B-164486, JUN. 27, 1968

B-164486: Jun 27, 1968

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THE CITED REGULATION PROVIDES THAT REIMBURSEMENT FOR OTHERWISE ALLOWABLE EXPENSES INCIDENT TO THE SALE AND PURCHASE OF RESIDENCES MAY BE MADE ONLY IF: "THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION. EXCEPT THAT AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED BY THE HEAD OF THE DEPARTMENT OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION.'. THE FIRST CASE YOU PRESENT INVOLVES AN EMPLOYEE WHOSE TRANSFER WAS EFFECTIVE AUGUST 21. THAT EMPLOYEE DECIDED TO LEASE HIS RESIDENCE AT HIS OLD OFFICIAL STATION BECAUSE THE REAL ESTATE MARKET WAS NOT FAVORABLE AT THE TIME HE WAS TRANSFERRED.

B-164486, JUN. 27, 1968

TO MR. MACY:

WE REFER TO YOUR LETTER OF MAY 29, 1968, CONCERNING THE PROPRIETY OF REIMBURSING TWO EMPLOYEES OF THE CIVIL SERVICE COMMISSION FOR THE EXPENSES THEY INCURRED IN THE SALE AND PURCHASE OF RESIDENCES INCIDENT TO TRANSFERS OF OFFICIAL STATION UNDER THE PROVISIONS OF 5 U.S.C. 5724A (A) IN VIEW OF THE RESTRICTION CONTAINED IN SECTION 4.1D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56.

THE CITED REGULATION PROVIDES THAT REIMBURSEMENT FOR OTHERWISE ALLOWABLE EXPENSES INCIDENT TO THE SALE AND PURCHASE OF RESIDENCES MAY BE MADE ONLY IF: "THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED BY THE HEAD OF THE DEPARTMENT OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION.'

THE FIRST CASE YOU PRESENT INVOLVES AN EMPLOYEE WHOSE TRANSFER WAS EFFECTIVE AUGUST 21, 1966. THE EMPLOYEE CONTRACTED TO PURCHASE A HOME ON JULY 25, 1967, AND MOVED INTO THAT HOME UNDER A RENTAL AGREEMENT ON AUGUST 20, 1967. AS A RESULT OF DELAYS IN OBTAINING A VETERANS ADMINISTRATION LOAN GUARANTEE, FINAL SETTLEMENT OF THE PURCHASE DID NOT TAKE PLACE UNTIL SEPTEMBER 30, 1967.

THE OTHER CASE YOU PRESENT INVOLVES AN EMPLOYEE WHO REPORTED FOR DUTY AT HIS NEW OFFICIAL STATION ON SEPTEMBER 4, 1966. THAT EMPLOYEE DECIDED TO LEASE HIS RESIDENCE AT HIS OLD OFFICIAL STATION BECAUSE THE REAL ESTATE MARKET WAS NOT FAVORABLE AT THE TIME HE WAS TRANSFERRED. AFTER HE LEARNED OF THE ONE-YEAR LIMITATION IMPOSED BY THE QUOTED REGULATION, HE PUT THE RESIDENCE UP FOR SALE. HOWEVER, HE WAS NOT ABLE TO COMPLETE THE SALES TRANSACTION UNTIL AFTER THE ONE YEAR TIME LIMIT HAD EXPIRED PARTLY DUE TO THE FACT THAT SETTLEMENT WAS DELAYED BY THE TIME REQUIRED FOR THE BUYER TO OBTAIN VETERANS ADMINISTRATION GUARANTEED FINANCING. FINAL SETTLEMENT OF THE SALE IN THE SECOND CASE PRESENTED TOOK PLACE ON OCTOBER 26, 1967.

ENCLOSED IS A COPY OF THE DECISION OF MAY 20, 1968, B-163955, IN WHICH IT WAS HELD THAT, UNDER THE RESTRICTION IMPOSED BY SECTION 4.1D OF CIRCULAR NO. A-56, FINAL SETTLEMENT MUST BE WITHIN ONE YEAR AFTER THE EFFECTIVE DATE OF THE EMPLOYEE'S TRANSFER EVEN THOUGH THE SETTLEMENT DATE MAY HAVE BEEN DELAYED BY DIFFICULTIES IN OBTAINING VETERANS ADMINISTRATION GUARANTEED FINANCING. IT WAS ALSO HELD IN THAT CASE THAT THE TERM LITIGATION AS USED IN THE SUBJECT REGULATION REFERS TO ACTION BEFORE THE COURTS. SEE GENERALLY B-164201, MAY 27, 1968, COPY ENCLOSED.

SINCE SETTLEMENT, AS THAT TERM IS GENERALLY USED, OCCURRED IN CONNECTION WITH BOTH OF THE CASES PRESENTED, THE DECISION 46 COMP. GEN. 677 WHICH YOU CITE PROVIDES NO BASIS FOR A CONCLUSION THAT THE EMPLOYEES INVOLVED QUALIFY FOR REIMBURSEMENT UNDER THE REGULATION IN QUESTION BY VIRTUE OF THE SALES CONTRACTS THEY ENTERED INTO PRIOR TO THE EXPIRATION OF THE ONE YEAR ALLOWABLE. SEE B-160799, MAY 20, 1968, COPY ENCLOSED.

REGARDING YOUR COMMENTS ON THE POSSIBLE EXTENSION OF THE ONE YEAR TIME LIMIT IN THE CASES PRESENTED IN VIEW OF THE FACT THAT THE REVISED CIRCULAR NO. A-56 CONTAINING THE REGULATION INVOLVED WAS NOT PUBLISHED UNTIL AFTER THE EMPLOYEES HAD TRANSFERRED, WE NOTE THAT THE INTERIM GUIDELINES ATTACHED TO TRANSMITTAL MEMORANDUM NO. 6, CIRCULAR NO. A 56, DATED JULY 26, 1966, CONTAINED THE FOLLOWING STATEMENT WITH REGARD TO REIMBURSEMENT FOR COSTS INVOLVED IN THE SALE AND PURCHASE OF RESIDENCES:

"SECTION 23 (4) - THIS SECTION CONCERNS THE EXPENSES INCIDENT TO SELLING AND BUYING A HOME AND EXPENSES INCIDENT TO UNEXPIRED LEASES. THE FINAL REGULATIONS WILL DESCRIBE THE VARIOUS TYPES OF EXPENSES WHICH ARE REIMBURSABLE. IT IS ANTICIPATED THAT APPROPRIATE CEILINGS WILL BE ESTABLISHED IN THIS CONNECTION. IN ADDITION, IT IS ANTICIPATED THAT APPROPRIATE TIME LIMITS WILL BE ESTABLISHED WITHIN WHICH THE SALES AND PURCHASES OF RESIDENCES AND SETTLEMENT OF UNEXPIRED LEASES MUST TAKE PLACE.' IT IS FURTHER NOTED THAT THE PUBLIC LAW 89-516 ITSELF PROVIDES THAT THE REGULATIONS TO BE ISSUED THEREUNDER WILL BE RETROACTIVELY EFFECTIVE TO THE DATE OF ENACTMENT. THEREFORE, WE DO NOT BELIEVE THAT THE FACT THAT THE EMPLOYEES WERE TRANSFERRED PRIOR TO THE PROMULGATION OF THE REVISED CIRCULAR NO. A-56 ON OCTOBER 12, 1966, PROVIDES A BASIS FOR EXTENDING THE ONE-YEAR LIMITATION IMPOSED BY SECTION 4.1D THEREOF.

WE MAKE NO COMMENT AS TO WHETHER OR NOT THE REGULATIONS CONTAINED IN CIRCULAR NO. A-56 ARE REQUIRED TO BE PUBLISHED IN THE FEDERAL REGISTER EXCEPT TO NOTE THAT PUBLICATION IN THE FEDERAL REGISTER IS PRIMARILY INTENDED AS A MEANS OF INFORMING INTERESTED MEMBERS OF THE PUBLIC ABOUT THE REQUIREMENTS OF GOVERNMENT REGULATIONS WHEREAS CIRCULAR NO. A-56 IS APPLICABLE ONLY TO GOVERNMENT EMPLOYEES.