B-16194, APRIL 29, 1941, 20 COMP. GEN. 699

B-16194: Apr 29, 1941

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IS NOT SUBJECT TO ASSIGNMENT TO ANOTHER FEDERAL AGENCY UNDER THE PROVISIONS OF THE ACT OF AUGUST 27. THE PURPOSE FOR WHICH IT WAS CREATED. 1941: I HAVE YOUR LETTER OF APRIL 15. A PROPOSAL WAS RECEIVED FROM THE RECONSTRUCTION FINANCE CORPORATION SPECIFYING A RENTAL OF $1. THE DEPARTMENT IS IN DOUBT WHETHER IT COULD LEGALLY UNDERTAKE TO PAY RENT AT THE RATE SPECIFIED OR AT ANY RATE IN EXCESS OF THE REASONABLE MAINTENANCE COSTS OF THE AREA PROPOSED TO BE USED. TO GRANT A FURTHER EXTENSION AT THE END OF THAT TIME PROVIDED NO OTHER ACCEPTABLE OFFER FOR THE PURCHASE OR LEASE OF THE PREMISES IS RECEIVED IN THE MEANWHILE. IT IS REQUESTED THAT YOU FURNISH THIS DEPARTMENT PROMPTLY WITH A DECISION AS TO THE ACCEPTABILITY OF THE PROPOSAL OF THE RECONSTRUCTION FINANCE CORPORATION.

B-16194, APRIL 29, 1941, 20 COMP. GEN. 699

LEASES - RENT - PROPERTY HELD BY THE RECONSTRUCTION FINANCE CORPORATION WHERE REAL PROPERTY UNDER CONTROL OF THE RECONSTRUCTION FINANCE CORPORATION HAS NOT BEEN DECLARED IN EXCESS OF ITS NEEDS BY EITHER THE CORPORATION OR THE PRESIDENT, AND SO, IS NOT SUBJECT TO ASSIGNMENT TO ANOTHER FEDERAL AGENCY UNDER THE PROVISIONS OF THE ACT OF AUGUST 27, 1935, RENTAL PAYMENTS FOR SUCH PROPERTY MAY PROPERLY BE MADE TO THE CORPORATION BY THE POST OFFICE DEPARTMENT, THE GENERAL RULE PROHIBITING PAYMENT OF RENT BY ONE GOVERNMENT AGENCY FOR PROPERTY UNDER THE CONTROL OF ANOTHER NOT BEING APPLICABLE TO THE RECONSTRUCTION FINANCE CORPORATION IN VIEW OF ITS BROAD GENERAL POWERS, FUNCTIONS, AND THE PURPOSE FOR WHICH IT WAS CREATED.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, APRIL 29, 1941:

I HAVE YOUR LETTER OF APRIL 15, 1941, AS FOLLOWS:

IN RESPONSE TO ADVERTISEMENTS FOR QUARTERS FOR THE GARWOOD, NEW JERSEY, POST OFFICE, A PROPOSAL WAS RECEIVED FROM THE RECONSTRUCTION FINANCE CORPORATION SPECIFYING A RENTAL OF $1,056 PER ANNUM (AVERAGE OVER A FIVE- YEAR TERM), WHICH HAS PROVED THE LOWEST ACCEPTABLE OFFER. HOWEVER, IN VIEW OF THE PROVISIONS OF 40 U.S.C. 304A, THE DEPARTMENT IS IN DOUBT WHETHER IT COULD LEGALLY UNDERTAKE TO PAY RENT AT THE RATE SPECIFIED OR AT ANY RATE IN EXCESS OF THE REASONABLE MAINTENANCE COSTS OF THE AREA PROPOSED TO BE USED. ALTHOUGH THE ORIGINAL OFFER EXPIRED ON MARCH 31, THE RECONSTRUCTION FINANCE CORPORATION HAS AGREED TO EXTEND THE OFFER FOR A PERIOD OF SIXTY DAYS FROM APRIL 1, 1941, AND TO GRANT A FURTHER EXTENSION AT THE END OF THAT TIME PROVIDED NO OTHER ACCEPTABLE OFFER FOR THE PURCHASE OR LEASE OF THE PREMISES IS RECEIVED IN THE MEANWHILE.

IT IS REQUESTED THAT YOU FURNISH THIS DEPARTMENT PROMPTLY WITH A DECISION AS TO THE ACCEPTABILITY OF THE PROPOSAL OF THE RECONSTRUCTION FINANCE CORPORATION, IN VIEW OF THE APPARENT LIMITATIONS IMPOSED BY 40 U.S.C. 304A.

THE ACT OF AUGUST 27, 1935, 49 STAT. 885 ( U.S.C. SUPP. IV, TITLE 40, SECTION 304A), REFERRED TO IN YOUR LETTER, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

THAT NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW, WHENEVER ANY REAL PROPERTY LOCATED OUTSIDE OF THE DISTRICT OF COLUMBIA, EXCLUSIVE OF MILITARY OR NAVAL RESERVATIONS, HERETOFORE OR HEREAFTER ACQUIRED BY ANY FEDERAL AGENCY, BY JUDICIAL PROCESS OR OTHERWISE IN THE COLLECTION OF DEBTS, PURCHASE, DONATION, CONDEMNATION, DEVISE, FORFEITURE, LEASE, OR IN ANY OTHER MANNER, IS, IN WHOLE OR IN PART, DECLARED TO BE IN EXCESS OF ITS NEEDS BY THE FEDERAL AGENCY HAVING CONTROL THEREOF, OR BY THE PRESIDENT ON RECOMMENDATION OF THE SECRETARY OF THE TREASURY, THE DIRECTOR OF PROCUREMENT, WITH THE APPROVAL OF THE SECRETARY OF THE TREASURY, IS AUTHORIZED (A) TO ASSIGN OR REASSIGN TO ANY FEDERAL AGENCY OR AGENCIES SPACE THEREIN: PROVIDED, THAT IF THE FEDERAL AGENCY TO WHICH SPACE IS ASSIGNED DOES NOT DESIRE TO OCCUPY THE SPACE SO ASSIGNED TO IT, THE DECISION OF THE DIRECTOR OF PROCUREMENT SHALL BE SUBJECT TO REVIEW BY THE PRESIDENT; OR (B) PENDING A SALE, TO LEASE SUCH REAL PROPERTY ON SUCH TERMS AND FOR SUCH PERIOD NOT IN EXCESS OF FIVE YEARS AS HE MAY DEEM IN THE PUBLIC INTEREST; OR (C) TO SELL THE SAME AT PUBLIC SALE TO THE HIGHEST RESPONSIBLE BIDDER UPON SUCH TERMS AND AFTER SUCH PUBLIC ADVERTISEMENT AS HE MAY DEEM IN THE PUBLIC INTEREST.

SECTION 5 OF THE SAME ACT PROVIDES AS FOLLOWS:

THE TERM " FEDERAL AGENCY," AS USED IN THIS ACT, MEANS ANY EXECUTIVE DEPARTMENT, INDEPENDENT ESTABLISHMENT, COMMISSION, BOARD, BUREAU, DIVISION, OR OFFICE IN THE EXECUTIVE BRANCH, OR OTHER AGENCY OF THE UNITED STATES, INCLUDING CORPORATIONS WHOLLY OWNED BY THE UNITED STATES. ITALICS SUPPLIED.)

UNDER REORGANIZATION PLAN NO. I OF THE REORGANIZATION ACT OF 1939, APPROVED APRIL 3, 1939, THE PUBLIC BUILDINGS BRANCH OF THE PROCUREMENT DIVISION IN THE TREASURY DEPARTMENT AND ITS FUNCTIONS AND PERSONNEL WERE TRANSFERRED FROM THE TREASURY DEPARTMENT TO THE FEDERAL WORKS AGENCY TO BE ADMINISTERED AS THE PUBLIC BUILDINGS ADMINISTRATION WITH A COMMISSIONER OF PUBLIC BUILDINGS AT THE HEAD THEREOF. SECTION 8C OF SAID REORGANIZATION ACT PROVIDES THAT---

ALL LAWS RELATING TO ANY AGENCY OR FUNCTION TRANSFERRED TO, OR CONSOLIDATED WITH, ANY OTHER AGENCY OR FUNCTION UNDER THE PROVISIONS OF THIS TITLE, SHALL INSOFAR AS SUCH LAWS ARE NOT INAPPLICABLE, REMAIN IN FULL FORCE AND EFFECT.

THE CIRCUMSTANCES UNDER WHICH THE PROPERTY OFFERED BY THE RECONSTRUCTION FINANCE CORPORATION WAS ACQUIRED BY THAT AGENCY OR THE MANNER IN WHICH THE PROPERTY IS HELD BY SAID AGENCY ARE NOT DISCLOSED IN YOUR LETTER. UNDER THE SPECIFIC PROVISIONS OF SECTION 1 OF THE ACT OF AUGUST 27, 1935, SUPRA, THE ACT IS NOT APPLICABLE UNLESS THE CORPORATION HAS DECLARED THE PROPERTY TO BE IN EXCESS OF ITS NEEDS, OR SUCH A DECLARATION IS MADE BY THE PRESIDENT ON RECOMMENDATION OF THE FEDERAL WORKS ADMINISTRATOR. IT IS ASSUMED THAT NO SUCH DECLARATION AS REQUIRED BY THE ACT HAS BEEN MADE. HENCE, THE PROVISIONS OF THE ACT OF AUGUST 27, 1935, SUPRA, WOULD NOT APPEAR APPLICABLE TO THE PROPERTY OFFERED BY THE CORPORATION.

ASIDE FROM THE SAID PROVISIONS OF THE ACT OF AUGUST 27, 1935, THE GENERAL RULE IS THAT PAYMENT OF RENT IS UNAUTHORIZED BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER THE ADMINISTRATIVE CONTROL OF ANOTHER DEPARTMENT OR AGENCY. 21 COMP. DEC. 524; 22 ID. 684. ALSO COMPARE 29 OP. ATTY. GEN. 447; 30 ID. 70.

THE RECONSTRUCTION FINANCE CORPORATION IS A CORPORATE AGENCY OF THE GOVERNMENT, WHICH IS ITS SOLE STOCKHOLDER. IT IS MANAGED BY A BOARD OF DIRECTORS APPOINTED BY THE PRESIDENT BY AND WITH THE ADVICE AND CONSENT OF THE SENATE. WHILE IT ACTS AS A GOVERNMENTAL AGENCY IN PERFORMING ITS FUNCTIONS (SEE PITTMAN V. HOME OWNERS' LOAN CORPORATION, 308 U.S. 21, 32, 33), STILL ITS TRANSACTIONS ARE AKIN TO THOSE OF PRIVATE ENTERPRISES. SEE DECISION OF THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF RECONSTRUCTION FINANCE CORPORATION V. J. G. MENIHAN CORPORATION, DECIDED FEBRUARY 3, 1941. THE CORPORATION IS AUTHORIZED UNDER SUCH CONDITIONS AS IT SHALL PRESCRIBE TO TAKE OVER OR PROVIDE FOR THE ADMINISTRATION AND LIQUIDATION OF ANY SECURITY ACCEPTED BY IT FOR LOANS AND ADVANCES MADE BY IT. RECONSTRUCTION FINANCE CORPORATION V. J. G. MEN THAN CORPORATION, D.C.N.Y. 1938, 22 F.1SUPP. 180.

IN DECISION OF MARCH 27, 1937, A-83629, TO YOU, REPORTED IN 16 COMP. GEN. 887, IT WAS HELD, QUOTING FROM THE SYLLABUS, AS FOLLOWS:

THE GENERAL RULE THAT PAYMENT OF RENTAL BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER THE CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY IS UNAUTHORIZED, IS NOT FOR APPLICATION TO QUARTERS OCCUPIED AS A POST OFFICE IN A BUILDING ERECTED AND OWNED BY THE ALASKA RURAL REHABILITATION CORPORATION, THE CORPORATION HAVING BEEN ORGANIZED UNDER THE TERRITORIAL LAWS OF ALASKA, BEING A SEPARATE CORPORATE ENTITY, AND ONLY PARTIALLY UNDER THE SUPERVISION OR CONTROL OF FEDERAL OFFICIALS. COMPARE DECISION OF MARCH 31, 1941, B-15721, 20 COMP. GEN. 581. ALSO, 38 OP. ATTY. GEN. 549.

THE RECONSTRUCTION FINANCE CORPORATION MUST BE CONSIDERED A GOVERNMENT AGENCY BOTH UNDER THE PROVISION OF LAW, 40 U.S.C. 304A, AND OTHERWISE GENERALLY. HOWEVER, ON THE ASSUMPTION THAT THE PROPERTY HERE IN QUESTION IS NOT SUBJECT TO THE CITED PROVISION OF LAW, AND IN VIEW OF THE BROAD POWERS OF THE CORPORATION, ITS FUNCTIONS, AND THE PURPOSES FOR WHICH IT WAS CREATED, THE GENERAL RULE THAT PAYMENT OF RENT BY ONE GOVERNMENT DEPARTMENT OR ESTABLISHMENT FOR PREMISES UNDER THE CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY IS UNAUTHORIZED, NEED NOT BE HELD APPLICABLE TO THE PRESENT MATTER. THEREFORE, YOU ARE ADVISED THAT THIS OFFICE WILL NOT OBJECT TO OTHERWISE PROPER PAYMENTS UNDER A LEASE ENTERED INTO FOR THE SUBJECT PREMISES.