B-91122, DECEMBER 15, 1949, 29 COMP. GEN. 279

B-91122, DECEMBER 15, 1949, 29 COMP. GEN. 279

LEASES - REPAIRS AND IMPROVEMENTS - LIMITATIONS - APPLICABILITY TO CONSTRUCTION OF ROADWAYS AND WALKWAYS ROADWAYS AND WALKWAYS UPON PRIVATE PROPERTY LEASED BY THE UNITED STATES MAY NOT BE CONSTRUCTED WITHOUT REGARD TO THE PROVISIONS OF SECTION 322 OF THE ECONOMY ACT, LIMITING TO 25 PERCENTUM OF THE FIRST YEAR'S RENTAL THE AMOUNT WHICH MAY BE EXPENDED FOR ALTERATIONS, IMPROVEMENTS, OR REPAIRS TO LEASED PROPERTY, EVEN THOUGH, BY REASON OF THEIR LOCATION, SUCH ALTERATIONS WOULD BE SOLELY FOR THE CONVENIENCE OF THE GOVERNMENT AND WOULD RESULT IN NO ENHANCEMENT OF THE LESSOR'S PROPERTY.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION, DECEMBER 15, 949:

I HAVE YOUR LETTER OF NOVEMBER 28, 1949 (YOUR FILE 5410), STATING THAT IT IS CONSIDERED ESSENTIAL THAT THE COMMISSION BE PERMITTED TO CONSTRUCT ROADWAYS AND/OR WALKWAYS ON EIGHT OF THE COMMISSION'S SECONDARY MONITORING STATIONS LOCATED ON LEASED PROPERTY SUBJECT TO THE LIMITATIONS OF SECTION 322 OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 412, AND REQUESTING TO BE ADVISED WHETHER SUCH CONSTRUCTION MAY BE PERFORMED WITHOUT REGARD TO THE 25 PERCENTUM LIMITATION OF THE CITED STATUTORY PROVISION.

THE PARTICULAR LEASES INVOLVED ARE NOT SPECIFICALLY IDENTIFIED IN YOUR LETTER BUT IT IS STATED THEREIN THAT THE COST OF CONSTRUCTION OF THE PROPOSED ROADWAYS AND WALKWAYS WOULD EXCEED THE 25 PERCENTUM LIMITATION ABOVE REFERRED TO IF SUCH COSTS SHOULD BE CONSIDERED AS IMPROVEMENTS TO THE PROPERTY. HOWEVER, IT IS SUGGESTED THAT THE PROPOSED EXPENDITURE DOES NOT COME WITHIN THE PURVIEW OF THE LIMITATION SINCE THE IMPROVEMENTS ACTUALLY WOULD BE OF NO BENEFIT TO THE OWNER BECAUSE OF THEIR LOCATION.

IT IS THE GENERAL RULE THAT APPROPRIATED FUNDS MAY NOT BE USED FOR THE PERMANENT IMPROVEMENT OF PRIVATELY OWNED PROPERTY BY ANY AGENCY OF THE UNITED STATES UNLESS SPECIFICALLY AUTHORIZED BY LAW. HOWEVER, AN EXCEPTION TO THAT RULE IS PROVIDED BY THE CITED SECTION OF THE ECONOMY ACT, 47 STAT. 412, WHICH READS, IN PERTINENT PART, AS FOLLOWS:

HEREAFTER NO APPROPRIATION SHALL BE OBLIGATED OR EXPENDED FOR THE RENT OF ANY BUILDING OR PART OF A BUILDING TO BE OCCUPIED FOR GOVERNMENT PURPOSES AT A RENTAL IN EXCESS OF THE PER ANNUM RATE OF 15 PERCENTUM OF THE FAIR MARKET VALUE OF THE RENTED PREMISES AT DATE OF THE LEASE UNDER WHICH THE PREMISES ARE TO BE OCCUPIED BY THE GOVERNMENT NOR FOR ALTERATIONS, IMPROVEMENTS, AND REPAIRS OF THE RENTED PREMISES IN EXCESS OF 25 PERCENTUM OF THE AMOUNT OF THE RENT FOR THE FIRST YEAR OF THE RENTAL TERM, OR FOR THE RENTAL TERM IF LESS THAN ONE YEAR * * *.

IN VIEW OF THE PLAIN AND UNQUALIFIED LANGUAGE OF SECTION 322, THERE IS NO ALTERNATIVE TO CONCLUDING THAT THE PROPOSED CONSTRUCTION FALLS WITHIN ITS TERMS. FURTHER, THERE IS PERCEIVED NO SOUND REASON FOR PERMITTING A DETERMINATION AS TO WHETHER THE STATUTORY PROVISION IS APPLICABLE IN PARTICULAR CASE UPON THE BASIS OF AN EVALUATION OR FORECAST OF THE PRESENT OR FUTURE BENEFIT OF SUCH IMPROVEMENTS TO THE LESSOR. IN THAT CONNECTION, WHILE THE TERM "IMPROVEMENTS" MAY CONNOTE A RESULTANT BENEFIT TO THE PROPERTY OR AN INCREASE IN ITS VALUE, IT WOULD SEEM THAT BY THE USE OF THE TERM "ALTERATIONS" ALSO IT WAS INTENDED BY THE LAW TO CIRCUMSCRIBE EXPENDITURES FOR ANY MODIFICATIONS OR CHANGES IN LEASED PROPERTY IRRESPECTIVE OF THE EXTENT TO WHICH THEY MIGHT PROVE USEFUL TO THE OWNER THEREOF.

ACCORDINGLY, I HAVE TO ADVISE THAT THE CONTEMPLATED WORK MAY NOT BE PERFORMED WITHOUT REGARD TO THE LIMITATION UPON EXPENDITURES SET FORTH IN THE ECONOMY ACT OF 1932.