B-154113, JUN. 24, 1964

B-154113: Jun 24, 1964

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BERNARD LINN: REFERENCE IS MADE TO YOUR LETTER OF APRIL 10. THE SUM OF $597.60 WAS SET OFF TO EFFECT COLLECTION OF THE AMOUNTS DUE THE DEPARTMENTS OF THE ARMY AND THE AIR FORCE. YOU URGE PROPER WAYS AND MEANS OF RESOLVING SUCH MATTERS WHICH WILL NOT INFRINGE UPON THE PRIVILEGES AND THE IMMUNITIES OF EITHER THE UNITED STATES OR THE STATE OF SOUTH DAKOTA. ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT OF THE UNITED STATES IS CONCERNED. BY VIRTUE OF THIS LAW WHENEVER THERE IS INVOLVED ANY CLAIM OR DEMAND WHATEVER BY THE UNITED STATES AGAINST ANY PERSON OR ENTITY HAVING A CLAIM AGAINST THE GOVERNMENT. THE GENERAL ACCOUNTING OFFICE NOT ONLY IS AUTHORIZED BUT IS REQUIRED IN THE PROPER EXERCISE OF ITS DUTIES TO SET OFF ONE INDEBTEDNESS AGAINST THE OTHER AND TO CERTIFY FOR PAYMENT.

B-154113, JUN. 24, 1964

TO MR. BERNARD LINN:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 10, 1964, TO THE BUREAU OF LAND MANAGEMENT, DEPARTMENT OF THE INTERIOR, BILLINGS, MONTANA, PROTESTING SET OFF OF $597.60 FROM FUNDS OTHERWISE DUE THE STATE OF SOUTH DAKOTA UNDER THE MINERAL LEASING ACT OF 1920, AS AMENDED, 30 U.S.C. 191. BY LETTER OF MAY 4 WE INFORMED YOU THAT YOUR LETTER HAD BEEN REFERRED TO THIS OFFICE FOR CONSIDERATION.

AS STATED IN YOUR LETTER, THE SUM OF $597.60 WAS SET OFF TO EFFECT COLLECTION OF THE AMOUNTS DUE THE DEPARTMENTS OF THE ARMY AND THE AIR FORCE, NATIONAL GUARD BUREAU, LINCOLN, NEBRASKA, FOR REFUND OF OVERPAYMENTS OF MOTOR VEHICLE FUEL TAX COVERING GASOLINE USED IN GOVERNMENT VEHICLES OPERATED IN THE STATE OF SOUTH DAKOTA. YOU STATE THAT AS COMMISSIONER OF SCHOOL AND PUBLIC LANDS YOU MUST PROTEST THE WITHHOLDING OF THESE FUNDS UNDER THE MINERAL LEASING ACT, AND THAT YOU REFUSE TO BE PLACED IN THE POSITION OF HAVING DEDUCTED FROM THE COMMON SCHOOL FUNDS OF THE STATE CLAIMS BASED ON ALLEGED OBLIGATIONS OF OTHER STATE AGENCIES. YOU URGE PROPER WAYS AND MEANS OF RESOLVING SUCH MATTERS WHICH WILL NOT INFRINGE UPON THE PRIVILEGES AND THE IMMUNITIES OF EITHER THE UNITED STATES OR THE STATE OF SOUTH DAKOTA. ALSO, YOU REQUEST THAT THE AMOUNT SET OFF BE PAID TO YOUR DEPARTMENT AND THAT IN THE FUTURE OTHER MEANS OF COLLECTING CLAIMS AGAINST OTHER DEPARTMENTS BE EMPLOYED.

SECTION 236, REVISED STATUTES, AS AMENDED BY SECTION 305 OF THE BUDGET AND ACCOUNTING ACT, 1921, 42 STAT. 24, 31 U.S.C. 71, PROVIDES:

"ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT, AND ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT OF THE UNITED STATES IS CONCERNED, EITHER AS DEBTOR OR CREDITOR, SHALL BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE.'

BY VIRTUE OF THIS LAW WHENEVER THERE IS INVOLVED ANY CLAIM OR DEMAND WHATEVER BY THE UNITED STATES AGAINST ANY PERSON OR ENTITY HAVING A CLAIM AGAINST THE GOVERNMENT, THE GENERAL ACCOUNTING OFFICE NOT ONLY IS AUTHORIZED BUT IS REQUIRED IN THE PROPER EXERCISE OF ITS DUTIES TO SET OFF ONE INDEBTEDNESS AGAINST THE OTHER AND TO CERTIFY FOR PAYMENT, OR COLLECTION, ONLY THE BALANCE FOUND DUE ON ONE SIDE OR THE OTHER. SEE TAGGART V. UNITED STATES, 17 CT.CL. 322; CHERRY COTTON MILLS, INC., V. UNITED STATES, 103 CT.CL. 243; AFFIRMED 327 U.S. 536; UNITED STATES V. MUNSEY TRUST CO. OF WASHINGTON, D.C., 332 U.S. 234; AND SEABOARD SURETY CO. V. UNITED STATES, 67 F.SUPP. 969. MOREOVER, IT IS WELL ESTABLISHED THAT AMOUNTS FOR WHICH A STATE IS INDEBTED TO THE UNITED STATES ARE FOR SET OFF AGAINST AMOUNTS DUE AGENCIES OF A STATE, EVEN THOUGH THE OPPOSING CLAIMS AROSE FROM SEPARATE TRANSACTIONS. SEE UNITED STATES V. LOUISIANA, 127 U.S. 182.

IN THIS CASE, THE GOVERNMENT HAS MERELY USED FEDERAL FUNDS IN ITS POSSESSION OTHERWISE DUE THE STATE OF SOUTH DAKOTA--- AS DISTINGUISHED FROM ANY PARTICULAR DEPARTMENT OF THE STATE--- UNDER THE TERMS OF SECTION 35 OF THE MINERAL LEASING ACT OF FEBRUARY 25, 1920, AS AMENDED, 30 U.S.C. 191, TO LIQUIDATE A DEBT WHICH THE STATE HAS REFUSED TO HONOR. UNDERSTAND FROM THE DEPARTMENT OF THE INTERIOR THAT THE INDEBTEDNESS OF $597.60 WAS SET OFF FROM THE SUM OF $72,833 DUE THE STATE AND THAT A CHECK IN THE NET AMOUNT OF $72,235.40 WAS DRAWN IN FAVOR OF AND ADDRESSED TO THE TREASURER OF THE STATE OF SOUTH DAKOTA PURSUANT TO THE TERMS OF 30 U.S.C. 191.

IT THUS SEEMS CLEAR THAT THERE IS NO DIRECT FISCAL RESPONSIBILITY BETWEEN THE UNITED STATES AND THE DEPARTMENT OF SCHOOL AND PUBLIC LANDS OF THE STATE OF SOUTH DAKOTA, AND THAT SINCE THE STATE HAS MADE IT NECESSARY TO LIQUIDATE A DEBT PAYABLE BY IT TO THE UNITED STATES THROUGH SET OFF ACTION, RESTORATION OF THE FUNDS SO SET OFF AND WHICH OTHERWISE WOULD BE DUE THE DEPARTMENT OF SCHOOL AND PUBLIC LANDS, IN ACCORDANCE WITH STATE LAW, WOULD APPEAR TO BE A STATE RESPONSIBILITY. ACCORDINGLY, AND FOR THE REASONS STATED HEREIN, YOU ARE ADVISED THAT YOUR REQUEST FOR REFUND OF THE AMOUNT OF $597.60 SET OFF FROM MONEYS OTHERWISE DUE THE STATE OF SOUTH DAKOTA ON ACCOUNT OF MOTOR VEHICLE FUEL TAXES PAID WITH RESPECT TO FUEL USED BY GOVERNMENT VEHICLES OF THE DEPARTMENT OF THE ARMY AND THE AIR FORCE, NATIONAL GUARD BUREAU, OPERATING IN THE STATE, IS DENIED.