B-67907, AUGUST 20, 1947, 27 COMP. GEN. 105

B-67907: Aug 20, 1947

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ONLY IN CONNECTION WITH THE PURCHASE OF VEHICLES WHICH HAVE BEEN SPECIFICALLY AUTHORIZED IN THE APPLICABLE APPROPRIATION ACT PURSUANT TO THE PROVISIONS OF SECTION 16 (A) OF SAID ACT. AS FOLLOWS: FOR SEVERAL YEARS THE ACTS APPROPRIATING FUNDS FOR THE TREASURY AND POST OFFICE DEPARTMENTS HAVE AUTHORIZED THE BUREAU OF INTERNAL REVENUE TO PURCHASE A LIMITED NUMBER OF AUTOMOBILES FOR USE IN THE FIELD SERVICE OF THE ALCOHOL TAX AND INTELLIGENCE UNITS OF THAT BUREAU. AGAINST THE LIMITATION SET FORTH IN THE APPROPRIATION ACTS HAVE BEEN CHARGED THE PURCHASE OF NEW VEHICLES. OLD AUTOMOBILES HAVE BEEN TRADED IN OR SOLD AT THE TIME NEW VEHICLES WERE PURCHASED. REPLACEMENT AUTOMOBILES FOR THE ALCOHOL TAX AND INTELLIGENCE UNITS ARE OBTAINED THROUGH FORFEITURE AND ACQUISITION OF VEHICLES SEIZED FOR VIOLATIONS OF THE INTERNAL REVENUE LAWS EXCEPT IN THE PACIFIC COAST AREA.

B-67907, AUGUST 20, 1947, 27 COMP. GEN. 105

SALE OF USED VEHICLES - APPLICATION OF PROCEEDS TO PURCHASE PRICE OF NEW VEHICLES IN EXCESS OF APPROPRIATION LIMITATION THE AUTHORITY IN SECTION 8 OF THE ADMINISTRATIVE EXPENSE STATUTE OF AUGUST 2, 1946, FOR APPLICATION OF THE PROCEEDS OF SALE OF OLD VEHICLES TOWARD THE PURCHASE OF NEW MAY BE EXERCISED, IN THE CASE OF PASSENGER VEHICLES, ONLY IN CONNECTION WITH THE PURCHASE OF VEHICLES WHICH HAVE BEEN SPECIFICALLY AUTHORIZED IN THE APPLICABLE APPROPRIATION ACT PURSUANT TO THE PROVISIONS OF SECTION 16 (A) OF SAID ACT, AND MAY NOT BE REGARDED AS AUTHORITY FOR THE SALE OF OLD VEHICLES AND THE USE OF THE PROCEEDS THEREOF WITHOUT REGARD TO THE APPROPRIATION LIMITATION RESPECTING THE NUMBER OF PASSENGER VEHICLES WHICH MAY BE PURCHASED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, AUGUST 20, 1947:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF JULY 7, 1947, AS FOLLOWS:

FOR SEVERAL YEARS THE ACTS APPROPRIATING FUNDS FOR THE TREASURY AND POST OFFICE DEPARTMENTS HAVE AUTHORIZED THE BUREAU OF INTERNAL REVENUE TO PURCHASE A LIMITED NUMBER OF AUTOMOBILES FOR USE IN THE FIELD SERVICE OF THE ALCOHOL TAX AND INTELLIGENCE UNITS OF THAT BUREAU. AGAINST THE LIMITATION SET FORTH IN THE APPROPRIATION ACTS HAVE BEEN CHARGED THE PURCHASE OF NEW VEHICLES, VEHICLES OBTAINED BY TRANSFER FROM OTHER AGENCIES AND THOSE ACQUIRED UNDER TITLE III, LIQUOR LAW REPEAL AND ENFORCEMENT ACT, BY THE PAYMENT OF ALLOWED LIENS. UNDER AUTHORITY OF THE GENERAL PROVISIONS OF THE SEVERAL INDEPENDENT OFFICES APPROPRIATIONS ACTS, OLD AUTOMOBILES HAVE BEEN TRADED IN OR SOLD AT THE TIME NEW VEHICLES WERE PURCHASED. IN NO YEAR HAS THE NUMBER OF AUTOMOBILES PURCHASED EXCEEDED THE LIMITATION SET FORTH IN THE ACTS APPROPRIATING FUNDS FOR THE BUREAU OF INTERNAL REVENUE FOR THAT YEAR.

NORMALLY, REPLACEMENT AUTOMOBILES FOR THE ALCOHOL TAX AND INTELLIGENCE UNITS ARE OBTAINED THROUGH FORFEITURE AND ACQUISITION OF VEHICLES SEIZED FOR VIOLATIONS OF THE INTERNAL REVENUE LAWS EXCEPT IN THE PACIFIC COAST AREA, WHERE THE AUTOMOBILES ARE NOT SEIZED AND FORFEITED. HOWEVER, DUE TO WARTIME RESTRICTIONS ON RAW MATERIALS, AND THE NONPRODUCTION OF AUTOMOBILES FOR CIVILIAN USE, THE BUREAU OF INTERNAL REVENUE HAS BEEN ACQUIRING ONLY A SMALL PORTION OF THE NECESSARY REPLACEMENTS WITH THE RESULT THAT THERE IS IN OPERATION AN ACCUMULATION OF OLD, WORN-OUT AUTOMOTIVE EQUIPMENT, WHICH IS DANGEROUS TO DRIVE AND EXPENSIVE TO OPERATE (AS MUCH AS 6 CENTS PER MILE FOR GASOLINE, OIL AND REPAIRS IN SOME AREAS).

IN VIEW OF THE FOREGOING IT IS THE DESIRE OF THE BUREAU OF INTERNAL REVENUE TO SELL A NUMBER OF THE OLD VEHICLES AND IN ACCORDANCE WITH AUTHORITY CONTAINED IN SECTION 8 OF THE ACT OF AUGUST 2, 1946, PUBLIC LAW 600, 79TH CONGRESS, 2ND SESSION, APPLY THE PROCEEDS OF SALE ON THE PURCHASE OF NEW AUTOMOBILES. THE QUESTION HAS ARISEN WHETHER THE LIMITATION IN THE APPROPRIATION ACT WOULD PRECLUDE THE PURCHASE OF AUTOMOBILES IN EXCESS OF SUCH LIMITATION IF THE PURCHASE PRICE WERE PAID-- - NOT FROM APPROPRIATED FUNDS--- BUT ENTIRELY FROM THE PROCEEDS OF SALE OF OLD UNSERVICEABLE AUTOMOBILES.

SECTION 8, PUBLIC LAW 600, READS AS FOLLOWS:

"IN PURCHASING MOTOR-PROPELLED OR ANIMAL-DRAWN VEHICLES OR TRACTORS, OR ROAD, AGRICULTURAL, MANUFACTURING, OR LABORATORY EQUIPMENT, OR BOATS, OR PARTS, ACCESSORIES, TIRES, OR EQUIPMENT THEREOF, OR ANY OTHER ARTICLE OR ITEM THE EXCHANGE OF WHICH IS AUTHORIZED BY LAW, THE HEAD OF ANY DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVE MAY EXCHANGE OR SELL SIMILAR ITEMS AND APPLY THE EXCHANGE ALLOWANCES OR PROCEEDS OF SALES IN SUCH CASES IN WHOLE OR IN PART PAYMENT THEREFOR: PROVIDED, THAT ANY TRANSACTION CARRIED OUT UNDER THE AUTHORITY OF THIS SECTION SHALL BE EVIDENCED IN WRITING.'

THE TREASURY AND POST OFFICE DEPARTMENTS APPROPRIATION ACT, 1947, PUBLIC LAW 518--- 79TH CONGRESS--- 2ND SESSION, PROVIDES FUNDS "FOR THE PURCHASE (NOT TO EXCEED THIRTY-FOUR), HIRE, MAINTENANCE, REPAIR, AND OPERATION OF MOTOR PROPELLED OR HORSE-DRAWN PASSENGER-CARRYING VEHICLES WHEN NECESSARY, FOR OFFICIAL USE OF THE ALCOHOL TAX AND INTELLIGENCE UNITS IN FIELD WORK.' A SIMILAR PROVISION IS CONTAINED IN THE TEXT OF THE 1948 APPROPRIATION FOR THE BUREAU OF INTERNAL REVENUE.

THE BUREAU OF INTERNAL REVENUE HAS ALREADY PLACED WITH THE BUREAU OF FEDERAL SUPPLY PURCHASE AUTHORITY FOR 20 NEW AUTOMOBILES AND HAS LISTED CERTAIN VEHICLES TO BE TRADED IN OR SOLD AS CREDIT TOWARDS THE COST OF THE NEW AUTOMOBILES. THESE 20 CARS, PLUS 14 WHICH WILL BE ACQUIRED THROUGH THE PAYMENT OF ALLOWED LIENS, MAKE UP THE TOTAL NUMBER OF 34 AUTHORIZED TO BE PURCHASED FROM THE BUREAU'S 1947 APPROPRIATION. HOWEVER, AS STATED ABOVE, THE BUREAU OF INTERNAL REVENUE IS OPERATING, AND HAS ON HAND, A NUMBER OF OLD, UNSERVICEABLE AUTOMOBILES WHICH IT DESIRES TO SELL AND REPLACE WITH AS MANY NEW AUTOMOBILES AS THE PROCEEDS OF SALE WILL COVER. THIS PROCEDURE, IF PERMISSIBLE, WOULD RESULT IN THE BUREAU PURCHASING MORE THAN 34 AUTOMOBILES DURING THE FISCAL YEAR, BUT THE PURCHASE PRICE WOULD BE PAID FROM FUNDS DERIVED FROM THE SALE OF OLD AUTOMOBILES, AND NOT FROM APPROPRIATED FUNDS.

YOUR DECISION IS THEREFORE REQUESTED REGARDING THE FOLLOWING:

1. WOULD THE LIMITATION AS TO THE NUMBER OF AUTOMOBILES WHICH MAY BE PURCHASED IN THE APPROPRIATION FOR COLLECTING THE INTERNAL REVENUE PROHIBIT THE PURCHASE BY THE BUREAU OF INTERNAL REVENUE OF MORE THAN 34 AUTOMOBILES DURING THE FISCAL YEAR 1947 (OR 1948) IF THE FUNDS FOR THE PURCHASE OF THE EXCESS NUMBER ARE OBTAINED SOLELY FROM THE PROCEEDS OF SALE OF OLD AND UNSERVICEABLE AUTOMOBILES?

2. IF, BY REASON OF THE FACT THAT PROCEEDS OF SALE OF OLD AUTOMOBILES ARE DEPOSITED TO THE CREDIT OF THE APPROPRIATION FOR COLLECTING THE INTERNAL REVENUE, IT SHOULD BE HELD THAT THE PURCHASE OF VEHICLES AS INDICATED IN (1) ABOVE IS A PURCHASE FROM THE APPROPRIATION AND IS THEREFORE SUBJECT TO THE LIMITATION CONTAINED THEREIN AS TO THE NUMBER OF AUTOMOBILES WHICH MAY BE PURCHASED, YOUR ADVICE IS REQUESTED WHETHER THE PROCEEDS FROM THE SALE OF OLD AUTOMOTIVE EQUIPMENT MAY BE DEPOSITED IN A SPECIAL ACCOUNT AND NEW AUTOMOBILES PURCHASED FROM SUCH ACCOUNT WITHOUT REFERENCE TO THE APPROPRIATION FOR COLLECTING THE INTERNAL REVENUE OR THE LIMITATIONS CONTAINED THEREIN.

SECTION 5 OF THE ACT OF JULY 16, 1914, 5 U.S.C. 78, AS AMENDED BY SECTION 16 (A) OF PUBLIC LAW 600, APPROVED AUGUST 2, 1946, 60 STAT. 810, PROVIDES, IN PART, AS FOLLOWS:

(A) UNLESS SPECIFICALLY AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW, NO APPROPRIATION SHALL BE EXPENDED TO PURCHASE OR HIRE PASSENGER MOTOR VEHICLES FOR ANY BRANCH OF THE GOVERNMENT OTHER THAN THOSE FOR THE USE OF THE PRESIDENT OF THE UNITED STATES, THE SECRETARIES TO THE PRESIDENT, OR THE HEADS OF THE EXECUTIVE DEPARTMENTS ENUMERATED IN 5 U.S.C. 1.

(D) IN THE BUDGETS FOR THE FISCAL YEAR 1948 AND SUBSEQUENT FISCAL YEARS THERE SHALL BE SUBMITTED IN DETAIL ESTIMATES FOR SUCH NECESSARY APPROPRIATIONS AS ARE INTENDED TO BE USED FOR PURCHASE OR HIRE OF PASSENGER MOTOR VEHICLES OR FOR PURCHASE, MAINTENANCE, OR OPERATION OF AIRCRAFT, SPECIFYING THE SUMS REQUIRED, THE PUBLIC PURPOSES FOR WHICH SAID CONVEYANCES ARE INTENDED, THE NUMBER OF CURRENTLY OWNED CONVEYANCES TO BE CONTINUED IN USE, AND THE OFFICIALS OR EMPLOYEES BY WHOM ALL OF SUCH CONVEYANCES ARE TO BE USED.

AS A GENERAL RULE THE PROCEEDS OF SALE OF OLD EQUIPMENT UNDER THE CONTROL OF THE VARIOUS AGENCIES OF THE GOVERNMENT ARE REQUIRED BY LAW TO BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. SEE SECTION 3618, REVISED STATUTES, 31 U.S.C. 487, AND SECTION 30 (A), OF THE SURPLUS PROPERTY ACT OF 1944, 58 STAT. 781. HENCE, SECTION 8 OF PUBLIC LAW 600, 60 STAT. 808, CITED IN YOUR LETTER, REPRESENTS AN EXCEPTION TO THE FOREGOING RULE TO THE EXTENT THAT, IN THE PURCHASE OF NEW EQUIPMENT OF THE TYPES SPECIFIED THEREIN, SIMILAR ITEMS OF EQUIPMENT MAY BE SOLD OR EXCHANGED AND THE PROCEEDS OR ALLOWANCE APPLIED TO THE PURCHASE PRICE OF THE NEW EQUIPMENT. THE RESULT IS THAT THE APPROPRIATION FROM WHICH PAYMENT FOR THE NEW EQUIPMENT IS MADE IS DEPLETED ONLY BY THE AMOUNT, IF ANY, BY WHICH THE PRICE OF THE NEW EQUIPMENT EXCEEDS THE AMOUNT RECEIVED FOR THE USED EQUIPMENT--- REGARDLESS OF WHETHER THE AMOUNT RECEIVED FOR THE USED EQUIPMENT IS IN THE FORM OF CASH OR AN EXCHANGE ALLOWANCE. THAT CONNECTION, IT IS IMPORTANT TO NOTE THAT IT IS THE PRACTICE TO BASE APPROPRIATION ESTIMATES UPON THE NET--- RATHER THAN THE GROSS--- AMOUNT NECESSARY TO PURCHASE NEW EQUIPMENT FOR THE ENSUING FISCAL YEAR. THEREFORE, WHILE IT MIGHT BE THAT THE PROCEEDS OF SALES ARE NOT, IN A TECHNICAL SENSE, APPROPRIATED FUNDS, YET, SINCE SAID PROCEEDS OTHERWISE WOULD BE FOR DEPOSIT INTO THE TREASURY AS A MISCELLANEOUS RECEIPT, AND AS IT IS EVIDENT THAT THE AMOUNTS OF FUNDS APPROPRIATED BY THE CONGRESS FOR THE PURCHASE OF NEW EQUIPMENT ARE FIXED IN CONSIDERATION OF THE FACT THAT SAID PROCEEDS WILL SUPPLEMENT THE FUNDS MADE AVAILABLE, IT WOULD SEEM REASONABLE TO CONCLUDE THAT, UNDER SECTION 8 OF PUBLIC LAW 600, PROCEEDS OF SALES MAY BE APPLIED TO THE PURCHASE PRICE OF NEW VEHICLES ONLY WHEN THE PURCHASE IS BEING MADE PURSUANT TO SPECIFIC AUTHORITY CONTAINED IN A PARTICULAR APPROPRIATION ACT. TO HOLD OTHERWISE, WOULD RESULT IN THE USE BY DEPARTMENTS--- WITHOUT THE APPROVAL OF THE CONGRESS--- OF FUNDS WHICH ARE REQUIRED BY LAW TO BE DEPOSITED INTO THE TREASURY. HENCE, SO FAR AS CONCERNS THE ACQUISITION OF PASSENGER-CARRYING VEHICLES, THE SAID SECTION 8 MAY NOT BE REGARDED AS AUTHORIZING THE SALE OF OLD VEHICLES AND THE USE OF THE PROCEEDS THEREOF WITHOUT LIMITATION BUT THAT SUCH AUTHORITY MAY BE EXERCISED ONLY IN CONNECTION WITH THE PURCHASE OF A MOTOR VEHICLE WHICH HAS BEEN SPECIFICALLY AUTHORIZED BY THE CONGRESS PURSUANT TO THE ABOVE QUOTED PROVISIONS OF SECTION 16 (A) OF PUBLIC LAW 600.

IN THE INSTANT CASE, THE SPECIFIC AUTHORITY OF LAW FOR THE PURCHASE OF MOTOR VEHICLES--- AS REQUIRED BY THE REFERRED-TO SECTION 16 (A) OF PUBLIC LAW 600--- IS CONTAINED IN THE APPROPRIATION FOR THE BUREAU OF INTERNAL REVENUE FOR THE FISCAL YEAR 1948 ( PUBLIC LAW 147, APPROVED JULY 1, 1947, 61 STAT. 220), AND THE NUMBER OF VEHICLES AUTHORIZED TO BE ACQUIRED THEREIN EXPRESSLY IS LIMITED TO 34. SINCE IT IS INDICATED IN YOUR LETTER THAT STEPS HAVE BEEN TAKEN TO OBTAIN THE TOTAL NUMBER OF VEHICLES THUS AUTHORIZED, THERE IS PERCEIVED NO PROPER BASIS FOR INVOKING THE PROCEDURE CONTEMPLATED BY SECTION 8, SUPRA, BY UTILIZING THE PROCEEDS OF SALE OF OLD VEHICLES IN ORDER TO OBTAIN ADDITIONAL VEHICLES IN EXCESS OF 34. IN SUCH CIRCUMSTANCES, THE DISPOSITION OF SUCH PROCEEDS IS CONTROLLED SOLELY BY THE PROVISIONS OF THE STATUTES HEREINABOVE REFERRED TO WHICH DIRECT THE DEPOSIT THEREOF INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

MOREOVER, IT IS NOTED FROM THE BUDGET FOR THE FISCAL YEAR 1948, AT PAGE 806, THAT, IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 5 (D) OF THE 1914 STATUTE, SUPRA, THERE WAS PRESENTED TO THE CONGRESS A STATEMENT OF PROPOSED OBLIGATIONS TO BE INCURRED BY THE BUREAU OF INTERNAL REVENUE FOR THE PURCHASE OF PASSENGER MOTOR VEHICLES FOR THE CURRENT FISCAL YEAR, FROM WHICH IT APPEARS THAT 34 MOTOR VEHICLES ARE TO BE PURCHASED AND 20 TO BE EXCHANGED, THE NET COST OF SUCH PURCHASES TO BE $19,600, WITH 1,360 OLD VEHICLES STILL TO REMAIN IN USE. OBVIOUSLY, IT WAS UPON THE BASIS OF THESE REPRESENTATIONS AS TO THE NEEDS OF THE BUREAU OF INTERNAL REVENUE THAT THE CONGRESS SPECIFICALLY LIMITED THE BUREAU'S MOTOR VEHICLE ACQUISITIONS FOR THE FISCAL YEAR 1948. I CANNOT BUT OBSERVE THAT TO PERMIT THE ACQUISITION OF VEHICLES IN EXCESS OF 34 WOULD DIRECTLY CONTRAVENE THE EXPRESS WILL OF THE CONGRESS.

IN VIEW OF THE FOREGOING, THE FIRST QUESTION PRESENTED IN YOUR LETTER IS ANSWERED IN THE AFFIRMATIVE. AS TO THE SECOND QUESTION, YOU ARE ADVISED THAT, EXCEPT IN CONNECTION WITH A PURCHASE OF NEW VEHICLES SPECIFICALLY AUTHORIZED BY LAW, THERE IS NO AUTHORITY FOR DEPOSITING THE PROCEEDS OF THE SALES OF OLD CARS EITHER TO THE CREDIT OF THE APPROPRIATION FOR COLLECTING THE INTERNAL REVENUE OR INTO A SPECIAL DEPOSIT ACCOUNT. SAID PROCEEDS ARE FOR DEPOSIT WITH THE TREASURY AS MISCELLANEOUS RECEIPTS.