B-44758, NOVEMBER 1, 1944, 24 COMP. GEN. 339

B-44758, NOVEMBER 1, 1944, 24 COMP. GEN. 339

ACQUISITION OF LAND, IN LIEU OF RESTORATION, INCIDENT TO TERMINATION OF FEDERAL HOUSING PROJECTS IN THE ABSENCE OF THE EXPRESS STATUTORY AUTHORITY REQUIRED BY SECTION 3736, REVISED STATUTES, FOR THE PURCHASE OF LAND, RECEIPTS FROM RENTAL OR OPERATION OF TEMPORARY HOUSING PROJECTS AVAILABLE TO THE FEDERAL PUBLIC HOUSING AUTHORITY UNDER SECTION 303 OF THE ACT OF OCTOBER 14, 1940, AS AMENDED, FOR EXPENSES INCIDENTAL TO THE TERMINATION OF SUCH PROJECTS ARE NOT AVAILABLE FOR THE ACQUISITION OF THE LAND ON WHICH THE PROJECTS ARE LOCATED, IN LIEU OF RESTORING THE LAND TO ITS FORMER CONDITION, EVEN THOUGH THE SUM REQUIRED FOR RESTORATION MAY EXCEED THAT FOR WHICH THE OWNER WOULD SELL THE PROPERTY TO THE GOVERNMENT. 5 COMP. GEN. 300, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE NATIONAL HOUSING ADMINISTRATOR, NOVEMBER 1, 1944:

THERE HAS BEEN CONSIDERED YOUR LETTER OF SEPTEMBER 22, 1944, AS FOLLOWS:

THE FEDERAL PUBLIC HOUSING AUTHORITY IS ENGAGED IN PROVIDING WAR HOUSING FACILITIES FOR WAR WORKERS UNDER THE PROVISIONS OF THE LANHAM ACT, 54 STAT. 1125-1128, AS AMENDED, A COPY OF WHICH IS ATTACHED. IT IS AUTHORIZED BY THESE PROVISIONS TO ACQUIRE LAND OR INTEREST IN LAND ON WHICH TO CONSTRUCT PERMANENT AND TEMPORARY HOUSING FACILITIES. IN THE CASE OF LAND NEEDED FOR TEMPORARY HOUSING, IT NORMALLY DOES NOT ACQUIRE A FEE SIMPLE TITLE. INSTEAD, EITHER BY VOLUNTARY LEASE OR BY CONDEMNATION PROCEEDINGS, IT ACQUIRES AN INTEREST FOR A ONE-YEAR PERIOD, RENEWABLE BY THE GOVERNMENT FROM YEAR TO YEAR. THE ACT REQUIRES ALL TEMPORARY HOUSING BUILT UNDER ITS PROVISIONS TO BE REMOVED WITHIN TWO YEARS AFTER THE NATIONAL EMERGENCY, EXCEPT IN THOSE CASES WHERE THE ADMINISTRATOR, AFTER CONSULTATION WITH THE LOCAL COMMUNITIES FINDS THAT THE HOUSING IS STILL NEEDED IN THE INTEREST OF ORDERLY DEMOBILIZATION OF THE WAR EFFORT ( SECTION 313). ALL SUCH EXCEPTIONS MUST BE REEXAMINED ANNUALLY AND ALL EXCEPTIONS AND REEXAMINATIONS REPORTED TO CONGRESS. THE ACT ALSO AUTHORIZES THE USE OF PROJECT RENTAL INCOME TO PAY ALL EXPENSES INVOLVED IN THE DISPOSITION AND REMOVAL OF SUCH HOUSING ( SECTION 303).

IN RETURNING THE LAND TO ITS OWNERS IN CONNECTION WITH SUCH REMOVAL, THE AUTHORITY WILL BE SUBJECT TO CERTAIN OBLIGATIONS WITH RESPECT TO THE CONDITION OF THE LAND. IN THE CASE OF LAND ACQUIRED BY CONDEMNATION OF A TEMPORARY USE, THE GOVERNMENT WILL BE LIABLE FOR DAMAGE TO THE FEE UNLESS IT RESTORES THE LAND TO ITS ORIGINAL CONDITION, EXCEPT FOR ORDINARY WEAR AND TEAR COMPENSATED FOR BY RENT. ALEXANDER V. U.S., 39 CT.1CLS. 383; U.S. V. 16.747 ACRES IN WILMINGTON, DEL., 50 F1/SUPP. 389, 391. CF. JACOBS V. U.S., 290 U.S. 13; U.S. 13; U.S. V. GRIZZARD, 180 U.S. 180; U.S. V. 5.741 ACRES IN FLUSHING, N.Y., 51 F.1SUPP. 147, 149; U.S. V. IMPROVED PREMISES ETC. IN YONKERS, N.Y., 54 F. SUPP. 469, 470-471. (IN TWO CASES THE COURTS HAVE DIRECTED THAT DAMAGE OF THIS KIND BE ASSESSED PROSPECTIVELY IN THE CONDEMNATION PROCEEDING, INSTEAD OF AFTER THE RETURN OF THE PROPERTY. U.S. V. 9.94 ACRES IN CHARLESTON, S.C., 51 F.1SUPP. 478, AND U.S. V. 60,000 SQ. FT. AND 8 STORY HOTEL, 53 F.1SUPP. 767, 771.) A SIMILAR OBLIGATION EXISTS WITH RESPECT TO LAND HELD UNDER SOME OF THE VOLUNTARY LEASES (GENERALLY ENTERED INTO BY PREDECESSOR AGENCIES OF THE AUTHORITY AND TRANSFERRED TO THE AUTHORITY BY EXECUTIVE ORDER 9070), WHICH CONTAIN EXPRESS COVENANTS TO RESTORE THE LAND TO ITS ORIGINAL CONDITION. IN SOME INSTANCES, THESE LEASES PROVIDE FOR THE PAYMENT OF A NOMINAL RENTAL AND THE COVENANTS TO RESTORE CONSTITUTE THE SOLE REAL CONSIDERATION TO THE LESSOR. IN THE CASE OF LAND ACQUIRED UNDER STANDARD LEASES, WHICH CONTAIN NO SUCH EXPRESS COVENANT, THE GOVERNMENT WILL BE REQUIRED TO REPAIR SUCH DAMAGE TO THE LAND AS FALLS WITHIN THE CATEGORY OF NEGLIGENT USE OF VOLUNTARY WASTE. ITALIAN NATIONAL RIFLE SHOOTING SOCIETY. U.S., 66 CT.1CLS. 418; U.S. V. BOSTWICK, 94 U.S. 53; MOUNT MANRESA V. U.S., 70 CT.1CLS. 144. THE OPERATIONS NECESSARY TO COMPLY WITH THESE OBLIGATIONS TO RESTORE MAY INCLUDE, DEPENDING UPON THE FACTS IN THE PARTICULAR SITUATION, SUCH OPERATIONS AS CLEARING THE PREMISES OF DEMOLITION RUBBLE, REMOVING HARD BED, CRUSHED-STONE, AND GRAVEL SIDEWALKS, STREETS, AND OTHER AREAS, REMOVING UTILITY INSTALLATIONS, AND LEVELING FILLS AND EXCAVATIONS.

IT IS BELIEVED THAT THE AUTHORITY WILL BE ABLE TO DIVEST ITSELF OF ITS INTERESTS IN PRACTICALLY ALL OF THESE LANDS TO THE MUTUAL SATISFACTION OF THE GOVERNMENT AND THE OWNER WITH MODERATE (AND IN MOST INSTANCES WITHOUT ANY) EXPENDITURES FOR SITE RESTORATION. HOWEVER, IT IS EXPECTED THAT IN A FEW INSTANCES THE SUM WHICH THE OWNER WOULD BE WILLING TO SELL THE PROPERTY TO THE GOVERNMENT. IN THESE FEW CASES, IT WOULD, OF COURSE, BE MORE ECONOMICAL FOR THE GOVERNMENT TO PURCHASE THE FEE TITLE TO THE LAND. IT HAS BEEN HELD BY YOUR OFFICE THAT WHERE IT WAS DESIRABLE TO TERMINATE A LEASEHOLD INTEREST BEFORE THE END OF THE TERM, THE GOVERNMENT COULD PAY THE OWNER A LUMP SUM FOR A RELEASE FROM THE RENTS DUE FOR THE REMAINDER OF THE TERM, PROVIDED THAT A SAVING TO THE GOVERNMENT WOULD THEREBY RESULT. 5 COMP. GEN. 300 (1925). YOUR OFFICE HAS LIKEWISE HELD THAT WHERE THE GOVERNMENT WAS OBLIGATED TO RESTORE LEASED PREMISES TO AN EARLIER CONDITION, IT WAS PROPER FOR THE GOVERNMENT TO ENTER INTO A LEASE TERMINATION AGREEMENT UNDER WHICH IT WAS RELEASED FROM ITS OBLIGATION UPON PAYMENT OF A SUM LESS THAN WHAT IT WOULD HAVE TO EXPEND FOR THE REQUIRED RESTORATION. (UNPUBLISHED DECISION OF THE COMPTROLLER GENERAL, APRIL 2, 1929, A-25247). WHILE NO RULING OF YOUR OFFICE HAS BEEN FOUND DEALING SQUARELY WITH THE CIRCUMSTANCES UNDER CONSIDERATION, IT WOULD APPEAR THAT ACQUISITION OF A FEE SIMPLE TITLE BY THE AUTHORITY IN ORDER TO MINIMIZE THE EXPENDITURES ATTENDANT UPON THE TERMINATION OF ITS TEMPORARY HOUSING PROJECTS WOULD BE CONSISTENT WITH THE PRINCIPLES STATED IN THESE DECISIONS. THIS IS ESPECIALLY SO, SINCE, IN ADDITION TO THE SAVINGS OF EXPENDITURE, THE GOVERNMENT WOULD HAVE RECEIVED SOMETHING OF VALUE. SUCH LAND COULD BE SOLD OR OTHERWISE DISPOSED OF BY THE AUTHORITY IN THE SAME MANNER AS OTHER REAL PROPERTY UNDER ITS JURISDICTION, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 304 OF THE LANHAM ACT.

THE QUESTION IS PRESENTED WHETHER UNDER SUCH CIRCUMSTANCES THE GOVERNMENT COULD, AFTER PROJECTS HAVE BEEN TERMINATED AND ARE BEING REMOVED, BUY THE FEE IN LIEU OF EXPENDING FUNDS FOR RESTORATION, USING FOR SUCH PURCHASE, FUNDS AVAILABLE UNDER SECTION 303 OF THE LANHAM ACT FOR THE PAYMENT OF RENTAL FOR THE USE OF LAND AND FOR REMOVAL OF TEMPORARY HOUSING.

SINCE THE AUTHORITY IS NOW ENGAGED IN THE FORMULATION OF DEFINITE POLICIES WITH RESPECT TO THE EXPEDITIOUS CLOSING OUT OF ITS OBLIGATIONS ON TERMINATED TEMPORARY HOUSING PROJECTS, WE SHOULD APPRECIATE AN EARLY REPLY.

SECTION 303 (FORMERLY SECTION 6) OF THE LANHAM ACT, AS AMENDED (ACT OF JULY 7, 1943, 57 STAT. 388), PROVIDES AS FOLLOWS:

MONEYS DERIVED FROM RENTAL OR OPERATION OF PROPERTY ACQUIRED OR CONSTRUCTED UNDER THE PROVISIONS OF THIS ACT, OF PUBLIC LAWS NUMBERED 9, 73, AND 353, SEVENTY-SEVENTH CONGRESS, AND OF SECTION 201 OF THE SECOND SUPPLEMENTAL NATIONAL DEFENSE APPROPRIATION ACT, 1941, AS AMENDED, SHALL BE AVAILABLE FOR EXPENSES OF OPERATION AND MAINTENANCE AND EXPENSES FOUND NECESSARY IN THE DISPOSITION OF ANY SUCH PROPERTY OR THE REMOVAL OF TEMPORARY HOUSING BY THE ADMINISTRATOR, INCLUDING THE ESTABLISHMENT OF NECESSARY RESERVES THEREFOR AND ADMINISTRATIVE EXPENSES IN CONNECTION THEREWITH: PROVIDED, THAT MONEYS DERIVED BY THE ADMINISTRATOR FROM THE RENTAL OR OPERATION OF ANY SUCH PROPERTY MAY BE DEPOSITED IN A COMMON FUND ACCOUNT OR ACCOUNTS IN THE TREASURY: AND PROVIDED FURTHER, THAT EXCEPT FOR NECESSARY RESERVES AUTHORIZED BY THIS ACT OR BY SECTION 201 OF THE SECOND SUPPLEMENTAL NATIONAL DEFENSE APPROPRIATION ACT, 1941, AS AMENDED, THE UNOBLIGATED BALANCES OF THE MONEYS DEPOSITED INTO THE TREASURY FROM THE RENTAL OR OPERATION OF SUCH PROPERTY SHALL BE COVERED AT THE END OF EACH FISCAL YEAR INTO MISCELLANEOUS RECEIPTS.

WHILE, AS POINTED OUT IN YOUR LETTER, THE FEDERAL PUBLIC HOUSING AUTHORITY, IS AUTHORIZED UNDER THE LANHAM ACT TO ACQUIRE LANDS OR INTERESTS IN LANDS ON WHICH TO CONSTRUCT PERMANENT AND TEMPORARY HOUSING FACILITIES, THE DISPOSITION OF THE MONEYS DERIVED FROM RENTALS OR OPERATION OF SUCH PROPERTY IS LIMITED TO THE OBJECTS SPECIFICALLY SET FORTH IN SECTION 303 OF SAID ACT AS QUOTED ABOVE. BY THE TERMS OF SAID SECTION 303 THE USE OF THE RECEIPTS IS LIMITED TO "EXPENSES OF OPERATION AND MAINTENANCE AND EXPENSES FOUND NECESSARY IN THE DISPOSITION OF ANY SUCH PROPERTY OR THE REMOVAL OF TEMPORARY HOUSING BY THE ADMINISTRATOR.' ALL UNOBLIGATED BALANCES OF RECEIPTS FROM SUCH PROPERTY OVER AND ABOVE THE AUTHORIZED USE AS SET FORTH IN SECTION 303 AND SUBJECT TO THE EXCEPTION THEREIN NOTED ARE REQUIRED TO BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AT THE END OF EACH FISCAL YEAR. CF. 21 COMP. 880.

SECTION 3736, REVISED STATUTES, PROVIDES:

NO LAND SHALL BE PURCHASED ON ACCOUNT OF THE UNITED STATES, EXCEPT UNDER A LAW AUTHORIZING SUCH PURCHASE.

AS THERE IS FOUND NO EXPRESS AUTHORITY OF LAW IN SECTION 303 OF THE LANHAM ACT, OR IN ANY OTHER STATUTE, FOR THE ACQUISITION OF LAND INCIDENTAL TO THE TERMINATION OF TEMPORARY HOUSING PROJECTS AND THE DISPOSITION OF SUCH HOUSING, IT MUST BE HELD THAT, UNDER EXISTING LAW, THE PROPOSED ACQUISITION OF LAND IS PROHIBITED BY THE SAID SECTION 3736, REVISED STATUTES. THEREFORE, THE QUESTION PRESENTED IS ANSWERED IN THE NEGATIVE. OF COURSE, THE PROHIBITION AGAINST THE PURCHASE OF LAND DOES NOT EXTEND TO PAYMENT OF COSTS OF RESTORING THE PROPERTY TO ITS ORIGINAL CONDITION, OR TO PAYMENT UNDER AN AGREEMENT IN LIEU OF RESTORATION, IN PROPER CASES, FOR WHICH THE RENTAL RECEIPTS WOULD BE AVAILABLE. THE DECISIONS OF THIS OFFICE, CITED IN YOUR LETTER, WOULD APPEAR TO BE APPLICABLE IN SUCH CASES BUT, OF COURSE, THEY DID NOT PURPORT TO, AND COULD NOT, OVERCOME THE STATUTORY PROHIBITION AGAINST THE PURCHASE OF LAND EXCEPT WHEN SPECIFICALLY AUTHORIZED BY LAW.