B-166666, MAY 9, 1969

B-166666, MAY 9, 1969

TO MR. HENRY P. SEUFERT:

THIS REFERS TO YOUR REGISTERED LETTER NO. 340378 OF MARCH 19, 1969, WITH ENCLOSURES, REQUESTING RECONSIDERATION OF OUR OFFICE SETTLEMENT OF FEBRUARY 13, 1969, WHICH DISALLOWED YOUR CLAIM FOR REIMBURSEMENT OF EXPENSES INCURRED IN CONNECTION WITH THE SALE OF YOUR RESIDENCE AT YOUR OLD OFFICIAL DUTY STATION INCIDENT TO A PERMANENT TRANSFER OF DUTY STATION FROM AUSTIN, TEXAS, TO WASHINGTON, D.C.

THE RECORD SHOWED THAT YOU ENTERED ON DUTY AT YOUR NEW OFFICIAL STATION ON AUGUST 25, 1966. IN OCTOBER 1966 YOU ENTERED INTO A LEASE PURCHASE CONTRACT COVERING YOUR HOUSE IN AUSTIN, TEXAS. HOWEVER, THE OPTION TO PURCHASE WAS NOT EXERCISED AND YOU OBTAINED AN ATTORNEY TO ASSURE EVICTION OF THE LESSEE. THE HOUSE WAS SOLD PURSUANT TO A PURCHASE AGREEMENT DATED APRIL 9, 1968, OR APPROXIMATELY 20 MONTHS AFTER YOU REPORTED TO YOUR NEW OFFICIAL DUTY STATION IN WASHINGTON, D.C. THE DISALLOWANCE OF YOUR CLAIM WAS ON THE GROUND THAT THE SALE OF YOUR RESIDENCE OCCURRED MORE THAN ONE YEAR AFTER YOUR TRANSFER.

SECTION 4.1D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, SETS FORTH THE FOLLOWING CONDITION FOR REIMBURSEMENT TO AN EMPLOYEE OF EXPENSES INCURRED IN REAL ESTATE TRANSACTIONS:

"THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED BY THE HEAD OF THE DEPARTMENT OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION.'

THAT REGULATION WAS PROMULGATED BY THE BUREAU OF THE BUDGET UNDER THE AUTHORITY DELEGATED BY THE PRESIDENT AND IN ACCORDANCE WITH SECTION 23 OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, AS ADDED BY THE ACT OF JULY 21, 1966, PUBLIC LAW 89-516, NOW CONTAINED IN 5 U.S.C. 5724A (A) WHICH PROVIDES IN PERTINENT PART:

"/A) UNDER SUCH REGULATIONS AS THE PRESIDENT MAY PRESCRIBE AND TO THE EXTENT CONSIDERED NECESSARY AND APPROPRIATE, AS PROVIDED THEREIN, APPROPRIATIONS OR OTHER FUNDS AVAILABLE TO AN AGENCY FOR ADMINISTRATIVE EXPENSES ARE AVAILABLE FOR THE REIMBURSEMENT OF ALL OR PART OF THE FOLLOWING EXPENSES OF AN EMPLOYEE FOR WHOM THE GOVERNMENT PAYS EXPENSES OF TRAVEL AND TRANSPORTATION UNDER SECTION 5724 (A) OF THIS TITLE:

"/4) EXPENSES OF THE SALE OF THE RESIDENCE (OR THE SETTLEMENT OF AN UNEXPIRED LEASE) OF THE EMPLOYEE AT THE OLD STATION AND PURCHASE OF A HOME AT THE NEW OFFICIAL STATION REQUIRED TO BE PAID BY HIM WHEN THE OLD AND NEW OFFICIAL STATIONS ARE LOCATED WITHIN THE UNITED STATES, ITS TERRITORIES OR POSSESSIONS, THE COMMONWEALTH OF PUERTO RICO, OR THE CANAL ZONE. HOWEVER, REIMBURSEMENT FOR BROKERAGE FEES ON THE SALE OF THE RESIDENCE AND OTHER EXPENSES UNDER THIS PARAGRAPH MAY NOT EXCEED THOSE CUSTOMARILY CHARGED IN THE LOCALITY WHERE THE RESIDENCE IS LOCATED, AND REIMBURSEMENT MAY NOT BE MADE FOR LOSSES ON THE SALE OF THE RESIDENCE. THIS PARAGRAPH APPLIES REGARDLESS OF WHETHER TITLE TO THE RESIDENCE OR THE UNEXPIRED LEASE IS IN THE NAME OF THE EMPLOYEE ALONE, IN THE JOINT NAMES OF THE EMPLOYEE AND A MEMBER OF HIS IMMEDIATE FAMILY, OR IN THE NAME OF A MEMBER OF HIS IMMEDIATE FAMILY ALONE.'

WE FIND NOTHING IN THE LEGISLATIVE HISTORY OF THAT SECTION TO INDICATE THAT THE CONGRESS HAD ANY SPECIFIC INTENT WITH REGARD TO THE TIME LIMITATIONS WHICH MIGHT BE IMPOSED BY THE REQUIRED IMPLEMENTING REGULATIONS. OUR OPINION IS THAT THE BUREAU OF THE BUDGET ACTED WITHIN THE SCOPE OF ITS AUTHORITY IN SETTING THE 1-YEAR TIME LIMIT IMPOSED BY SECTION 4.1D EVEN THOUGH IT IS MORE RESTRICTIVE THAN THE 2-YEAR GENERAL LIMITATION CONTAINED IN SECTION 1.3D. THE REGULATION PRESCRIBES ONLY ONE EXCEPTION WHEREBY THE DESIGNATED 1 YEAR CAN BE EXTENDED. SUCH EXCEPTION PROVIDES THAT AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED BY THE HEAD OF THE DEPARTMENT OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION.

ON SEVERAL OCCASIONS WE HAVE FOUND IT NECESSARY TO CONSTRUE THE TERM "LITIGATION" AS USED IN SECTION 4.1D OF THE CIRCULAR. AS DEFINED IN BLACK'S LAW DICTIONARY, FOURTH EDITION, WEST PUBLISHING CO. 1951, THE TERM "LITIGATION" MEANS A CONTEST IN A COURT OF JUSTICE FOR THE PURPOSE OF ENFORCING A RIGHT; A JUDICIAL CONTEST; A JUDICIAL CONTROVERSY; A SUIT AT LAW. WE HAVE HELD THAT THE TERM WAS TO BE GIVEN ITS USUAL MEANING, I.E., ACTION BEFORE A COURT. THEREFORE, WE CANNOT AGREE THAT A DELAY IN A SALE OF A DWELLING NOT STEMMING FROM A SUIT AT LAW COULD BE VIEWED AS LITIGATION WITHIN THE MEANING OF THE BUDGET CIRCULAR. SEE B-164902, AUGUST 9, 1968, 48 COMP. GEN. -----.

CONCERNING YOUR STATEMENT THAT 2 YEARS SHOULD BE ALLOWED FOR THE SALE OF A DWELLING, WE NOTE THAT A BILL (H.R. 12186) WAS INTRODUCED IN THE 90TH CONGRESS PROPOSING TO AMEND 5 U.S.C. 5724A (RETROACTIVE TO JULY 1, 1966) SO AS TO PERMIT REIMBURSEMENT OF THE EXPENSES OF THE SALE OR PURCHASE OF A RESIDENCE WITHIN 2 YEARS AFTER THE DATE OF AN EMPLOYEE REPORTING FOR DUTY AT HIS NEW OFFICIAL STATION. HOWEVER, THAT BILL WAS NEVER ENACTED INTO LAW AND WE ARE NOT AWARE OF ANY SIMILAR BILL HAVING BEEN INTRODUCED IN THE PRESENT CONGRESS.

ALTHOUGH YOU INDICATE THAT THE SALE OF YOUR RESIDENCE AT THE OLD DUTY STATION WAS DELAYED DUE TO UNFAVORABLE MARKET CONDITIONS, NEVERTHELESS, AS INDICATED ABOVE, THIS IS NOT A BASIS SPECIFIED IN THE REGULATION FOR EXTENDING THE 1-YEAR REQUIREMENT. THE REGULATION IN QUESTION, ISSUED PURSUANT TO PUBLIC LAW 89-516, HAS THE FORCE AND EFFECT OF LAW AND CANNOT BE WAIVED OR MODIFIED BY OUR OFFICE. ANY AMENDMENT TO THE REGULATION IS A MATTER FOR CONSIDERATION BY THE BUREAU OF THE BUDGET.

REGARDING YOUR COMMENTS ON THE POSSIBLE EXTENSION OF THE 1-YEAR TIME LIMIT IN VIEW OF THE FACT THAT THE ADMINISTRATIVE OFFICE DID NOT ISSUE INSTRUCTIONS UNTIL AFTER YOU HAD LEASED YOUR RESIDENCE, WE NOTE THAT THE INTERIM GUIDELINES ATTACHED TO TRANSMITTAL MEMORANDUM NO. 6, CIRCULAR NO. A-56, DATED JULY 26, 1966, ISSUED TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS CONTAINED THE FOLLOWING STATEMENT WITH REGARD TO REIMBURSEMENT FOR COSTS INVOLVED IN THE SALE AND PURCHASE OF RESIDENCES:

"SECTION 23 (4) - THIS SECTION CONCERNS THE EXPENSES INCIDENT TO SELLING AND BUYING A HOME AND EXPENSES INCIDENT TO UNEXPIRED LEASES. THE FINAL REGULATIONS WILL DESCRIBE THE VARIOUS TYPES OF EXPENSES WHICH ARE REIMBURSABLE. IT IS ANTICIPATED THAT APPROPRIATE CEILINGS WILL BE ESTABLISHED IN THIS CONNECTION. IN ADDITION, IT IS ANTICIPATED THAT APPROPRIATE TIME LIMITS WILL BE ESTABLISHED WITHIN WHICH THE SALES AND PURCHASES OF RESIDENCES AND SETTLEMENT OF UNEXPIRED LEASES MUST TAKE PLACE.' IT IS FURTHER NOTED THAT THE PUBLIC LAW 89-516 ITSELF PROVIDES THAT THE REGULATIONS TO BE ISSUED THEREUNDER WILL BE RETROACTIVELY EFFECTIVE TO THE DATE OF ENACTMENT.

ACCORDINGLY, THE ACTION TAKEN IN OUR SETTLEMENT OF FEBRUARY 13, 1969, IN DISALLOWING YOUR CLAIM IS SUSTAINED.

A COPY OF THIS DECISION IS BEING TRANSMITTED TO THE HONORABLE J. J. PICKLE AND THE HONORABLE L. J. HOGAN.