B-144902, FEB. 10, 1961

B-144902: Feb 10, 1961

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STATE OF OREGON: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 25. INDIAN RESERVATION ROADS ARE CONSTRUCTED. THE OREGON STATE DEPARTMENT OF MOTOR VEHICLES CONTENDS THAT SINCE THE ROADS IN QUESTION ARE CONSIDERED AS NOT BEING IN PRIVATE OWNERSHIP AND THE UNITED STATES CANNOT HAVE AN AGREEMENT WITH ITSELF FOR THE PURPOSE OF TAKING ADVANTAGE OF THE PROVISIONS OF 2 ORS. A REFUND OF TAX FOR GASOLINE USED BY GOVERNMENT VEHICLES ON INDIAN RESERVATION ROADS IS NOT AUTHORIZED. A SIMILAR CLAIM WAS CONSIDERED BY US IN OUR DECISION OF JUNE 7. A COPY OF WHICH IS ENCLOSED. WE STATED: "BUT THE INSTANT CLAIM FOR REFUND IS NOT NECESSARILY BASED UPON THE PROPOSITION THAT NATIONAL PARK ROADS ARE PRIVATELY OWNED OR UPON PRIVATELY OWNED PROPERTY.

B-144902, FEB. 10, 1961

TO ASSISTANT SECRETARY OF STATE, STATE OF OREGON:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 25, 1960, PROTESTING THE ACTION TAKEN BY THIS OFFICE ON SEPTEMBER 8, 1960, IN OFFSETTING FROM AMOUNTS OTHERWISE DUE THE STATE OF OREGON THE AMOUNT OF $941.46 REPRESENTING REFUND OF STATE MOTOR VEHICLE FUEL TAXES DUE THE UNITED STATES DEPARTMENT OF THE INTERIOR, BUREAU OF INDIAN AFFAIRS, KLAMATH INDIAN AGENCY, KLAMATH AGENCY, OREGON.

INDIAN RESERVATION ROADS ARE CONSTRUCTED, OPERATED AND MAINTAINED EXCLUSIVELY BY THE FEDERAL GOVERNMENT WITH FUNDS PROVIDED UNDER AUTHORITY OF THE PROVISIONS OF SECTION 318A, TITLE 25, UNITED STATES CODE. THE STATE OF OREGON CONTRIBUTES NOTHING TOWARD THE EXPENDITURES RELATING TO THE CONSTRUCTION, OPERATION OR MAINTENANCE OF SUCH ROADS, AND THE ROADS CANNOT IN ANY WAY BE CONSTRUED AS BEING STATE OR COUNTY ROADS. THE OREGON STATE DEPARTMENT OF MOTOR VEHICLES CONTENDS THAT SINCE THE ROADS IN QUESTION ARE CONSIDERED AS NOT BEING IN PRIVATE OWNERSHIP AND THE UNITED STATES CANNOT HAVE AN AGREEMENT WITH ITSELF FOR THE PURPOSE OF TAKING ADVANTAGE OF THE PROVISIONS OF 2 ORS, 1953 ED., 319.320, A REFUND OF TAX FOR GASOLINE USED BY GOVERNMENT VEHICLES ON INDIAN RESERVATION ROADS IS NOT AUTHORIZED.

A SIMILAR CLAIM WAS CONSIDERED BY US IN OUR DECISION OF JUNE 7, 1960, B- 142528, PUBLISHED AT 39 COMP. GEN. 816, INVOLVING TAXES PAID ON MOTOR VEHICLE FUEL USED EXCLUSIVELY BY THE UNITED STATES GOVERNMENT WITHIN CRATER LAKE NATIONAL PARK, CRATER LAKE, OREGON. IN THAT DECISION, A COPY OF WHICH IS ENCLOSED, WE STATED:

"BUT THE INSTANT CLAIM FOR REFUND IS NOT NECESSARILY BASED UPON THE PROPOSITION THAT NATIONAL PARK ROADS ARE PRIVATELY OWNED OR UPON PRIVATELY OWNED PROPERTY. CLAUSE (2)OF SECTION 319.320 PROVIDES FOR REFUND OF MOTOR VEHICLE FUEL TAXES WHERE THE FUEL IS USED ON ANY ROAD OR THOROUGHFARE OTHER THAN A STATE HIGHWAY OR COUNTY ROAD AND WHERE THE USER IS OBLIGATED UNDER AGREEMENT WITH THE UNITED STATES OR ITS LICENSEE TO CONSTRUCT OR MAINTAIN THE ROAD OR THOROUGHFARE AT THE USER'S EXPENSE OR TO PAY A REASONABLE CONSIDERATION FOR THE USE OR RIGHT OF WAY THEREOF. NATIONAL PARK ROADS CLEARLY ARE NOT STATE HIGHWAYS OR COUNTY ROADS WITHIN THE PURVIEW OF CLAUSE (2). THEREFORE, THE HOLDING IN OPINIONS OF THE ATTORNEY GENERAL, 1946-1948, P. 495, DENYING TAX REFUND TO A PRIVATE CORPORATION IN A SITUATION INVOLVING A UNITED STATES FOREST ROAD WHICH WAS AUTHORIZED BY THE UNITED STATES TO BE RECONSTRUCTED, MAINTAINED AND USED BY THE CORPORATION, WOULD NOT APPEAR TO BE FOR APPLICATION UNDER THE PRESENT LAW. AND IT WOULD APPEAR THAT USERS OF SUCH ROADS WHO ARE REQUIRED TO PAY A FEE TO THE UNITED STATES ARE ALSO ENTITLED UNDER CLAUSE (2) TO APPROPRIATE REFUNDS OF TAXES.

"WE SUBMIT THAT IT IS ANOMALOUS TO CONSTRUE THE OREGON STATUTE AS AUTHORIZING A REFUND OF MOTOR VEHICLE FUEL TAXES TO PERSONS WHO ARE GRANTED BY THE UNITED STATES THE LICENSE TO CONSTRUCT, MAINTAIN, OR USE ITS ROADS BUT THAT WHERE SUCH ROADS ARE CONSTRUCTED, MAINTAINED AND USED BY THE UNITED STATES ITSELF, REFUND OF TAXES TO THE UNITED STATES IS NOT AUTHORIZED. READING CLAUSES (1) AND (2) OF SECTION 319.320 TOGETHER IT IS MANIFEST THAT THE LEGISLATURE OF THE STATE OF OREGON HAS RECOGNIZED THE EQUITIES DICTATING THAT FUEL USED IN VEHICLES TRAVELING OVER PRIVATE PROPERTY SHOULD NOT BE TAXED AND, SO FAR AS PUBLIC THOROUGHFARES OF THE UNITED STATES ARE CONCERNED, FOR THE CONSTRUCTION OR MAINTENANCE OF WHICH NEITHER THE STATE NOR ANY COUNTY CONTRIBUTES, THAT USERS THEREOF SHOULD NOT BE REQUIRED TO BEAR ANY REASONABLE PORTION OF THE EXPENSE OF CONSTRUCTING OR MAINTAINING THEM AND TO PAY MOTOR VEHICLE FUEL TAXES ALSO. AND WE BELIEVE THE ONLY REASONABLE CONSTRUCTION OF THE STATUTE REQUIRES THE GRANTING OF A REFUND TO THE UNITED STATES UNDER THE CIRCUMSTANCES HERE INVOLVED. WHILE THE GENERAL UNITED STATES EXEMPTION FROM PAYMENT OF THE MOTOR VEHICLE FUEL TAX HAS BEEN REPEALED, WE DO NOT BELIEVE THAT THE REPEAL IS OF ANY SIGNIFICANCE IN INTERPRETING CLAUSE (2) OF SECTION 319.320, WHICH, IN ESSENCE, IS A STATUTE GRANTING RELIEF FROM TAXES ON THE BASIS OF EQUITABLE CONSIDERATIONS ALONE.'

THE HOLDING IN THE CRATER LAKE DECISION IS EQUALLY APPLICABLE TO THE CIRCUMSTANCES HERE INVOLVED, AND WE MUST ADVISE THAT FOR THE REASONS FULLY SET FORTH THEREIN YOUR CLAIM FOR RELEASE OF $941.46 SET OFF FROM MONEYS OTHERWISE DUE THE STATE OF OREGON, ON ACCOUNT OF MOTOR VEHICLE FUEL TAXES PAID WITH RESPECT TO FUEL USED BY THE UNITED STATES EXCLUSIVELY ON KLAMATH INDIAN ROADS IS DENIED.