B-126544, FEB. 17, 1956

B-126544, FEB. 17, 1956

TO HONORABLE SECRETARY OF THE TREASURY:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1956, REQUESTING A DECISION WHETHER CERTAIN ROLLING MILLS MAY BE SOLD AND THE PROCEEDS USED FOR THE PURCHASE OF NEW PARTS FOR A ROLLING MILL LINE.

IT IS STATED IN YOUR LETTER, IN SUBSTANCE, THAT EACH OF FIVE ROLLING MILL LINES USED BY THE MINT AT PHILADELPHIA IN MAKING COINS CONSISTS OF ONE 16- INCH MILL AND TWO 10-INCH MILLS; THAT THREE ROLLING MILL LINES ARE BEING COMBINED INTO ONE SINGLE LINE, USING THE THREE LARGER MILLS WITH CERTAIN ALTERATIONS AND ADDITIONS; AND THAT THE SIX SMALLER MILLS WILL NOT BE NEEDED AND WILL BE SOLD. IT IS STATED FURTHER THAT THE NEW LINE "WILL BE USED FOR THE SAME SPECIFIC PURPOSE AS THOSE NOW IN OPERATION" AND THAT ITS CAPACITY WILL BE MUCH GREATER THAN THAT OF THE THREE OLD LINES. THE QUESTION PRESENTED IS WHETHER, WITHIN THE PROVISIONS OF 40 U.S.C. 481 (C) AND THE PERTINENT GENERAL SERVICES ADMINISTRATION REGULATIONS, THE PROCEEDS OF THE SALE OF THE SIX SMALLER MILLS MAY BE USED FOR THE PURCHASE OF NEW PARTS OR ADDITIONS NEEDED FOR THE COMPLETION OF THE COMBINED ROLLING MILL LINE.

SECTION 201 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 384, AS AMENDED, 40 U.S.C. 481 (C), PROVIDES:

"/C) IN ACQUIRING PERSONAL PROPERTY, ANY EXECUTIVE AGENCY, UNDER REGULATIONS TO BE PRESCRIBED BY THE ADMINISTRATOR, MAY EXCHANGE OR SELL SIMILAR ITEMS AND MAY APPLY THE EXCHANGE ALLOWANCE OR PROCEEDS OF SALE IN SUCH CASES IN WHOLE OR IN PART PAYMENT FOR THE PROPERTY ACQUIRED: PROVIDED, THAT ANY TRANSACTION CARRIED OUT UNDER THE AUTHORITY OF THIS SUBSECTION SHALL BE EVIDENCED IN WRITING.'

SEC. 213.00 OF GENERAL SERVICES ADMINISTRATION REGULATIONS I-II 213,RELATIVE TO EXCHANGE OR SALE OF PERSONAL PROPERTY FOR REPLACEMENT PURPOSES, PRESCRIBED PURSUANT TO THE ABOVE-QUOTED SECTION 201 (C), PROVIDES IN PART AS FOLLOWS:

"213.02 GENERAL AUTHORIZATION. SUBJECT TO THE PROVISIONS OF THIS TITLE, EXECUTIVE AGENCIES ARE HEREBY AUTHORIZED, IN ACQUIRING REPLACEMENT PERSONAL PROPERTY WITHIN THE UNITED STATES OR ELSEWHERE, TO EXCHANGE OR SELL SIMILAR ITEMS AND APPLY THE EXCHANGE ALLOWANCE OR THE PROCEEDS OF SALE IN SUCH CASES, IN WHOLE OR IN PART PAYMENT FOR THE REPLACEMENT PROPERTY ACQUIRED.'

"213.04B. THE ITEM OF PERSONAL PROPERTY TO BE EXCHANGED OR SOLD AND THE ITEM TO BE ACQUIRED SHALL BE DEEMED SIMILAR FOR THE PURPOSE OF THIS SECTION WHEN:

"2. IN THE CASE OF PERSONAL PROPERTY NOT FALLING WITHIN THE CATEGORIES OF SUBPARAGRAPH 1. ABOVE, THE ITEM TO BE ACQUIRED IS DESIGNED AND CONSTRUCTED FOR THE SAME SPECIFIC PURPOSE AS THE ITEM TO BE REPLACED; OR

"4. BOTH CONSTITUTE PARTS FOR ITEMS WHICH ARE SIMILAR WITHIN THE MEANING OF SUBPARAGRAPH 1. OR 2. ABOVE.'

IN REPLY TO OUR REQUEST FOR A REPORT IN THE MATTER, THE ADMINISTRATOR OF GENERAL SERVICES EXPRESSES THE VIEW, IN SUBSTANCE, THAT THE PROPOSED TRANSACTION IS WITHIN THE INTENDED PURVIEW OF THE PERTINENT REGULATIONS AND IS CONSISTENT WITH SECTION 201 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED.

FOR THE REASONS ABOVE INDICATED, IT IS CONCLUDED THAT THE 10-INCH ROLLING MILLS AND THE PARTS OR ADDITIONS TO BE OBTAINED FOR COMPLETING THE COMBINED ROLLING MILL LINE PROPERLY MAY BE REGARDED AS "SIMILAR ITEMS" WITHIN THE MEANING OF SECTION 201 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949. ACCORDINGLY, THERE IS NOT PERCEIVED ANY OBJECTION TO THE APPLICATION OF THE PROCEEDS OF THE SALE OF THE MILLS TO THE PURCHASE OF THE NEW PARTS OR ADDITIONS AS PROPOSED.