B-251044 April 14, 1993

B-251044 April 14, 1993

The Honorable Tom Lantos House of Representatives

Dear Mr. Lantos:

This is in response to your letter regarding the claim of your constituent, Billy Meyer. As you know, Mr. Meyer has over 60 checks in his possession dated from January 1981 to September 1984, for which he now claims payment. He advises that he was unaware that his checks were subject to being voided 1 year after their issuance and he was saving them for his retirement. Unfortunately, as explained in further detail below, not only were the checks he saved canceled, the underlying claim against the government is barred by 31 U.S.C. Sec. 3702(b).

The Competitive Equality Banking Act of 1989 (Act) established new time limits on the payability of government checks. Pub. L. No. 100-86, 101 Stat. 659 (1987). The law amended 31 U.S.C. Sec. 3702(c) to provide that:

"Any claims on account of a Treasury check shall be barred unless it is presented to the agency that authorized the issuance of such check within 1 year after the date of issuance of the check or the effective date of this subsection, whichever is later."

However, the law also states that:

"Nothing in this subsection affects the underlying obligation of the United States, or any agency thereof, for which a Treasury check was issued."

31 U.S.C. Sec. 3702(c)(2).

The checks issued to Mr. Meyer dated from January 1981 to September 1984. The Act requires the Depart ment of the Treasury, not later than 18 months after the effective date of the Act, to cancel checks issued before October 1, 1989. 31 U.S.C. Sec. 3334(b)(1). (The effective date of the Act was October 1, 1989. See 53 Fed. Reg. 10366, Feb. 8, 1988.) The proceeds of the canceled checks were to be applied to eliminate the balances in certain Treasury accounts. 31 U.S.C. Sec. 3334(b)(2). Thus, on April 1, 1991, the Treasury began a mass cancellation of all pre- effective date checks. Presumably, Mr. Meyer's checks were canceled and they may no longer be paid.

Nevertheless, the statute provides that the cancellation does not affect the underlying obligation. Although the specific moneys backing the canceled checks are, by law, diverted to another use, the underlying obligation for which the checks were issued is unaffected. B-239249.1, Apr. 15, 1991. For claims submitted under such obligations, the original appropriations charged, to the extent they are available under the account closing procedures, can be used to support reissued checks. Id. See also Pub. L. No. 101-510, Sec. 1405, 104 Stat. 1675 (1990). For those appropriation accounts that are closed, the law allows current appropriations made for the same general purpose to be charged subject to a 1 percent limitation. Id.

Unfortunately, although an underlying claim is preserved by the statute, the provision does not "resurrect claims that are otherwise unenforceable." B-239249, Apr. 15, 1991 (note 2); B-244431, Oct. 8, 1991. Under 31 U.S.C. Sec. 3702(b), a claim against the government which is not presented to the GAO, or the agency whose activities gave rise to the claim, within 6 years after the claim accrues is barred. This provision barring old claims makes Mr. Meyer's claims which accrued between 1981 and 1984 unenforceable. Of course, private relief legislation could be introduced on Mr. Meyer's behalf.

I trust the foregoing answers your questions. If we can be of further assistance, please contact Gary Kepplinger, Associate General Counsel, at 202-512-5624.

Sincerely yours,

James F. Hinchman General Counsel