B-161277, JUL. 7, 1967

B-161277, JUL. 7, 1967

ARMED SERVICES - RETIRED PAY - DUAL COMPENSATION - NONAPPROPRIATED FUND CHANGE TO APPROPRIATED FUND DECISION TO NAVY DISBURSING OFFICER HOLDING THAT ALTHOUGH RETIRED MEMBER WHO RECEIVED RETIRED PAY COMPUTED ON BASIS OF COMMISSIONED WARRANT OFFICER GRADE LOST EXEMPTION UNDER SEC. 201/F), DUAL COMP. ACT, WHEN CIVILIAN EMPLOYMENT WAS CHANGE FROM NONAPPROPRIATED TO APPROPRIATED FUND ACTIVITY, HE CONTINUED TO HAVE AN EXEMPT STATUS BY REASON OF HIS ELECTION UNDER SEC. 201/F), AND, THEREFORE THE RETIRED MEMBER REMAINS FREE OF DUAL COMPENSATION RESTRICTIONS IN SEC. 201/A) SO LONG AS HE RECEIVED RETIRED PAY ON BASIS OF COMMISSIONED WARRANT OFFICER GRADE.

TO MAJOR C. C. CRAIG, DISBURSING OFFICER, RETIRED PAY SECTION, FISCAL DIVISION, THROUGH HEADQUARTERS U. S. MARINE CORPS, DEPARTMENT OF THE NAVY:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 23, 1967, YOUR FILE CDH-JH, REQUESTING AN ADVANCE DECISION WHETHER AN OFFICER WHO WAS RECEIVING THE RETIRED PAY OF A COMMISSIONED CHIEF WARRANT OFFICER (W 3) ON DECEMBER 1, 1964, AND CONTINUES TO RECEIVE SUCH RETIRED PAY BASED ON THE GRADE OF W-3, WILL RETAIN HIS EXEMPTION PURSUANT TO CLAUSE (1), SUBSECTION 201 (F) OF THE DUAL COMPENSATION ACT OF 1964,AFTER THE DATE HIS EMPLOYER'S DESIGNATION CHANGED FROM A NONAPPROPRIATED TO AN APPROPRIATED FUND ACTIVITY. YOUR REQUEST WAS ASSIGNED CONTROL NO. DO-MC-950 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

YOU STATE THAT FIRST LIEUTENANT ROBERT C. MCINTYRE, 028474, U. S. MARINE CORPS, WAS RETIRED ON APRIL 1, 1957, UNDER THE PROVISIONS OF 10 U.S.C. 1293, IN THE PERMANENT GRADE OF COMMISSIONED WARRANT OFFICER (W 3) AND THAT HE WAS SIMULTANEOUSLY ADVANCED ON THE RETIRED LIST TO THE GRADE OF FIRST LIEUTENANT, THE TEMPORARY GRADE IN WHICH HE SERVED SATISFACTORILY AS DETERMINED BY THE SECRETARY OF THE NAVY PURSUANT TO 10 U.S.C. 6151 (A). YOU ALSO STATE THAT FOR THE PERIOD APRIL 1, 1957, THROUGH SEPTEMBER 30, 1963, LIEUTENANT MCINTYRE RECEIVED RETIRED PAY BASED ON HIS ADVANCED GRADE AS AUTHORIZED BY FORMULA NO. 4 OF 10 U.S.C. 1401.

EFFECTIVE OCTOBER 1, 1963, HOWEVER, YOU STATE THAT THE OFFICER BECAME ENTITLED TO RECOMPUTATION OF HIS RETIRED PAY AS PRESCRIBED IN SECTION 5 (C) (1) OF THE ACT OF OCTOBER 2, 1963, 77 STAT. 210, 213 (EFFECTIVE OCTOBER 1, 1963), AND SINCE RECOMPUTATION UNDER THAT SECTION, BASED ON THE GRADE OF W-3, WAS GREATER THAN RECOMPUTATION ON THE GRADE OF FIRST LIEUTENANT, THE OFFICER'S RETIRED PAY WAS RECOMPUTED BASED ON THE 1958 BASIC PAY RATES OF A W-3 AND HE HAS CONTINUED TO RECEIVE RETIRED PAY ON THAT BASIS SINCE OCTOBER 1, 1963.

YOU FURTHER STATE THAT ON JUNE 1, 1959, THE OFFICER WAS EMPLOYED BY BASE SPECIAL SERVICES, MARINE CORPS BASE, CAMP LEJEUNE, NORTH CAROLINA, WITH SALARY PAID FROM NONAPPROPRIATED FUNDS. IN THAT STATUS YOU SAY THAT HE DID NOT HOLD AN "OFFICE" WITHIN THE MEANING OF SECTION 2 OF THE ACT OF JULY 31, 1894, 5 U.S.C. 62 (1958 ED./-- CITING 36 COMP. GEN. 309--- AND THAT HE DID NOT HOLD A ,CIVILIAN OFFICE OR POSITION" WITHIN THE MEANING OF SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, 5 U.S.C. 59A (1958 ED./--CITING 43 COMP. GEN. 181.

YOU SAY THAT THE OFFICER CONTINUED HIS EMPLOYMENT IN THE SAME POSITION AND WAS SO EMPLOYED ON NOVEMBER 30, 1964, THE DAY PRECEDING THE EFFECTIVE DATE OF THE DUAL COMPENSATION ACT OF 1964, 78 STAT. 484, AND THAT HE FILED A TIMELY ELECTION UNDER THE 1964 ACT TO REMAIN IN THE STATUS HE OCCUPIED ON NOVEMBER 30, 1964. YOU REPORT, HOWEVER, THAT ON FEBRUARY 21, 1967, HIS EMPLOYER'S DESIGNATION CHANGED FROM NONAPPROPRIATED TO APPROPRIATED FUNDS; THAT HE WAS GIVEN A CAREER CONDITIONAL APPOINTMENT IN THE COMPETITIVE CIVIL SERVICE; AND THAT HE CONTINUED IN THE SAME LINE OF EMPLOYMENT WITH THE SAME BASE AND EMPLOYER WHICH HE HAD SINCE JUNE 1, 1959.

YOU EXPRESS THE VIEW THAT THIS CASE IS DISTINGUISHABLE FROM THE SITUATION IN 45 COMP. GEN. 194 AND YOU SAY THAT WHILE THE CONVERSION OF LIEUTENANT MCINTYRE'S CIVILIAN SALARY FROM NONAPPROPRIATED TO APPROPRIATED FUNDS NULLIFIES HIS "NONAPPROPRIATED FUND EXEMPTION", YOU ARE IN DOUBT AS TO THE EFFECT THE CONVERSION HAS UPON HIS "WARRANT OFFICER EXEMPTION;, YOU ASK WHETHER UNDER THE APPLICABLE PROVISIONS OF LAW YOU ARE REQUIRED TO REDUCE THE RETIRED PAY OF LIEUTENANT MCINTYRE EFFECTIVE FEBRUARY 21, 1967.

UNDER SECTION 101 (1) OF THE DUAL COMPENSATION ACT, PUB. L. 88-448, 78 STAT. 484, WHICH BECAME EFFECTIVE DECEMBER 1, 1964, THE TERMS "OFFICER" AND "WARRANT OFFICER" HAVE THE DEFINITIONS GIVEN THEM BY SECTION 101 OF TITLE 37, U.S.C. SECTION 101 (3) OF THE 1964 ACT DEFINES THE TERM ,CIVILIAN OFFICE" TO MEAN, AMONG OTHER THINGS, A CIVILIAN OFFICE OR POSITION WITH A NONAPPROPRIATED FUND INSTRUMENTALITY. SECTION 201 (A) OF THE ACT RESTRICTS THE AMOUNT OF RETIRED PAY WHICH MAY BE PAID TO "A RETIRED OFFICER OF ANY REGULAR COMPONENT OF THE UNIFORMED SERVICES" WHILE HOLDING A CIVILIAN OFFICE WITH THE FEDERAL GOVERNMENT. CONCERNING A RETIRED OFFICER OF A REGULAR COMPONENT WHO WAS EMPLOYED IN A CIVILIAN OFFICE ON NOVEMBER 30, 1964, SECTION 201 (F) OF THE 1964 ACT PROVIDES IN PERTINENT PART AS FOLLOWS:

"/1) IF, ON SUCH IMMEDIATELY PRECEDING DAY, HE WAS EXEMPT FROM LIMITATIONS ON COMPENSATION, MAY ELECT (A) TO REMAIN SUBJECT TO AND CONTINUE UNDER SUCH EXEMPTION OR (B) TO BE SUBJECT TO APPLICABLE LIMITATIONS AND EXEMPTIONS OF SUBSECTIONS (A), (B), (C), AND (E) OF THIS SECTION; OR

"/2) IF, ON SUCH IMMEDIATELY PRECEDING DAY, HE WAS SUBJECT TO LIMITATIONS ON COMPENSATION, MAY ELECT (A) TO REMAIN SUBJECT TO AND CONTINUE UNDER SUCH LIMITATIONS, OR (B) TO BE SUBJECT TO APPLICABLE LIMITATIONS AND EXEMPTIONS OF SUBSECTIONS (A), (B), (C), AND (E) OF THIS SECTION.

"SUCH ELECTION IS IRREVOCABLE AND SHALL BE FILED WITH THE DEPARTMENT CONCERNED NOT LATER THAN THE NINTIETH DAY AFTER THE EFFECTIVE DATE OF THIS SUBSECTION;,

IN OUR DECISION OF OCTOBER 25, 1965, 45 COMP. GEN. 194, CITED BY YOU, THERE WAS CONSIDERED THE CASE OF A RETIRED REGULAR COMMISSIONED OFFICER (MAJOR) WHO, ON NOVEMBER 30, 1964, WAS EMPLOYED AS A CIVILIAN IN A NONAPPROPRIATED FUND ACTIVITY AND WHO WAS CONSIDERED TO HAVE ELECTED UNDER SECTION 201 (F) OF THE 1964 ACT TO REMAIN IN THAT EXEMPT STATUS. HOWEVER, ON DECEMBER 7, 1964, THE OFFICER'S EMPLOYER'S DESIGNATION CHANGED FROM NONAPPROPRIATED FUND TO APPROPRIATED FUND. WE HELD THAT WHEN THE OFFICER'S STATUS CHANGED SO THAT HIS CIVILIAN SALARY BECAME PAYABLE FROM APPROPRIATED RATHER THAN NONAPPROPRIATED FUNDS, THE PROVISIONS OF SECTION 201 (F) CEASED TO OPERATE AND THEREAFTER HE BECAME SUBJECT TO A REDUCTION IN HIS RETIRED PAY AS SPECIFIED IN SECTION 201 (A) OF THE ACT.

IT APPEARS FROM THE FACTS DISCLOSED THAT UNDER THE STATUTORY PROVISIONS THAT WERE IN EFFECT ON NOVEMBER 30, 1964, LIEUTENANT MCINTYRE HAD TWO EXEMPTIONS ON THAT DATE, NAMELY, (1) HIS EMPLOYMENT WITH A NONAPPROPRIATED FUND ACTIVITY DID NOT CONTRAVENE THE DUAL EMPLOYMENT AND (2) SINCE ON THAT DATE HE WAS RECEIVING RETIRED PAY BASED ON HIS COMMISSIONED WARRANT OFFICER GRADE, HE WAS NOT SUBJECT TO THE COMPENSATION LIMITATIONS PRESCRIBED IN 5 U.S.C. 59A. SEE 39 COMP. GEN. 810. ALSO, SEE 37 COMP. GEN. 591 RELATING TO THE TATO AND ATKINS DECISIONS, 136 CT. CL. 651 (1956) AND 141 CT. CL. 88 (1958), RESPECTIVELY. THE PROVISIONS OF 5 U.S.C. 62 AND 5 U.S.C. 59A WERE REPEALED EFFECTIVE DECEMBER 1, 1964, BY SECTION 402 (A) (7) AND (20) OF PUBLIC LAW 88-448.

LIKE THE INDIVIDUAL CONSIDERED IN 45 COMP. GEN. 194, WHEN LIEUTENANT MCINTYRE'S STATUS CHANGED ON FEBRUARY 21, 1967, AND HIS SALARY WAS PAID FROM APPROPRIATED RATHER THAN NONAPPROPRIATED FUNDS, THE EXEMPTION WHICH HE ENJOYED IN THAT RESPECT AS A RESULT OF HIS ELECTION UNDER THE PROVISIONS OF SECTION 201 (F) TERMINATED ON THAT DATE AND, UNLESS HE CONTINUED TO QUALIFY BY REASON OF SOME OTHER EXEMPTION WHICH HE ALSO HAD ON NOVEMBER 30, 1964, HIS ELECTION WAS NO LONGER EFFECTIVE.

AS INDICATED ABOVE, ON NOVEMBER 30, 1964, THE OFFICER'S EXEMPTION FROM THE DUAL COMPENSATION LIMITATIONS IMPOSED BY THE PROVISIONS OF LAW FORMERLY CONTAINED IN 5 U.S.C. 59A RESTED ALSO ON HIS COMMISSIONED WARRANT OFFICER STATUS AND THE RECEIPT OF RETIRED PAY COMPUTED ON THE BASIS OF HIS WARRANT OFFICER PAY. COMPARE THE ANSWER TO QUESTION 3A, 39 COMP. GEN. 810. HIS STATUS IN THAT RESPECT WAS JUST THE SAME ON DECEMBER 1, 1964, WHEN PUBLIC LAW 88-448 BECAME EFFECTIVE AS IT HAD BEEN ON THE PREVIOUS DAY. HENCE, THE OFFICER HAS NOT LOST THAT EXEMPT STATUS WHICH HE CONTINUED THROUGH HIS ELECTION UNDER SECTION 201 (F) OF THE 1964 LAW AND CONSEQUENTLY HE REMAINS FREE OF THE DUAL COMPENSATION RESTRICTIONS IMPOSED IN SECTION 201 (A) OF THAT LAW SO LONG AS HE CONTINUES TO RECEIVE RETIRED PAY COMPUTED ON THE BASIS OF HIS COMMISSIONED WARRANT OFFICER GRADE. SEE OUR DECISION OF JUNE 30, 1966, 45 COMP. GEN. 846. THE QUESTION PRESENTED IS ANSWERED ACCORDINGLY.