B-154778, AUG. 6, 1964

B-154778: Aug 6, 1964

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THE SETOFF WAS RESORTED TOIN ORDER TO OBTAIN REIMBURSEMENT FOR THE GOVERNMENT'S ENTITLEMENT TO REFUND OF MOTOR VEHICLE FUEL TAXES LEVIED AGAINST THE UNITED STATES. THESE TAXES WERE PAID ON FUEL PURCHASED BY THE DEPARTMENT OF INTERIOR TO OPERATE VEHICLES OVER ROADS CONSTRUCTED AND MAINTAINED BY THE UNITED STATES IN THE JOSHUA TREE NATIONAL MONUMENT WHICH IS A FEDERAL ENCLAVE. IT IS YOUR POSITION THAT INASMUCH AS THE CLAIM FOR REFUND WAS NOT TIMELY FILED BY THE UNITED STATES WITHIN THE 13-MONTH PERIOD PRESCRIBED BY SECTION 8105 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THE CLAIM OF THE UNITED STATES IS NOT VALID AND CANNOT BE SATISFIED BY SETOFF. THE POSITION IS TAKEN BY YOU AND BY THE CALIFORNIA DEPARTMENT OF PUBLIC WORKS IN ITS LETTER OF MAY 28.

B-154778, AUG. 6, 1964

TO THE HONORABLE STANLEY MOSK, ATTORNEY GENERAL, STATE OF CALIFORNIA:

BY LETTER DATED JULY 6, 1964, DEPUTY ATTORNEY GENERAL EDWARD P. HOLLINGSHEAD WROTE TO OUR OFFICE PROTESTING THE SETOFF OF AN AMOUNT DUE THE UNITED STATES FROM THE STATE OF CALIFORNIA FROM FUNDS DUE THE STATE FROM THE DEPARTMENT OF THE NAVY.

SPECIFICALLY--- AT THE DIRECTION OF THIS OFFICE--- THE DEPARTMENT OF THE NAVY HAS SETOFF $471.54 FROM FUNDS OTHERWISE DUE THE STATE OF CALIFORNIA, DIVISION OF BAY TOLL CROSSINGS, UNDER NAVY CONTRACT NBY 48647. THE SETOFF WAS RESORTED TOIN ORDER TO OBTAIN REIMBURSEMENT FOR THE GOVERNMENT'S ENTITLEMENT TO REFUND OF MOTOR VEHICLE FUEL TAXES LEVIED AGAINST THE UNITED STATES. THESE TAXES WERE PAID ON FUEL PURCHASED BY THE DEPARTMENT OF INTERIOR TO OPERATE VEHICLES OVER ROADS CONSTRUCTED AND MAINTAINED BY THE UNITED STATES IN THE JOSHUA TREE NATIONAL MONUMENT WHICH IS A FEDERAL ENCLAVE.

IT IS YOUR POSITION THAT INASMUCH AS THE CLAIM FOR REFUND WAS NOT TIMELY FILED BY THE UNITED STATES WITHIN THE 13-MONTH PERIOD PRESCRIBED BY SECTION 8105 OF THE CALIFORNIA REVENUE AND TAXATION CODE, DEERING'S CALIFORNIA CODES, REV. AND TAX. C.A., SEC. 8105, THE CLAIM OF THE UNITED STATES IS NOT VALID AND CANNOT BE SATISFIED BY SETOFF.

ADDITIONALLY, THE POSITION IS TAKEN BY YOU AND BY THE CALIFORNIA DEPARTMENT OF PUBLIC WORKS IN ITS LETTER OF MAY 28, 1964, TO THE NAVAL SUPPLY CENTER AT OAKLAND, CALIFORNIA, THAT THIS PARTICULAR SETOFF--- AGAINST THE SAN FRANCISCO-OAKLAND BAY BRIDGE TOLL REVENUE FUND--- SHOULD NOT BE MADE. IT IS ARGUED THAT INASMUCH AS THIS FUND DRAWS NO MONEY FROM ANY GENERAL FUND OF THE STATE OF CALIFORNIA, SETOFF AGAINST MONIES DUE THIS FUND TO RECOUP AN OBLIGATION OWED BY THE STATE IS IMPROPER. YOU EXPLAIN THAT THE SAN FRANCISCO-OAKLAND BAY BRIDGE TOLL REVENUE FUND CANNOT UNDER PRESENT CALIFORNIA LAW RECOVER THE AMOUNT IN QUESTION FROM THE MOTOR VEHICLE FUEL TAX FUND AND THE CONTROLLER OF CALIFORNIA HAS NO LEGAL AUTHORITY TO PAY THE AMOUNT IN QUESTION OUT OF THE MOTOR VEHICLE FUEL TAX FUND TO THE BAY BRIDGE TOLL REVENUE FUND.

AS TO THE POSITION THAT THE GOVERNMENT'S CLAIM FOR REFUND OF THE TAXES INVOLVED IS PRECLUDED BY SECTION 8105 OF THE CALIFORNIA REVENUE AND TAXATION CODE, IT IS A RULE OF LONG-STANDING THAT THE UNITED STATES IS NOT BOUND BY STATE STATUTES OF LIMITATION UNLESS CONGRESS HAS CLEARLY MANIFESTED ITS INTENTION THAT IT SHOULD BE SO BOUND. SEE UNITED STATES V. SUMMERLIN, 310 U.S. 414, 416 (1940) AND JACKSONVILLE PAPER CO. V. TOBIN, 206 F.2D 333, 334 (1953). IN IN RE HOOPER'S ESTATE, 301 P.2D 419, 421 (1956) THE CALIFORNIA FIRST DISTRICT COURT OF APPEALS RECOGNIZED THIS LONG -STANDING RULE.

AS TO THE SECOND ARGUMENT, THE UNAVAILABILITY OF MONIES DUE THE DIVISION OF BAY TOLL CROSSINGS TO SATISFY THE REFUND DUE FROM THE MOTOR VEHICLE FUEL TAX FUND, THE GOVERNMENT HAS MERELY USED FEDERAL FUNDS IN ITS POSSESSION OTHERWISE DUE THE STATE TO LIQUIDATE A DEBT WHICH THE STATE HAS REFUSED TO HONOR.

BOTH THE DEBIT AND THE CREDIT INVOLVES THE STATE OF CALIFORNIA. MANIFESTLY, THE DIVISION OF BAY TOLL CROSSINGS IS A UNIT OF THE GOVERNMENT OF CALIFORNIA. AMOUNTS FOR WHICH A STATE IS INDEBTED TO THE UNITED STATES ARE FOR SETOFF 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 (1887).

THE FACT THAT THE NAVY'S CONTRIBUTION TOWARD THE CONSTRUCTION PERFORMED UNDER CONTRACT NBY 48647 IS NOT CREDITED TO A GENERAL FUND OF THE STATE OF CALIFORNIA CAN HAVE NO BEARING ON THE RIGHT OF SETOFF EXERCISED BY THE UNITED STATES. ANY DIVERSION OF FUNDS RESULTING FROM THIS SETOFF IS BECAUSE OF STATE PRACTICES. BY REFUSING TO HONOR THE TAX REFUND CLAIM, CALIFORNIA HAS MADE IT NECESSARY TO FORCE USE OF MONIES OTHERWISE DUE THE DIVISION OF BAY TOLL CROSSINGS, ONE GOVERNMENTAL UNIT OF THE STATE OF CALIFORNIA, TO LIQUIDATE A DEBT PAYABLE IN THE FIRST INSTANCE FROM THE CALIFORNIA MOTOR VEHICLE FUEL TAX FUND, ANOTHER UNIT OF THE STATE GOVERNMENT. RESTORATION TO THE SAN FRANCISCO-OAKLAND BAY BRIDGE TOLL REVENUE FUND UNDER THESE CIRCUMSTANCES WOULD APPEAR TO BE A STATE RESPONSIBILITY.

IT IS REGRETTED THAT THE SETOFF INVOLVED WAS FOUND TO BE NECESSARY AND THAT SUCH SETOFF HAS DISRUPTIVE EFFECTS IN THE STATE'S SYSTEM OF FINANCIAL MANAGEMENT. HOWEVER, WE SEE NO ALTERNATIVE TO THIS PROCEDURE.

WHILE WE APPRECIATE YOUR SUGGESTION THAT THE UNITED STATES COULD FILE A CLAIM WITH THE CALIFORNIA BOARD OF CONTROL TO RECOVER THIS SUM OF MONEY, IT MUST BE CLEAR TO YOU--- IN VIEW OF OUR LETTER TO THE CONTROLLER OF CALIFORNIA, B-150285, JANUARY 25, 1963, COPY ENCLOSED--- AND WHAT APPEARS HEREIN, THAT THE UNITED STATES CANNOT ADOPT YOUR SUGGESTION.

WE TRUST THAT WHAT IS CONTAINED HEREIN ADEQUATELY DETAILS THE POSITION OUR OFFICE MUST TAKE IN THE MATTER.