B-132294, SEP. 4, 1957

B-132294, SEP. 4, 1957

TO CAPTAIN J. K. SWEENEY, FC. U.S. ARMY:

YOUR LETTER OF APRIL 10, 1957 (ACFIN 160 GEN), FORWARDED HERE BY THE CHIEF OF FINANCE ON JUNE 19, 1957, REQUESTS A DECISION AS TO THE PROPRIETY OF THE PAYMENT ON A VOUCHER STATED IN FAVOR OF THE CITY OF DOTHAN, ALABAMA, IN THE AMOUNT OF $2,485.48 REPRESENTING THE PRO RATA SHARE OF THE COST OF MAINTENANCE AND OPERATION OF THE MUNICIPAL AIRPORT AT DOTHAN ALLOCABLE TO THE USE OF SAME BY THE UNITED STATES ARMY AVIATION CENTER, FORT RUCKER, ALABAMA, FOR THE PERIOD OCTOBER 1, 1955, THROUGH JUNE 30, 1956.

IT IS ADMINISTRATIVELY REPORTED THAT THE FACILITIES OF THE DOTHAN AIRPORT HAVE BEEN UTILIZED BY THE ARMY SINCE LATE 1954, FIRST UNDER AN ORAL AGREEMENT AND MORE RECENTLY UNDER A FORMAL LEASE AGREEMENT DATED MARCH 13, 1956. PARAGRAPH 6 OF THE LEASE AGREEMENT STIPULATES THAT THE ARMY AVIATION SCHOOL SHALL ENTER INTO A SEPARATE SERVICE CONTRACT WITH THE CITY PROVIDING FOR PAYMENT BY THE ARMY FOR ITS PROPORTIONATE SHARE OF MAINTAINING AIRPORT FACILITIES. IT IS REPORTED, HOWEVER, THAT NO SERVICE CONTRACT HAS BEEN EXECUTED PENDING A DETERMINATION AS TO THE PROPRIETY OF THE EXECUTION OF SUCH A CONTRACT FOR USE OF A PUBLIC AIRPORT. ALTHOUGH THE ABOVE CLAIM APPEARS TO BE BASED ON THE USE OF THE AIRPORT FOR DAY AND NIGHT FLYING, PARAGRAPH 2 (B) OF THE ABOVE LEASE STIPULATES THAT THE GOVERNMENT SHALL HAVE THE RIGHT TO USE THE AIRPORT FOR NIGHT FLYING PURPOSES ONLY. PARAGRAPH 9 GRANTS THE GOVERNMENT THE RIGHT DURING THE EXISTENCE OF THE LEASE TO MAKE ALTERATIONS, ATTACH FIXTURES, AND ERECT ADDITIONS, STRUCTURES, OR SIGNS IN OR UPON THE PREMISES. PARAGRAPH 2 PROVIDES THAT IT WILL BE SUBJECT TO ANY, EACH AND ALL LIMITATIONS, RESTRICTIONS, AND CONDITIONS CONTAINED IN THREE PRIOR AGREEMENTS BETWEEN THE CITY AND THE FEDERAL GOVERNMENT.

AS TO THE THREE PRIOR AGREEMENTS IT APPEARS THAT THE AIRPORT IS SUBJECT TO (1) AN AGREEMENT WITH THE UNITED STATES, ACTING THROUGH THE CIVIL AERONAUTICS ADMINISTRATION, DATED SEPTEMBER 16, 1941, UNDER WHICH LANDING FACILITIES OF THE AIRPORT WERE ORIGINALLY CONSTRUCTED WITH FEDERAL FUNDS AND PURSUANT TO WHICH THE CITY OF DOTHAN AND THE COUNTY OF HOUSTON ASSUMED CERTAIN OBLIGATIONS WITH RESPECT TO MAINTENANCE AND OPERATION OF THE FACILITY AS A PUBLIC AIRPORT; (2) A SURPLUS PROPERTY INSTRUMENT OF DISPOSAL, ENTITLED "AGREEMENT" DATED FEBRUARY 20, 1947, PURSUANT TO WHICH THE GOVERNMENT'S LEASEHOLD INTEREST IN THE PROPERTY, ACQUIRED JUNE 15, 1942, WAS SURRENDERED TO THE CITY AND COUNTY AND CERTAIN IMPROVEMENTS ON THE PREMISES CONSTRUCTED OR DEVELOPED BY THE FEDERAL GOVERNMENT WERE CONVEYED TO THE CITY AND COUNTY, SUBJECT TO CERTAIN TERMS AND CONDITIONS CONCERNING MAINTENANCE AND OPERATION OF THE AIRPORT AND ITS FUTURE USE BY THE UNITED STATES; AND (3) A GRANT AGREEMENT BETWEEN THE UNITED STATES, ACTING THROUGH THE CIVIL AERONAUTICS ADMINISTRATION, AND THE CITY AND COUNTY, DATED JUNE 19, 1951, UNDER WHICH FUNDS AUTHORIZED BY THE FEDERAL AIRPORT ACT (49 U.S. 1101) WERE MADE AVAILABLE TO THE CITY AND COUNTY FOR FURTHER DEVELOPMENT OF THE AIRPORT AND WHICH GRANT AGREEMENT IMPOSED CERTAIN OBLIGATIONS ON THE CITY AND COUNTY WITH RESPECT TO THE MAINTENANCE AND OPERATION OF THE AIRPORT AS A PUBLIC AIRPORT AND ITS USE BY THE UNITED STATES.

THE SURPLUS PROPERTY INSTRUMENT OF DISPOSAL OF FEBRUARY 20, 1947, PROVIDES, WITH RESPECT TO USE OF THE AIRPORT BY THE UNITED STATES, (1) THAT DURING TIME OF NATIONAL EMERGENCY DECLARED BY THE PRESIDENT OR THE CONGRESS, THE GOVERNMENT SHALL HAVE THE RIGHT TO FULL AND UNRESTRICTED POSSESSION, CONTROL AND USE OF THE AIRPORT, OR ANY PART THEREOF, PROVIDED THAT THE GOVERNMENT SHALL BE RESPONSIBLE DURING THE PERIOD OF SUCH USE FOR THE ENTIRE COST OF MAINTENANCE OF THE PORTION USED AND SHALL PAY A FAIR RENTAL FOR THE USE OF ANY IMPROVEMENTS ADDED TO THE AIRPORT WITHOUT FEDERAL AID, AND (2) THAT "ITINERANT AIRCRAFT OWNED BY THE UNITED STATES OF AMERICA * * * OR OPERATED BY ANY OF ITS EMPLOYEES OR AGENTS ON GOVERNMENT BUSINESS, SHALL AT ALL TIMES HAVE THE RIGHT TO USE THE AIRPORT IN COMMON WITH OTHERS; * * * GOVERNMENT'S USE OF THE AIRPORT BY VIRTUE OF THE PROVISIONS OF THIS SUBPARAGRAPH SHALL BE WITHOUT CHARGE OF ANY NATURE OTHER THAN PAYMENT FOR DAMAGE CAUSED BY SUCH ITINERANT AIRCRAFT.'

THE GRANT AGREEMENT OF JUNE 19, 1951, PROVIDES, WITH RESPECT TO GOVERNMENT USE OF THE AIRPORT, THAT "ALL FACILITIES OF THE AIRPORT DEVELOPED WITH FEDERAL AID, AND THOSE USABLE FOR THE LANDING AND TAKING- OFF OF AIRCRAFT, WILL BE AVAILABLE TO THE UNITED STATES AT ALL TIMES, WITHOUT CHARGE, FOR USE BY MILITARY AND NAVAL AIRCRAFT IN COMMON WITH OTHER AIRCRAFT, EXCEPT THAT IF THE USE BY MILITARY AND NAVAL AIRCRAFT IS SUBSTANTIAL, A REASONABLE SHARE, PROPORTIONAL TO SUCH USE, OF THE COST OF OPERATING AND MAINTAINING FACILITIES SO USED, MAY BE CHARGED. THE AMOUNT OF USE TO BE CONSIDERED "SUBSTANTIAL," AND THE CHARGES TO BE MADE THEREFOR, SHALL BE DETERMINED BY THE SPONSOR AND USING AGENCY.'

SECTION 3 OF THE ACT OF OCTOBER 1, 1949, 63 STAT. 700, 50 U.S.C. 1622 (B) PROVIDES THAT THE ADMINISTRATOR OF CIVIL AERONAUTICS SHALL HAVE THE SOLE RESPONSIBILITY FOR DETERMINING AND ENFORCING COMPLIANCE WITH THE TERMS, CONDITIONS, RESERVATIONS, AND RESTRICTIONS CONTAINED IN INSTRUMENTS OF DISPOSAL OF SURPLUS PROPERTY TO STATES AND THEIR POLITICAL SUBDIVISIONS AND MUNICIPALITIES PURSUANT TO THE SURPLUS PROPERTY ACT OF 1944, FOR USE IN THE DEVELOPMENT, IMPROVEMENT, OPERATION OR MAINTENANCE OF A PUBLIC AIRPORT. IN VIEW OF THIS STATUTE THE ADMINISTRATOR, CIVIL AERONAUTICS ADMINISTRATION, WAS REQUESTED TO FURNISH A STATEMENT OF HIS VIEWS AS TO WHETHER UNDER THE INSTRUMENT OF DISPOSAL OF FEBRUARY 20, 1947, AND THE GRANT AGREEMENT OF JUNE 15, 1951, THE ARMY IS ENTITLED TO USE THE AIRPORT WITHOUT CHARGE. REPLY DATED AUGUST 6, 1957, AFTER POINTING OUT THAT THE LEASE AGREEMENT OF MARCH 13, 1956, CONFERS ON THE GOVERNMENT VARIOUS RIGHTS OVER AND ABOVE THOSE RECEIVED BY THE DISPOSAL INSTRUMENT OF FEBRUARY 20, 1947, OR STIPULATED IN THE GRANT AGREEMENT OF JUNE 19, 1951, STATES AS FOLLOWS:

"IN VIEW OF THE ADDITIONAL RIGHTS GIVEN THE UNITED STATES BY THE LEASE AGREEMENT OF MARCH 13, 1956, IT IS OUR OPINION THAT THE PROVISIONS OF THE LEASE AGREEMENT WITH RESPECT TO PAYMENT FOR USE OF THE AIRPORT BY THE ARMY PREVAIL OVER THE RIGHTS GRANTED THE UNITED STATES UNDER THE SURPLUS PROPERTY AGREEMENT. IN OTHER WORDS, IT IS OUR VIEW THAT TO THE EXTENT THE LEASE AGREEMENT COVERS THE TYPES OF OPERATIONS WHICH HAVE BEEN CONDUCTED AT THE AIRPORT, THOSE OPERATIONS HAVE BEEN CONDUCTED PURSUANT TO THE RIGHT GRANTED IN THE LEASE AGREEMENT AND ON THE TERMS PRESCRIBED THEREIN, RATHER THAN IN ACCORDANCE WITH THE GOVERNMENT USE PROVISION OF THE INSTRUMENT OF DISPOSAL.

"AS STATED ABOVE, PARAGRAPH 6 IN THE LEASE AGREEMENT CONTAINS A STIPULATION TO THE EFFECT THAT THE PARTIES INVOLVED SHALL ENTER INTO A SEPARATE SERVICE CONTRACT PROVIDING FOR PAYMENT BY THE ARMY OF ITS PROPORTIONATE SHARE OF MAINTAINING THE AIRPORT FACILITIES. IN VIEW OF THIS SPECIFIC PROVISION IN THE LEASE REGARDING PAYMENT BY THE ARMY OF A PORTION OF THE COST OF MAINTAINING THE AIRPORT FACILITIES, IT APPEARS THAT SUCH AMOUNT AS WAS OR MAY BE SUBSEQUENTLY AGREED UPON WOULD CONSTITUTE PART OF THE CONSIDERATION FOR THE LEASE AGREEMENT.

"IN THIS CONNECTION, HOWEVER, IT IS NOTED THAT PARAGRAPH 2 (B) OF THE LEASE AGREEMENT PROVIDES THAT THE GOVERNMENT SHALL HAVE THE RIGHT UNDER THE LEASE TO USE THE LAND DESCRIBED THEREIN "FOR NIGHT FLYING PURPOSES ONLY.' THE QUESTION WHETHER THE UNITED STATES' PROPORTIONATE SHARE OF THE COST OF MAINTENANCE OF THE AIRPORT FACILITIES TO BE ESTABLISHED BY THE SERVICE CONTRACT IN ACCORDANCE WITH PARAGRAPH 6 OF THE LEASE SHOULD BE BASED ON DAYTIME OPERATIONS ON THE FIELD AS WELL AS NIGHT OPERATIONS, NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH 2 (B), IS A MATTER THAT INVOLVES INTERPRETATION OF THE LEASE AGREEMENT AND ONE ON WHICH WE DO NOT FEEL WE ARE IN A POSITION TO COMMENT.

"THE LEGAL PRINCIPLES OUTLINED ABOVE WITH RESPECT TO THE EFFECT OF THE LEASE AGREEMENT ON THE ARMY'S RIGHTS UNDER THE ITINERANT USE PROVISION OF THE SURPLUS PROPERTY INSTRUMENT ARE EQUALLY APPLICABLE TO THE EFFECT OF SUCH AGREEMENT ON THE ABOVE-QUOTED PROVISION OF THE GRANT AGREEMENT PERTAINING TO USE OF THE AIRPORT FACILITIES BY MILITARY AND NAVAL AIRCRAFT, WITHOUT CHARGE, IN COMMON WITH OTHER AIRCRAFT.

"IT IS POINTED OUT, HOWEVER, THAT IT IS OUR VIEW THAT A GRANT AGREEMENT EXECUTED PURSUANT TO THE FEDERAL AIRPORT ACT IN NO WAY AMENDS A SURPLUS PROPERTY INSTRUMENT OF DISPOSAL ISSUED PURSUANT TO THE SURPLUS PROPERTY ACT OF 1944. THERE IS NOTHING IN THE FEDERAL AIRPORT ACT THAT AUTHORIZES THE ADMINISTRATOR OF CIVIL AERONAUTICS TO MODIFY INSTRUMENTS OF DISPOSAL OF SURPLUS AIRPORT PROPERTY ISSUED UNDER THE SURPLUS PROPERTY ACT OF 1944, OR TO SURRENDER ANY RIGHTS VESTED IN THE UNITED STATES BY THE TERMS OF SUCH INSTRUMENTS.

"FURTHER, THE ONLY STATUTE THAT AUTHORIZES THE ADMINISTRATOR OF CIVIL AERONAUTICS TO REVISE OR MODIFY SURPLUS AIRPORT PROPERTY DISPOSAL INSTRUMENTS IS PUBLIC LAW 311, 81ST CONGRESS (63 STAT. 700). THAT STATUTE, IN SECTION 4, AUTHORIZES THE ADMINISTRATOR TO "GRANT RELEASES FROM ANY OF THE TERMS, CONDITIONS, RESERVATIONS AND RESTRICTIONS CONTAINED IN, AND TO CONVEY, QUITCLAIM, OR RELEASE ANY RIGHT OR INTEREST RESERVED TO THE UNITED STATES BY," INSTRUMENTS OF DISPOSAL OF SURPLUS AIRPORT PROPERTY. HOWEVER, SUCH A RELEASE MAY BE GRANTED ONLY IF IT IS DETERMINED BY THE ADMINISTRATOR THAT EITHER (1) THE PROPERTY TRANSFERRED NO LONGER SERVES THE PURPOSE FOR WHICH IT WAS TRANSFERRED OR (2) THE RELEASE WILL NOT PREVENT ACCOMPLISHMENT OF THE PURPOSE FOR WHICH THE PROPERTY WAS TRANSFERRED AND IS NECESSARY TO PROTECT OR ADVANCE THE INTERESTS OF THE UNITED STATES IN CIVIL AVIATION.

"ACCORDINGLY, IT IS OUR OPINION THAT A GRANT AGREEMENT UNDER THE FEDERAL AIRPORT ACT, EVEN THOUGH EXECUTED SUBSEQUENT TO THE EXECUTION OF A SURPLUS PROPERTY DISPOSAL INSTRUMENT CANNOT BE CONSIDERED AS AMENDING OR MODIFYING SUCH SURPLUS PROPERTY DISPOSAL INSTRUMENT. TO THE EXTENT THAT THE PROVISIONS OF A SURPLUS PROPERTY INSTRUMENT OF DISPOSAL VEST RIGHTS IN THE UNITED STATES GREATER OR MORE FAVORABLE TO THE UNITED STATES THAN SUCH A GRANT AGREEMENT RELATING TO THE SAME AIRPORT, THE PROVISIONS OF THE INSTRUMENT OF DISPOSAL WILL PREVAIL.

"IN THE INSTANT CASE, HOWEVER, AS INDICATED ABOVE, IT IS OUR OPINION THAT THE LEASE AGREEMENT OF MARCH 13, 1956, UNDER WHICH THE GOVERNMENT OBTAINED RIGHTS IN THE AIRPORT IN ADDITION TO THOSE HELD UNDER THE GRANT AGREEMENT AND UNDER THE SURPLUS INSTRUMENT, PREVAILS OVER BOTH OF THOSE INSTRUMENTS INSOFAR AS CONCERNS THE ARMY'S USE OF THE AIRPORT.'

IN VIEW OF THE ADMINISTRATOR'S REPORT TO THE EFFECT THAT THERE IS NO LEGAL OBJECTION TO THE EXECUTION OF A LEASE GRANTING RIGHTS IN ADDITION TO THOSE PREVIOUSLY ACQUIRED BY THE GOVERNMENT UNDER THE INSTRUMENT OF DISPOSAL AND THE GRANT AGREEMENT, PAYMENTS FOR THOSE ADDITIONAL RIGHTS PROPERLY MAY BE MADE. ALTHOUGH THE ADMINISTRATOR RAISES A QUESTION AS TO THE PROPRIETY OF THE AMOUNT TO BE PAID UNDER THE LEASE, SINCE IT IS BASED ON THE COST OF MAINTENANCE FOR DAYTIME OPERATIONS, EFFECT MUST BE GIVEN TO PARAGRAPH 6 OF THE LEASE, WHICH REQUIRES THE EXECUTION OF A SEPARATE CONTRACT PROVIDING FOR THE PAYMENT OF THE GOVERNMENT'S PROPORTIONATE SHARE OF MAINTAINING THE AIRPORT FACILITIES. THUS, IT WOULD APPEAR THAT THE MANNER IN WHICH THE AMOUNT OF THE PAYMENT IS DETERMINED IS IMMATERIAL SO LONG AS THE ADMINISTRATIVE OFFICE DETERMINES, ON THE BASIS OF FACTS FAIRLY ESTABLISHED, THAT THE AMOUNT REPRESENTS THE FAIR AND REASONABLE VALUE OF THE ADDITIONAL RIGHTS OBTAINED UNDER THE LEASE.

ACCORDINGLY, PAYMENT ON THE VOUCHER, RETURNED HEREWITH TOGETHER WITH ATTACHMENTS, IS AUTHORIZED, IF OTHERWISE CORRECT.