS, REPAIRS, AND IMPROVEMENTS OF A PERMANENT NATURE TO THE EXISTING OFFICE SPACE AND FSS OPERATIONS AREA, A SCHEDULE OF WHICH IS ENCLOSED, ARE ESTIMATED TO COST APPROXIMATELY $52,575. THE LIMITATION IN SECTION 322, IF APPLICABLE TO THE PROPOSED FSS ALTERATIONS, WOULD LIMIT EXPENDITURES THERFOR TO $5,813.75.

IN A PREVIOUS DECISION ISSUED BY YOUR OFFICE, PUBLISHED AT 46 COMP. GEN. 60 (1966), FAA WAS HELD AUTHORIZED TO EXPEND APPROPRIATED FUNDS WITHOUT REGARD TO SECTION 322 FOR REINFORCEMENT AND OTHER STRUCTURAL IMPROVEMENTS TO NON-FEDERALLY OWNED AIRPORT BUILDINGS AS PART OF THE COST OF CONSTRUCTING AIR NAVIGATION AND RELATED FACILITIES THEREON WHERE, PURSUANT TO SECTION 11(6) OF THE FEDERAL AIRPORT ACT, THE AIRPORT OWNER OR OPERATOR HAD GRANTED THE GOVERNMENT THE RIGHT WITHOUT COST TO INSTALL SUCH FACILITIES. THAT DECISION APPEARS TO HAVE BEEN BASED UPON LANGUAGE IN SECTION 11(6) WHICH, AFTER AMENDMENT OF THE FEDERAL AIRPORT ACT IN 1961 (P.L. 87-255), REQUIRED AN AIRPORT OPERATOR RECEIVING AN AIRPORT DEVELOPMENT GRANT TO PROVIDE "RIGHTS IN BUILDINGS" AS NEEDED BY FAA "FOR CONSTRUCTION AT FEDERAL EXPENSE" OF FACILITIES FOR AIR TRAFFIC CONTROL WEATHER REPORTING, AND RELATED COMMUNICATION ACTIVITIES. PRIOR TO THE 1961 AMENDMENT, SECTION 11(5) OF THE FEDERAL AIRPORT ACT (FORMERLY 49 U.S.C. 1110(5)) HAD REQUIRED INSTEAD THAT OPERATORS PROVIDE AT NO COST "SPACE IN AIRPORT BUILDINGS AS MAY BE REASONABLY ADEQUATE" FOR USE IN CONNECTION WITH SUCH ACTIVITIES, AND IN AN EARLIER DECISION, B-122722 (AUGUST 16, 1965), IT HAD BEEN RULED THAT EXPENDITURES BY FAA FOR CHANGES IN RENT-FREE SPACE FURNISHED PURSUANT TO THAT REQUIREMENT WERE SUBJECT TO THE ECONOMY ACT LIMITATION. THE 1961 AMENDMENT WAS VIEWED IN 46 COMP. GEN. 60 AS INDICATING A CONGRESSIONAL INTENT THAT THE FEDERAL AVIATION AGENCY NOT BE HAMPERED BY RESTRICTIONS OR LIMITATIONS IN THE CONSTRUCTION OF THESE VITALLY IMPORTANT AIR TRAFFIC CONTROL FACILITIES. 46 COMP. GEN. AT 62.

ACCORDINGLY, YOUR OFFICE HAD NO OBJECTION TO PAYMENT FROM FUNDS APPROPRIATED TO THE FEDERAL AVIATION AGENCY FOR REINFORCEMENTS OF BUILDING FOUNDATIONS AND OTHER STRUCTURAL IMPROVEMENTS AS PART OF THE COST OF CONSTRUCTING AIR-NAVIGATION AND RELATED FACILITIES AT SELECTED AIRPORTS.

UNLIKE THE SITUATIONS CONSIDERED IN B-152722 AND 46 COMP. GEN. 60, THE FSS AT ATLANTA DOES NOT INVOLVE EITHER "SPACE" OR "RIGHTS" IN BUILDINGS FURNISHED BY THE AIRPORT IN CONNECTION WITH A GRANT AGREEMENT UNDER THE FEDERAL AIRPORT ACT (OR UNDER ITS SUCCESSOR, THE AIRPORT AND AIRWAY DEVELOPMENT ACT OF 1970). THE FSS OCCUPIES RENTED SPACE WHICH WAS ORIGINALLY ACQUIRED PURSUANT TO A LEASE-CONSTRUCTION ARRANGEMENT IN 1960. HOWEVER, AS IN THE CASE OF THE EARLIER DECISIONS, WE ARE HERE CONCERNED WITH THE INSTALLATION OF AIR NAVIGATION FACILITIES PURSUANT TO AUTHORITY IN SECTION 307(B) OF THE FEDERAL AVIATION ACT. WHETHER IMPROVEMENTS INCIDENTAL TO SUCH INSTALLATION MAY BE MADE WITHOUT REFERENCE TO THE GENERAL PROHIBITION AGAINST IMPROVING PRIVATE PROPERTY OR THE ECONOMY ACT LIMITATION WOULD NOT SEEM LOGICALLY TO A DEPEND UPON WHETHER THE AGENCY HAS LEASED THE PROPERTY TO BE IMPROVED OR HAS, IN CONNECTION WITH AN AIRPORT DEVELOPMENT GRANT, ACQUIRED "RIGHTS" THEREIN. BASED UPON THIS AND OUR BELIEF THAT CONGRESS DID NOT INTEND THAT FAA BE RESTRICTED IN ESTABLISHING AND IMPROVING AIR NAVIGATION AND RELATED FACILITIES AT AIRPORTS PURSUANT TO SECTION 307(B) OF THE ACT, NEITHER THE GENERAL PROHIBITION NOR THE ECONOMY ACT LIMITATION WOULD SEEM TO BE APPLICABLE TO SUCH ACTIVITIES. (FOOTNOTES OMITTED.)

YOU ADVISE THAT FAA HAS AN ACTIVE CONTRACT IN THE AMOUNT OF $1,287,285 FOR THE DESIGN, DEVELOPMENT, INSTALLATION AND TESTING OF THE AUTOMATED AWANS AT THE FULTON COUNTY AIRPORT.

AS A GENERAL RULE, AS YOU ACKNOWLEDGE, APPROPRIATED FUNDS MAY NOT BE EXPENDED FOR PERMANENT IMPROVEMENTS TO LEASED PRIVATE PROPERTY UNLESS SPECIFICALLY AUTHORIZED BY LAW. 19 COMP. GEN. 528 (1939); 29 ID. 279 (1949); 35 ID. 715 (1956). SECTION 322 OF THE ECONOMY ACT (40 U.S.C. 278A), PROVIDING IN PERTINENT PART THAT NO APPROPRIATION SHALL BE OBLIGATED OR EXPENDED FOR ALTERATIONS, IMPROVEMENTS, OR REPAIRS OF RENTED PREMISES IN EXCESS OF 25 PERCENT OF THE FIRST YEAR'S RENT, CONSTITUTES A LIMITED EXEMPTION FROM THE RULE, BUT THE AMOUNT WHICH COULD BE EXPENDED BY FAA UNDER THIS EXEMPTION IS, YOU ADVISE, NOT SUFFICIENT TO EFFECT THE DESIRED IMPROVEMENTS.

THE QUESTION PRESENTED IS, THEREFORE, WHETHER ANY OTHER EXEMPTION FROM THE RULE AGAINST EXPENDITURE OF APPROPRIATED FUNDS FOR IMPROVEMENTS TO PRIVATE PROPERTY WOULD APPLY IN THE CIRCUMSTANCES HERE PRESENT SO AS TO ALLOW FAA, WITHOUT REGARD TO 40 U.S.C. 278A, TO MAKE THE PROPOSED EXPENDITURES. YOU ARGUE THAT SUCH AN EXEMPTION EXISTS, BASED ON WHAT YOU CONTEND ARE THE IMPLICATIONS OF OUR DECISION IN 46 COMP. GEN. 60 (1966), AND ON YOUR BELIEF "THAT CONGRESS DID NOT INTEND THAT FAA BE RESTRICTED IN ESTABLISHING AND IMPROVING AIR NAVIGATION AND RELATED FACILITIES AT AIRPORTS PURSUANT TO SECTION 307(B)" OF THE FEDERAL AVIATION ACT.

IN 46 COMP. GEN. 60, IT WAS DECIDED THAT IN THE CIRCUMSTANCES THERE PRESENT, WE WOULD NOT OBJECT TO PAYMENT BY FAA FOR PERMANENT IMPROVEMENTS TO BUILDINGS PROVIDED BY AN AIRPORT OWNER OR OPERATOR FOR USE BY FAA PURSUANT TO SECTION 11(6) OF THE FEDERAL AIRPORT ACT. (THE FEDERAL AIRPORT ACT WAS REPEALED BY SECTION 52(A) OF THE ACT OF MAY 21, 1970, PUBLIC LAW 91-258, 84 STAT. 235. SECTION 18(6) OF THE ACT OF MAY 21, 1970 (49 U.S.C. 1718(6)) IS HOWEVER SUBSTANTIALLY THE SAME AS SECTION 11(6) OF THE FEDERAL AIRPORT ACT.) SECTION 11(6) PROVIDED THAT AN AIRPORT OWNER OR OPERATOR MUST AGREE, AS A CONDITION PRECEDENT TO RECEIVING FEDERAL AID FOR AN AIRPORT DEVELOPMENT PROJECT, THAT HE WOULD FURNISH WITHOUT COST SUCH "RIGHTS IN BUILDINGS OF THE SPONSOR AS THE ADMINISTRATOR MAY CONSIDER NECESSARY OR DESIRABLE FOR CONSTRUCTION AT FEDERAL EXPENSE OF SPACE OR FACILITIES" FOR USE IN CONNECTION WITH AIR TRAFFIC CONTROL FACILITIES. EARLIER VERSION OF SECTION 11(6), BEFORE BEING AMENDED BY THE ACT OF SEPTEMBER 20, 1961, PUBLIC LAW 87 255, 75 STAT. 526, HAD REQUIRED ONLY THAT THE AIRPORT OWNER OR OPERATOR FURNISH WITHOUT CHARGE "SUCH SPACE IN AIRPORT BUILDINGS AS MAY BE REASONABLY ADEQUATE" FOR AIR TRAFFIC CONTROL FACILITIES. WHILE WE HELD IN 46 COMP. GEN. 60 THAT "CONGRESS EXPRESSED ITS INTENT IN UNEQUIVOCAL LANGUAGE" THAT FAA NOT BE HAMPERED BY RESTRICTIONS OR LIMITATIONS IN THE CONSTRUCTION OF AIR TRAFFIC CONTROL FACILITIES, THAT HOLDING WAS BASED EXPLICITLY ON OUR CONSTRUCTION OF THE LANGUAGE OF THE 1961 AMENDMENT TO SECTION 11(6) OF THE FEDERAL AIRPORT ACT. THAT DECISION CANNOT, THEREFORE, SUPPORT THE PROPOSITION YOU ADVANCE THAT CONGRESS DID NOT INTEND THAT FAA BE RESTRICTED IN IMPROVING AIR NAVIGATION FACILITIES PURSUANT TO SECTION 307(B) OF THE FEDERAL AVIATION ACT, APPROVED AUGUST 23, 1958, PUBLIC LAW 85-726, 72 STAT. 749, 49 U.S.C. 1348(B).

SECTION 307(B) AUTHORIZES THE ADMINISTRATOR

WITHIN THE LIMITS OF AVAILABLE APPROPRIATIONS MADE BY THE CONGRESS, (1) TO ACQUIRE, ESTABLISH, AND IMPROVE AIR-NAVIGATION FACILITIES WHEREVER NECESSARY; (2) TO OPERATE AND MAINTAIN SUCH AIR-NAVIGATION FACILITIES; *** AND (4) TO PROVIDE NECESSARY FACILITIES AND PERSONNEL FOR THE REGULATION AND PROTECTION OF AIR TRAFFIC.

IN AN EARLIER DECISION, IN WHICH WE SPECIFICALLY CONSIDERED THE EFFECT OF SECTION 307(B) IN THIS RESPECT, WE HELD THAT IT, ALONG WITH OTHER PROVISIONS OF LAW GRANTING CERTAIN POWERS TO THE ADMINISTRATOR CONCERNING ESTABLISHMENT AND OPERATION OF AIR TRAFFIC CONTROL FACILITIES, DOES NOT CONSTITUTE STATUTORY AUTHORITY FOR FAA TO EFFECT PERMANENT IMPROVEMENTS TO PRIVATE PROPERTY WITHOUT REGARD TO THE LIMITATION IN 40 U.S.C. 278A. 152722, AUGUST 16, 1965. NOTHING IN 46 COMP. GEN. 60 AFFECTS THE CONCLUSION IN B-152722 WITH RESPECT TO THE AUTHORITY CONTAINED IN SECTION 307(B) OF THE FEDERAL AVIATION ACT. OUR DECISION IN 46 COMP. GEN. 60 - CONSTRUING THE CONGRESS' INTENT IN PROVIDING FOR RIGHTS IN BUILDINGS TO BE PROVIDED TO FAA WITHOUT CHARGE FOR CONSTRUCTION OF AIR TRAFFIC FACILITIES AT FEDERAL EXPENSE - HAS NO APPLICATION TO THE FACTS OF THE INSTANT CASE, WHEREIN THE PRIVATE PROPERTY IN QUESTION IS BEING RENTED.

CONSEQUENTLY, THE GENERAL RULE AGAINST EXPENDITURE OF APPROPRIATED FUNDS FOR PERMANENT IMPROVEMENTS TO PRIVATE PROPERTY IS APPLICABLE TO THIS CASE, SUBJECT TO THE LIMITED EXEMPTION IN 40 U.S.C. 278A. ACCORDINGLY, YOU ARE ADVISED THAT THE AGGREGATE EXPENDITURE FOR THE PROPOSED IMPROVEMENTS TO RENTED PREMISES AT FULTON COUNTY AIRPORT MAY NOT EXCEED 25 PERCENT OF THE AMOUNT OF THE RENT FOR THE FIRST YEAR OF THE RENTAL TERM.