B-121815, AUG. 18, 1955

B-121815, AUG. 18, 1955

TO THE ATTORNEY GENERAL AND HONORABLE HENRY P. CHANDLER, DIRECTOR, ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS:

THE ASSISTANT ATTORNEY GENERAL'S LETTER OF APRIL 12, 1955, JOINTLY SIGNED BY THE DIRECTOR, ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS, REQUESTS FURTHER CONSIDERATION OF OUR DECISION OF MARCH 16, 1955, B- 121815, TO THE GOVERNOR OF THE CANAL ZONE CONCERNING THE LEGALITY OF PROVIDING RENT-FREE LIVING QUARTERS TO THE DISTRICT JUDGE, THE DISTRICT ATTORNEY, AND THE MARSHAL OF THE CANAL ZONE.

CAREFUL CONSIDERATION HAS BEEN GIVEN THE VIEWS PRESENTED IN THE LETTER AND IN THE MEMORANDUM PREPARED BY THE DISTRICT ATTORNEY OF THE CANAL ZONE. THE ARGUMENTS ADVANCED IN SUPPORT OF THE PROPOSITION THAT THE DISTRICT JUDGE, THE DISTRICT ATTORNEY, AND THE MARSHAL OF THE CANAL ZONE ARE ENTITLED TO RESIDENT QUARTERS FREE OF RENT ARE SUMMARIZED IN THE THIRD PARAGRAPH, PAGE 2 OF THE LETTER REFERRED TO, WHICH READS AS FOLLOWS:

"IN THE ABSENCE OF A CLEAR INDICATION TO THE CONTRARY, AND CONSIDERING THE SPECIAL STATUS OF THE ZONE AND THE LAWS AFFECTING ITS GOVERNMENT, IT IS SUBMITTED THAT THESE OFFICIALS ARE ENTITLED TO RENT FREE QUARTERS BY VIRTUE OF THE CANAL ZONE CODE, THE IMPLEMENTING EXECUTIVE ORDERS, THE COURT DECISIONS, AND THE ABSENCE OF ANY SPECIFIC OVERRIDING LEGISLATION ON THE PART OF CONGRESS.'

MORE SPECIFICALLY, RELIANCE IS PLACED UPON THE PRACTICES AND CUSTOMS WHICH HAVE DEVELOPED DURING THE HISTORY OF THE CANAL ZONE; THE DECISION OF THE COURT IN THE CASE OF JACKSON V. SMITH, 241 F. 747, AFFIRMED 246 U.S. 388; THE PROVISIONS OF EXECUTIVE ORDER NO. 7676 OF JULY 26, 1937; AND SECTION 42, TITLE 7, CANAL ZONE CODE, WHICH REQUIRES THAT THE DISTRICT JUDGE RESIDE IN THE ZONE. FURTHER, IT IS REASONED THAT THE ACT OF MARCH 5, 1928, 5 U.S.C. 75A AND SECTION 1413 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1953, 66 STAT. 637, 661, AND SIMILAR PROVISIONS IN SUBSEQUENT ACTS IMPLEMENTING BUREAU OF THE BUDGET CIRCULAR NO. A-45, DATED JUNE 3, 1952, HAVE NO APPLICATION TO THE QUESTION.

IT IS SIGNIFICANT THAT IN THE CASE OF JACKSON V. SMITH THE SUPREME COURT CONFINED ITS DISCUSSION TO THE ISSUE OF THE AUDITOR'S RIGHT TO COLLECT RENT FROM THE JUDGE BY WAY OF DEDUCTION FROM HIS BASIC SALARY. ALSO, THE LOWER COURT STRESSED THE FACT THAT DURING THE PERIOD FOR WHICH THE AUDITOR WAS SEEKING TO CHARGE RENT TO THE JUDGE NO RENT WAS BEING EXACTED FROM OTHER PERSONNEL IN THE CANAL ZONE. SINCE THE TIME OF THAT DECISION (1917) SIGNIFICANT CHANGES PERTINENT TO THE ISSUE BEFORE US HAVE OCCURRED. EFFECTIVE JANUARY 1, 1922, THE PRESIDENT REQUIRED COLLECTION OF RENT FROM EMPLOYEES OF THE PANAMA CANAL (NOW CANAL ZONE GOVERNMENT) AND THE PANAMA RAILROAD COMPANY (NOW PANAMA CANAL COMPANY) OCCUPYING GOVERNMENT-OWNED HOUSING IN THE CANAL ZONE. THE VALIDITY OF THE PRESIDENTIAL ACTION WAS UPHELD IN MCCONAUGHEY V. MORROW, 279 F. 617, AFFIRMED 263 U.S. 39. THAT CONCLUSION WAS REACHED BY THE COURT NOTWITHSTANDING THAT, OF NECESSITY, MOST EMPLOYEES OF THE PANAMA CANAL AND THE PANAMA RAILROAD COMPANY WERE REQUIRED TO RESIDE IN GOVERNMENT-OWNED HOUSING IN THE CANAL ZONE. SECTION 6 OF EXECUTIVE ORDER NO. 7676 OF JULY 26, 1937, PROVIDES THAT THE DISTRICT COURT AND ITS PERSONNEL "SHALL CONTINUE TO RECEIVE THE PERQUISITES, PRIVILEGES, AND ALLOWANCES TO WHICH THEY WERE ENTITLED AND WERE RECEIVING PRIOR TO NOVEMBER 4, 1933.' IT DOES NOT PURPORT TO AUTHORIZE ANY RIGHT NOT SANCTIONED BY THE LAW. NOR DOES IT EXPRESSLY PURPORT TO PLACE THE FINANCIAL BURDEN OF FURNISHING THE DISTRICT COURT AND ITS PERSONNEL WITH THE PERQUISITES, PRIVILEGES, AND ALLOWANCES, TO WHICH IT REFERS, ON THE CANAL ZONE GOVERNMENT OR THE PANAMA CANAL COMPANY. EXISTING LAW IMPLICITLY REQUIRES THAT THE PANAMA CANAL COMPANY-CANAL ZONE GOVERNMENT ORGANIZATION BE SELF SUSTAINING. AMONG THE ASSETS TRANSFERRED TO THE COMPANY INCIDENT TO THE REORGANIZATION LAW (64 STAT. 1038) WAS ALL PUBLIC HOUSING, INCLUDING THE RESIDENCE OF THE GOVERNOR AND THE QUARTERS OCCUPIED BY THE THREE OFFICERS REFERRED TO ABOVE. IN THAT REGARD IT IS SIGNIFICANT THAT, SUBSEQUENT TO THE ACQUISITION OF TITLE TO THE HOUSING BY THE COMPANY, IT WAS THOUGHT NECESSARY BY THE BOARD OF DIRECTORS TO AUTHORIZE, BY FORMAL RESOLUTION, THE CONTINUED OCCUPANCY, WITHOUT RENTAL CHARGE, OF THE RESIDENCE OF THE GOVERNOR. IT IS OF GREATER SIGNIFICANCE, HOWEVER, THAT THE CONGRESS FOR THE FIRST TIME DEEMED IT ESSENTIAL TO CONFIRM THAT ACTION BY STATUTE. IN SENATE REPORT NO. 1783, 83D CONGRESS, PAGE 16, THE FOLLOWING STATEMENT APPEARS:

"THE COMMITTEE RECOMMENDS INCLUSION OF THE FOLLOWING LANGUAGE IN THE BILL:

"; RESIDENCE FOR THE GOVERNOR

"THIS LANGUAGE IS CONSIDERED DESIRABLE TO INSURE THAT THE CANAL ZONE GOVERNMENT CONTINUE TO PROVIDE A RESIDENCE FOR THE GOVERNOR THAT IS SUITABLE FOR THE PERFORMANCE OF HIS OFFICIAL TIES.'

THE PROPOSED LEGISLATION WAS INCLUDED IN THE CIVIL FUNCTIONS APPROPRIATIONS ACT, 1955, 68 STAT. 330.

THE ACT OF MARCH 5, 1928, 5 U.S.C. 75A, AUTHORIZES THE HEAD OF AN EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT TO FURNISH CIVILIANS EMPLOYED IN THE FIELD SERVICE WITH QUARTERS, HEAT, LIGHT, ETC., PROVIDED THAT THE REASONABLE VALUE OF SUCH ALLOWANCES SHALL BE DETERMINED AND CONSIDERED AS PART OF THE COMPENSATION IN FIXING THE SALARY RATE OF SUCH CIVILIANS. THERE IS NOTHING IN THAT ACT SUGGESTING ITS INAPPLICABILITY TO THE CANAL ZONE. NOR DO WE VIEW THE TERMS OF THAT ACT TO BE SUCH AS TO EXCLUDE FROM ITS PURVIEW PERSONS APPOINTED BY THE PRESIDENT BY AND WITH THE ADVICE OF THE SENATE. SEE, GENERALLY, 16 U.S.C. 754, EXEMPTING OFFICERS AND CREWS OF VESSELS OF THE FISH AND WILDLIFE SERVICE, AND 5 U.S.C. 75B EXEMPTING THE DIRECTOR OF THE BOTANIC GARDEN FROM 5 U.S.C. 75A. ALSO, IT IS SIGNIFICANT THAT THE ACT OF JUNE 26, 1930, 5 U.S.C. 118A, AUTHORIZING FREE QUARTERS TO BE FURNISHED TO GOVERNMENT EMPLOYEES STATIONED IN "FOREIGN COUNTRIES" HAS BEEN HELD TO BE INAPPLICABLE TO THE CANAL ZONE. 16 COMP. GEN. 515. AS A RESULT OF THE CASUAL COMPLIANCE WITH THE 1928 ACT THE BUREAU OF THE BUDGET ISSUED CIRCULAR A-45 DATED JULY 9, 1951 (REVISED JUNE 3, 1952), FOR THE PURPOSE OF SETTING STANDARDS FOR THE CHARGING OF RENT UNDER THAT ACT. SECTION 1413 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1953, 66 STAT. 661, REQUIRED THAT DURING THE FISCAL YEAR 1953 "THE PROVISIONS OF THE BUREAU OF THE BUDGET CIRCULAR A-45, DATED JUNE 3, 1952, SHALL BE CONTROLLING OVER THE ACTIVITIES OF ALL DEPARTMENTS, AGENCIES, AND CORPORATIONS OF THE GOVERNMENT.' THE PROVISION HAS BEEN CONTINUED SINCE THAT TIME AND FOR THE CURRENT FISCAL YEAR APPEARS IN SECTION 208 OF THE GENERAL GOVERNMENT MATTERS APPROPRIATION ACT, 1956, 69 STAT. 196. WHILE AGENCIES IN THE CANAL ZONE HAVE BEEN AUTHORIZED BY THE BUREAU OF THE BUDGET TO UTILIZE A SPECIAL FORMULA FOR FIXING RENTS TO BE CHARGED EMPLOYEES OCCUPYING GOVERNMENT-OWNED HOUSING, IT IS CLEAR FROM THE WORDING OF THE CIRCULAR AND THE REPORTS TO THE CONGRESS THEREUNDER THAT THE AGENCIES HAVE NOT BEEN EXEMPTED FROM THE BASIC CONCEPT OF THE CIRCULAR, THAT IS, THE CHARGING OF REASONABLE RENT FOR USE OF GOVERNMENT HOUSING.

IN VIEW OF THE ABOVE WE CONCLUDE THAT UNDER EXISTING LAW THE PANAMA CANAL COMPANY HAS NO AUTHORITY TO FURNISH RENT-FREE QUARTERS TO THE DISTRICT JUDGE, THE DISTRICT ATTORNEY, AND THE MARSHAL OF THE CANAL ZONE. ON THE CONTRARY, BUREAU OF THE BUDGET CIRCULAR NO. A-45, AS IMPLEMENTED BY THE APPROPRIATION ACT PROVISION, ABOVE, REQUIRES THE PAYMENT OF REASONABLE RENTAL FOR THE QUARTERS SO FURNISHED, BASED ON STANDARDS ADOPTED BY THE CANAL COMPANY FOR FIXING RENTALS ON ITS HOUSING IN THE CANAL ZONE.

ACCORDINGLY, WE MUST ADHERE TO THE CONCLUSION REACHED IN OUR DECISION OF MARCH 16, 1955, TO THE GOVERNOR OF THE CANAL ZONE.