B-136720, JULY 18, 1958, 38 COMP. GEN. 36

B-136720: Jul 18, 1958

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PROPERTY - PUBLIC - PRIVATE USE - FACILITY CONSTRUCTED FOR THE USE OF SEVERAL AGENCIES PERMISSION TO A PRIVATE UTILITY COMPANY TO INSTALL CONNECTIONS IN A GOVERNMENT-OWNED NATURAL GAS LINE AND DISTRIBUTION SYSTEM MAY NOT BE REGARDED AS A TEMPORARY REVOCABLE PERMIT OR LICENSE WHICH THE HEAD OF A DEPARTMENT HAS AUTHORITY TO GRANT BUT IS A RIGHT TO PROPERTY OF THE UNITED STATES WHICH ONLY THE CONGRESS HAS THE POWER TO GRANT. A FACILITY CONSTRUCTED BY ONE AGENCY FOR THE USE OF SEVERAL AGENCIES PURSUANT TO AUTHORITY IN 31 U.S.C. 686 IS CONSIDERED THE PROPERTY OF ALL THE AGENCIES ON A PRO RATA BASIS. EVEN THOUGH IT IS IN THE CUSTODY OF ONE OF THE AGENCIES. 1958: REFERENCE IS MADE TO A LETTER DATED JULY 7.

B-136720, JULY 18, 1958, 38 COMP. GEN. 36

PROPERTY - PUBLIC - PRIVATE USE - FACILITY CONSTRUCTED FOR THE USE OF SEVERAL AGENCIES PERMISSION TO A PRIVATE UTILITY COMPANY TO INSTALL CONNECTIONS IN A GOVERNMENT-OWNED NATURAL GAS LINE AND DISTRIBUTION SYSTEM MAY NOT BE REGARDED AS A TEMPORARY REVOCABLE PERMIT OR LICENSE WHICH THE HEAD OF A DEPARTMENT HAS AUTHORITY TO GRANT BUT IS A RIGHT TO PROPERTY OF THE UNITED STATES WHICH ONLY THE CONGRESS HAS THE POWER TO GRANT. A FACILITY CONSTRUCTED BY ONE AGENCY FOR THE USE OF SEVERAL AGENCIES PURSUANT TO AUTHORITY IN 31 U.S.C. 686 IS CONSIDERED THE PROPERTY OF ALL THE AGENCIES ON A PRO RATA BASIS, EVEN THOUGH IT IS IN THE CUSTODY OF ONE OF THE AGENCIES, AND NONE OF THE AGENCIES MAY LIMIT, RESTRICT, REDUCE, ABRIDGE OR ENCUMBER IN ANY MANNER THE PRO RATA INTERESTS OF THE OTHER AGENCIES IN THE PROPERTY.

TO THE SECRETARY OF COMMERCE, JULY 18, 1958:

REFERENCE IS MADE TO A LETTER DATED JULY 7, 1958, FROM MR. C. O. SCHICK, CONTRACTING OFFICER, WEATHER BUREAU, FILE NO. A-3.5, REQUESTING A DECISION AS TO WHETHER HE LEGALLY MAY AUTHORIZE THE ALASKA PROPANE COMPANY, INC., TO INSTALL TWELVE TEES AT ITS EXPENSE IN THE GOVERNMENT OWNED NATURAL GAS LINE AND DISTRIBUTION SYSTEM NOW BEING CONSTRUCTED UNDER CONTRACT CWB-9366 WITH THE UNDERSTANDING THAT SUCH AUTHORIZATION WOULD BE SUBJECT TO CERTAIN CONDITIONS AS OUTLINED IN LETTER OF JUNE 27, 1958, FROM THE UNDER SECRETARY OF THE INTERIOR TO THE SECRETARY OF THE NAVY.

IT IS STATED IN THE LETTER OF JULY 7, THAT THE CITED CONTRACT WAS ENTERED INTO WITH THE THORGAARD PLUMBING AND HEATING COMPANY, SEATTLE, WASHINGTON, FOR THE CONVERSION OF THE FACILITIES OF THE SEVERAL GOVERNMENT AGENCIES NAMED IN THE LETTER FROM FUEL OIL AND COAL TO NATURAL GAS; THAT THE NATURAL GAS WILL BE PROVIDED FROM WELLS UNDER CONTROL OF THE DEPARTMENT OF THE NAVY; AND THAT THE CONVERSIONS WILL REDUCE GOVERNMENT FUEL COSTS AT BARROW BY APPROXIMATELY $100,000 PER ANNUM. IN THE EVENT THE ALASKA PROPANE COMPANY, INC., IS PERMITTED TO INSTALL THE TWELVE TEES AND IT IS GRANTED THE RIGHT TO PURCHASE NATURAL GAS FROM THE INVOLVED NAVAL PETROLEUM RESERVE THE OUTLETS WOULD BE USED BY THE COMPANY FOR THE SALE AND DISTRIBUTION OF NATURAL GAS TO THE NATIVES OF BARROW VILLAGE. ALSO, IN THE EVENT INSTALLATION OF THE 12 TEES SHOULD BE AUTHORIZED AND IT SHOULD BECOME NECESSARY FOR THE GOVERNMENT TO USE SAME, THE PRESIDENT OF THE ALASKA PROPANE COMPANY, INC., BY LETTER DATED JULY 3, 1958, HAS OFFERED TO PERMIT SUCH USE WITHOUT COST TO THE GOVERNMENT, A FACTOR WHICH THE CONTRACTING OFFICER STATES WILL ENHANCE THE VALUE OF THE NATURAL GAS LINE AND DISTRIBUTION SYSTEM TO THE GOVERNMENT. IN THE SAME LETTER, THE PRESIDENT HAS INDICATED THAT IF THE PROPOSED INSTALLATION SHOULD BE PERMITTED AND IF AT SOME FUTURE DATE A CONTRACT FOR THE PURCHASE OF THE NATURAL GAS SHOULD BE AWARDED TO ANOTHER COMPANY AFTER PUBLIC SALE, HIS COMPANY THEN WOULD RELINQUISH TO THE GOVERNMENT, WITHOUT COST, ALL CLAIMS, RIGHTS AND TITLE TO THE 12 TEES.

THE ENCLOSURES FORWARDED WITH MR. SCHICK'S LETTER INDICATE THAT THIS MATTER HAS BEEN PREVIOUSLY DISCUSSED WITH NUMEROUS GOVERNMENT OFFICIALS INCLUDING, AMONG OTHERS, THE DIRECTOR OF NAVAL PETROLEUM RESERVES AND OFFICIALS OF THE DEPARTMENT OF THE INTERIOR. IT IS UNDERSTOOD INFORMALLY THAT ORIGINALLY THE DEPARTMENT OF THE INTERIOR OBJECTED TO THE PROPOSED INSTALLATION OF THE 12 TEES ON THE GROUND THAT THE NATIVES WERE NOT PREPARED TO HANDLE GAS; THAT THEIR DWELLINGS WERE NOT EQUIPPED FOR SAME; AND THAT THE DEPARTMENT DID NOT WANT TO ASSUME ANY RESPONSIBILITY IN THE EVENT OF SUCH INSTALLATION.

IN THE CITED LETTER OF JUNE 27, 1958, THE UNDER SECRETARY OF THE INTERIOR INFORMED THE SECRETARY OF THE NAVY THAT ADDITIONAL INTEREST IN THE PROJECT HAS BEEN EXPRESSED BY THE PEOPLE OF THE VILLAGE OF BARROW; THAT THEY ARE WILLING TO REARRANGE THEIR HOMES AND BUILDINGS WITHIN THE VILLAGE TO INSURE ORDERLY DISTRIBUTION OF THE GAS AND THAT UNDER SUCH CIRCUMSTANCES THE DEPARTMENT OF THE INTERIOR WOULD HAVE NO OBJECTION TO A PRIVATE UTILITY COMPANY BEING FORMED WHICH WOULD ASSUME FULL RESPONSIBILITY FOR THE DISTRIBUTION OF GAS TO THE NATIVES PROVIDED THAT: (1) SUITABLE ARRANGEMENTS CAN BE MADE WITH THE SEVERAL GOVERNMENT AGENCIES FOR THE USE OF THE PIPE LINE PRESENTLY BEING INSTALLED AT THEIR EXPENSE, (2) THE DEPARTMENT OF THE NAVY IS WILLING TO SELL GAS FOR THIS PURPOSE, AND (3) THE GAS SUPPLY IS ADEQUATE TO MEET THIS ADDITIONAL LOAD.

AS STATED BY THE SUPREME COURT IN THE CASE OF ROYAL INDEMNITY CO. V. UNITED STATES, 313 U.S. 289, 294, THE POWER TO RELEASE OR OTHERWISE DISPOSE OF THE RIGHTS AND PROPERTY OF THE UNITED STATES IS LODGED IN THE CONGRESS, CITING ARTICLE IV, SECTION 3, CLAUSE 2 OF THE CONSTITUTION. WHILE IT HAS BEEN HELD IN A NUMBER OF DECISIONS BY OUR OFFICE AND IN OPINIONS OF THE ATTORNEY GENERAL THAT THE HEAD OF A GOVERNMENT DEPARTMENT HAS AUTHORITY TO GRANT TO INDIVIDUALS OR ORGANIZATIONS REVOCABLE LICENSES OR PERMITS IN THE PUBLIC INTEREST FOR THE USE OF GOVERNMENT PROPERTY INCLUDING REAL OR PERSONAL, TANGIBLE OR INTANGIBLE, THE ARRANGEMENT IN THIS INSTANCE UNDER WHICH THE ALASKA PROPANE COMPANY, INC., WOULD ACQUIRE A VALUABLE RIGHT IN THE LINE AND DISTRIBUTION SYSTEM MAY NOT BE REGARDED AS A REVOCABLE TEMPORARY PERMIT OR LICENSE SINCE UNDER THE ARRANGEMENT THE COMPANY WOULD ONLY RELINQUISH ITS RIGHTS IN THE EVENT OF ITS FAILURE TO ACQUIRE A RIGHT TO PURCHASE GAS PURSUANT TO THE REQUIREMENTS OF 10 U.S.C. 7430 AND 7431.

ASIDE FROM THE FOREGOING, SINCE IT IS UNDERSTOOD THAT THE FUNDS USED FOR CONSTRUCTION OF THE NATURAL GAS LINE AND DISTRIBUTION SYSTEM WERE ADVANCED TO THE WEATHER BUREAU BY THE SEVERAL AGENCIES TO BE BENEFITED FROM THE FACILITIES UNDER SECTION 601 OF THE ECONOMY ACT OF 1932, 47 STAT. 417, AS AMENDED, 31 U.S.C. 686, SUCH FACILITIES MUST BE REGARDED AS PROPERTY UNDER THE CONTROL OF THOSE AGENCIES ON A PRO RATA BASIS EVEN THOUGH PRESENTLY IN THE CUSTODY OF THE WEATHER BUREAU UNDER THE INVOLVED ARRANGEMENT. COMP. GEN. 565. IN THE CIRCUMSTANCES, THE DEPARTMENT OF COMMERCE WOULD NOT BE AUTHORIZED TO LIMIT, RESTRICT, REDUCE, ABRIDGE, OR ENCUMBER IN ANY MANNER THE PRO RATA INTERESTS OF THE OTHER AGENCIES IN THE FACILITIES. CF. SECTION 161, REVISED STATUTES, 5 U.S.C. 22.

ACCORDINGLY, WE ARE OF THE OPINION THAT NO LEGAL BASIS EXISTS WHICH WOULD PERMIT THE WEATHER BUREAU TO AUTHORIZE THE ALASKA PROPANE COMPANY, INC., TO INSTALL THE TEES IN THE GOVERNMENT-OWNED GAS LINE.