B-103841, OCTOBER 6, 1954, 34 COMP. GEN. 158

B-103841, OCTOBER 6, 1954, 34 COMP. GEN. 158

CIVIL AERONAUTICS BOARD - RATE FIXING AUTHORITY V. SUFFICIENCY OF APPROPRIATIONS THE AUTHORITY VESTED IN THE CIVIL AERONAUTICS BOARD BY SECTION 406 (A) OF THE CIVIL AERONAUTICS ACT TO FIX AND DETERMINE RATES OF COMPENSATION FOR TRANSPORTATION OF MAIL BY AIRCRAFT IS INDEPENDENT OF THE DIRECTION CONTAINED IN SAID SECTION THAT THE RATES SO FIXED BE PAID BY THE POSTMASTER GENERAL FROM APPROPRIATIONS FOR THE TRANSPORTATION OF MAIL BY AIRCRAFT, AND, THEREFORE, THE EXISTENCE OR NON-EXISTENCE OF APPROPRIATIONS DOES NOT IN ANY WAY RESTRICT OR INTERFERE WITH THE RATE MAKING DUTIES OF THE BOARD. REORGANIZATION PLAN NO. 10 OF 1953, WHICH SEPARATED AIRMAIL TRANSPORTATION COMPENSATION INTO TWO ELEMENTS--- SERVICE AND SUBSIDY--- AND TRANSFERRED THE PAYMENT FUNCTION INCIDENT TO THE LATTER ELEMENT FROM THE POSTMASTER GENERAL TO THE CIVIL AERONAUTICS BOARD, DID NOT ALTER THE STATUTORY REQUIREMENT THAT THE BOARD DETERMINE THE OVERALL "FAIR AND REASONABLE" RATE AS PROVIDED IN THE CIVIL AERONAUTICS ACT OR CHANGE THE REQUIREMENT THAT PAYMENT BE BASED ON QUANTITIES OF AIR MAIL TRANSPORTED. SINCE THE QUESTION OF WHETHER A CLAIM OF AN AIRCRAFT CARRIER OF MAIL FOR SUBSIDY PAYMENTS AUTHORIZED IN SECTION 406 (A) OF THE CIVIL AERONAUTICS ACT WOULD CONSTITUTE A VALID CLAIM AGAINST THE UNITED STATES IN THE ABSENCE OF APPROPRIATIONS FOR SUCH PAYMENTS IN A HYPOTHETICAL QUESTION WHICH INVOLVES A SUPPOSITION THAT THE CONGRESS WILL NOT APPROPRIATE FUNDS, AN AUTHORITATIVE DECISION WOULD NOT BE PROPER AT THIS TIME.

ACTING COMPTROLLER GENERAL WEITZEL TO THE CHAIRMAN, CIVIL AERONAUTICS BOARD, OCTOBER 6, 1954:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 25, 1954, REQUESTING DECISION (1) AS TO WHETHER THE CIVIL AERONAUTICS BOARD, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 406 OF THE CIVIL AERONAUTICS ACT OF 1938, 52 STAT. 998, 49 U.S.C. 401, 486, HAS AUTHORITY TO FIX AND DETERMINE RATES OF COMPENSATION FOR THE TRANSPORTATION OF MAIL BE AIRCRAFT, INCLUDING THE "NEED" OF CARRIERS AS DEFINED IN SUBSECTION (B), WITHOUT REGARD TO THE AVAILABILITY OF APPROPRIATIONS SUFFICIENT TO COVER AMOUNTS WHICH MAY BECOME DUE, AND (2) AS TO WHETHER A CARRIER'S CLAIM FOR THE "NEED" ELEMENT OF SUCH A RATE CONSTITUTES A VALID LEGAL CLAIM AGAINST THE UNITED STATES REGARDLESS OF THE SUFFICIENCY OF APPROPRIATIONS THEREFOR.

SUBSECTIONS (A) AND (B) OF SECTION 406, 52 STAT. 998 STATES, INSOFAR AS PERTINENT, THAT---

(A) THE BOARD IS EMPOWERED AND DIRECTED * * * (1) TO FIX AND DETERMINE * * * THAT FAIR AND REASONABLE RATES OF COMPENSATION FOR THE TRANSPORTATION OF MAIL BY AIRCRAFT, THE FACILITIES USED AND USEFUL THEREFOR, AND THE SERVICES CONNECTED THEREWITH * * * AND (3) * * * THE RATES SO FIXED AND DETERMINED SHALL BE PAID BY THE POSTMASTER GENERAL FROM APPROPRIATIONS FOR THE TRANSPORTATION OF MAIL BY AIRCRAFT.

(B) * * * IN DETERMINING THE RATE * * * THE BOARD SHALL TAKE INTO CONSIDERATION * * * THE NEED OF EACH SUCH AIR CARRIER FOR COMPENSATION FOR THE TRANSPORTATION OF MAIL SUFFICIENT TO INSURE THE PERFORMANCE OF SUCH SERVICE, AND, TOGETHER WITH ALL OTHER REVENUE OF THE AIR CARRIER, TO ENABLE SUCH AIR CARRIER UNDER HONEST, ECONOMICAL, AND EFFICIENT MANAGEMENT, TO MAINTAIN AND CONTINUE THE DEVELOPMENT OF AIR TRANSPORTATION TO THE EXTENT AND OF THE CHARACTER AND QUALITY REQUIRED FOR THE COMMERCE OF THE UNITED STATES, THE POSTAL SERVICE, AND THE NATIONAL DEFENSE.

AS YOU POINT OUT, THE "NEED" ELEMENT OF A PARTICULAR RATE IS COMMONLY REFERRED TO AS "SUBSIDY" TO DISTINGUISH IT FROM THE "SERVICE" ELEMENT. APPEARS THAT SUCH "SERVICE" AND "SUBSIDY" ELEMENTS WERE FIRST IDENTIFIED BY THE BOARD IN 1951 (DOMESTIC AIR CARRIERS) AND 1952 (INTERNATIONAL, OVERSEAS, AND TERRITORIAL AIR CARRIERS). AT THAT TIME, A SINGLE APPROPRIATION WAS MADE TO THE POST OFFICE DEPARTMENT FOR PAYMENT PURPOSES.

EFFECTIVE OCTOBER 1, 1953, REORGANIZATION PLAN NO. 10 OF 1953, 67 STAT. 644, TRANSFERRED TO THE BOARD THE FUNCTIONS OF THE POSTMASTER GENERAL WITH RESPECT TO PAYING "SO MUCH OF THE COMPENSATION FIXED AND DETERMINED BY THE BOARD UNDER SECTION 406" AS THERETOFORE COMMONLY HAD BEEN REFERRED TO AS THE "NEED" OR "SUBSIDY" ELEMENT. AS STATED IN THE PRESIDENTIAL MESSAGE TRANSMITTING PLAN NO. 10 TO THE CONGRESS:

* * * THE POST OFFICE DEPARTMENT WILL PAY ONLY THAT PORTION WHICH REPRESENTS COMPENSATION FOR CARRYING THE MAIL ON THE BASIS OF FAIR AND REASONABLE RATES DETERMINED BY THE BOARD WITHOUT REGARD TO THE NEED FOR FEDERAL AID. THE PLAN WILL TRANSFER TO THE BOARD THE RESPONSIBILITY FOR PAYING ANY AMOUNTS IN EXCESS OF SUCH COMPENSATION, THIS EXCESS BEING THE SUBSIDY ELEMENT OF THE AGGREGATE FEDERAL PAYMENT. (FIFTH PARAGRAPH)

YOU REFER TO DIFFERENT INTERPRETATIONS OF THE PLAN VOICED DURING CONSIDERATION BY THE CONGRESS OF H.R. 8067 (1955 APPROPRIATION TO THE BOARD, PAGE 12, PUBLIC LAW 480, 83D CONGRESS), WHICH ALSO ARE REFLECTED IN THE AIR MAIL INDUSTRY INVESTIGATION (S.1RES. 50, 81ST CONGRESS). CONTROVERSY APPEARS TO HAVE BEEN BASED UPON COMMENT IN THE MESSAGE THAT --

BY PROVIDING FOR A COMPLETE AND FORMAL SEPARATION OF SUBSIDY FROM COMPENSATION FOR THE TRANSPORTATION OF MAIL, THE REORGANIZATION PLAN WILL CLEARLY FIX THE FISCAL RESPONSIBILITY FOR THE SUBSIDY PROGRAM IN THE APPROPRIATE AGENCY * * * IT WILL GIVE THE CONGRESS AN OPPORTUNITY TO REVIEW AND TAKE ANY APPROPRIATE ACTION WITH RESPECT TO THE LEVEL OF SUBSIDY AID IN THE COURSE OF REGULAR APPROPRIATION PROCESS. * * * (SEVENTH PARAGRAPH)

WHILE SUCH COMMENT, STANDING BY ITSELF, DOES SUPPORT CONTENTIONS THAT THE PLAN WAS DESIGNED TO MAKE POSSIBLE CONTROL OF THE AMOUNTS OF "SUBSIDY" PAYMENTS THROUGH APPROPRIATIONS, THE MESSAGE AS A WHOLE DOES NOT. THE PRESIDENT STATED, AMONG OTHER THINGS, THAT THE DIVISION AND TRANSFER OF PAYMENT FUNCTIONS PROVIDED FOR BY THE PLAN

* * * WILL NOT ALTER THE BASIC NATIONAL POLICY OF PROMOTING THE SOUND DEVELOPMENT OF AIR TRANSPORTATION THROUGH FEDERAL AID. NOR WILL THE PLAN IN ITSELF CHANGE THE AGGREGATE AMOUNT OF REVENUE FOR WHICH ANY AIRLINE IS ELIGIBLE. * * * (SECOND PARAGRAPH) AND FLATLY ADVISED THAT---

UNDER THE REORGANIZATION PLAN THE CIVIL AERONAUTICS BOARD WILL CONTINUE TO DETERMINE THE OVERALL LEVEL OF PAYMENTS TO BE MADE TO THE AIRLINES, AND WILL DO SO IN ACCORDANCE WITH THE EXISTING POLICIES STANDARDS OF THE CIVIL AERONAUTICS ACT. * * * (FIFTH PARAGRAPH)

THUS, IT IS CLEAR THAT THE CLAUSE "OPPORTUNITY TO REVIEW AND TAKE APPROPRIATE ACTION WITH RESPECT TO THE LEVEL OF SUBSIDY AID IN THE COURSE OF THE REGULAR APPROPRIATION PROCESS" REALLY WAS A REFERENCE TO THE OPPORTUNITY AFFORDED THE CONGRESS, THROUGH THE APPROPRIATION PROCESS, TO MAKE AN INFORMED ANALYSIS OF THE SUBSIDY ELEMENT OF MAIL PAY AND THUS BE IN POSITION TO EFFECT ANY NECESSARY OR DESIRABLE REVISION OF THE LAW. OTHERWISE, THE STATE MUST BE REGARDED AS AN INCORRECT EXPRESSION OF OPINION ON THE LEGAL SIGNIFICANCE OF THE PROVISIONS OF THE PLAN.

THE STATUTORY DIRECTION THAT THE BOARD FIX AND DETERMINE FAIR AND REASONABLE RATES IS INDEPENDENT OF THE DIRECTION THAT THE POSTMASTER GENERAL PAY SUCH RATES FOR THE TRANSPORTATION OF MAIL BY AIRCRAFT. THE RATES ARE NOT EARNED, AND NEITHER THE POSTMASTER GENERAL NOR THE BOARD INCURS AN OBLIGATION TO PAY THEM, UNTIL MAIL HAS BEEN TRANSPORTED. OTHER WORDS, DETERMINATION OF RATES IS DISASSOCIATED NOT ONLY FROM THE FUNCTION OF PAYMENT BUT EVEN FROM THE INCURRENCE OF OBLIGATION. HENCE, I AM OF THE VIEW THAT THE EXISTENCE OR NONEXISTENCE OF APPROPRIATIONS DOES NOT IN ANY WAY RESTRICT OR INTERFERE WITH THE RATE-MAKING DUTIES OF THE BOARD.

IN THIS CONNECTION, SEE TRANSCONTINENTAL AND WESTERN AIR, INC. V. CIVIL AERONAUTICS BOARD, 336 U.S. 601, WHEREIN THE SUPREME COURT, CONCLUDING THAT THE BOARD WAS WITHOUT AUTHORITY TO MAKE A RATE RETROACTIVE TO A DATE EARLIER THAN THE DATE OF THE CARRIER'S PETITION, OBSERVED THAT "THE LANGUAGE OF SEC. 406 (A) * * * READS LIKE A TYPICAL PUBLIC UTILITY RATE- MAKING AUTHORITY," STATING THAT, WHILE BOTH SUBSECTIONS (A) AND REFLECT SOME CHARACTERISTICS OF RATE-MAKING WHICH ARE PECULIAR TO AIR CARRIERS,"1THE LANGUAGE OF THE ACT DOES NOT SUGGEST THAT CONGRESS INTENDED TO BREAK WITH THESE TRADITIONS OF RATE-MAKING.'

WITH RESPECT TO YOUR SECOND QUESTION, YOU EXPRESS NO DOUBT AS TO YOUR AUTHORITY TO SATISFY PROPER CLAIMS FOR THE "SUBSIDY" PORTION OF THE FIXED COMPENSATION, BASED UPON EARNINGS AS A RESULT OF AIRMAIL CARRIAGE, WHERE APPROPRIATIONS HAVE BEEN MADE AVAILABLE. WHETHER, IN THE ABSENCE OF APPROPRIATIONS TO SATISFY THEM, THOSE CLAIMS CONSTITUTE VALID LEGAL OBLIGATIONS OF THE UNITED STATES IS A HYPOTHETICAL QUESTION, WHICH INVOLVES A SUPPOSITION THAT THE CONGRESS WILL NOT APPROPRIATE FUNDS ADEQUATE TO COVER THE OBJECTS IN QUESTION. THIS OFFICE HAS CONSISTENTLY DECLINED TO RENDER DECISIONS IN SUCH CASES. SEE 21 COMP. GEN. 83.