B-135411, MAY 15, 1958, 37 COMP. GEN. 767

B-135411, MAY 15, 1958, 37 COMP. GEN. 767

PANAMA CANAL - APPROPRIATION AVAILABILITY - PUBLIC BUILDING CONVERSION THE AUTHORITY IN SECTION 16, TITLE 2, CANAL ZONE CODE, FOR THE ACQUISITION OR CONSTRUCTION OF BUILDINGS IS AN APPROPRIATION AUTHORIZATION AND DOES NOT SUPERSEDE THE PROHIBITION IN SECTION 3733, REVISED STATUTES, 41 U.S.C. 12, AGAINST THE EXECUTION OF CONTRACTS FOR CONSTRUCTION OF PUBLIC BUILDINGS IN THE ABSENCE OF A SPECIFIC APPROPRIATION FOR SUCH PURPOSE; THEREFORE, A SPECIFIC APPROPRIATION FOR THE CONVERSION OF BUILDINGS IN THE CANAL ZONE IS REQUIRED BEFORE ANY EXPENDITURE CAN BE MADE. ALTHOUGH THE 1958 APPROPRIATION FOR THE CANAL ZONE ( PUBLIC LAW 85 52) IS IN SUCH BROAD TERMS THAT IT MIGHT BE LEGALLY AVAILABLE FOR THE CONVERSION OF CERTAIN BUILDINGS, THE FACT THAT THE CONGRESS WAS ADVISED THAT THE APPROPRIATION WAS TO BE USED FOR COMPLETELY DIFFERENT PROJECTS REQUIRES SUBMISSION OF THE ENTIRE MATTER TO THE CONGRESS BEFORE PROCEEDING WITH THE BUILDING PROGRAM. THE EXPENDITURE OF CANAL ZONE GOVERNMENT FUNDS FOR THE CONVERSION OF BUILDINGS TRANSFERRED TO THE GOVERNMENT BY THE DEPARTMENT OF THE NAVY, WITH THE RIGHT OF RECAPTURE RESERVED TO THE TRANSFEROR, WOULD NOT BE AN IMPROPER AUGMENTATION OF NAVY APPROPRIATIONS PROVIDED THAT FUNDS WERE SPECIFICALLY APPROPRIATED TO THE CANAL ZONE FOR SUCH PURPOSE.

TO THE GOVERNOR OF THE CANAL ZONE, MAY 15, 1958:

YOUR LETTERS OF APRIL 3 AND 11, 1958, CONCERN THE AUTHORITY OF THE CANAL ZONE GOVERNMENT TO EXPEND APPROPRIATED FUNDS FOR THE CONVERSION OF CERTAIN BUILDINGS IN THE CANAL ZONE FOR USE AS SCHOOLS AND FOR OTHER PURPOSES. THE APRIL 3 LETTER CONCERNS THE CONVERSION OF BUILDING NO. 98 FOR USE AS AN ELEMENTARY SCHOOL AND THE APRIL 11 LETTER CONCERNS THE CONVERSION OF A FORMER NAVY BARRACKS FOR USE AS A HIGH SCHOOL AND APPARENTLY THE CONVERSION OF OTHER BUILDINGS FOR VARIOUS PURPOSES. THE PROPOSED CONVERSION OF THE BUILDINGS IN QUESTION APPARENTLY IS INCIDENT TO THE TRANSFER OF CERTAIN PANAMA CANAL COMPANY/1CANAL ZONE GOVERNMENT PROPERTY TO THE REPUBLIC OF PANAMA PURSUANT TO A 1955 TREATY AND PUBLIC LAW 85-223, APPROVED AUGUST 30, 1957, 71 STAT. 509.

BRIEFLY, IT APPEARS THAT THE TWO BUILDINGS PROPOSED TO BE CONVERTED INTO SCHOOLS ARE PART OF A DEFINED AREA IN THE CANAL ZONE WHICH THE DEPARTMENT OF THE NAVY HAS INDICATED IT WILL TRANSFER TO THE CANAL ZONE GOVERNMENT PURSUANT TO SECTION 204 OF THE DEPARTMENT OF COMMERCE AND RELATED AGENCIES APPROPRIATION ACT, 1956, 69 STAT. 236. THE NAVY HAS INDICATED THAT ONE- HALF OF THE AREA WILL BE TRANSFERRED UNCONDITIONALLY BUT THAT THE OTHER HALF WILL BE TRANSFERRED SUBJECT TO THE NAVY'S RIGHT TO RECAPTURE IN THE EVENT OF THE OCCURRENCE OF A NATIONAL EMERGENCY. WE HAVE BEEN INFORMALLY ADVISED BY YOUR WASHINGTON OFFICE THAT BUILDING NO. 98 (PROPOSED ELEMENTARY SCHOOL) WILL BE TRANSFERRED UNCONDITIONALLY AND YOUR LETTER OF APRIL 11 INDICATES THAT THE FORMER NAVY BARRACKS (PROPOSED HIGH SCHOOL) AND CERTAIN OTHER BUILDINGS, WILL BE TRANSFERRED SUBJECT TO RECAPTURE BY THE NAVY IN THE EVENT OF A NATIONAL EMERGENCY. WE HAVE ALSO BEEN INFORMALLY ADVISED BY YOUR WASHINGTON OFFICE THAT THE COST OF CONVERTING BUILDING NO. 98 INTO AN ELEMENTARY SCHOOL WILL BE APPROXIMATELY $460,000, AND YOUR LETTER OF APRIL 11 INDICATES THE COST OF CONVERTING THE BARRACKS INTO A HIGH SCHOOL WILL BE APPROXIMATELY $2,000,000. CONVERSION OF THE TWO BUILDINGS INTO SCHOOLS WILL ELIMINATE THE NECESSITY OF THE CANAL ZONE GOVERNMENT CONSTRUCTING TWO NEW SCHOOLS AT A COST GREATER THAN THE COSTS OF CONVERSION.

WE WILL FIRST CONSIDER THE QUESTIONS RAISED IN YOUR LETTER OF APRIL 3, 1958.

THE CONVERSION OF BUILDING NO. 98 WAS THE SUBJECT OF OUR DECISION OF MARCH 24, 1958, B-135411, TO YOU, AND WE HELD THEREIN THAT CANAL ZONE GOVERNMENT FUNDS WERE NOT AVAILABLE FOR SUCH A PURPOSE SINCE YOUR CURRENT APPROPRIATIONS DID NOT CONTAIN SPECIFIC AUTHORITY THEREFOR. OUR HOLDING WAS BASED MAINLY ON THE PROVISIONS OF SECTION 3733 REVISED STATUTES (41 U.S.C. 12), WHICH, IN EFFECT, PROHIBIT ENTERING INTO CONTRACTS FOR THE ERECTION, REPAIR, OR FURNISHING OF ANY PUBLIC BUILDINGS, OR ANY PUBLIC IMPROVEMENT, IN THE ABSENCE OF A SPECIFIC APPROPRIATION FOR SUCH PURPOSE. WE ALSO STATED IN THAT DECISION THAT THE CONCLUDING SENTENCE OF PUBLIC LAW 85-223 CLEARLY CONTEMPLATES THE MAKING BY THE CONGRESS OF AN APPROPRIATION FOR REPLACEMENT SUCH AS THERE AUTHORIZED. THIS SENTENCE PROVIDES, IN PERTINENT PART:

* * * THERE ARE HEREBY AUTHORIZED TO BE APPROPRIATED SUCH AMOUNTS AS MAY BE REQUIRED FOR THE NECESSARY REPLACEMENT OF PROPERTY OR FACILITIES OF THE PANAMA CANAL COMPANY OR CANAL ZONE GOVERNMENT CONVEYED OR RENDERED EXCESS AS THE RESULT OF THE TREATY OR MEMORANDUM * * *. ( ITALICS SUPPLIED.)

YOU REQUEST THAT WE CONSIDER BOTH ASPECTS OF THAT DECISION. YOU SAY THAT THE FIRST HOLDING IN THE DECISION, TO THE EFFECT THAT A SPECIFIC APPROPRIATION FOR CONVERSION OF BUILDING NO. 98 IS A PREREQUISITE IN VIEW OF SECTION 3733, REVISED STATUTES, APPEARS NOT TO TAKE INTO ACCOUNT SECTION 16, TITLE 2, CANAL ZONE CODE. YOU EXPRESS THE VIEW THAT SECTION 16 HAS THE EFFECT OF SUPERSEDING SECTION 3733, REVISED STATUTES, INSOFAR AS CONCERNS THE CANAL ZONE GOVERNMENT. SECTION 16 READS AS FOLLOWS:

ACQUISITION OR CONSTRUCTION OF STRUCTURES, EQUIPMENT, AND IMPROVEMENTS.-- - THE GOVERNOR OF THE PANAMA CANAL IS AUTHORIZED, WITHIN THE LIMITS OF AVAILABLE FUNDS, TO PURCHASE OR OTHERWISE ACQUIRE EQUIPMENT, AND WITHIN THE CANAL ZONE TO PURCHASE OR OTHERWISE ACQUIRE, CONSTRUCT, REPAIR, REPLACE, ALTER, OR ENLARGE ANY BUILDING, STRUCTURE, OR OTHER IMPROVEMENT, WHEN IN HIS JUDGMENT SUCH ACTION IS NECESSARY FOR THE OPERATION, MAINTENANCE, SANITATION, OR CIVIL GOVERNMENT OF THE PANAMA CANAL OR CANAL ZONE.

YOU STATE THAT THE ASSERTION IN YOUR ORIGINAL SUBMISSION TO US TO THE EFFECT THAT THE PROPOSED EARLY INITIATION OF THE PROJECT COULD BE ACCOMPLISHED BY USING, SUBJECT TO THE APPROVAL OF THE BUREAU OF THE BUDGET, FUNDS CURRENTLY AVAILABLE (TO THE CANAL ZONE GOVERNMENT), WAS NECESSARILY MADE IN RELIANCE UPON THE AUTHORITY CONFERRED UPON YOUR OFFICE BY CONGRESS IN SECTION 16.

YOU ALSO QUESTION WHAT YOU CALL THE SECOND ASPECT OF OUR DECISION, THAT IS, THE CONCLUSION THEREIN TO THE EFFECT THAT PUBLIC LAW 85-223 "CLEARLY CONTEMPLATES THE MAKING BY THE CONGRESS OF AN APPROPRIATION FOR REPLACEMENT SUCH AS THERE AUTHORIZED.'

SECTION 16, TITLE 2, OF THE CANAL ZONE CODE WAS ADDED THERETO BY THE ACT OF AUGUST 12, 1949, 63 STAT. 600, THE SO-CALLED "1POINT-OF-ORDER ACT.' THE PURPOSE OF SECTION 16, AS INDICATED BY THE ABOVE TITLE AND AS DISCLOSED BY THE LEGISLATIVE HISTORY OF THE SECTION, IS TO PROVIDE THE NECESSARY SUPPORT FOR LANGUAGE IN THE CANAL ZONE GOVERNMENT ANNUAL APPROPRIATION ACTS PROVIDING FUNDS FOR THE PURCHASE, CONSTRUCTION, REPAIR, REPLACEMENT, ALTERATION OR ENLARGEMENT OF BUILDINGS, STRUCTURES, EQUIPMENT, AND OTHER IMPROVEMENTS IN THE CANAL ZONE. IN OTHER WORDS, THE PURPOSE OF THE SECTION IS TO INSURE THAT THE ABOVE REFERRED TO LANGUAGE IN ANNUAL CANAL ZONE APPROPRIATION ACTS WILL NOT BE SUBJECT TO A POINT/OF/ORDER ON THE GROUND THAT SUCH LANGUAGE CONSTITUTES LEGISLATION. SEE PAGE 1, SENATE REPORT NO. 198, 81ST CONGRESS, ST SESSION, ON S. 1136, WHICH BECAME THE ACT OF AUGUST 12, 1949, AND PAGES 1 AND 2, SENATE REPORT NO. 1539, 80TH CONGRESS, 2D SESSION, ON S. 2829, WHICH CONTAINED A PROVISION IDENTICAL WITH SECTION 16. SEE ALSO, PAGES 25, 26, AND 27, HEARINGS BEFORE THE SUBCOMMITTEE ON THE PANAMA CANAL OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES, HOUSE OF REPRESENTATIVES, 81ST CONGRESS, ON H.R. 3159 (AMONG OTHERS), WHICH IS IDENTICAL WITH S. 2829; AND PAGES 14, 15, 16, 17, AND 18, HEARING BEFORE SUBCOMMITTEE OF THE COMMITTEE ON ARMED SERVICES, UNITED STATES SENATE, 80TH CONGRESS, 2D SESSION, ON S. 2829. ALSO, IT IS CLEAR FROM THE ABOVE REFERRED-TO SENATE HEARING THAT A SPECIFIC APPROPRIATION IS NECESSARY FOR THE PURPOSES AUTHORIZED BY SECTION 16. IN CONNECTION WITH THE FOREGOING NOTE THE FOLLOWING DISCUSSION OF HEARING ON PAGES 17 AND 18 OF THE SENATE HEARING:

SENATOR MORSE. YOUR DIFFICULTY IS THAT THE COMPTROLLER GENERAL NOW TAKES THE POSITION THAT UNLESS YOU HAVE LEGISLATION TO THIS EFFECT THAT YOU CANNOT TAKE, FOR EXAMPLE, RESERVE FUNDS THAT YOU COLLECT FROM PANAMA CANAL OPERATIONS AND USE THEM FOR CONSTRUCTION AND REPAIR AND REPLACEMENTS AND ALTERATIONS OR ENLARGEMENTS, AS PROVIDED FOR HERE IN SECTION 16 WITHOUT SPECIAL APPROVAL OF CONGRESS. IS THAT THE PROBLEM?

MR. BURDICK. HE DID TAKE THAT POSITION, MR. CHAIRMAN, A FEW YEARS AGO AND TO OVERCOME THAT OBJECTION, THAT TECHNICAL OBJECTION, WE CAME TO CONGRESS AND ASKED FOR LANGUAGE TO BE INCLUDED IN OUR ANNUAL APPROPRIATION ACT. THAT HAS BEEN CARRIED IN THE APPROPRIATION ACTS EVER SINCE, BUT THE POINT WE MAKE NOW IS THAT THE CHAIRMAN OF THE HOUSE APPROPRIATIONS COMMITTEE HAS CALLED ATTENTION TO THE FACT THAT SOME OF THESE ARE SUBJECT TO POINTS OF ORDER, AND THEREFORE SHOULD NOW BE PLACED INTO SUBSTANTIVE LEGISLATION.

SENATOR MORSE. THAT IS WHAT YOU PROPOSE TO DO BY THIS BILL.

MR. BURDICK. THAT IS WHAT WE PROPOSE.

SENATOR MORSE. SO IF YOU EVER GOT INTO A SITUATION IN THE HOUSE WHERE SOMEBODY WOULD RAISE A POINT OF ORDER THAT THE REQUEST IS FOR FUNDS FOR CONSTRUCTION AND REPAIR, FOR EXAMPLE, ATTACHED TO AN APPROPRIATION BILL CONSTITUTES LEGISLATION AND THEREFORE IS SUBJECT TO A POINT OF ORDER, THAT SITUATION WOULD NOT BE POSSIBLE, THAT POINT OF ORDER WOULD NOT BE POSSIBLE IF THIS BILL WERE PASSED.

MR. BURDICK. THAT IS CORRECT, SIR. ( * * * * * *

SENATOR MORSE. WOULD THE BILL IN THE LIGHT OF MY HYPOTHETICAL QUESTION, IN VIEW OF THE FACT OF YOUR TESTIMONY THAT THE $50,000,000 WOULD AUTOMATICALLY GO INTO THE MISCELLANEOUS FUNDS OF THE TREASURY, REQUIRE THE APPROPRIATIONS COMMITTEE NOT ONLY TO AUTHORIZE THE CONSTRUCTION OF THE $20,000,000 WAREHOUSE, BUT SPECIFICALLY APPROPRIATE THE MONEY FOR THE CONSTRUCTION OF THE $20,000,000 WAREHOUSE?

MR. BURDICK. IT WOULD REQUIRE AN AUTHORIZATION AND IT WOULD REQUIRE AN APPROPRIATION SINCE THE NET PROFITS FROM THESE BUSINESS OPERATIONS ARE TURNED INTO THE TREASURY AT THE END OF THE YEAR.

SENATOR MORSE. IT WOULD REQUIRE BOTH AUTHORIZATION AND APPROPRIATION.

MR. BURDICK. YES, SIR. ( ITALICS SUPPLIED.)

IT IS CLEAR FROM THE FOREGOING THAT SECTION 16, TITLE 2, CANAL ZONE CODE, IS, IN EFFECT, AN APPROPRIATION AUTHORIZATION, AND THAT IT DOES NOT SUPERSEDE SECTION 3733, REVISED STATUTES. HENCE, A SPECIFIC APPROPRIATION IS NECESSARY FOR THE PURPOSES AUTHORIZED BY SECTION 16.

THE CANAL ZONE GOVERNMENT'S CURRENT YEAR APPROPRIATION ACT--- DEPARTMENT OF COMMERCE AND RELATED AGENCIES APPROPRIATION ACT, 1958, PUBLIC LAW 85- 52, 71 STAT. 70, 78--- CONTAINS THE FOLLOWING PROVISION:

CAPITAL OUTLAY: FOR ACQUISITION OF LAND AND LAND UNDER WATER AND ACQUISITION, CONSTRUCTION, AND REPLACEMENT OF IMPROVEMENTS, FACILITIES, STRUCTURES, AND EQUIPMENT, AS AUTHORIZED BY LAW (2 C.Z. CODE, SECS. 3 AND 16; 63 STAT. 600), INCLUDING THE PURCHASE OF NOT TO EXCEED EIGHT PASSENGER MOTOR VEHICLES FOR REPLACEMENT ONLY; AND EXPENSES INCIDENT TO THE RETIREMENT OF SUCH ASSETS; $1,000,000, TO REMAIN AVAILABLE UNTIL EXPENDED. ( ITALICS SUPPLIED.)

IT APPEARS FROM THE LEGISLATIVE HISTORY OF THE LAST QUOTED PROVISION THAT THE CANAL ZONE GOVERNMENT HAD, AT THE TIME OF ITS APPROPRIATION REQUEST FOR " CAPITAL OUTLAY FUNDS" FOR FISCAL YEAR 1958, AN UNOBLIGATED BALANCE OF APPROXIMATELY $729,000 IN ITS " CAPITAL OUTLAY" APPROPRIATION FROM PREVIOUS YEARS THAT IS AVAILABLE FOR THE PURPOSES ENUMERATED IN SECTION 16, TITLE 2, CANAL ZONE CODE, UNTIL EXPENDED. HOWEVER, AN EXAMINATION OF THE LEGISLATIVE HISTORY OF THE ABOVE QUOTED APPROPRIATION PROVISION (AND OF THE LEGISLATIVE HISTORIES OF YOUR PRIOR YEAR APPROPRIATIONS FOR " CAPITAL OUTLAY") DISCLOSES THAT THE CONGRESS WAS INFORMED, THROUGH THE HEARINGS AND BUDGET JUSTIFICATIONS, THAT THE FUNDS SOUGHT FOR " CAPITAL OUTLAY" WERE TO BE USED FOR CERTAIN SPECIFIC PURPOSES AND THAT CONVERSION OF THE BUILDINGS IN QUESTION TO SCHOOLS (AND OTHER USES) WAS NOT AMONG THE PURPOSES INCLUDED IN THE BUDGET JUSTIFICATIONS OR MENTIONED IN THE HEARINGS. MOREOVER, IT APPEARS FROM THE SAID LEGISLATIVE HISTORY THAT THE CANAL ZONE GOVERNMENT INTENDED TO ASK THE CONGRESS FOR A SUPPLEMENTAL APPROPRIATION IN ORDER TO CONSTRUCT A NEW SCHOOL BUILDING INCIDENT TO TRANSFERRING CERTAIN PROPERTY TO THE REPUBLIC OF PANAMA. SEE PAGE 822, HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, 85TH CONGRESS, ST SESSION, ON DEPARTMENT OF COMMERCE AND RELATED AGENCIES APPROPRIATIONS FOR 1958. THUS, IT IS CLEAR THAT THE CONVERSION OF THE BUILDINGS IN QUESTION INTO SCHOOLS IS AN ENTIRELY DIFFERENT PROJECT OR PURPOSE FROM ANY MADE KNOWN TO THE CONGRESS AND FOR WHICH THE CONGRESS APPROPRIATED FUNDS.

WHILE THE ABOVE QUOTED APPROPRIATION LANGUAGE (AND THE LANGUAGE IN YOUR PRIOR YEAR APPROPRIATIONS FOR " CAPITAL OUTLAY") IS IN SUCH BROAD TERMS THAT IT PERHAPS COULD BE SAID THAT THE MONEY GRANTED IN SUCH APPROPRIATION LEGALLY IS AVAILABLE FOR THE PURPOSE PROPOSED (I.E., THE CONVERSION OF THE TWO BUILDINGS INTO SCHOOLS), THE QUESTION ARISES WHETHER THERE IS A KEEPING OF FAITH WITH THE CONGRESS WHICH HAD IN MIND COMPLETELY DIFFERENT PROJECTS WHEN IT APPROPRIATED THE FUNDS INVOLVED. THEREFORE, WE FEEL THAT BEFORE PROCEEDING WITH THE CONVERSION OF THE BUILDINGS IN QUESTION YOU SHOULD PRESENT THE ENTIRE MATTER TO THE CONGRESS FOR CONSIDERATION. THIS CONNECTION WE UNDERSTAND THAT HEARINGS ARE TO BE HELD IN THE VERY NEAR FUTURE IN CONNECTION WITH YOUR APPROPRIATION REQUESTS FOR FISCAL YEAR 1959.

IN VIEW OF THE FOREGOING IT DOES NOT APPEAR NECESSARY TO DISCUSS THE SECOND ISSUE PRESENTED IN YOUR LETTER OF APRIL 3, 1958.

YOUR LETTER OF APRIL 11 RAISES A QUESTION AS TO WHETHER THE EXPENDITURE OF CANAL ZONE GOVERNMENT FUNDS FOR THE IMPROVEMENT AND MAINTENANCE OF BUILDINGS IN AN AREA TRANSFERRED (AS INDICATED ABOVE) TO THE CANAL ZONE GOVERNMENT BY THE NAVY WITH THE RIGHT OF RECAPTURE BY THE TRANSFEROR WOULD BE REGARDED BY US "AS AN IMPROPER AUGMENTATION OF NAVY APPROPRIATIONS OR FOR ANY OTHER REASON.' SPECIFICALLY, YOU APPEAR CONCERNED WITH THE CONVERSION OF THE BARRACKS (SUBJECT TO RECAPTURE BY THE NAVY) INTO A HIGH SCHOOL. ASSUMING THAT THE CONGRESS, AFTER BEING APPRISED OF ALL THE FACTS INVOLVED, MAKES FUNDS AVAILABLE TO THE CANAL ZONE GOVERNMENT FOR THE CONVERSION OF BUILDINGS TRANSFERRED TO IT BY THE DEPARTMENT OF THE NAVY WITH THE RIGHT OF RECAPTURE RESERVED TO THE TRANSFEROR, WE WOULD NOT REGARD EXPENDITURES FOR CONVERSION PURPOSES AS AN IMPROPER AUGMENTATION OF NAVY APPROPRIATIONS.