B-128069, JUN. 21, 1956

B-128069: Jun 21, 1956

Additional Materials:

Contact:

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

 

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

EDUCATION AND WELFARE: REFERENCE IS MADE TO YOUR LETTER OF MAY 28. IT IS STATED IN YOUR LETTER THAT THE ABOVE CONVEYANCE WAS MADE ON MARCH 23. THE DEED WAS SUBJECT TO CERTAIN CONDITIONS SUBSEQUENT PROVIDING. THE CONSIDERATION FOR THE CONVEYANCE IS STATED AT $28. THE DEED IS STATED TO HAVE PROVIDED THAT THE DISTRICT MIGHT. IT IS STATED THAT PRIOR TO THE ABOVE DISPOSAL THE CITY OF OCEANSIDE HAD BEEN INTERESTED IN ACQUIRING A 40-FOOT STRIP OF THE PROPERTY CONVEYED TO THE SCHOOL DISTRICT FOR THE PURPOSE OF TRANSFERRING IT TO THE STATE OF CALIFORNIA FOR WIDENING MISSION AVENUE AND THAT. THE SCHOOL DISTRICT'S OFFER TO PURCHASE WAS MADE SUBJECT TO SUCH A PROPOSED GRANT. IT IS STATED THAT UNDER THE ABOVE ABROGATION PROVISION IT WAS ADMINISTRATIVELY DETERMINED THAT IT WOULD BE IN THE BEST INTEREST OF THE UNITED STATES TO PERMIT THE GRANTEE.

B-128069, JUN. 21, 1956

TO THE HONORABLE SECRETARY OF HEALTH, EDUCATION AND WELFARE:

REFERENCE IS MADE TO YOUR LETTER OF MAY 28, 1956, REQUESTING A DECISION AS TO WHETHER WE WOULD BE REQUIRED TO OBJECT TO THE DEPARTMENT'S REFUNDING $6,028 TO THE OCEANSIDE-LIBBY UNION SCHOOL DISTRICT, SAN DIEGO COUNTY, CALIFORNIA. THE PROPOSED REFUND REPRESENTS THE ABROGATION SUM PAID BY THE SCHOOL DISTRICT TO THE DEPARTMENT FOR RELEASE, FOR THE PURPOSE OF GRANTING TO THE STATE OF CALIFORNIA A 40-FOOT EASEMENT OF RIGHT-OF-WAY OF A PART OF A 3.386 ACRE TRACT CONVEYED TO THE SCHOOL DISTRICT FOR EDUCATIONAL PURPOSES UNDER SECTION 203/K) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 484 (D) (2) (A) (II) AND (III).

IT IS STATED IN YOUR LETTER THAT THE ABOVE CONVEYANCE WAS MADE ON MARCH 23, 1955, UNDER THE TERMS AND CONDITIONS PRESCRIBED FOR SUCH CONVEYANCES BY DEPARTMENTAL REGULATIONS. THE DEED WAS SUBJECT TO CERTAIN CONDITIONS SUBSEQUENT PROVIDING, AMONG OTHER THINGS, THAT THE PROPERTY SHOULD BE USED FOR STIPULATED EDUCATIONAL PURPOSES FOR A PERIOD OF 20 YEARS AND THAT DURING SUCH PERIOD THE PROPERTY WOULD NOT BE RESOLD, LEASED, MORTGAGED, ENCUMBERED OR DISPOSED OF WITHOUT THE WRITTEN PERMISSION OF THE DEPARTMENT. THE CONSIDERATION FOR THE CONVEYANCE IS STATED AT $28,000 REPRESENTING THE FAIR MARKET VALUE, LESS A 100 PERCENT DISCOUNT OR PUBLIC BENEFIT ALLOWANCE REFLECTING POSSIBLE BENEFITS TO THE UNITED STATES FROM THE USE BY THE SCHOOL DISTRICT FOR EDUCATIONAL PURPOSES. THE DEED IS STATED TO HAVE PROVIDED THAT THE DISTRICT MIGHT, WITH DEPARTMENTAL PERMISSION, ABROGATE THE CONDITIONS SUBSEQUENT BY PAYING THE UNAMORTIZED PORTION OF THE PUBLIC BENEFIT ALLOWANCE AT THE RATE OF 5 PERCENT OF THE FAIR MARKET VALUE FOR EACH FULL YEAR OF USE OF THE PROPERTY FOR EDUCATIONAL PURPOSES.

IT IS STATED THAT PRIOR TO THE ABOVE DISPOSAL THE CITY OF OCEANSIDE HAD BEEN INTERESTED IN ACQUIRING A 40-FOOT STRIP OF THE PROPERTY CONVEYED TO THE SCHOOL DISTRICT FOR THE PURPOSE OF TRANSFERRING IT TO THE STATE OF CALIFORNIA FOR WIDENING MISSION AVENUE AND THAT, ACCORDINGLY, THE SCHOOL DISTRICT'S OFFER TO PURCHASE WAS MADE SUBJECT TO SUCH A PROPOSED GRANT. ALSO, IT IS STATED THAT UNDER THE ABOVE ABROGATION PROVISION IT WAS ADMINISTRATIVELY DETERMINED THAT IT WOULD BE IN THE BEST INTEREST OF THE UNITED STATES TO PERMIT THE GRANTEE, AFTER ITS ACQUISITION OF THE PROPERTY, TO ABROGATE AS TO THE 40-FOOT STRIP OF LAND. ACCORDINGLY, YOU STATE THAT ON THE SAME DAY THE QUITCLAIM DEED WAS EXECUTED THE DEPARTMENT EXECUTED A CONSENT INSTRUMENT FOR A CONSIDERATION OF $6,028, REPRESENTING THE UNAMORTIZED FAIR VALUE OF THE LAND OVER WHICH THE EASEMENT WAS TO BE GRANTED, CONSENTING TO THE RETRANSFER OF AN EASEMENT IN THE 40-FOOT STRIP FROM THE SCHOOL DISTRICT TO THE STATE OF CALIFORNIA.

SECTION 203 (K) (2) OF THE ACT, AS IMPLEMENTED BY SECTIONS 509.00 AND 509.01 OF THE DEPARTMENT'S SURPLUS PROPERTY MANUAL, IS QUOTED IN YOUR LETTER AS AUTHORITY FOR MODIFICATION OF THE CONDITIONS SUBSEQUENT IN THE DEED OF MARCH 23, 1955, AND THE RELEASE IN THE CONSENT INSTRUMENT. THE TERMS OF THE CONSENT INSTRUMENT ARE STATED TO INCLUDE A PROVISION TO THE EFFECT THAT, IF THE STATE FAILS TO USE AND MAINTAIN THE IMPROVED HIGHWAY, THE EASEMENT WILL BE EXTINGUISHED AND TITLE TO THE LAND WILL REVERT TO THE SCHOOL DISTRICT FOR USE UNDER THE TERMS AND CONDITIONS OF THE DEED OF MARCH 23, 1955. UNDER AUTHORITY OF THE CONSENT INSTRUMENT THE SCHOOL DISTRICT CONVEYED AN EASEMENT TO THE STATE OF CALIFORNIA DIVISION OF HIGHWAYS. YOU STATE THAT SINCE THE SCHOOL DISTRICT HAS NOT BEEN REIMBURSED THE AMOUNT OF $6,028 IT PAID FOR ABROGATION, EITHER BY THE CITY OF OCEANSIDE OR BY THE STATE, THE SCHOOL DISTRICT NOW IS SEEKING REFUND OF THAT AMOUNT FROM THE UNITED STATES. THE REFUND IS SOUGHT ON THE GROUND THAT THE ABROGATION WAS FOR THE BENEFIT OF THE STATE WHICH COULD HAVE OBTAINED THE PROPERTY FROM THE UNITED STATES WITHOUT REIMBURSEMENT UNDER SECTION 17 OF THE FEDERAL HIGHWAY ACT OF 1921, 23 U.S.C. 18. IN SUPPORT OF THE PROPOSED REFUND YOU STATE THAT IN A LETTER OF DECEMBER 16, 1955, FROM MR. ARCHIBALD, DIVISION ENGINEER OF THE BUREAU OF PUBLIC ROADS, SAN FRANCISCO, TO YOUR REGIONAL PROPERTY COORDINATOR, IT IS ASSERTED THAT MADISON AVENUE, THE SUBJECT OF THE PROPOSED ROAD WIDENING PLAN, IS CALIFORNIA STATE HIGHWAY ROUTE 195 AND THAT IT IS ON AND IDENTICAL TO THE CALIFORNIA FEDERAL AID SECONDARY SYSTEM APPROVED ROUTE 646. ALSO, IT IS ASSERTED THAT MR. ARCHIBALD'S LETTER, PREPARED AT THE REQUEST OF THE CALIFORNIA DIVISION OF HIGHWAYS, STATES THAT TRANSFERS OF TITLE TO THE LAND UNDERLYING THE EASEMENT COULD HAVE BEEN MADE LEGALLY BY THE UNITED STATES TO THE STATE WITHOUT COMPENSATION UNDER SECTION 17 OF THE FEDERAL HIGHWAY ACT OF 1921. IT IS STATED THAT THE LETTER FURTHER ASSERTS THAT THE 40-FOOT RIGHT-OF-WAY IS NECESSARY FOR THE CONSTRUCTION OF A HIGHWAY IMPROVEMENT ON AN EXTENSION OF THE FEDERAL AID SECONDARY HIGHWAY SYSTEM WITHIN THE OCEANSIDE URBAN AREA. IN CONCLUSION YOU STATE THAT, SINCE THE CONSENT GRANTED TO THE SCHOOL DISTRICT WAS FOR THE PURPOSE OF MAKING POSSIBLE THE IDENTICAL GRANT TO THE STATE, THE DEPARTMENT DESIRES TO REIMBURSE THE SCHOOL DISTRICT THE $6,028 IT PAID FOR THE ABROGATION.

IN VIEW OF THE PROVISIONS OF 40 U.S.C. 484 (K) (2) (A) (II) AND (III) AS IMPLEMENTED BY THE REGULATIONS QUOTED IN YOUR LETTER, THERE IS NO QUESTION AS TO THE PROPRIETY OF THE ABROGATION OF THE 40-FOOT STRIP FOR THE PURPOSE OF MAKING IT AVAILABLE FOR CONVEYANCE BY THE SCHOOL DISTRICT TO THE STATE FOR HIGHWAY PURPOSES SUBJECT, OF COURSE, TO THE PAYMENT OF $6,028 REPRESENTING THE UNAMORTIZED FAIR VALUE OF THE PROPERTY. THUS, THE CONSIDERATION OF $6,028 PAID FOR SUCH ABROGATION WAS PROPERLY COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. WHILE IT MAY BE TRUE, AS STATED IN YOUR LETTER, THAT DURING THE TIME THE PROPERTY WAS IN FEDERAL OWNERSHIP A TRANSFER OF THE EASEMENT TO THE STATE COULD HAVE BEEN EFFECTED WITHOUT REIMBURSEMENT UNDER SECTION 17 OF THE FEDERAL HIGHWAY ACT OF 1921, SPONSORSHIP FOR SUCH A TRANSFER WOULD HAVE BEEN REQUIRED TO BE INITIATED BY THE SECRETARY OF COMMERCE AND THE CONVEYANCE TO BE MADE BY THE HOLDING AGENCY. SINCE THE 40-FOOT STRIP IS NO LONGER OWNED BY THE UNITED STATES, SECTION 17 OF THE FEDERAL HIGHWAY ACT OF 1921 MAY NOT NOW BE INVOKED AS A BASIS FOR EFFECTING A REFUND. IN OTHER WORDS, TO AUTHORIZE A REFUND IN THIS INSTANCE AS REQUESTED WOULD BE TANTAMOUNT TO HOLDING THAT YOU ARE AUTHORIZED TO TRANSFER THE 40-FOOT STRIP TO THE STATE FOR HIGHWAY PURPOSES UNDER SECTION 17 OF THAT ACT. WE ARE WELL AWARE OF THE SEEMING INEQUITY OF A REFUSAL TO AUTHORIZE THE REQUESTED REFUND, PARTICULARLY IN THE LIGHT OF YOUR OBSERVATION THAT IF THE CONVEYANCE OF THE 40-FOOT STRIP WERE TO BE MADE TO THE STATE NOW FOR THE FIRST TIME IT COULD BE EFFECTED WITHOUT COMPENSATION UNDER SECTION 17 OF THE FEDERAL HIGHWAY ACT OF 1921. IT LONG HAS BEEN THE RULE THAT MONEYS COVERED INTO MISCELLANEOUS RECEIPTS MAY NOT BE WITHDRAWN THEREFROM FOR ANY PURPOSE EXCEPT PURSUANT TO AN ACT OF CONGRESS. WHILE THE CONGRESS BY THE ACT OF JUNE 30, 1949, 63 STAT. 358, HAS AUTHORIZED REPAYMENT IN CERTAIN SITUATIONS WHERE MONEYS HAVE BEEN COVERED INTO MISCELLANEOUS RECEIPTS, REPAYMENTS AS AUTHORIZED BY THAT ACT ARE EXPRESSLY LIMITED TO SITUATIONS INVOLVING COLLECTIONS ERRONEOUSLY RECEIVED AND COVERED. SINCE THE COLLECTION IN THIS INSTANCE WAS EFFECTED UNDER A PROPER AGREEMENT AND SINCE THE DEPOSIT TO THE CREDIT OF MISCELLANEOUS RECEIPTS WAS PURSUANT TO THE REQUIREMENTS OF SECTION 3617 REVISED STATUTES, 31 U.S.C. 484, THE PROPOSED REFUND IS NOT AUTHORIZED.