B-114720, APRIL 1, 1955, 34 COMP. GEN. 493

B-114720: Apr 1, 1955

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WHICH WAS LEASED TO THE UNITED STATES GOVERNMENT FOR USE IN THE CONSTRUCTION OF A MILITARY PROJECT AND TRANSPORTED UNDER BILLS OF LADING WHICH DESCRIBED THE EQUIPMENT AS " U.S. IS PROPERTY OF THE UNITED STATES WITHIN THE MEANING OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940. THE TRANSPORTATION CHARGES ARE SUBJECT TO LAND-GRANT DEDUCTIONS. 1955: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 20. THE PROPERTY WAS TRANSPORTED ON COMMERCIAL BILLS OF LADING WHICH WERE LATER CONVERTED TO GOVERNMENT BILLS OF LADING WE-508101 AND WE-508103. FOR THIS TRANSPORTATION YOU CLAIMED AND WERE PAID. THE PROPER CHARGES WERE DETERMINED TO BE THOSE BASED UPON AN EXPORT RATE OF $1.17 PER 100 POUNDS. WAS COLLECTED BY SETOFF IN THE PAYMENT OF YOUR BILL NO.

B-114720, APRIL 1, 1955, 34 COMP. GEN. 493

TRANSPORTATION - LAND-GRANT DEDUCTIONS - LEASED EQUIPMENT AS PROPERTY OF THE UNITED STATES ROAD CONSTRUCTION EQUIPMENT, WHICH WAS LEASED TO THE UNITED STATES GOVERNMENT FOR USE IN THE CONSTRUCTION OF A MILITARY PROJECT AND TRANSPORTED UNDER BILLS OF LADING WHICH DESCRIBED THE EQUIPMENT AS " U.S. GOVERNMENT PROPERTY" FOR MILITARY PURPOSES, IS PROPERTY OF THE UNITED STATES WITHIN THE MEANING OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, AND THE TRANSPORTATION CHARGES ARE SUBJECT TO LAND-GRANT DEDUCTIONS.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO THE TEXAS AND NEW ORLEANS RAILROAD COMPANY, APRIL 1, 1955:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 20, 1954, FILE WQ-256-1 1A- 1MB, RELATIVE TO YOUR BILL NO. WQ-256-1-A FOR $1,551.56, ADDITIONAL FREIGHT CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF TWO CARLOADS OF ROAD CONSTRUCTION EQUIPMENT FROM LONG BEACH, CALIFORNIA, TO NEW ORLEANS, LOUISIANA, DURING DECEMBER, 1942. THE PROPERTY WAS TRANSPORTED ON COMMERCIAL BILLS OF LADING WHICH WERE LATER CONVERTED TO GOVERNMENT BILLS OF LADING WE-508101 AND WE-508103.

FOR THIS TRANSPORTATION YOU CLAIMED AND WERE PAID, ON YOUR BILL NO. WQ- 256-1, CHARGES BASED ON A RATE OF $1.79 PER 100 POUNDS, WITHOUT DEDUCTIONS FOR LAND GRANT. IN THE AUDIT OF THE PAYMENT VOUCHER HERE, THE PROPER CHARGES WERE DETERMINED TO BE THOSE BASED UPON AN EXPORT RATE OF $1.17 PER 100 POUNDS, LESS LAND-GRANT DEDUCTIONS. THE RESULTING OVERPAYMENT OF $1,551.56, WAS COLLECTED BY SETOFF IN THE PAYMENT OF YOUR BILL NO. W-58227 -7 IN SEPTEMBER 1946. YOUR BILL NO. WQ 256-1-A, IN THE AMOUNT OF $1,151.56, LATER CORRECTED TO $1,551.56, WAS DISALLOWED IN GENERAL ACCOUNTING OFFICE SETTLEMENT CERTIFICATE NO. 394300 1/2, DATED JULY 23, 1948, ON THE GROUND THAT THE BILLS OF LADING DESCRIBED THE EQUIPMENT AS " U.S. GOVERNMENT PROPERTY" FOR MILITARY PURPOSES, AND " FOR EXPORT.'

THE EQUIPMENT WHICH WAS TRANSPORTED WAS UNDER LEASE TO THE UNITED STATES GOVERNMENT FOR USE IN THE CONSTRUCTION OF A MILITARY PROJECT. YOUR OBJECTION TO THE APPLICATION OF LAND-GRAND DEDUCTIONS SEEMS TO BE PREDICATED ON THE PROPOSITION THAT THE UNITED STATES, AS LESSEE, HAD NOT SUCH A RIGHT OR INTEREST IN THE EQUIPMENT AS TO RENDER IT "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES" WITHIN THE MEANING OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 954. THIS PROPOSITION WAS CONSIDERED AND REJECTED BY THE UNITED STATES COURT OF CLAIMS IN WABASH RAILROAD COMPANY V. THE UNITED STATES, NO. 47176, DECIDED JANUARY 11, 1955. PLAINTIFF IN THAT CASE CONTENDED THAT LAND GRANT DEDUCTIONS WERE NOT APPLICABLE TO CHARGES PAID FOR THE TRANSPORTATION OF 15 CARLOADS OF MACHINERY RENTED BY THE GOVERNMENT FROM THE OWNER, WHO OPERATED IT UNDER A SUBCONTRACT IN THE CONSTRUCTION OF A MILITARY PROJECT. THE COURT STATED THE PRECISE QUESTION TO BE "WHETHER FOR THE PURPOSE OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940 THIS MATERIAL (THE LEASED MACHINERY) WAS THE PROPERTY OF THE UNITED STATES AND THEREFORE ENTITLED TO LAND-GRANT TES.' ADVANCE SHEET, PAGE 5. THE COURT HELD THAT THE GOVERNMENT'S PROPERTY RIGHT IN LEASED MACHINERY IS WITHIN THE MEANING OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, SINCE THE TERM "PROPERTY OF THE UNITED STATES" IS BROAD AND COMPREHENSIVE ENOUGH TO INCLUDE ANY AND ALL TYPES OF PROPERTY RIGHTS.

IN VIEW OF THIS JUDICIAL CONSTRUCTION OF THE TERM "PROPERTY OF THE UNITED STATES," AS USED IN SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, THE DISALLOWANCE OF YOUR CLAIM IN SETTLEMENT CERTIFICATE NO. 394300 1/2 MUST BE SUSTAINED TO THE EXTENT THAT IT UPHELD THE ENTITLEMENT OF THE GOVERNMENT TO LAND-GRANT DEDUCTIONS FROM THE TRANSPORTATION CHARGES. HOWEVER, SINCE THE ADMINISTRATIVE OFFICE HAS REPORTED THAT THE EQUIPMENT WAS NOT EXPORTED, THE CHARGES WILL BE RECOMPUTED IN THE TRANSPORTATION DIVISION OF OUR OFFICE ON THE BASIS OF THE APPLICABLE DOMESTIC RATE, LESS APPROPRIATE LAND-GRANT DEDUCTIONS. PAYMENT OF THE AMOUNT ALLOWABLE ON THAT BASIS WILL BE MADE IN DUE COURSE.