B-78321, OCTOBER 7, 1948, 28 COMP. GEN. 221

B-78321: Oct 7, 1948

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CORPORATIONS WITHIN THE DEPARTMENT OF AGRICULTURE OCCUPYING SPACE IN BUILDING ASSIGNED TO THAT DEPARTMENT AND UNDER JURISDICTION OF THE PUBLIC BUILDINGS ADMINISTRATION ARE REQUIRED TO PAY RENTAL FOR SUCH SPACE FROM AND AFTER JULY 30. EVEN THOUGH SAID CORPORATIONS OWNED NO OFFICE BUILDINGS WHICH WERE TRANSFERRED TO THE UNITED STATES PURSUANT TO SECTION 306 AND HAD NOT INCLUDED IN THEIR BUDGET ESTIMATES A PROVISION FOR RENTAL. " SUCH RENTAL IS NOT LIMITED TO THE COST OF MAINTENANCE. IS IN ADDITION TO THE BARE OR NET RENTAL WHICH IS MERELY A CHARGE FOR USE OF SPACE. REFERENCE IS MADE TO YOUR LETTER OF JULY 8. ARE REQUIRED TO PAY RENTAL FOR SUCH SPACE FOR THE FISCAL YEARS 1948 AND 1949. WHICH ARE OWNED BY WHOLLY OWNED GOVERNMENT CORPORATIONS.

B-78321, OCTOBER 7, 1948, 28 COMP. GEN. 221

GOVERNMENT CORPORATIONS - FURNISHING OF SPACE, ETC., IN PUBLIC BUILDING UNDER SECTION 306 OF THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1948, REQUIRING WHOLLY OWNED GOVERNMENT CORPORATIONS OCCUPYING SPACE IN PUBLIC OFFICE BUILDING TO PAY RENTAL THEREFOR, CORPORATIONS WITHIN THE DEPARTMENT OF AGRICULTURE OCCUPYING SPACE IN BUILDING ASSIGNED TO THAT DEPARTMENT AND UNDER JURISDICTION OF THE PUBLIC BUILDINGS ADMINISTRATION ARE REQUIRED TO PAY RENTAL FOR SUCH SPACE FROM AND AFTER JULY 30, 1947, THE EFFECTIVE DATE OF THE ACT, EVEN THOUGH SAID CORPORATIONS OWNED NO OFFICE BUILDINGS WHICH WERE TRANSFERRED TO THE UNITED STATES PURSUANT TO SECTION 306 AND HAD NOT INCLUDED IN THEIR BUDGET ESTIMATES A PROVISION FOR RENTAL. UNDER SECTION 306 OF THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1948, REQUIRING WHOLLY OWNED GOVERNMENT CORPORATIONS OCCUPYING SPACE IN PUBLIC OFFICE BUILDINGS AT THE SEAT OF GOVERNMENT TO PAY RENTAL THEREON AS DETERMINED BY THE FEDERAL WORKS ADMINISTRATOR, INCLUDING "ALL COST OF MAINTENANCE, UPKEEP, AND REPAIR," SUCH RENTAL IS NOT LIMITED TO THE COST OF MAINTENANCE, UPKEEP, AND REPAIR, BUT IS IN ADDITION TO THE BARE OR NET RENTAL WHICH IS MERELY A CHARGE FOR USE OF SPACE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF AGRICULTURE, OCTOBER 7, 1948.

REFERENCE IS MADE TO YOUR LETTER OF JULY 8, 1948, REQUESTING A DECISION AS TO WHETHER, UNDER THE PROVISIONS OF SECTION 306 OF THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1948, PUBLIC LAW 268, APPROVED JULY 30, 1947, 61 STAT. 574, 584, CERTAIN WHOLLY OWNED GOVERNMENT CORPORATIONS WITHIN THE DEPARTMENT OF AGRICULTURE AND OCCUPYING SPACE IN THE DISTRICT OF COLUMBIA IN BUILDINGS ASSIGNED TO THE DEPARTMENT AND UNDER JURISDICTION OF PUBLIC BUILDINGS ADMINISTRATION, ARE REQUIRED TO PAY RENTAL FOR SUCH SPACE FOR THE FISCAL YEARS 1948 AND 1949, AND WHETHER SUCH RENTAL IF PAYABLE SHOULD COVER ONLY THE COST OF MAINTENANCE, UPKEEP AND REPAIR.

SECTION 306 PROVIDES AS FOLLOWS:

SEC. 306. TITLE TO ALL OFFICE BUILDINGS AT THE SEAT OF GOVERNMENT, WHICH ARE OWNED BY WHOLLY OWNED GOVERNMENT CORPORATIONS, AND ALL RIGHT, TITLE OR INTEREST OF SUCH CORPORATIONS IN THE LAND UPON WHICH SUCH BUILDINGS ARE LOCATED ARE HEREBY TRANSFERRED TO THE UNITED STATES, AND THE SECRETARY OF THE TREASURY IS AUTHORIZED AND DIRECTED TO DISCHARGE THE INDEBTEDNESS TO THE TREASURY OF ANY CORPORATION HOLDING SUCH RIGHTS, TITLE, OR INTEREST IN ANY SUCH LAND OR BUILDING TO THE VALUE THEREOF AS DETERMINED BY THE SECRETARY OF THE TREASURY AS OF THE DATE OF TRANSFER: PROVIDED, THAT IN CASE OF DISAGREEMENT ON THE PART OF THE HEAD OF THE CORPORATION WITH RESPECT TO SAID VALUE AS DETERMINED, THE ADMINISTRATOR OF THE FEDERAL WORKS AGENCY SHALL MAKE A FINAL DETERMINATION OF THE PROPERTY VALUE. HEREAFTER, SUCH BUILDINGS SHALL BE CONTROLLED AND MANAGED IN THE SAME MANNER AS PRESCRIBED IN THE ACT OF MARCH 1, 1919, AS AMENDED (40 U.S.C. 1). WHOLLY OWNED GOVERNMENT CORPORATIONS REQUIRING SPACE IN OFFICE BUILDINGS AT THE SEAT OF GOVERNMENT SHALL OCCUPY ONLY SUCH SPACE AS MAY BE ALLOTTED IN ACCORDANCE WITH THE PROVISIONS OF SUCH ACT OF MARCH 1, 1919, AS AMENDED (40 U.S.C. 1), AND SHALL PAY SUCH RENTAL THEREON AS MAY BE DETERMINED BY THE FEDERAL WORKS ADMINISTRATOR, SUCH RENTAL TO INCLUDE ALL COST OF MAINTENANCE, UPKEEP, AND REPAIR.

AS YOUR LETTER CONCEDES, THERE IS NO QUESTION BUT THAT, IN VIEW OF THE PROVISIONS OF SECTION 301 OF THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1948 ( PUBLIC LAW 268, APPROVED JULY 30, 1947, 61 STAT. 583), AND SECTION 203 OF THE DEPARTMENT OF AGRICULTURE APPROPRIATION ACT, 1948 ( PUBLIC LAW 266, APPROVED JULY 30, 1947, 61 STAT. 550), ADMINISTRATIVE EXPENSE FUNDS OF THE CORPORATIONS INVOLVED, NAMELY, THE COMMODITY CREDIT CORPORATION, FEDERAL CROP INSURANCE CORPORATION AND REGIONAL AGRICULTURAL CREDIT CORPORATION ARE AVAILABLE FOR THE PAYMENT OF RENT IN THE DISTRICT OF COLUMBIA FOR THE FISCAL YEAR 1948. UNDER SIMILAR PROVISIONS IN THE 1949 APPROPRIATION ACTS (SECTION 301 OF THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1949, PUBLIC LAW 860, APPROVED JUNE 30, 1948, 62 STAT. 1194, AND SECTION 203, DEPARTMENT OF AGRICULTURE APPROPRIATION ACT, 1949, PUBLIC LAW 712, APPROVED JUNE 19, 1948, 62 STAT. 531), THE SAME IS TRUE.

HOWEVER, IT IS CONTENDED IN YOUR LETTER THAT THE CORPORATIONS HERE INVOLVED SHOULD NOT BE REQUIRED TO PAY RENT FOR THE FISCAL YEARS 1948 AND 1949 FOR REASONS HEREINAFTER SET FORTH. FIRST, IT IS POINTED OUT THAT THE PROVISION REQUIRING THE PAYMENT OF RENTAL IS THE LAST SENTENCE OF SECTION 306, QUOTED ABOVE, THE PRECEDING PART OF WHICH TRANSFERS TO THE UNITED STATES THE TITLE TO ALL OFFICE BUILDINGS AT THE SEAT OF GOVERNMENT OWNED BY WHOLLY OWNED GOVERNMENT CORPORATIONS, AND PROVIDES FOR THE MANAGEMENT AND CONTROL OF SUCH BUILDINGS IN THE SAME MANNER AS PRESCRIBED IN THE ACT OF MARCH 1, 1919, AS AMENDED (40 U.S.C. 1), THUS PLACING SUCH BUILDINGS UNDER THE JURISDICTION OF THE PUBLIC BUILDINGS ADMINISTRATION. HENCE, IT IS URGED THAT IT WOULD SEEM TO BE A LOGICAL CONCLUSION THAT THE PROVISION IN QUESTION ONLY COVERS THOSE CORPORATIONS WHOSE OFFICE BUILDINGS WERE TRANSFERRED PURSUANT TO THE PRECEDING PART OF SECTION 306, AND THAT IT DOES NOT COVER CORPORATIONS WHICH WERE HOUSED IN BUILDINGS THERETOFORE ASSIGNED TO YOUR DEPARTMENT IN THE DISTRICT OF COLUMBIA AND WHICH WERE UNDER THE JURISDICTION OF THE PUBLIC BUILDINGS ADMINISTRATION. ALSO, IT IS STATED THAT THE AFORESAID CORPORATIONS MADE NO PROVISION IN THEIR BUDGETS FOR THE FISCAL YEAR 1948 AND 1949 FOR THE PAYMENT OF RENT AND, EVIDENTLY, THAT SUCH ITEM WAS NOT CONSIDERED BY THE CONGRESS IN DETERMINING THE AMOUNTS WHICH WOULD BE AVAILABLE TO THEM FOR ADMINISTRATIVE EXPENSES FOR SUCH YEARS. IT IS STATED FURTHER THAT IT IS YOUR UNDERSTANDING THAT BUDGET ESTIMATES OF THE PUBLIC BUILDINGS ADMINISTRATION BOTH FOR THE FISCAL YEARS 1948 AND 1949 CONTAINED COMPLETE ALLOWANCES FOR THE OPERATIONS OF THE BUILDINGS ASSIGNED IN THE DISTRICT OF COLUMBIA TO THE DEPARTMENT OF AGRICULTURE, INCLUDING SPACE THEREIN USED BY EMPLOYEES PERFORMING CORPORATE FUNCTIONS AND, THEREFORE, THAT FUNDS COVERING RENTAL FOR SUCH SPACE ARE NOT NEEDED BY THE PUBLIC BUILDINGS ADMINISTRATION FOR SUCH OPERATIONS. IN THIS LATTER CONNECTION, YOU INVITE ATTENTION TO THE PROVISION CARRIED IN THE INDEPENDENT OFFICES APPROPRIATION ACT, 1949, PUBLIC LAW 491, APPROVED APRIL 20, 1948, 62 STAT. 184, WHICH PROVIDES THAT THE COST OF MAINTENANCE, UPKEEP AND REPAIR PAID BY GOVERNMENT CORPORATIONS PURSUANT TO SECTION 306 OF THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1948, SHALL BE CREDITED TO THE APPROPRIATIONS OF THE PUBLIC BUILDINGS ADMINISTRATION BEARING SUCH COSTS.

WITH RESPECT TO THE FIRST OF THE AFORESAID CONTENTIONS, IF IT HAD BEEN THE INTENTION OF THE CONGRESS THAT THE PROVISION WITH RESPECT TO THE ALLOTMENT OF SPACE AND THE PAYMENT OF RENTAL BE RESTRICTED TO THOSE CORPORATIONS WHOSE BUILDINGS WERE TRANSFERRED TO THE JURISDICTION OF THE PUBLIC BUILDINGS ADMINISTRATION BY SECTION 306, SUCH INTENTION COULD EASILY HAVE BEEN EXPRESSED IN THE LEGISLATION. INSTEAD THE RENTAL PROVISION EVIDENCES AN INTENT TO CENTRALIZE IN THE PUBLIC BUILDINGS ADMINISTRATION THE CONTROL OF ALL OFFICE SPACE REQUIREMENTS OF WHOLLY OWNED GOVERNMENT CORPORATIONS AT THE SEAT OF GOVERNMENT REGARDLESS OF WHETHER SUCH CORPORATIONS MIGHT PREVIOUSLY HAVE OWNED OFFICE BUILDINGS OR HAVE OCCUPIED SPACE IN GOVERNMENT BUILDINGS. FURTHERMORE, AS WILL BE SEEN FROM THE ANSWER TO YOUR SECOND QUESTION, THE REIMBURSEMENT OF THE APPROPRIATIONS OF THE PUBLIC BUILDINGS ADMINISTRATION IS NOT THE SOLE PURPOSE OF THE RENTAL PROVISION, SINCE THE NET RENTAL FOR THE SPACE IS NECESSARILY FOR COVERING INTO MISCELLANEOUS RECEIPTS. ALSO, SINCE THE EFFECT OF THE PROVISION IS TO REQUIRE CORPORATIONS TO PAY AND REFLECT IN THEIR FINANCIAL STATEMENTS AN EXPENSE WHICH IS AN ORDINARY INCIDENT TO A BUSINESS CORPORATION, THERE IS NO REASON FOR DRAWING ANY DISTINCTION BETWEEN THE SEVERAL WHOLLY OWNED GOVERNMENT CORPORATIONS IN THE APPLICATION OF SUCH REQUIREMENT.

AS TO THE STATEMENT THAT, SINCE SECTION 306 HAD NOT BEEN ENACTED AT THE TIME BUDGET ESTIMATES WERE SUBMITTED TO CONGRESS FOR THE FISCAL YEAR 1948, NO PROVISION FOR PAYMENT OF RENT TO PUBLIC BUILDINGS ADMINISTRATION WAS MADE IN THE ESTIMATES OF ADMINISTRATIVE EXPENSES IN THE BUDGETS OF THE CORPORATIONS IN QUESTION, AND THAT, EVIDENTLY, SUCH AN ITEM WAS NOT CONSIDERED BY THE CONGRESS IN DETERMINING THE AMOUNT TO BE MADE AVAILABLE FOR ADMINISTRATIVE EXPENSES, THE ABSENCE OF SUCH PROVISION IN THE BUDGET ESTIMATES PROPERLY MAY NOT BE CONSIDERED AS RELIEVING THE CORPORATIONS OF THE OBLIGATION TO PAYMENT IN VIEW OF THE PLAIN LANGUAGE OF SECTION 306. NOR WOULD THE FACT THAT THE BUDGET ESTIMATES OF PUBLIC BUILDINGS ADMINISTRATION INCLUDED THE COST OF OPERATION OF SUCH SPACE AVAIL TO PRECLUDE THE APPLICATION OF SECTION 306. CF. 27 COMP. GEN. 347. ON THE CONTRARY, THE INCLUSION OF SECTION 306 IN THE SAME ACT WHICH GRANTED THE AUTHORIZATION OF $200,000 FOR ADMINISTRATIVE EXPENSES OF THE REGIONAL AGRICULTURAL CORPORATION, AND MADE SUCH FUNDS AVAILABLE FOR RENT IN THE DISTRICT OF COLUMBIA, IS TO BE REGARDED AS EVIDENCE OF AN INTENT THAT THE RENTAL BE PAID FROM SUCH AMOUNT. THE SAME REASONING IS APPLICABLE IN THE CASE OF COMMODITY CREDIT CORPORATION AND FEDERAL CROP INSURANCE CORPORATION, FUNDS FOR WHOSE ADMINISTRATION WERE PROVIDED FOR BY THE DEPARTMENT OF AGRICULTURE APPROPRIATION ACT, 1948, APPROVED ON THE SAME DATE AS THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1948.

IT DOES NOT APPEAR WHY NO ESTIMATE WAS INCLUDED IN THE 1949 BUDGETS FOR THE THREE CORPORATIONS FOR RENTAL UNDER SECTION 306, AND NO QUESTION APPEARS TO HAVE BEEN RAISED CONCERNING THE APPLICATION OF THE SECTION IN CONNECTION WITH THE SUBMISSION OF SUCH BUDGETS. BUT, BE THAT AS IT MAY, SECTION 306 MUST BE CONSTRUED AS APPLYING TO THE THREE CORPORATIONS NAMED IN YOUR LETTER EFFECTIVE JULY 30, 1947, THE DATE OF ENACTMENT OF THE GOVERNMENT CORPORATIONS APPROPRIATION ACT, 1948, AND THEREAFTER. YOUR FIRST QUESTION IS ANSWERED ACCORDINGLY.

WITH RESPECT TO YOUR SECOND QUESTION, WHILE RENTAL MAY INCLUDE CHARGES FOR SPECIAL SERVICES, IT IS NOT LIMITED THERETO. BASICALLY, RENTAL IS A CHARGE FOR USE OF SPACE. 12 COMP. GEN. 546. IN REQUIRING THAT THE RENTAL DETERMINED BY THE FEDERAL WORKS ADMINISTRATOR INCLUDE ALL COSTS OF MAINTENANCE, UPKEEP AND REPAIR, SECTION 306 MERELY INSURES THAT THESE ITEMS ARE COVERED AS WELL AS THE BARE OR NET RENTAL FOR THE SPACE. PURSUANT TO THE PROVISIONS UNDER THE HEADING " PUBLIC BUILDINGS ADMINISTRATION" IN THE SECOND SUPPLEMENTAL APPROPRIATION ACT, 1948, PUBLIC LAW 299, APPROVED JULY 31, 1947, 61 STAT. 697, AND THE INDEPENDENT OFFICES APPROPRIATION ACT, 1949, PUBLIC LAW 491, APPROVED APRIL 20, 1948, THAT PART OF THE RENTAL ATTRIBUTABLE TO MAINTENANCE, UPKEEP AND REPAIR IS TO BE CREDITED TO THE APPROPRIATIONS OF PUBLIC BUILDINGS ADMINISTRATION BEARING SUCH COSTS BUT THE NET OR BARE RENTAL IS, AS INDICATED ABOVE, FOR COVERING INTO THE TREASURY AS A MISCELLANEOUS RECEIPT.