B-147870, APRIL 6, 1962, 41 COMP. GEN. 653

B-147870: Apr 6, 1962

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WHICH AIRSPACE IS HELD BY THE STATES UNDER FEE SIMPLE TITLE. IS NOT IN ACCORD WITH THE CONGRESSIONAL PURPOSE OF THE PROVISION. THE PROPOSALS TO REQUIRE EARMARKING OF INCOME AS A CONDITION PRECEDENT TO INCLUDING AIRSPACE USE PROVISIONS IN THE AGREEMENTS ARE NOT APPROVED. THE ASSISTANT SECRETARY OF COMMERCE FOR ADMINISTRATION STATES THAT THE BUREAU OF PUBLIC ROADS IS IN THE PROCESS OF PREPARING POLICY AND PROCEDURE INSTRUCTIONS TO IMPLEMENT THE PROVISIONS OF SECTION 111 OF TITLE 23. PROVIDES AS FOLLOWS: ALL AGREEMENTS BETWEEN THE SECRETARY AND THE STATE HIGHWAY DEPARTMENT FOR THE CONSTRUCTION OF PROJECTS ON THE INTERSTATE SYSTEM SHALL CONTAIN A CLAUSE PROVIDING THAT THE STATE WILL NOT ADD ANY POINTS OF ACCESS TO.

B-147870, APRIL 6, 1962, 41 COMP. GEN. 653

HIGHWAYS - CONSTRUCTION - FEDERAL AID HIGHWAY PROGRAM - AIRSPACE USE REVENUE PROPOSALS TO REQUIRE THE STATES PARTICIPATING IN THE FEDERAL AID HIGHWAY PROGRAM TO EARMARK FOR HIGHWAY PURPOSES INCOME FROM THE LEASING OR RENTING OF AIRSPACE OVER HIGHWAYS, WHICH AIRSPACE IS HELD BY THE STATES UNDER FEE SIMPLE TITLE, ON THE BASIS THAT 23 U.S.C. 111, WHICH PROVIDES THAT THE SECRETARY OF COMMERCE IN HIGHWAY AGREEMENTS "MAY" AUTHORIZE THE STATES TO USE THE AIRSPACE, VESTS DISCRETION IN THE SECRETARY TO INCLUDE OR EXCLUDE SUCH AIRSPACE CLAUSES, IS NOT IN ACCORD WITH THE CONGRESSIONAL PURPOSE OF THE PROVISION, THE WORD "MAY" BEING USED SO THAT THE CLAUSE COULD BE INCLUDED OR EXCLUDED AT THE REQUEST OF A STATE; THEREFORE, IN THE ABSENCE OF ANY CONGRESSIONAL DIRECTION CONCERNING THE DISPOSITION OF INCOME FROM AIRSPACE USE, THE PROPOSALS TO REQUIRE EARMARKING OF INCOME AS A CONDITION PRECEDENT TO INCLUDING AIRSPACE USE PROVISIONS IN THE AGREEMENTS ARE NOT APPROVED, HOWEVER, IN VIEW OF THE SUBSTANTIAL FEDERAL CONTRIBUTION TO THE COSTS OF THE RIGHTS OF WAY, THE MATTER OF RECOGNITION OF THE FEDERAL INTEREST IN AIRSPACE SHOULD BE BROUGHT TO THE ATTENTION OF CONGRESS.

TO THE SECRETARY OF COMMERCE, APRIL 6, 1962:

IN LETTER DATED JANUARY 2, 1962, THE ASSISTANT SECRETARY OF COMMERCE FOR ADMINISTRATION STATES THAT THE BUREAU OF PUBLIC ROADS IS IN THE PROCESS OF PREPARING POLICY AND PROCEDURE INSTRUCTIONS TO IMPLEMENT THE PROVISIONS OF SECTION 111 OF TITLE 23, U.S.C. RELATING TO USE OF THE AIRSPACE ABOVE AND BELOW THE ESTABLISHED GRADE LINE OF INTERSTATE HIGHWAY PAVEMENTS. SECTION 111, DERIVED FROM SECTION 112 OF THE FEDERAL-AID HIGHWAY ACT OF 1956, 70 STAT. 374, 383, AND AMENDED BY SECTION 104 OF THE FEDERAL-AID HIGHWAY ACT OF 1961, 75 STAT. 122, PROVIDES AS FOLLOWS:

ALL AGREEMENTS BETWEEN THE SECRETARY AND THE STATE HIGHWAY DEPARTMENT FOR THE CONSTRUCTION OF PROJECTS ON THE INTERSTATE SYSTEM SHALL CONTAIN A CLAUSE PROVIDING THAT THE STATE WILL NOT ADD ANY POINTS OF ACCESS TO, OR EXIT FROM, THE PROJECT IN ADDITION TO THOSE APPROVED BY THE SECRETARY IN THE PLANS FOR SUCH PROJECT, WITHOUT THE PRIOR APPROVAL OF THE SECRETARY. SUCH AGREEMENTS SHALL ALSO CONTAIN A CLAUSE PROVIDING THAT THE STATE WILL NOT PERMIT AUTOMOTIVE SERVICE STATIONS OR OTHER COMMERCIAL ESTABLISHMENTS FOR SERVING MOTOR VEHICLE USERS TO BE CONSTRUCTED OR LOCATED ON THE RIGHTS -OF-WAY OF THE INTERSTATE SYSTEM. SUCH AGREEMENTS MAY, HOWEVER, AUTHORIZE A STATE OR POLITICAL SUBDIVISION THEREOF TO USE OR PERMIT THE USE OF THE AIRSPACE ABOVE AND BELOW THE ESTABLISHED GRADE LINE OF THE HIGHWAY PAVEMENT FOR SUCH PURPOSES AS WILL NOT IMPAIR THE FULL USE AND SAFETY OF THE HIGHWAY, AS WILL NOT REQUIRE OR PERMIT VEHICULAR ACCESS TO SUCH SPACE DIRECTLY FROM SUCH ESTABLISHED GRADE LINE OF THE HIGHWAY, OR OTHERWISE INTERFERE IN ANY WAY WITH THE FREE FLOW OF TRAFFIC ON THE INTERSTATE SYSTEM. ( ITALICS SUPPLIED.)

THE ASSISTANT SECRETARY ADVISES THAT PRIOR TO THE ENACTMENT OF SECTION 104 OF THE 1961 ACT, THE LAST SENTENCE OF SECTION 111, TITLE 23, AUTHORIZED THE STATES OR POLITICAL SUBDIVISIONS THEREOF TO USE THE AIRSPACE ABOVE AND BELOW HIGHWAY GRADE LINE ONLY FOR THE PARKING OF MOTOR VEHICLES. HE STATES THAT THE PURPOSE UNDERLYING THE AMENDMENT EFFECTED BY SECTION 104, WHICH CHANGED THE LAST SENTENCE OF SECTION 111 TO READ AS QUOTED ABOVE, WAS TO PERMIT OTHER USES BY PUBLIC OR PRIVATE INTERESTS. THIS CONNECTION HE REFERS TO SENATE REPORT NO. 293, 87TH CONGRESS, ST SESSION, PAGE 14, HOUSE REPORT NO. 326, 87TH CONGRESS, ST SESSION, PAGE 11, AND THE COLLOQUY WHICH OCCURRED ON THE FLOOR OF THE SENATE, 107 CONG. REC. 10559 (1961).

WITH RESPECT TO SUCH USE OF THE AIRSPACE IN QUESTION FROM WHICH NO REVENUES WILL ACCRUE, THE ASSISTANT SECRETARY STATES THAT IT IS CLEAR FROM THE LEGISLATIVE HISTORY REFERRED TO THAT THE SECRETARY OF COMMERCE IS AUTHORIZED TO PERMIT SAME PROVIDED THERE IS NOT INVOLVED ANY INTERFERENCE WITH THE FREE FLOW OF INTERSTATE SYSTEM TRAFFIC. HOWEVER, HE ADVISES THAT IT IS CONTEMPLATED THAT INSTANCES WILL ARISE WHERE A STATE DESIRES TO PERMIT USE OF THE AIRSPACE UNDER CIRCUMSTANCES WHICH WOULD RESULT IN INCOME TO THE STATE. HE STATES THAT SUCH USE, STATE LAW PERMITTING, COULD TAKE THE FORM OF A LEASE OF AIRSPACE RIGHTS TO PRIVATE INTERESTS FOR VARIOUS BUILDING PURPOSES. YOUR DEPARTMENT FINDS NOTHING IN THE STATUTE OR ITS LEGISLATIVE HISTORY THAT WOULD PRECLUDE PRIVATE USE IN THIS MANNER. IN THIS CONNECTION THE ASSISTANT SECRETARY POINTS OUT THAT UNDER THE FEDERAL-AID HIGHWAY PROGRAM, THE STATES IN MANY INSTANCES ACQUIRE FEE SIMPLE TITLE TO LAND ACQUIRED FOR HIGHWAY PURPOSES AND THAT THE TITLE THUS ACQUIRED COVERS NOT ONLY SURFACE PROPERTY BUT THE AIR ABOVE AND THE GROUND BELOW THE SURFACE AS WELL. HE STATES THAT WHILE FEDERAL FINANCING OF THE HIGHWAY PROGRAM IS PREDICATED UPON REIMBURSEMENT TO THE STATES OF A PORTION OF THE COSTS INCURRED BY THEM IN CONSTRUCTING HIGHWAYS ON THE VARIOUS FEDERAL-AID SYSTEMS, FEDERAL AID DOES NOT CONTEMPLATE ANY PROPERTY INTEREST BEING TURNED OVER TO THE FEDERAL GOVERNMENT IN CONSIDERATION OF ITS CONTRIBUTION. REFERENCE IS MADE TO 23 U.S.C. 121; ID. 107 (C), AND THE DEFINITION OF THE TERM "CONSTRUCTION" CONTAINED IN 23 U.S.C. 101.

ALTHOUGH PRIVATE USE OF THE AIRSPACE AS INDICATED IS CLEARLY AUTHORIZED UNDER THE STATUTE, YOUR DEPARTMENT FEELS THAT IN DISPOSING OF THE INCOME REALIZED THEREBY SOME RECOGNITION SHOULD BE GIVEN TO THE FACT THAT THE FEDERAL GOVERNMENT HAS CONTRIBUTED IN MOST INSTANCES 90 PERCENT OF THE COSTS OF THE RIGHTS-OF-WAY INVOLVED. AS THE STATUTE AND LEGISLATIVE HISTORY ARE SILENT CONCERNING THE MATTER OF DISPOSITION OF MONIES WHICH MAY ACCRUE AS A RESULT OF THE PERMIT TO USE INTERSTATE RIGHT-OF-WAY AIRSPACE, THE ASSISTANT SECRETARY REQUESTS OUR CONCURRENCE WITH TWO ALTERNATIVE CONCEPTS YOUR DEPARTMENT IS CONSIDERING FOR POSSIBLE INCLUSION IN INTERSTATE PROJECT AGREEMENTS TO GIVE RECOGNITION TO THE FEDERAL INTEREST IN SUCH AIRSPACE BY VIRTUE OF ITS HAVING BEEN FINANCED SUBSTANTIALLY BY THE UNITED STATES FOR HIGHWAY PURPOSES BUT WHICH LATER PRODUCES INCOME UPON DEDICATION TO A NONHIGHWAY USE. THESE CONCEPTS ARE:

1. THAT A PRO RATA SHARE (EQUIVALENT TO THE PERCENTAGE OF FEDERAL CONTRIBUTION TOWARD THE PERTINENT RIGHT OF WAY ACQUISITION COSTS) OF THE NET RECEIPTS TO THE STATE OR POLITICAL SUBDIVISION FROM SUCH AUTHORIZED USE OF AIRSPACE SHALL BE USED BY THE STATE OR POLITICAL SUBDIVISION EXCLUSIVELY FOR THE CONSTRUCTION OF HIGHWAY PROJECTS UPON THE INTERSTATE SYSTEM, WHICH PROJECTS SHALL BE FINANCED FROM SUCH RECEIPTS WITHOUT THE USE OF FEDERAL MATCHING FUNDS.

2. THAT A PRO RATA SHARE (EQUIVALENT TO THE PERCENTAGE OF FEDERAL CONTRIBUTION TOWARD THE PERTINENT RIGHT OF WAY ACQUISITION COSTS) OF THE NET RECEIPTS TO THE STATE OR POLITICAL SUBDIVISION FROM SUCH AUTHORIZED USE OF AIRSPACE SHALL BE USED BY THE STATE OR POLITICAL SUBDIVISION EXCLUSIVELY, WITHOUT FEDERAL MATCHING FUNDS, FOR THE CONSTRUCTION OF ANY PUBLIC HIGHWAY PROJECTS, IRRESPECTIVE OF WHETHER THEY ARE ON ANY FEDERAL- AID SYSTEM.

WE ARE ADVISED THAT UNDER BOTH PROPOSALS THE STATES WOULD BE REQUIRED TO EARMARK SUCH INCOME AND ADMINISTER IT UNDER PROCEDURES WHICH WOULD MAKE POSSIBLE BY MEANS OF AUDIT A DETERMINATION OF COMPLIANCE. YOUR DEPARTMENT BELIEVES THAT THESE PROPOSALS GIVE DUE RECOGNITION TO STATE OWNERSHIP OF THE AIRSPACE INVOLVED IN THAT THE PROCEEDS DERIVED THEREFROM WILL BE USED FOR STATE ROAD PURPOSES; WHILE, AT THE SAME TIME, THEY RECOGNIZE THE PARTNERSHIP ARRANGEMENT BETWEEN THE STATES AND THE FEDERAL GOVERNMENT UNDER WHICH THE INCOME-PRODUCING AIRSPACE WAS ACQUIRED IN THE FIRST INSTANCE. THE ASSISTANT SECRETARY STATES THAT SINCE THE ACT STIPULATES THAT THE SECRETARY MAY AUTHORIZE A STATE OR POLITICAL SUBDIVISION TO USE OR PERMIT THE USE OF AIRSPACE BUT DOES NOT REQUIRE HIM TO DO SO, YOUR DEPARTMENT BELIEVES THAT THE AREA OF DISCRETION LEFT TO HIM IS SUFFICIENTLY BROAD TO EMBRACE THE PROPOSALS SET FORTH HEREIN. THE ASSISTANT SECRETARY THINKS IT NOT ONLY LAWFUL BUT DESIRABLE THAT THE SECRETARY TAKE STEPS TO MITIGATE, BY RELIEVING TO SOME EXTENT FUTURE FEDERAL HIGHWAY CONTRIBUTIONS, WHAT WOULD OTHERWISE AMOUNT TO A VIRTUAL WINDFALL TO THE STATES REALIZED BY THEM UPON AN INVESTMENT FINANCED ALMOST WHOLLY BY THE FEDERAL GOVERNMENT. HE STATES THAT UNDER THE SECOND PROPOSAL, THE FEDERAL HIGHWAY PROGRAM COULD BE EXPECTED TO DERIVE CONSIDERABLE BENEFIT TO THE EXTENT THAT A SUBSTANTIAL PORTION OF ALL PUBLIC HIGHWAYS ARE ON ONE OF THE FEDERAL-AID SYSTEMS. IN ANY EVENT, HE ADVISES THAT THIS PROPOSAL WOULD ASSURE THAT THE INCOME INVOLVED WOULD BE USED FOR HIGHWAY PURPOSES RATHER THAN DIVERTED TO OTHER STATE USES.

OUR OPINION IS REQUESTED AS TO THE LEGALITY OF THE ABOVE PROPOSALS.

PRESUMABLY YOUR DEPARTMENT FEELS THAT BECAUSE OF THE USE OF THE WORD "MAY" IN THE LAST SENTENCE OF 23 U.S.C. 111, THE SECRETARY OF COMMERCE HAS DISCRETION THEREUNDER TO INCLUDE OR EXCLUDE A PROVISION IN THE PROJECT AGREEMENT WITH THE STATE AUTHORIZING THE USE OF AIRSPACE. HOWEVER, IN DETERMINING THE MANDATORY OR DIRECTORY CHARACTER OF A STATUTORY PROVISION, THE PROBLEM, AS WITH OTHER QUESTIONS OF STATUTORY CONSTRUCTION, IS PRIMARILY ONE OF ASCERTAINING THE INTENT OF THE CONGRESS. SEE 3 SUTHERLAND, STATUTORY CONSTRUCTION (3D USED.) SECTION 5803. WHILE ORDINARILY THE WORD "MAY" AS USED IN A STATUTE IS PERMISSIVE, IF PROVISION OR CONTEXT OTHERWISE INDICATES IT, THE MANDATORY MEANING IS REQUIRED. HOLLMAN V. WARREN, 196 P.2D 562. CF. CITY OF BAYONNE V. NORTH JERSEY DISTRICT. WATER SUP. COM-M., 105 A.2D 19; CHESAPEAKE AND O. RY CO. V. PULLMAN, 41 S.E.2D 54; BLACKFORD V. JUDITH BASIN COUNTY, 98 P.2D 872; HARLESS V. CARTER, 267 P.2D 4; SMITH V. CITY COMMISSION OF CITY OF GRAND RAPIDS, 274 N.W. 776.

AS INDICATED ABOVE, PRIOR TO ITS AMENDMENT BY ENACTMENT OF SECTION 104 OF THE FEDERAL-AID HIGHWAY ACT OF 1961, 75 STAT. 122, 23 U.S.C. 111 PROVIDED THAT THE PROJECT AGREEMENTS REFERRED TO THEREIN "MAY" AUTHORIZE A STATE OR POLITICAL SUBDIVISION THEREOF TO USE THE AIRSPACE ABOVE BELOW THE HIGHWAY GRADE LINE FOR THE PARKING OF MOTOR VEHICLES. THE LEGISLATIVE HISTORY OF THE 1956 ACT DISCLOSES THAT THE PURPOSE OF THE SENTENCE WAS TO AUTHORIZE A STATE OR POLITICAL SUBDIVISION THEREOF TO USE THE AIRSPACE ABOVE OR BELOW THE HIGHWAY PAVEMENT FOR PARKING PURPOSES PROVIDED THAT SUCH USE DOES NOT INTERFERE WITH THE FREE FLOW OF TRAFFIC. SEE PAGE 17, SENATE REPORT NO. 1965, 84TH CONGRESS, 2D SESSION, ACCOMPANYING H.R. 10660, WHICH BECAME THE FEDERAL-AID HIGHWAY ACT OF 1956. THUS THE EVIDENT INTENT OF THE SENTENCE WAS TO GRANT TO A STATE OR POLITICAL SUBDIVISION THEREOF THE RIGHT TO USE THE AIRSPACE FOR SUCH PURPOSES AND LEFT NO DISCRETION IN THE SECRETARY TO DENY SUCH RIGHT, SUBJECT TO THE STATED LIMITATION. THE APPARENT SOLE PURPOSE OF SECTION 104 IN CHANGING SUCH SENTENCE WAS TO ENLARGE THE RIGHTS OF A STATE OR POLITICAL SUBDIVISION THEREOF BY AUTHORIZING OTHER USES BY PUBLIC OR PRIVATE INTERESTS. HENCE, IT IS OUR VIEW THAT THE WORD "MAY" WAS USED IN THE SENTENCE IN QUESTION, NOT TO VEST DISCRETION IN THE SECRETARY OF COMMERCE TO DETERMINE WHETHER TO INCLUDE OR EXCLUDE, AS HE SAW FIT, A CLAUSE IN THE PROJECT AGREEMENT AUTHORIZING A STATE TO USE THE AIRSPACE, BUT FOR THE PURPOSE OF PROVIDING FOR THE INCLUSION OF SUCH A CLAUSE AT THE REQUEST OF THE STATE. IN OTHER WORDS "MAY" WAS USED RATHER THAN "SHALL" SO THAT THE INCLUSION OF SUCH A CLAUSE IN THE AGREEMENT WOULD NOT BE NECESSARY IF THE STATE DID NOT DESIRE IT.

FURTHER, THE LEGISLATIVE HISTORY OF THE 1961 LAW WHICH AMENDED 23 U.S.C. 111 TO PROVIDE THAT THE PROJECT AGREEMENT MAY AUTHORIZE A STATE TO USE OR PERMIT OTHERS TO USE THE AIRSPACE, INDICATES THAT LEASING OR RENTING OF SUCH SPACE TO PRIVATE INTERESTS WAS CONTEMPLATED. SEE PAGES 20 AND 21, HEARINGS BEFORE THE SUBCOMMITTEE ON ROADS OF THE HOUSE COMMITTEE ON PUBLIC WORKS, ON THE BILL WHICH, IN EFFECT, BECAME TITLE I OF H.R. 6713, SUBSEQUENTLY ENACTED AS THE FEDERAL-AID HIGHWAY ACT OF 1961.'LEASE" AND "RENT" IMPLY GENERALLY A PAYMENT OF A MONETARY CONSIDERATION FOR THE USE OF PROPERTY. HOWEVER, WE FOUND NOTHING IN THE ACT IN QUESTION OR IN ITS LEGISLATIVE HISTORY TO INDICATE THE INTENT OF CONGRESS CONCERNING THE DISPOSITION OF MONIES WHICH MIGHT ACCRUE TO A STATE AS A RESULT OF RENTING OR LEASING THE USE OF THE RIGHT-OF-WAY AIRSPACE. ABSENT ANY SPECIFIC DIRECTION BY THE CONGRESS CONCERNING DISPOSITION OF RECEIPTS FROM THE USE OF AIRSPACE TO WHICH A STATE HELD FEE SIMPLE TITLE, IT WOULD APPEAR THAT THE CONGRESS DID NOT CONSIDER THE QUESTION OF FEDERAL PARTICIPATION THEREIN.

IN VIEW OF THE FOREGOING, WE HAVE CONSIDERABLE DOUBT THAT YOU HAVE AUTHORITY UNDER 23 U.S.C. 111, TO REQUIRE THE STATE TO AGREE TO THE INCLUSION IN THE PROJECT AGREEMENT OF EITHER OF THE TWO CONCEPTS PROPOSED IN THE ASSISTANT SECRETARY'S LETTER AS A CONDITION PRECEDENT TO INCLUDING IN THE AGREEMENT AUTHORITY FOR THE STATE TO USE OR PERMIT THE USE OF INTERSTATE HIGHWAY AIRSPACE.

HOWEVER, WE AGREE WITH THE VIEWS OF YOUR DEPARTMENT THAT SOME RECOGNITION SHOULD BE GIVEN TO THE FACT THAT THE FEDERAL GOVERNMENT HAS CONTRIBUTED IN MOST INSTANCES 90 PERCENT OF THE COSTS OF THE RIGHTS-OF WAY INVOLVED, ALTHOUGH WE DO NOT FEEL THAT EITHER OF THE TWO CONCEPTS PROPOSED IN THE ASSISTANT SECRETARY'S LETTER GIVE APPROPRIATE RECOGNITION TO THE FEDERAL INTEREST IN SUCH AIRSPACE. THEREFORE, WE SUGGEST THAT YOU MAY WISH TO BRING THE MATTER TO THE ATTENTION OF THE CONGRESS. WE FURTHER SUGGEST THAT YOU MAY WISH TO RECOMMEND TO THE CONGRESS AN AMENDMENT TO THE LAW WHICH, IF ENACTED WOULD RESULT IN A CREDIT TO THE UNITED STATES FROM ANY PROFITS DERIVED BY A STATE FROM USE OF THE AIRSPACE. WE UNDERSTAND THAT THE BUREAU OF THE BUDGET INFORMALLY SUGGESTED THAT THE 1961 AMENDMENT BE WORDED TO INCLUDE SUCH A PROVISION, BUT THAT YOUR DEPARTMENT FELT THAT SUCH LANGUAGE WAS UNNECESSARY AND THEREFORE THE SUGGESTION WAS NOT ADOPTED.

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