B-69487, OCTOBER 22, 1947, 27 COMP. GEN. 232

B-69487: Oct 22, 1947

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

FEES - INSPECTION - GOVERNMENT LIABILITY THE GOVERNMENT IS NOT LIABLE FOR PAYMENT OF INSPECTION FEES PRESCRIBED BY MUNICIPAL REGULATIONS ENACTED UNDER POLICE POWERS FOR THE PURPOSE OF CONTROLLING DANGEROUS INSTRUMENTALITIES IN CONNECTION WITH PROPERTY USED BY THE COAST GUARD IN THE EXERCISE OF GOVERNMENTAL FUNCTIONS. 1947: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 5. WHICH DISALLOWED YOUR CLAIM FOR $21 COVERING FEES FOR INSPECTING CERTAIN PROPERTY OF THE GOVERNMENT WHICH WAS USED BY THE UNITED STATES COAST GUARD. IT APPEARS THAT CERTAIN PROPERTY OWNED BY THE UNITED STATES KNOWN AS THE DETROIT OPERATING BASE IS USED TO MAINTAIN AND REPAIR AIDS TO NAVIGATION AND TO REPAIR TRUCKS AND VESSELS OF THE UNITED STATES COAST GUARD.

B-69487, OCTOBER 22, 1947, 27 COMP. GEN. 232

FEES - INSPECTION - GOVERNMENT LIABILITY THE GOVERNMENT IS NOT LIABLE FOR PAYMENT OF INSPECTION FEES PRESCRIBED BY MUNICIPAL REGULATIONS ENACTED UNDER POLICE POWERS FOR THE PURPOSE OF CONTROLLING DANGEROUS INSTRUMENTALITIES IN CONNECTION WITH PROPERTY USED BY THE COAST GUARD IN THE EXERCISE OF GOVERNMENTAL FUNCTIONS.

COMPTROLLER GENERAL WARREN TO THE CITY OF DETROIT, OCTOBER 22, 1947:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 5, 1947, REQUESTING REVIEW OF SETTLEMENT DATED APRIL 2, 1947, WHICH DISALLOWED YOUR CLAIM FOR $21 COVERING FEES FOR INSPECTING CERTAIN PROPERTY OF THE GOVERNMENT WHICH WAS USED BY THE UNITED STATES COAST GUARD, DETROIT, MICHIGAN.

IT APPEARS THAT CERTAIN PROPERTY OWNED BY THE UNITED STATES KNOWN AS THE DETROIT OPERATING BASE IS USED TO MAINTAIN AND REPAIR AIDS TO NAVIGATION AND TO REPAIR TRUCKS AND VESSELS OF THE UNITED STATES COAST GUARD. THE DETROIT FIRE DEPARTMENT SUBMITTED TO THE COAST GUARD, DETROIT, MICHIGAN, THREE INVOICES AS FOLLOWS:

NO. DATE INVOICE FOR AMOUNT

7906 12/18/45 GARAGE--- 3,000 SQ. FT. $10.00

80981) 5/46 STORAGE OF INFLAMMABLE LIQUIDS 6.00

8097 1) 5/46 ACETYLENE TORCH 5.00

IN YOUR LETTER OF JULY 11, 1946, IT IS STATED THAT SAID INVOICES COVER RESPECTIVELY " GARAGE PERMIT AT COAST GUARD STATION, NORTH END OF BELLE ISLE BRIDGE; PERMIT FOR INFLAMMABLE LIQUID STORAGE AT COAST GUARD BASE, MT. ELLIOTT AND WIGHT STREET; ACETYLENE PERMIT AT COAST GUARD BASE, MT. ELLIOTT AND WIGHT STREETS.'

THE CLAIM WAS DISALLOWED FOR THE REASON THAT THE AMOUNT ASKED CONSTITUTED A TAX ON AN ADMINISTRATIVE FUNCTION OF THE FEDERAL GOVERNMENT AND, ACCORDINGLY, WAS NOT A PROPER CHARGE AGAINST THE GOVERNMENT.

IN YOUR LETTER REQUESTING REVIEW, YOU STATE THAT YOU CANNOT SUBSCRIBE TO THE REASON STATED IN THE SETTLEMENT FOR THE DISALLOWANCE OF YOUR CLAIM SINCE THE "CHARGE IS ONE MADE UNDER THE POLICE POWERS AND IS DESIGNED TO COVER THE ACTUAL COST OF INSPECTION AND CONTROL OF DANGEROUS INSTRUMENTALITIES AND FOR THE PREVENTION OF FIRE.'

EVEN THOUGH THE INSPECTION FEES COVERED BY THE REFERRED-TO INVOICES BE BASED ON POLICE POWERS, THAT DOES NOT GIVE RISE TO ANY LIABILITY ON THE PART OF THE GOVERNMENT FOR THE PAYMENT THEREOF. SEE UNITED STATES V. CITY OF CHESTER, ET AL., 51 F.1SUPP. 573, AFFIRMED 144 F.2D 415. IN THE LATTER DECISION, THE CIRCUIT COURT OF APPEALS, THIRD CIRCUIT, PAGE 420, SAID---

A STATE STATUTE, A LOCAL ENACTMENT OR REGULATION OR A CITY ORDINANCE, EVEN IF BASED ON THE VALID POLICE POWERS OF A STATE, MUST YIELD IN CASE OF DIRECT CONFLICT WITH THE EXERCISE BY THE GOVERNMENT OF THE UNITED STATES OF ANY POWER IT POSSESSES UNDER THE CONSTITUTION. ( CITING COURT DECISIONS.)

ALSO, SEE UNITED STATES V. CITY OF PHILADELPHIA, ET AL., 56 F.1SUPP. 862, AFFIRMED 147 F.2D 291, CERTIORARI DENIED 325 U.S. 870.

IN THE CASE OF UNITED STATES V. MAYO, ET AL., 47 F.1SUPP. 552, IT WAS HELD THAT THE GOVERNMENT WAS NOT LIABLE FOR PAYMENT OF AN INSPECTION FEE UNDER THE FLORIDA COMMERCIAL FERTILIZER LAW ON FERTILIZER OWNED BY THE GOVERNMENT WHICH WAS SHIPPED INTO THE STATE OF FLORIDA TO COUNTY AGRICULTURAL CONSERVATION ASSOCIATIONS FOR THE PURPOSE OF DELIVERY TO FARMERS, THE COURT STATING (PAGES 556 AND 557/--

* * * IT SEEMS TO BE WELL SETTLED AS A MATTER OF LAW THAT THE POLICE POWER OF A STATE DOES NOT EXTEND TO THE UNITED STATES, ITS PROPERTY OR TRANSACTIONS, AND THAT SUCH FEDERAL PROPERTY AND TRANSACTIONS ARE IMMUNE FROM THE STATE REGULATIONS, AND STATE STATUTES ARE INVALID UNDER THE SUPREMACY CLAUSE OF THE CONSTITUTION ( ARTICLE VI, CLAUSE 2). * * * THE UNITED STATES MAY PERFORM ITS FUNCTIONS WITHOUT CONFORMING TO THE POLICE REGULATIONS OF A STATE. ( CITING COURT DECISIONS.)

SAID DECISION WAS AFFIRMED IN 319 U.S. 441, WHEREIN THE SUPREME COURT OF THE UNITED STATES, PAGE 447, SAID---

THESE INSPECTION FEES ARE LAID DIRECTLY UPON THE UNITED STATES. THEY ARE MONEY EXACTIONS THE PAYMENT OF WHICH, IF THEY ARE ENFORCEABLE, WOULD BE REQUIRED BEFORE EXECUTING A FUNCTION OF GOVERNMENT. SUCH A REQUIREMENT IS PROHIBITED BY THE SUPREMACY CLAUSE. WE ARE NOT DEALING AS IN GRAVES V. NEW YORK EX REL. O-KEEFE, SUPRA, WITH A TAX UPON THE SALARY OF AN EMPLOYEE, OR AS IN ALABAMA V. KING AND BOOZER, 314 U.S. 1, WITH A TAX UPON THE PURCHASE OF A SUPPLIER, OR AS IN PENN DAIRIES V. MILK CONTROL COMM-N, 318 U.S. 261, WITH PRICE CONTROL EXERCISED OVER A CONTRACTOR WITH THE UNITED STATES. IN THESE CASES THE EXACTIONS DIRECTLY AFFECTED PERSONS WHO WERE ACTING FOR THEMSELVES AND NOT FOR THE UNITED STATES. THESE FEES ARE LIKE A TAX UPON THE RIGHT TO CARRY ON THE BUSINESS OF THE POST OFFICE OR UPON THE PRIVILEGE OF SELLING UNITED STATES BONDS THROUGH FEDERAL OFFICIALS. ADMITTEDLY THE STATE INSPECTION SERVICE IS TO PROTECT CONSUMERS FROM FRAUD BUT IN CARRYING OUT SUCH PROTECTION, THE FEDERAL FUNCTION MUST BE LEFT FREE. THIS FREEDOM IS INHERENT IN SOVEREIGNTY. * *

UNDER THE LAW, AS SET FORTH ABOVE, IT IS CLEAR THAT THE GOVERNMENT IS NOT LIABLE FOR PAYMENT OF INSPECTION FEES, IMPOSED UNDER MUNICIPAL REGULATIONS FOR CONTROLLING DANGEROUS INSTRUMENTALITIES, IN CONNECTION WITH PROPERTY USED BY THE UNITED STATES COAST GUARD IN THE EXERCISE OF GOVERNMENTAL FUNCTIONS.