B-204474.OM, JAN 11, 1982

B-204474.OM: Jan 11, 1982

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IT IS NOT CLEAR WHETHER SECTION 28(A) OF ORGANIC ACT OF GUAM (48 U.S.C. SEC. 1421FA)) WAS INTENDED TO APPLY TO THOSE PROPERTIES EMPLOYED FOR BOTH MILITARY AND CIVILIAN PURPOSES OR WHETHER ITS SCOPE WAS LIMITED TO PROPERTIES BENEFITING ONLY CIVILIAN POPULATION OF GUAM. GUAM'S POWER SYSTEM WAS GOVERNED BY SECTION 28(B) AND. NO VIOLATION OF LAW OCCURRED WHEN POWER SYSTEM WAS NOT TURNED OVER TO GOVERNMENT OF GUAM BUT WAS RESERVED FOR MILITARY USE BY PRESIDENT OF UNITED STATES. 2. I HAVE PREPARED THE ATTACHED LEGAL ANALYSIS RELATIVE TO CONGRESSIONAL INTENT ON WHO SHOULD CONTROL GUAM'S POWER GENERATING AND DISTRIBUTION SYSTEM - THE NAVY OR THE GOVERNMENT OF GUAM. WHATEVER MAY HAVE BEEN THE EXPECTATIONS OF GUAM'S CIVILIAN POPULATION.

B-204474.OM, JAN 11, 1982

SUBJECT: REVIEW OF THE POWER SYSTEM ON GUAM (FILE B-204474; CODE 467300) DIGEST: 1. IT IS NOT CLEAR WHETHER SECTION 28(A) OF ORGANIC ACT OF GUAM (48 U.S.C. SEC. 1421FA)) WAS INTENDED TO APPLY TO THOSE PROPERTIES EMPLOYED FOR BOTH MILITARY AND CIVILIAN PURPOSES OR WHETHER ITS SCOPE WAS LIMITED TO PROPERTIES BENEFITING ONLY CIVILIAN POPULATION OF GUAM. HOWEVER, IT APPEARS THAT, AS OF AUGUST 1, 1950, GUAM'S POWER SYSTEM WAS GOVERNED BY SECTION 28(B) AND, THUS, NO VIOLATION OF LAW OCCURRED WHEN POWER SYSTEM WAS NOT TURNED OVER TO GOVERNMENT OF GUAM BUT WAS RESERVED FOR MILITARY USE BY PRESIDENT OF UNITED STATES. 2. NOTHING IN LEGISLATIVE HISTORIES OF MILITARY CONSTRUCTION AUTHORIZATION AND APPROPRIATION ACTS SPANNING LAST 30 YEARS EVIDENCES A CONGRESSIONAL INTENT THAT NAVY TRANSFER CONTROL OF ALL OR PART OF POWER SYSTEM TO GOVERNMENT OF GUAM.

ASSOCIATE DIRECTOR, ID/SIR - HARRY R. FINLEY:

IN RESPONSE TO YOUR REQUEST, I HAVE PREPARED THE ATTACHED LEGAL ANALYSIS RELATIVE TO CONGRESSIONAL INTENT ON WHO SHOULD CONTROL GUAM'S POWER GENERATING AND DISTRIBUTION SYSTEM - THE NAVY OR THE GOVERNMENT OF GUAM.

I CONCLUDE THAT, WHATEVER MAY HAVE BEEN THE EXPECTATIONS OF GUAM'S CIVILIAN POPULATION, I FOUND NO EVIDENCE THAT CONGRESS OR THE NAVY INTENDED TO TRANSFER THE POWER SYSTEM TO GUAM'S CIVIL GOVERNMENT UNDER SECTION 28(A) OF THE ORGANIC ACT OF GUAM (48 U.S.C. SEC. 1421FA)). I ALSO CONCLUDE THAT NAVY'S POSITION THAT THERE BE A SINGLE ISLAND-WIDE POWER SYSTEM ON GUAM TO BE USED TO SATISFY BOTH MILITARY AND CIVILIAN NEEDS WAS COMMUNICATED TO CONGRESSIONAL MEMBERS ON A NUMBER OF OCCASIONS AND THEY DID NOT AT ANY TIME DISAGREE WITH NAVY'S VIEW. INCIDENTALLY, IN ORDER TO RESPOND TO THIS QUESTION, I HAD TO IDENTIFY OVER 50 LAWS ENACTED SINCE 1950 AUTHORIZING OR APPROPRIATING MONEY FOR MILITARY CONSTRUCTION, INDIVIDUALLY EXAMINE EACH LAW TO DETERMINE WHETHER IT WAS CONCERNED WITH GUAM'S POWER SYSTEM, AND RESEARCH THE LEGISLATIVE HISTORY OF THOSE LAWS FOUND TO BE PERTINENT.

YOU ALSO ASKED WHETHER NEW LEGISLATION WOULD BE REQUIRED TO AUTHORIZE TRANSFER OF THE POWER SYSTEM TO THE CONTROL OF THE GOVERNMENT OF GUAM. BELIEVE THAT NEW LEGISLATION IS UNNECESSARY. UNDER SECTION 28(C) OF THE ORGANIC ACT, THE HEAD OF THE AGENCY HAVING ADMINISTRATIVE SUPERVISION OVER THE PROPERTY CONCERNED (IN GENERAL, THE SECRETARY OF THE INTERIOR BUT IN THE CASE OF THE POWER SYSTEM, THE SECRETARY OF THE NAVY) IS "AUTHORIZED TO LEASE OR TO SELL ON SUCH TERMS AS HE MAY DEEM IN THE PUBLIC INTEREST ANY PROPERTY *** NOT NEEDED FOR PUBLIC PURPOSES." THE SECRETARY OF THE NAVY NEED NOT CONVEY THIS PROPERTY AT FULL MARKET VALUE, SINCE HE HAS AUTHORITY TO ACCEPT WHATEVER TERMS HE FINDS ARE IN THE "PUBLIC INTEREST." IN 1952, THE DEPARTMENT OF INTERIOR USED SECTION 28(C) AUTHORITY TO CONVEY LANDS TO THE GOVERNMENT OF GUAM FOR ONE DOLLAR (SUBJECT TO A STIPULATION CONDITIONING ANY SUBSEQUENT SALE OR LEASE BY THE GUAM GOVERNMENT OF THIS PROPERTY ON OBTAINING INTERIOR'S APPROVAL, OR THE TITLE TO THE LAND WILL AUTOMATICALLY REVERT TO THE UNITED STATES). THUS, THE SECRETARY OF THE NAVY HAS AUTHORITY AT THE PRESENT TIME TO TRANSFER TITLE OF ALL OR PART OF THE POWER SYSTEM TO THE GOVERNMENT OF GUAM BY SALE ON WHATEVER TERMS HE DETERMINES ARE IN THE "PUBLIC INTEREST," WHICH COULD INCLUDE SALE AT A NOMINAL VALUE.

LEGAL ANALYSIS

I. DID CONGRESS INTEND THAT THE NAVY TRANSFER THE ENTIRE POWER SYSTEM TO GUAM'S CIVIL GOVERNMENT UNDER PROVISIONS OF SECTION 28 OF THE ORGANIC ACT OF GUAM (P.L. 81-630)?

NO.

CEDED TO THE UNITED STATES BY SPAIN IN 1898, GUAM WAS PLACED UNDER THE JURISDICTION OF THE NAVY AND ADMINISTERED BY IT UNTIL DECEMBER 1941, WHEN JAPANESE FORCES SEIZED THE ISLAND. RETAKEN BY THE UNITED STATES IN JULY 1944, GUAM WAS GOVERNED BY THE NAVY UNTIL ENACTMENT OF THE ORGANIC ACT OF GUAM ON AUGUST 1, 1950 (48 U.S.C. SEC. 1421 ET SEQ.). THE ORGANIC ACT ESTABLISHED A CIVILIAN GOVERNMENT FOR GUAM AND TRANSFERRED JURISDICTION FROM THE NAVY TO THE DEPARTMENT OF INTERIOR.

SECTION 28 OF THE ACT PERTAINED TO THE TRANSFER OF TITLE OF REAL AND PERSONAL PROPERTY TO THE GOVERNMENT OF GUAM.

"SEC. 28(A) THE TITLE TO ALL PROPERTY, REAL AND PERSONAL, OWNED BY THE UNITED STATES AND EMPLOYED BY THE NAVAL GOVERNMENT OF GUAM IN THE ADMINISTRATION OF THE CIVIL AFFAIRS OF THE INHABITANTS OF GUAM, INCLUDING AUTOMOTIVE AND OTHER EQUIPMENT, TOOLS AND MACHINERY, WATER AND SEWERAGE FACILITIES, BUS LINES AND OTHER UTILITIES, HOSPITALS, SCHOOLS, AND OTHER BUILDINGS, SHALL BE TRANSFERRED TO THE GOVERNMENT OF GUAM WITHIN NINETY DAYS AFTER THE DATE OF ENACTMENT OF THIS ACT.

"(B) ALL OTHER PROPERTY, REAL AND PERSONAL, OWNED BY THE UNITED STATES IN GUAM, NOT RESERVED BY THE PRESIDENT OF THE UNITED STATES WITHIN NINETY DAYS AFTER THE DATE OF ENACTMENT OF THIS ACT, IS HEREBY PLACED UNDER THE CONTROL OF THE GOVERNMENT OF GUAM, TO BE ADMINISTERED FOR THE BENEFIT OF THE PEOPLE OF GUAM, AND THE LEGISLATURE SHALL HAVE AUTHORITY, SUBJECT TO SUCH LIMITATIONS AS MAY BE IMPOSED UPON ITS ACTS BY THIS ACT OR SUBSEQUENT ACT OF THE CONGRESS, TO LEGISLATE WITH RESPECT TO SUCH PROPERTY, REAL AND PERSONAL, IN SUCH MANNER AS IT MAY DEEM DESIRABLE.

"(C) ALL PROPERTY OWNED BY THE UNITED STATES IN GUAM, THE TITLE TO WHICH IS NOT TRANSFERRED TO THE GOVERNMENT OF GUAM BY SUBSECTION (A) HEREOF, OR WHICH IS NOT PLACED UNDER THE CONTROL OF THE GOVERNMENT OF GUAM BY SUBSECTION (B) HEREOF, IS TRANSFERRED TO THE ADMINISTRATIVE SUPERVISION OF THE HEAD OF THE DEPARTMENT OR AGENCY DESIGNATED BY THE PRESIDENT UNDER SECTION 3 OF THIS ACT, EXCEPT AS THE PRESIDENT MAY FROM TIME TO TIME OTHERWISE PRESCRIBE: PROVIDED, THAT THE HEAD OF SUCH DEPARTMENT OR AGENCY SHALL BE AUTHORIZED TO LEASE OR TO SELL, ON SUCH TERMS AS HE MAY DEEM IN THE PUBLIC INTEREST, ANY PROPERTY, REAL AND PERSONAL, OF THE UNITED STATES UNDER HIS ADMINISTRATIVE SUPERVISION IN GUAM NOT NEEDED FOR PUBLIC PURPOSES."

AMONG THE PROPERTY OWNED BY THE NAVY AT THE TIME THE LANGUAGE OF THE ORGANIC ACT WAS BEING DRAFTED WAS THE ISLAND'S ELECTRICAL POWER SYSTEM. IT IS THE CONTENTION OF THE COMMITTEE ON GENERAL GOVERNMENTAL OPERATIONS OF GUAM'S LEGISLATURE AND THE GUAM POWER AUTHORITY THAT THE ELECTRICAL POWER SYSTEM, OWNED BY THE U. S. NAVY, SHOULD HAVE BEEN TURNED OVER TO THE GOVERNMENT OF GUAM IN 1950 PURSUANT TO SECTION 28(A) OF THE ORGANIC ACT. A PAPER PREPARED BY THE GUAM POWER AUTHORITY GIVES ITS PERCEPTION OF EVENTS AT THAT TIME:

"ANTICIPATING THE MANDATORY TRANSFER OF PROPERTIES TO THE NEW CIVILIAN GOVERNMENT, DURING THE YEARS 1948 THRU JULY, 1950, THE NAVAL GOVERNMENT OF GUAM HELD A SERIES OF LAND CONDEMNATION PROCEEDINGS IN A COURT PRESIDED OVER BY A JUDGE APPOINTED BY THE SECRETARY OF THE NAVY. PROPERTIES CONDEMNED INCLUDED, AMONG OTHERS, THE AGANA DIESEL ELECTRIC GENERATING PLANTS, AND THE SUB-TRANSMISSION SYSTEM PITI STEAM PLANT. ON JULY 31, 1950, ONLY A FEW HOURS BEFORE THE IMPLEMENTATION OF THE ORGANIC ACT OF GUAM, WHEN THE PROPERTIES WERE TO HAVE BEEN TURNED OVER TO THE GOVERNMENT OF GUAM, A QUITCLAIM DEED WAS SIGNED BY GOVERNOR CARLTON SKINNER, A DEPARTMENT OF INTERIOR APPOINTEE, WHICH TRANSFERRED ALL TITLES, RIGHTS, AND INTERESTS OF THE CONDEMNED PROPERTIES 'TO THE UNITED STATES FOR ITS OWN USE.' THE FOLLOWING DAY, WHEN THE ORGANIC ACT BECAME LAW, THE NAVY DECIDED IT HAD ALMOST NOTHING OF CONSEQUENCE TO TRANSFER TO THE GOVERNMENT OF GUAM. ON THE DAY FOLLOWING THE EXPIRATION OF THE NINETY-DAY PERIOD, DURING WHICH PROPERTIES WERE TO HAVE BEEN TRANSFERRED TO THE GOVERNMENT OF GUAM, AN EXECUTIVE ORDER, DATED OCTOBER 30, 1950, WAS SIGNED BY PRESIDENT TRUMAN RETURNING THE PROPERTIES LISTED IN THE QUITCLAIM DEED TO THE JURISDICTION OF THE SECRETARY OF THE NAVY. FROM THAT DATE UNTIL AS LATE AS 1970, NAVY CLAIMED SOLE OWNERSHIP OF THE ISLAND'S POWER GENERATING FACILITIES."

GUAM'S POWER SYSTEM, THEN AS NOW, SERVED THE POWER NEEDS OF BOTH THE MILITARY AND CIVILIAN POPULATIONS OF THE ISLAND. SECTION 28(A) REQUIRED THAT ALL PROPERTY OWNED BY THE UNITED STATES ON AUGUST 1, 1950, AND EMPLOYED BY THE NAVAL GOVERNMENT OF GUAM IN THE ADMINISTRATION OF THE CIVIL AFFAIRS OF THE INHABITANTS OF GUAM BE TRANSFERRED TO THE CIVILIAN GOVERNMENT OF GUAM NO LATER THAN OCTOBER 30, 1950. SPECIFICALLY COVERED BY SECTION 28(A) WERE "WATER AND SEWERAGE FACILITIES, BUS LINES AND OTHER UTILITIES." GUAM'S POWER SYSTEM WAS NOT SPECIFICALLY LISTED FOR TRANSFER. IT IS NOT CLEAR EITHER FROM THE FACE OF THE STATUTE OR FROM ITS LEGISLATIVE HISTORY WHETHER SECTION 28(A) WAS INTENDED TO APPLY TO THOSE PROPERTIES EMPLOYED FOR MILITARY AND CIVILIAN PURPOSES OR WHETHER ITS SCOPE WAS LIMITED TO PROPERTIES BENEFITING ONLY THE CIVILIAN POPULATION OF GUAM. ON JULY 31, 1950, ONE DAY PRIOR TO ENACTMENT OF THE ORGANIC ACT, THE NAVAL GOVERNMENT DEEDED THE POWER SYSTEM TO THE UNITED STATES "FOR ITS OWN USE," THUS OSTENSIBLY REMOVING IT FROM SECTION 28(A) COVERAGE.

SECTION 28(B) PERMITTED THE PRESIDENT TO RESERVE FROM TRANSFER BY OCTOBER 30, 1950, ANY PROPERTY OWNED BY THE UNITED STATES. PRESIDENT TRUMAN ACTED AT THE LAST MOMENT, BUT BEFORE THE DEADLINE, TO RESERVE TO THE UNITED STATES GUAM'S POWER GENERATING FACILITIES ALONG WITH A NUMBER OF OTHER PROPERTIES. WHILE THE QUESTION IS NOT ENTIRELY FREE FROM DOUBT, IT APPEARS THAT, AS OF AUGUST 1, 1950, GUAM'S POWER SYSTEM WAS GOVERNED BY SECTION 28(B) AND, THUS, NO VIOLATION OF LAW OCCURRED WHEN THE POWER SYSTEM WAS NOT TURNED OVER TO THE GOVERNMENT OF GUAM BUT WAS RESERVED FOR MILITARY USE BY THE PRESIDENT OF THE UNITED STATES.

IT IS DIFFICULT TO ASCERTAIN WHETHER CONGRESS INTENDED FOR THE NAVY TO RETAIN TITLE AND CONTROL OF GUAM'S POWER SYSTEM. THE LEGISLATIVE HISTORY OF THE ORGANIC ACT OF GUAM SIMPLY DOES NOT ADDRESS THE ISSUE. REFERENCE TO THIS QUESTION IN OTHER DOCUMENTS IS MINIMAL. HOWEVER, IN 1948, A HOUSE COMMITTEE ASKED NAVY OFFICIALS HOW THE CIVILIAN POPULATION OF GUAM WOULD BENEFIT FROM THE CONSTRUCTION OF WATER AND POWER FACILITIES:

"CONGRESSMAN KEEFE. THEN WHAT WE ARE DOING HERE IS TO PROVIDE ALL OF THESE FACILITIES WHICH ARE IN THE NATURE OF UTILITIES FOR THE POPULATION?

"ADMIRAL CARNEY. AT THE PRESENT TIME, THE ARMED FORCES, AND MORE PARTICULARLY THE NAVY, ARE THE SOLE PRACTICAL SUPPORT FOR THE ISLAND OF GUAM IN THE MATTER OF UTILITIES ***.

"MR. KEEFE. DO THEY MAKE ANY CONTRIBUTION TOWARD THE MAINTENANCE OF THESE FUNCTIONS YOU ARE ASKING FOR HERE, TO BUILD OVER ON THAT ISLAND, WHICH I ASSUME ARE FOR THE BENEFIT OF THE CIVILIAN AS WELL AS THE MILITARY PERSONNEL?

"ADMIRAL MANNING. THE CIVILIANS WILL BENEFIT

INDIRECTLY FROM THE WATER-SUPPLY DEVELOPMENT AND THE ROAD SYSTEMS THAT WE PUT IN, AND THE ELECTRICAL POWER.

"MR. KEEFE. WILL THE GUAMANIAN GOVERNMENT MAKE ANY CONTRIBUTION TOWARD THE COST OF THOSE?

"CAPTAIN HANSEN. IT IS THE INTENTION, WHEN THESE UTILITIES ARE BUILT, THAT THEY WILL BE CHARGED JUST LIKE A UTILITY COMPANY ON THE MAINLAND WOULD CHARGE ITS CUSTOMERS." HEARING BEFORE THE SUBCOMMITTEE OF THE HOUSE APPROPRIATIONS COMMITTEE ON THE SECOND DEFICIENCY APPROPRIATION ACT FOR 1948, 80TH CONG., 2D SESS. PT. 2, AT 435-36 (1948).

NAVY'S RESPONSE INDICATED THAT, AT LEAST IN ITS PERCEPTION, THE POWER PLANTS WERE BEING BUILT PRIMARILY FOR MILITARY PURPOSES, ALTHOUGH THE CIVILIAN POPULATION WOULD BENEFIT INDIRECTLY FROM THEIR CONSTRUCTION, AND THAT THE CIVILIAN POPULATION WOULD BE CHARGED FOR THE POWER PROVIDED TO THEM. WE COULD FIND NO SUPPORT IN THE LEGISLATIVE HISTORY FOR THE CONTENTION OF GUAM OFFICIALS THAT CONGRESS INTENDED THAT THE ISLAND'S POWER SYSTEM BE TRANSFERRED TO CIVILIAN CONTROL.

MOREOVER, A 1950 AGREEMENT BETWEEN THE DEPARTMENT OF THE NAVY AND THE DEPARTMENT OF THE INTERIOR WITH RESPECT TO THE TRANSFER OF RESPONSIBILITY FOR THE ADMINISTRATION OF THE GOVERNMENT OF GUAM, DRAFTED PRIOR TO THE ENACTMENT OF THE ORGANIC ACT, PROVIDED AT ARTICLE 3(B) THAT "ALL POWER PLANTS, HIGH VOLTAGE TRANSMISSION LINES, PRIMARY DISTRIBUTION LINES AND SUBSTATIONS CONSTITUTING THE INTERCONNECTED AND COORDINATED ISLAND POWER SYSTEM SHALL BE OPERATED AND MAINTAINED BY THE NAVY IN CONJUNCTION WITH OTHER COMPONENTS OF THE UNITED STATES ARMED FORCES."

THUS, WHATEVER MAY HAVE BEEN THE EXPECTATIONS OF GUAM'S CIVILIAN POPULATION, WE HAVE FOUND NO EVIDENCE THAT CONGRESS OR THE NAVY INTENDED TO TRANSFER THE POWER SYSTEM TO GUAM'S CIVIL GOVERNMENT UNDER SECTION 28(A) OF THE ORGANIC ACT OF GUAM.

II. DID CONGRESS INTEND THAT THERE BE ONE ISLAND-WIDE POWER SYSTEM ON GUAM AND DID CONGRESS INTEND THAT APPROPRIATIONS PROVIDED BY THE NAVY OVER THE YEARS FOR EXPANSION AND IMPROVEMENT OF THE ELECTRICAL POWER SYSTEM SATISFY BOTH MILITARY AND CIVILIAN NEEDS?

YES TO BOTH QUESTIONS.

THERE IS LITTLE OR NO EVIDENCE IN THE LEGISLATIVE HISTORY CONCERNING WHAT CONGRESS AS A BODY INTENDED, BUT THE RECORD IS REPLETE WITH REFERENCES IN HEARINGS BEFORE A HANDFUL OF CONGRESSMEN AND SENATORS AS TO NAVY'S ASSERTION THAT A SINGLE POWER SYSTEM EXISTS ON GUAM, CONTROLLED SOLELY BY THE NAVY, TO SATISFY BOTH MILITARY AND CIVILIAN NEEDS. THESE SENTIMENTS SOMETIMES ARE ECHOED IN COMMITTEE REPORTS. THUS, A 1959 REPORT OF THE HOUSE ARMED SERVICES COMMITTEE AUTHORIZED APPROPRIATIONS TO THE NAVY TO IMPROVE GUAM'S "ELECTRIC POWER SYSTEM" (SINGULAR) SO AS TO ALLEVIATE AN "ISLANDWIDE POWER SHORTAGE ON GUAM." H.R.REP. NO. 223, 86TH CONG., AT 18 (1959).

IN HEARINGS BEFORE THE SENATE ARMED SERVICES COMMITTEE THAT SAME YEAR, A NAVY WITNESS INDICATED THAT BOTH THE NAVY AND THE GOVERNMENT OF GUAM WOULD CONTRIBUTE TO THE TOTAL DOLLAR AMOUNT NEEDED TO MAKE IMPROVEMENTS TO GUAM'S POWER SUPPLY. THE WITNESS ALSO STATED THAT THE POWER SYSTEM, IN ADDITION TO SERVING MILITARY NEEDS, "ALSO, OF COURSE, PROVIDES POWER FOR THE CIVILIAN COMMUNITY WHICH WE ARE GOING TO GET REIMBURSED FOR FROM THE ISLAND GOVERNMENT. WE HAVE ONE POWER SYSTEM ON THE ISLAND." HEARINGS ON S. 1086 AND H.R. 5674 BEFORE THE SUBCOMMITTEE ON MILITARY CONSTRUCTION, SENATE ARMED SERVICES COMMITTEE, 86TH CONG., 1ST SESS. 225 (1959).

ALTHOUGH THE NAVY INTENDED FOR THE GOVERNMENT OF GUAM TO REIMBURSE IT FOR THE POWER SUPPLIED TO IT, APPARENTLY THE COST-SHARING FORMULA FOR FUNDING THE CONSTRUCTION OF IMPROVEMENTS TO THE POWER SYSTEM WAS BASED ON PREDICTIONS OF GUAM'S FUTURE POWER REQUIREMENTS.

"THE GOVERNMENT OF GUAM WILL PARTICIPATE IN THIS PROJECT TO THE EXTENT OF $1,947,000, WHICH AMOUNT IS NOT INCLUDED IN NAVY'S $10,947,000 ESTIMATE AND IS BASED ON THE GOVERNMENT OF GUAM PREDICTED POWER REQUIREMENTS." HEARINGS ON H.R. 4414 AND H.R. 5674 BEFORE THE HOUSE ARMED SERVICES COMMITTEE, 86TH CONG., 1ST SESS. 1109 (1959).

THUS, NAVY EXPECTED GUAM TO PAY FOR THE VALUE OF THE ELECTRICITY IT RECEIVED FROM A POWER PLANT FACILITY THE CONSTRUCTION OF WHICH GUAM HAD HELPED TO FUND. IN THIS, CONGRESS APPEARED TO AGREE, OR AT LEAST ACQUIESCE.

I FOUND NOTHING IN THE LEGISLATIVE HISTORIES OF MILITARY CONSTRUCTION AUTHORIZATION AND APPROPRIATION ACTS SPANNING THE LAST 30 YEARS WHICH EVIDENCES A CONGRESSIONAL INTENT THAT THE NAVY TRANSFER CONTROL OF ALL OR PART OF THE POWER SYSTEM TO THE GOVERNMENT OF GUAM. CONGRESSIONAL COMMITTEE MEMBERS WERE TOLD BY NAVY WITNESSES ON A NUMBER OF OCCASIONS THAT A SINGLE ISLAND-WIDE POWER SYSTEM WAS BEING OPERATED BY THE NAVAL PUBLIC WORKS CENTER, A NAVY INSTALLATION; THAT IT WAS PROVIDING POWER TO BOTH THE MILITARY AND CIVILIAN POPULATIONS OF THE ISLAND; AND THAT THE GOVERNMENT OF GUAM WAS REIMBURSING THE NAVY FOR THE ELECTRICAL POWER IT RECEIVED. AT NO TIME WAS NAVY'S CONTINUED CONTROL OF THE POWER SYSTEM APPARENTLY QUESTIONED BY A MEMBER OF CONGRESS.

III. GUAM IS BEING CHARGED BY THE NAVY FOR AMORTIZATION COSTS OF THE ISLAND-WIDE POWER SYSTEM, WHICH JOINTLY SERVES MILITARY AND CIVILIAN NEEDS. DID CONGRESS INTEND THAT NAVY SHOULD CHARGE THE GOVERNMENT OF GUAM FOR THESE COSTS?

YES.

THIS QUESTION WAS ADDRESSED IN 1967 HEARINGS BEFORE A HOUSE APPROPRIATIONS SUBCOMMITTEE.

"MR. SIKES. THE NAVY SUPPLIES POWER TO THE ENTIRE ISLAND. WHAT ARRANGEMENTS HAVE BEEN MADE FOR REIMBURSEMENT?

"ADMIRAL HUSBAND. WE ARE REIMBURSED, MR. CHAIRMAN, FOR THE COST OF POWER BY BOTH DEFENSE AND NONDEFENSE AGENCIES.

"MR. SIKES. IS IT A REALISTIC RATE OF REIMBURSEMENT?

"ADMIRAL HUSBAND. YES, SIR.

"MR. SIKES. DOES IT INCLUDE THE COST OF AMORTIZATION OF FACILITIES? DOES THE REIMBURSEMENT MAKE YOU WHOLE?

"ADMIRAL HUSBAND. MR. CHAIRMAN, FROM TIME TO TIME THERE HAVE BEEN CAPITAL CONTRIBUTIONS TO THE COST FROM THE DEPARTMENT OF THE INTERIOR THROUGH THE ISLAND GOVERNMENT. I WOULD NOT LIKE TO MAKE THE STATEMENT THAT IT IS MAKING THE NAVY ENTIRELY WHOLE.

"MR. SIKES. I WOULD LIKE TO KNOW WHAT THE EXACT SITUATION IS. WILL YOU HAVE IT RESEARCHED AND PROVIDE US AN ANSWER.

"ADMIRAL HUSBAND. YES, SIR.

"MR. SIKES. THAT SHOULD INCLUDE, OF COURSE, CAPITAL INVESTMENT IN FACILITIES AND DISTRIBUTION LINES AS WELL AS REGULAR OPERATING COSTS. WE WANT TO KNOW WHETHER WE ARE GETTING, IN FACT, PROPER PAYMENT FOR THE COSTS OF THE NAVY.

(THE INFORMATION FOLLOWS:)

"RATES CHARGED ARE BASED ON FEDERAL POWER COMMISSION ACCOUNTING PROCEDURES UNDER WHICH THE LIFE OF THE INDIVIDUAL EQUIPMENT VARIES BETWEEN 15 AND 50 YEARS DEPENDING ON THE TYPE OF EQUIPMENT. THE AMORTIZATION FACTOR VARIES IN ACCORDANCE WITH THE INTEREST RATE PREVAILING AT THE TIME THE INVESTMENT WAS MADE.

RATES WHICH ARE CHARGED OTHER MILITARY AGENCIES AND THE GOVERNMENT OF GUAM FOR ITS OWN GOVERNMENTAL USE, AS DISTINGUISHED FROM THE POWER IT RESELLS TO THE CIVILIAN ECONOMY, INCLUDE ALL OPERATING COSTS BUT DO NOT INCLUDE AMORTIZATION. IN THE CASE OF RESALE OF POWER TO THE CIVILIAN ECONOMY BY THE GOVERNMENT OF GUAM, THE NAVY IS MADE WHOLE FOR THE POWER GENERATING AND DISTRIBUTION FACILITIES FINANCED BY THE NAVY, BY THE INCLUSION, IN THE RATE FOR SUCH SERVICE APPROPRIATE CAPITAL CHARGES AS SET FORTH IN THE PRECEDING PARAGRAPH. HOWEVER, AS TO THE PORTION OF THE NAVY'S GENERATING AND DISTRIBUTION FACILITIES FOR WHICH THE GOVERNMENT OF GUAM CONTRIBUTED FUNDS IN THE AMOUNT OF $4,900,000 TO DATE, ONLY OPERATION AND MAINTENANCE CHARGES ARE REFLECTED IN THE RATE." HEARINGS ON MILITARY CONSTRUCTION APPROPRIATIONS FOR 1968 BEFORE THE SUBCOMM. ON MILITARY CONSTRUCTION APPROPRIATIONS OF THE HOUSE APPROPRIATIONS COMM., 90TH CONG., 1ST SESS., PT. 2, AT 643 (1967).

THUS, CONGRESSMAN SIKES, AS CHAIRMAN OF THE MILITARY CONSTRUCTION APPROPRIATIONS SUBCOMMITTEE, INTENDED THAT NAVY CHARGE THE GOVERNMENT OF GUAM FOR THE AMORTIZATION OF POWER GENERATING AND DISTRIBUTION FACILITIES FINANCED BY THE NAVY. ACCORDING TO THE NAVY, HOWEVER, AMORTIZATION COSTS WERE NOT CHARGED FOR THE PORTION OF THOSE FACILITIES FINANCED BY THE GOVERNMENT OF GUAM.