B-132501, AUGUST 13, 1957, 37 COMP. GEN. 107

B-132501: Aug 13, 1957

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SERVICES FEDERAL EMPLOYEES WHO ARE STATIONED IN AREAS CONTIGUOUS TO THE CANAL ZONE AS WELL AS THOSE IN THE CANAL ZONE ARE SUBJECT TO THE PROVISIONS OF SECTION 107 OF THE CIVIL FUNCTIONS APPROPRIATION ACT. HOSPITAL AND MEDICAL CARE TO EMPLOYEES AND THEIR DEPENDENTS WHICH IS NOT RECOVERED THROUGH ASSESSMENT OF CHARGES TO THE EMPLOYEES THEMSELVES. IS ASSIGNED TO THE INTER-AMERICAN HIGHWAY PROJECT IN PANAMA AND IS SERVING UNDER A TWO-YEAR EMPLOYMENT CONTRACT EXECUTED PRIOR TO HIS DEPARTURE FROM THE UNITED STATES. THE APPROPRIATION OR FUND OF ANY SUCH OTHER AGENCY BEARING THE COST OF THE COMPENSATION OF THE EMPLOYEE CONCERNED IS HEREBY MADE AVAILABLE FOR SUCH REIMBURSEMENTS. ( ITALICS SUPPLIED.).

B-132501, AUGUST 13, 1957, 37 COMP. GEN. 107

FEDERAL EMPLOYEES - STATIONED IN PANAMA - REIMBURSEMENT TO CANAL ZONE GOVERNMENT FOR HEALTH, ETC., SERVICES FEDERAL EMPLOYEES WHO ARE STATIONED IN AREAS CONTIGUOUS TO THE CANAL ZONE AS WELL AS THOSE IN THE CANAL ZONE ARE SUBJECT TO THE PROVISIONS OF SECTION 107 OF THE CIVIL FUNCTIONS APPROPRIATION ACT, 1955, 68 STAT. 335, WHICH REQUIRES GOVERNMENT AGENCIES TO REIMBURSE THE CANAL ZONE GOVERNMENT FOR THAT PORTION OF THE COST OF FURNISHING EDUCATION, AND HOSPITAL AND MEDICAL CARE TO EMPLOYEES AND THEIR DEPENDENTS WHICH IS NOT RECOVERED THROUGH ASSESSMENT OF CHARGES TO THE EMPLOYEES THEMSELVES.

TO J. J. HANAGAN, DEPARTMENT OF COMMERCE, AUGUST 13, 1957:

YOUR LETTER OF JUNE 25, 1957, FILE 24-22.1, REQUESTS OUR DECISION WHETHER CANAL ZONE GOVERNMENT INVOICE NO. 4-3-82 OF APRIL 9, 1957 IN THE AMOUNT OF $22, FOR OUTPATIENT MEDICAL CARE (POLIO INOCULATIONS) FURNISHED DURING MARCH 1957 TO MR. MALCOLM V. GORDON AND HIS DEPENDENTS, MAY BE PAID FROM APPROPRIATED FUNDS.

YOU REPORT THAT MR. GORDON, AN EMPLOYEE OF THE BUREAU OF PUBLIC ROADS, IS ASSIGNED TO THE INTER-AMERICAN HIGHWAY PROJECT IN PANAMA AND IS SERVING UNDER A TWO-YEAR EMPLOYMENT CONTRACT EXECUTED PRIOR TO HIS DEPARTURE FROM THE UNITED STATES. HE HAS RESIDED IN PANAMA CITY, PANAMA, HIS OFFICIAL HEADQUARTERS, SINCE HIS ARRIVAL THERE, JANUARY 22, 1956.

SECTION 105 OF THE CIVIL FUNCTIONS APPROPRIATION ACT, 1954, AS AMENDED BY SECTION 107 OF THE CIVIL FUNCTIONS APPROPRIATION ACT, 1955, 68 STAT. 335, PROVIDES, IN PERTINENT PART, THAT:

* * * AMOUNTS EXPENDED BY THE CANAL ZONE GOVERNMENT FOR FURNISHING EDUCATION, AND HOSPITAL AND MEDICAL CARE TO EMPLOYEES OF AGENCIES OF THE UNITED STATES AND THEIR DEPENDENTS * * * LESS AMOUNTS PAYABLE BY SUCH EMPLOYEES AND THEIR DEPENDENTS HEREAFTER SHALL, NOTWITHSTANDING ANY OTHER PROVISION OF LAW, BE FULLY REIMBURSABLE TO THE CANAL ZONE GOVERNMENT BY SUCH AGENCIES. THE APPROPRIATION OR FUND OF ANY SUCH OTHER AGENCY BEARING THE COST OF THE COMPENSATION OF THE EMPLOYEE CONCERNED IS HEREBY MADE AVAILABLE FOR SUCH REIMBURSEMENTS. ( ITALICS SUPPLIED.)

SINCE MR. GORDON IS NOT STATIONED IN AND DOES NOT RESIDE IN THE CANAL ZONE, BUT RATHER IN AN AREA CONTIGUOUS THERETO, A PRELIMINARY QUESTION ARISES AS TO WHETHER THE CANAL ZONE GOVERNMENT PROPERLY MAY BILL THE BUREAU OF PUBLIC ROADS FOR MEDICAL COSTS IN EXCESS OF THE AMOUNTS PAYABLE BY SUCH EMPLOYEE AND HIS DEPENDENTS.

SECTION 107 ORIGINALLY WAS ENACTED INTO LAW BY THE CONGRESS AS SECTION 105 OF THE CIVIL FUNCTIONS APPROPRIATION ACT, 1954, 67 STAT. 202. IT WAS REMEDIAL LEGISLATION AND WAS ENACTED FOR THE EXPRESS PURPOSE OF CORRECTING THE EXTENT OF THE SUBSIDIZATION OF OTHER GOVERNMENT AGENCIES BY THE CANAL ZONE GOVERNMENT WITH RESPECT TO THE FURNISHING OF EDUCATION, AND HOSPITAL AND MEDICAL CARE TO THE EMPLOYEES OF THOSE AGENCIES.

DURING THE HEARINGS BEFORE THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, 83D CONGRESS, ST SESSION, CONCERNING THE BILL THAT LATER BECAME THE CIVIL FUNCTIONS APPROPRIATION ACT, 1954, SUPRA, THE EXTENT OF THE CANAL ZONE GOVERNMENT'S SUBSIDIZATION OF THOSE SERVICES WERE DISCUSSED. FOR EXAMPLE, THE GOVERNOR OF THE CANAL ZONE WAS QUESTIONED BY A MEMBER OF THE SUBCOMMITTEE, AS FOLLOWS (PAGE 144):

MR. HAND. DO I UNDERSTAND THAT YOU SERVE A POPULATION--- MEDICAL HOSPITALS AND CLINICAL CARE--- OF APPROXIMATELY 50,000?

GOVERNOR SEYBOLD. YES.

MR. HAND. WHAT TREATY OBLIGATIONS DO WE HAVE, IF ANY, WITH RESPECT TO THE PERSONS IN THE REPUBLIC OF PANAMA?

GOVERNOR SEYBOLD. WELL, OF COURSE, WE TAKE CARE OF EMPLOYEES OF THE AMERICAN GOVERNMENT IN THE PANAMA AREA, THE DEPARTMENT OF STATE AND THE POINT 4 GROUP. * * * ( ITALICS SUPPLIED.)

THE HOUSE COMMITTEE ON APPROPRIATIONS, IN HOUSE REPORT NO. 450, 83D CONGRESS, ST SESSION, PAGES 14 AND 15, EXPRESSED ALARM AT THE EXTENT OF THE SUBSIDIZATION AND INCLUDED IN THE BILL LANGUAGE TO PROVIDE THAT SERVICES OF THIS NATURE FURNISHED BY THE CANAL ZONE GOVERNMENT TO EMPLOYEES OF OTHER GOVERNMENT AGENCIES WOULD BE FULLY REIMBURSABLE BY THE USING AGENCIES, AND THE PROPOSED LANGUAGE SUBSEQUENTLY WAS ENACTED AS SECTION 105 OF THE 1954 ACT.

EARLY IN 1954, THE SECRETARY, PANAMA CANAL COMPANY, REQUESTED OUR DECISION AS TO WHETHER UNDER SECTION 105, THE CANAL ZONE GOVERNMENT WAS ENTITLED TO REIMBURSEMENT FOR SCHOOL AND HOSPITAL SERVICES USED BY OTHER GOVERNMENT AGENCIES OPERATING IN THE CANAL ZONE AND IN THE ADJACENT REPUBLIC OF PANAMA. IN OUR DECISION OF MARCH 3, 1954, B 118229, TO THE GOVERNOR OF THE CANAL ZONE, WE HELD THAT, WITHOUT EXPRESS STATUTORY AUTHORITY, THE APPROPRIATIONS OF ANY DEPARTMENT OR AGENCY WERE NOT AVAILABLE TO REIMBURSE THE CANAL ZONE GOVERNMENT FOR FREE MEDICAL CARE OR HOSPITALIZATION FURNISHED ITS EMPLOYEES, SINCE SECTION 106 OF THE 1954 ACT, WHICH DENIED FREE MEDICAL CARE AND HOSPITALIZATION AT GOVERNMENT EXPENSE TO EMPLOYEES OF THE CANAL ZONE GOVERNMENT AND THE PANAMA CANAL COMPANY, NEGATIVED THE CONCEPT THAT FREE MEDICAL CARE OR HOSPITALIZATION MAY BE FURNISHED EMPLOYEES OF ANY OTHER GOVERNMENT DEPARTMENT OR AGENCY OPERATING IN THE CANAL ZONE OR IN THE REPUBLIC OF PANAMA.

EARLY IN 1955, DURING THE HEARINGS BEFORE THE SUBCOMMITTEE ON APPROPRIATIONS, UNITED STATES SENATE, 83D CONGRESS, 2D SESSION, ON H.R. 8763, WHICH LATER WAS ENACTED INTO LAW AS THE CIVIL FUNCTIONS APPROPRIATION ACT, 1955, SUPRA, THE GOVERNOR OF THE CANAL ZONE COMMENTED ON SECTION 105 OF THE 1954 ACT, AS FOLLOWS (PAGE 1536):

THE APPLICATION OF SECTION 105 OF THE 1954 APPROPRIATION ACT HAS INVOLVED SOME PROBLEMS WHICH DESERVE FURTHER CONSIDERATION BY THE COMMITTEE. THESE PROBLEMS CONCERN THE EXTENT OF THE OBLIGATION OF OTHER AGENCIES TO REIMBURSE THE CANAL ZONE GOVERNMENT FOR SCHOOL AND HOSPITAL SERVICES, AND THE IMPACT ON CERTAIN GROUPS OF CANAL ZONE RESIDENTS OF NEW POLICIES OF RECOVERING THE COST OF HOSPITAL SERVICES.

PRIOR TO THE ADOPTION OF SECTION 105 THE CANAL ZONE GOVERNMENT, AS A PART OF THE LOCAL GOVERNMENT OF THE CANAL ZONE, FURNISHED FREE PRIMARY AND SECONDARY EDUCATION FOR CHILDREN OF ALL RESIDENTS OF THE CANAL ZONE AND OF EMPLOYEES OF THE UNITED STATES GOVERNMENT IN THE ADJACENT TERRITORY OF THE REPUBLIC OF PANAMA. HOSPITAL SERVICE WAS FURNISHED WITHOUT CHARGE TO EMPLOYEES OF THE CANAL AGENCIES, AND AT REDUCED RATES, DEPENDING ON THE ABILITY OF THE HEAD OF THE FAMILY TO PAY, TO FAMILIES OF CANAL EMPLOYEES AND TO EMPLOYEES OF OTHER GOVERNMENT AGENCIES AND THEIR FAMILIES. OTHER GOVERNMENT AGENCIES WHICH WERE AUTHORIZED BY LAW TO REIMBURSE THE LOCAL GOVERNMENT FOR THE COST OF THESE SERVICES FURNISHED TO THEIR PERSONNEL DID SO TO THE EXTENT OF THAT AUTHORIZATION. SECTION 105 OF THE 1954 APPROPRIATIONS ACT PROVIDES THAT AMOUNTS EXPENDED BY THE CANAL ZONE GOVERNMENT IN PROVIDING SCHOOL AND HOSPITAL SERVICES FOR GOVERNMENT AGENCIES OTHER THAN THE PANAMA CANAL COMPANY AND CANAL ZONE GOVERNMENT HEREAFTER SHALL, NOTWITHSTANDING ANY OTHER PROVISION OF LAW, BE FULLY REIMBURSABLE TO THE CANAL ZONE GOVERNMENT BY SUCH OTHER AGENCIES. ITALICS SUPPLIED.)

AFTER CONSIDERATION OF THIS AND OTHER TESTIMONY RELATING TO THE EXTENT AND THE OPERATION OF THE SUBSIDIZATION, THE SENATE AMENDED SECTION 105 OF THE 1954 ACT AND THE AMENDMENT WAS ENACTED INTO LAW AS SECTION 107 OF THE CIVIL FUNCTIONS APPROPRIATION ACT, 1955, SUPRA. SIGNIFICANTLY, AT PAGE 25 OF SENATE REPORT 1373, 83D CONGRESS, 2D SESSION, IN WHICH IS DISCUSSED THE REASONS FOR THE AMENDATORY LANGUAGE, NO FINITE DISTINCTION IS MADE BETWEEN EMPLOYEES OF THE GOVERNMENT RESIDING IN THE CANAL ZONE AND IN ITS CONTIGUOUS AREA. THUS, BOTH IN CONSIDERING SECTION 105 OF THE 1954 ACT AND SECTION 107 OF THE 1955 ACT, THE CONGRESS WAS AWARE THAT EDUCATION, AND HOSPITAL AND MEDICAL SERVICES HAD BEEN FURNISHED TO EMPLOYEES OF GOVERNMENT AGENCIES AND THEIR DEPENDENTS WHO WERE LOCATED IN AN AREA CONTIGUOUS TO THE CANAL ZONE.

SINCE THE PRIME PURPOSE OF THIS REMEDIAL LEGISLATION WAS TO REDUCE THE EXTENT OF THE CANAL ZONE GOVERNMENT'S SUBSIDIZATION OF THESE SERVICES, AND IN THE ABSENCE IN THE PERTINENT LEGISLATIVE HISTORIES OF ANY CLEAR INDICATIONS TO THE CONTRARY, WE ARE OF THE OPINION THAT EMPLOYEES OF GOVERNMENT AGENCIES STATIONED IN AN AREA CONTIGUOUS TO THE CANAL ZONE WERE INTENDED TO BE INCLUDED WITHIN THE COVERAGE OF SECTION 107 OF THE CIVIL FUNCTIONS APPROPRIATIONS ACT, 1955, SUPRA. THEREFORE, THE CANAL ZONE GOVERNMENT PROPERLY MAY BILL THE BUREAU OF PUBLIC ROADS FOR THE UNRECOVERED COSTS OF MEDICAL SERVICES FURNISHED TO MR. GORDON AND HIS DEPENDENTS.

SECTION 107 GENERALLY REQUIRES GOVERNMENT AGENCIES TO REIMBURSE THE CANAL ZONE GOVERNMENT FOR THAT PORTION OF THE COST OF FURNISHING THE INDICATED SERVICES TO EMPLOYEES OF SUCH AGENCIES AND THEIR DEPENDENTS WHICH IS NOT RECOVERED THROUGH ASSESSMENT OF CHARGES TO THE EMPLOYEES THEMSELVES. SEE DECISION OF JANUARY 18, 1956, B-124786, TO THE GOVERNOR OF THE CANAL ZONE, AND 34 COMP. GEN. 510. HOWEVER, WE NOTE THAT THERE IS NOTHING IN THE VOUCHER OR IN THE ITEMIZED STATEMENTS ATTACHED THERETO WHICH INDICATES WHETHER THE CANAL ZONE GOVERNMENT HAS ESTABLISHED AN APPROPRIATE CHARGE FOR POLIO INOCULATIONS SUCH AS ARE INVOLVED HERE AND WHETHER MR. GORDON HAS PAID SUCH CHARGES. FROM ALL THAT APPEARS, THE INVOICE MAY REPRESENT THE ASSESSED CHARGE IN WHICH EVENT PAYMENT SHOULD BE MADE BY MR. GORDON. IF THAT BE THE CASE THE VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT. HOWEVER, IF IT BE DETERMINED THAT THE $22 BILLED BY THE CANAL ZONE GOVERNMENT REPRESENTS UNRECOVERED COSTS IN EXCESS OF THOSE PAYABLE BY THE EMPLOYEE, THE INVOICE MAY BE PAID FROM THE APPROPRIATION BEARING THE COST OF THE COMPENSATION OF THE EMPLOYEE.