B-127726, AUGUST 6, 1956, 36 COMP. GEN. 84

B-127726, AUGUST 6, 1956, 36 COMP. GEN. 84

COMPENSATION - DOUBLE - RETIRED PERSONNEL - CONCURRENT RETIRED AND CIVILIAN PAY - AGRICULTURAL COOPERATIVE EMPLOYEES A RETIRED NAVAL RESERVE OFFICER WHO IS APPOINTED BY THE DEPARTMENT OF AGRICULTURE TO A CIVILIAN (COOPERATIVE) POSITION IN THE EXTENSION SERVICE AT A STATE UNIVERSITY, WHERE HE PERFORMS FEDERAL FUNCTIONS AND IS SUPERVISED BY A FEDERAL OFFICIAL, HOLDS A CIVILIAN OFFICE OR POSITION UNDER THE UNITED STATES GOVERNMENT WITHIN THE MEANING OF THE DUAL COMPENSATION LIMITATIONS IN SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, 5 U.S.C. 59A, EVEN THOUGH HIS CIVILIAN SALARY IS PAID FROM STATE OR NON-FEDERAL FUNDS. THE DECISION THAT DEPARTMENT OF AGRICULTURE COOPERATIVE EMPLOYEES (PAID BY STATES) HOLD POSITIONS UNDER THE UNITED STATES GOVERNMENT WITHIN THE MEANING OF THE DUAL COMPENSATION LIMITATIONS OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, 5 U.S.C. 59A, IS TANTAMOUNT TO A CHANGED CONSTRUCTION OF THE LAW AND, THEREFORE, WILL NOT BE GIVEN RETROACTIVE APPLICATION.

TO THE SECRETARY OF THE NAVY, AUGUST 6, 1956:

REFERENCE IS MADE TO LETTER DATED APRIL 25, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE NAVY ( FINANCIAL MANAGEMENT), REQUESTING DECISION WHETHER SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A, IS APPLICABLE TO THE EMPLOYMENT OF LIEUTENANT JAMES MONTELARO, UNITED STATES NAVAL RESERVE, RETIRED, 187 127, WITH THE AGRICULTURAL EXTENSION SERVICE OF THE UNIVERSITY OF FLORIDA AS AN ASSISTANT VEGETABLE CROP SPECIALIST.

SECTION 212, AS AMENDED, IS, IN PERTINENT PART, AS FOLLOWS (QUOTING FROM 5 U.S.C., SUPP. III, 59A):

(A) AFTER JUNE 30, 1932, NO PERSON HOLDING A CIVILIAN OFFICE OR POSITION, APPOINTIVE OR ELECTIVE, UNDER THE UNITED STATES GOVERNMENT OR THE MUNICIPAL GOVERNMENT OF THE DISTRICT OF COLUMBIA OR UNDER ANY CORPORATION, THE MAJORITY OF THE STOCK OF WHICH IS OWNED BY THE UNITED STATES, SHALL BE ENTITLED, DURING THE PERIOD OF SUCH INCUMBENCY, TO RETIRED PAY FROM THE UNITED STATES FOR OR ON ACCOUNT OF SERVICES AS A COMMISSIONED OFFICER IN THE ARMY OF THE UNITED STATES, NAVY, AIR FORCE, MARINE CORPS, COAST GUARD, COAST AND GEODETIC SURVEY, AND PUBLIC HEALTH SERVICE, AT A RATE IN EXCESS OF AN AMOUNT WHICH WHEN COMBINED WITH THE ANNUAL RATE OF COMPENSATION FROM SUCH CIVILIAN OFFICE OR POSITION, MAKES THE TOTAL RATE FROM BOTH SOURCES MORE THAN $10,000; AND WHEN THE RETIRED PAY AMOUNTS TO OR EXCEEDS THE RATE OF $10,000 PER ANNUM SUCH PERSON SHALL BE ENTITLED TO THE PAY OF THE CIVILIAN OFFICE OR POSITION OR THE RETIRED PAY, WHICHEVER HE MAY ELECT.

PRIOR TO THE ENACTMENT OF PUBLIC LAW 239, 84TH CONGRESS (ACT OF AUGUST 4, 1955, 69 STAT. 497-498), 5 U.S.C. SUPP. III 59A, WHICH AMENDED SECTION 212, AS AMENDED, THAT SECTION PLACED A LIMIT OF $3,000 (INSTEAD OF $10,000) PER ANNUM ON THE COMBINED AMOUNT OF RETIRED PAY AND CIVILIAN COMPENSATION. AND WHILE IT APPEARS THAT LIEUTENANT MONTELARO'S RETIRED PAY WHEN COMBINED WITH THE SALARY OF HIS CIVILIAN POSITION IS LESS THAN $10,000 PER ANNUM, THE ASSISTANT SECRETARY STATES THAT "IN VIEW OF THE FACT THAT THE FILE INDICATES THAT ERRONEOUS PAYMENTS MAY HAVE BEEN MADE TO LIEUTENANT MONTELARO PRIOR TO ENACTMENT OF PUBLIC LAW 239 * * * AND THE POSSIBILITY THAT OTHER OFFICERS IN THE SAME CIRCUMSTANCES MAY EXCEED THE $10,000 LIMITATION * * * (THE MATTER IS) CONSIDERED TO BE OF SUFFICIENT IMPORTANCE FOR TRANSMITTAL TO YOUR OFFICE FOR AN OPINION.'

THE ENCLOSURES RECEIVED WITH THE ASSISTANT SECRETARY'S LETTER SHOW THAT LIEUTENANT MONTELARO WAS PLACED ON THE RETIRED LIST ON FEBRUARY 1, 1947. HE HAS BEEN EMPLOYED SINCE SEPTEMBER 1, 1952, BY THE AGRICULTURAL EXTENSION SERVICE OF THE UNIVERSITY OF FLORIDA AND HIS CIVILIAN COMPENSATION, $4,800 TO $5,000 PER ANNUM, HAS BEEN PAID FROM STATE FUNDS, FEDERAL FUNDS GRANTED TO THE STATE OF FLORIDA, OR ITS AGENCIES, AND OTHER CONTRIBUTIONS. THE OFFICER WAS APPOINTED TO THE POSITION BY THE DEPARTMENT OF AGRICULTURE, THE APPOINTMENT DOCUMENTS SHOWING THAT THE POSITION IS A SCHEDULE A EXCEPTED POSITION IN THE EXTENSION SERVICE OF THE DEPARTMENT OF AGRICULTURE. IT APPEARS THAT IN HIS CIVILIAN POSITION THE OFFICER HAS BEEN ENGAGED IN THE PERFORMANCE OF FEDERAL FUNCTIONS AUTHORIZED BY FEDERAL STATUTES AND HAS BEEN SUPERVISED BY A FEDERAL OFFICIAL. UNDER A 1944 RULING BY THE UNITED STATES CIVIL SERVICE COMMISSION EMPLOYEES HOLDING POSITIONS LIKE THAT OF MR. MONTELARO ARE REGARDED AS FEDERAL EMPLOYEES FOR PURPOSES OF THE CIVIL SERVICE RETIREMENT ACT, 5 U.S.C. 691-736C, AND THE COMMISSION RECENTLY HAS CONCLUDED THAT SUCH EMPLOYEES ARE ENTITLED TO THE BENEFITS OF THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT, 5 U.S.C. 2091 2103.

ON THE GROUND THAT THE COMPENSATION ATTACHED TO COOPERATIVE POSITIONS IN THE AGRICULTURAL EXTENSION SERVICE OF THE DEPARTMENT OF AGRICULTURE IS PAID FROM STATE FUNDS, THE DUAL EMPLOYMENT AND COMPENSATION STATUTES CODIFIED IN 5 U.S.C. 58, 62, AND 69 WERE HELD IN DECISION OF JUNE 13, 1946, 25 COMP. GEN. 868, TO BE INAPPLICABLE TO EMPLOYMENTS IN SUCH POSITIONS. THE CONTROLLING TEST, HOWEVER, IN DETERMINING THE APPLICABILITY OF SECTION 212 OF THE ECONOMY ACT TO AN EMPLOYMENT IS WHETHER THE CIVILIAN OFFICE OR POSITION HELD BY THE EMPLOYEE IS, IN FACT, AN OFFICE OR POSITION ,UNDER" THE UNITED STATES GOVERNMENT, A GOVERNMENT- OWNED CORPORATION, OR THE MUNICIPAL GOVERNMENT OF THE DISTRICT OF COLUMBIA. COMPARE 28 COMP. GEN. 588.

THE CIRCUMSTANCES OF LIEUTENANT MONTELARO'S APPOINTMENT, THE CONDITIONS OF HIS SERVICE, AND THE POSITION OF THE CIVIL SERVICE COMMISSION AS TO HIS RETIREMENT AND INSURANCE RIGHTS LEAVE LITTLE ROOM FOR DOUBT THAT HIS CIVILIAN POSITION MUST BE CONSIDERED AN OFFICE OR POSITION UNDER THE UNITED STATES GOVERNMENT WITHOUT REGARD TO THE SOURCE OF THE FUNDS FROM WHICH HIS CIVILIAN COMPENSATION IS PAID. SALARY PAYMENTS BY THE STATE MAY BE REGARDED AS FOR THE ACCOUNT OF THE UNITED STATES UNDER AGREEMENTS BETWEEN THE STATE AND THE UNITED STATES. ACCORDINGLY, IT IS CONCLUDED THAT HE DOES HOLD A CIVILIAN POSITION WITHIN THE PURVIEW OF SECTION 212 AND THAT AN ADJUSTMENT WOULD BE REQUIRED IN HIS CASE BY THAT SECTION IF THE COMBINED AMOUNT OF HIS RETIRED PAY AND CIVILIAN COMPENSATION PRESENTLY EXCEEDED THE RATE OF $10,000 PER ANNUM.

PRIOR TO 1944, INDIVIDUALS SERVING UNDER EXTENSION SERVICE COOPERATIVE APPOINTMENTS SIMILAR TO THAT OF MR. MONTELARO'S WERE NOT CONSIDERED TO BE ENTITLED TO FEDERAL RETIREMENT BENEFITS, AND THE STATUS OF THEIR POSITIONS WAS NOT CLEARLY DEFINED. INSTRUCTIONS WERE ISSUED TO OUR AUDIT PERSONNEL SHORTLY AFTER THE ENACTMENT OF THE ECONOMY ACT OF 1932 TO THE EFFECT THAT SECTION 212 OF THE ACT HAD NO APPLICATION TO EMPLOYMENTS IN SUCH POSITIONS OR, AT LEAST, IN POSITIONS WHICH WERE SIMILAR IN NATURE. ALSO, WE HELD IN DECISION OF JUNE 25, 1935, 14 COMP. GEN. 916, THAT SECTION 212 WOULD NOT PRECLUDE A RETIRED MARINE CORPS OFFICER FROM HOLDING AN OFFICE OR POSITION CREATED BY A STATE, THE SALARY OF WHICH IS PAID FROM FUNDS GRANTED BY THE FEDERAL GOVERNMENT; AND THE DECISION DATED JUNE 13, 1946, 25 COMP. GEN. 868, MIGHT BE VIEWED AS IMPLYING THAT SECTION 212 DOES NOT APPLY TO THESE COOPERATIVE POSITIONS. THUS, THE PRESENT VIEW AS TO THE NATURE OF A COOPERATIVE EMPLOYMENT LIKE MR. MONTELARO'S REASONABLY MAY BE CONSIDERED TANTAMOUNT TO A CHANGED CONSTRUCTION OF LAW. HENCE, THIS DECISION WILL NOT BE GIVEN A RETROACTIVE APPLICATION. COMPARE 6 COMP. DEC. 91; 13 COMP. DEC. 53; 12 OPP. ATTY. GEN. 386, AND 20 COMP. GEN. 53. ACCORDINGLY, NO ACTION NEED BE TAKEN WITH RESPECT TO RECOVERY OF OTHERWISE PROPER PAYMENTS OF RETIRED PAY MADE TO LIEUTENANT MONTELARO, OR TO OTHER RETIRED OFFICERS SIMILARLY SITUATED, PRIOR TO THE DATE OF THIS DECISION.