B-95136, JUL 16, 1986, 65 COMP.GEN. 722

B-95136, JUL 16, 1986, 65 COMP.GEN. 722

LEASES - REPAIRS AND IMPROVEMENTS - LIMITATIONS - EXEMPTIONS THE GENERAL SERVICES ADMINISTRATION IS AUTHORIZED TO MAKE REPAIRS AND ALTERATIONS TO LEASED BUILDINGS WITHOUT REGARD TO THE LIMITATION SET FORTH IN SEC. 322 OF THE ECONOMY ACT OF 1932, AS AMENDED (40 U.S.C. 278A (1982)) UPON PROPER DETERMINATION SINCE SECTION 210(A)(8) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED (40 U.S.C. 490(A)(8)), AUTHORIZES REPAIRS AND ALTERATIONS TO LEASED PREMISES WITHOUT REGARD TO LIMITATIONS WHEN ADMINISTRATOR IS OTHERWISE AUTHORIZED TO MAINTAIN, OPERATE AND PROTECT ANY BUILDING PROPERTY OR GROUNDS INSIDE OR OUTSIDE THE DISTRICT OF COLUMBIA AND THE ADMINISTRATOR OF GENERAL SERVICES IS SO AUTHORIZED BOTH AS A RESULT OF TRANSFER OF AUTHORITY EFFECTED BY SECTION 103 OF THE 1949 ACT (40 U.S.C. 753) AND BY LANGUAGE CONTAINED IN ANNUAL APPROPRIATION TO GSA WHICH MAKES FUNDS AVAILABLE TO OPERATE, MAINTAIN AND PROTECT FEDERALLY LEASED BUILDINGS. GENERAL SERVICES ADMINISTRATION - AUTHORITY - GOVERNMENT OCCUPIED BUILDINGS GENERAL SERVICES ADMINISTRATION (GSA) IS NOT REQUIRED TO OBTAIN PROSPECTUS APPROVAL FOR REPAIRS AND ALTERATIONS TO LEASED BUILDINGS BY SECTION 7(A) OF THE PUBLIC BUILDINGS ACT OF 1959, AS AMENDED (40 U.S.C. 606(A)) SINCE LEASED BUILDINGS ARE NOT "PUBLIC BUILDINGS" FOR PURPOSE OF THAT ACT AND LEASES ARE NOT WITHIN MEANING OF "ACQUISITION" FOR PURPOSE OF THE 1959 ACT.

MATTER OF: THE HONORABLE ROBERT T. STAFFORD, CHAIRMAN, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, JULY 16, 1986:

THIS LETTER IS IN RESPONSE TO THE REQUEST DATED SEPTEMBER 16, 1985, SIGNED BY YOU AND SENATOR LLOYD BENTSEN, RANKING MINORITY MEMBER, SEEKING CLARIFICATION OF THE AUTHORITY OF THE GENERAL SERVICES ADMINISTRATION (GSA) TO REPAIR AND ALTER LEASED PREMISES IN LIGHT OF THE PUBLIC BUILDINGS ACT OF 1959 (1959 ACT), AS AMENDED, 40 U.S.C. SECS. 601-616 (1982) (THE SOURCE OF GSA'S AUTHORITY TO REPAIR AND ALTER PUBLIC BUILDINGS) AS WELL AS OTHER PROVISIONS OF LAW. DURING A MEETING HELD PRIOR TO RECEIPT OF YOUR FORMAL SUBMISSION, MEMBERS OF THE COMMITTEE STAFF INDICATED TO REPRESENTATIVES OF THIS OFFICE CONCERN OVER THE POSITION TAKEN BY GSA THAT REPAIRS AND ALTERATIONS TO LEASED PREMISES WERE NOT COVERED BY THE PROSPECTUS APPROVAL PROCEDURE CONTAINED IN THE 1959 ACT. AS EXPLAINED BY THE STAFF, IT WAS GSA'S OPINION THAT LEASED BUILDINGS WERE NOT PUBLIC BUILDINGS WITHIN THE SCOPE OF THE 1959 ACT.

THE COMMITTEE STAFF MEMBERS ALSO EXPRESSED CONCERN WITH THE POSITION TAKEN BY GSA THAT BASED UPON SECTION 322 OF THE ECONOMY ACT OF 1932, AS AMENDED, 40 U.S.C. SEC. 278A, IT HAS AUTHORITY INDEPENDENT OF THE 1959 ACT TO MAKE REPAIRS AND ALTERATIONS TO LEASED PREMISES. GSA'S POSITION IS BASED UPON THE DECISION OF THIS OFFICE APPEARING AT 29 COMP.GEN. 279 (1949). THE COMMITTEE STAFF EXPRESSED THE VIEW THAT 40 U.S.C. SEC. 278A IMPOSED A LIMITATION ON SPENDING FUNDS FOR REPAIRS AND ALTERATIONS TO LEASED PREMISES BUT THAT IT DID NOT CONSTITUTE AN AUTHORIZATION TO REPAIR AND ALTER LEASED PREMISES. CONSEQUENTLY, WE WERE ASKED TO REVIEW THESE SPECIFIC ISSUES (INCLUDING RECONSIDERATION OF OUR DECISION IN 29 COMP.GEN. 279, SUPRA) AS PART OF OUR RESPONSE TO YOUR INQUIRY.

AS AGREED TO BY MEMBERS OF THE COMMITTEE STAFF AND IN ORDER TO FULLY RESPOND TO THE ISSUES RAISED, WE REQUESTED AND RECEIVED A REPORT ON THIS MATTER FROM THE ADMINISTRATOR OF GENERAL SERVICES. HIS VIEWS WERE CONSIDERED DURING PREPARATION OF OUR RESPONSE. FOR THE REASONS EXPLAINED IN DETAIL IN THE ENCLOSED APPENDIX, WE FIND THAT GSA DOES HAVE AUTHORITY INDEPENDENT OF THE 1959 ACT TO ALTER AND REPAIR LEASED PREMISES. THEREFORE AFFIRM OUR 1949 DECISION TO THAT EFFECT. AS A RESULT GSA IS NOT REQUIRED TO OBTAIN PROSPECTUS APPROVAL FOR APPROPRIATIONS IN EXCESS OF $500,000 FOR ALTERATIONS TO LEASED PREMISES PURSUANT TO SECTION 7(A) OF THE 1959 ACT.

UNLESS YOU PUBLICLY ANNOUNCE ITS CONTENTS EARLIER, WE WILL NOT DISTRIBUTE COPIES OF THIS OPINION UNTIL 30 DAYS FROM ITS DATE.

GSA'S AUTHORITY TO REPAIR AND ALTER LEASED SPACE

THE FOLLOWING DISCUSSION PROVIDES A HISTORICAL REVIEW OF THE VARIOUS ASPECTS OF HOLDINGS BY THE COMPTROLLER GENERAL (AND HIS PREDECESSOR, THE COMPTROLLER OF THE TREASURY) CONCERNING THE AUTHORITY OF GOVERNMENT OFFICERS TO EXPEND PUBLIC FUNDS FOR REPAIRS AND ALTERATIONS TO PRIVATELY OWNED PROPERTY.

GENERALLY, PRIOR TO 1932 IT HAD BEEN THE POSITION OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT PERMANENT IMPROVEMENTS TO PRIVATE PROPERTY (INCLUDING LEASED PREMISES) COULD NOT BE MADE USING PUBLIC FUNDS /1/ UNLESS MADE PURSUANT TO STIPULATIONS IN LEASE AGREEMENTS THAT THE ALTERATIONS REPAIRS OR IMPROVEMENTS WERE PART OF THE CONSIDERATION UNDER THE LEASE. /2/ THE REASONING WAS THAT TO PERMIT THE IMPROVEMENTS WOULD CONSTITUTE A GRATUITY TO THE OWNER WHICH GOVERNMENT OFFICIALS ARE NOT AUTHORIZED TO MAKE IN THE ABSENCE OF STATUTORY AUTHORITY. /3/ WHILE THIS WOULD BE THE CASE IN SITUATIONS WHERE THE GOVERNMENT DERIVED NO BENEFIT FROM PAYING FOR THE IMPROVEMENTS IN QUESTION, IT WAS ALSO REALIZED THAT IN MANY INSTANCES THERE WAS A BENEFIT TO THE GOVERNMENT AS A RESULT OF MAKING PERMANENT IMPROVEMENTS TO PRIVATE PROPERTY. IT WAS THEREFORE RECOGNIZED THAT THE PROHIBITION WAS ONE OF PUBLIC POLICY, NOT STATUTORY PROHIBITION, SO THAT IN APPROPRIATE CIRCUMSTANCES, ALTERATIONS TO LEASED PREMISES WOULD BE PROPER. /4/ CONSEQUENTLY, IF AGENCIES HAD AUTHORITY TO LEASE PROPERTY, THEY WERE CONSIDERED TO HAVE AUTHORITY TO MAKE REPAIRS OR IMPROVEMENTS THERETO AS PART OF THE BARGAINED-FOR CONSIDERATION UNDER THE LEASE.

AGAINST THIS BACKGROUND, THE CONGRESS ENACTED SECTION 322 OF THE ECONOMY ACT OF 1932, /5/ WHICH PROVIDED IN PERTINENT PART THAT:

AFTER JUNE 30, 1932, NO APPROPRIATION SHALL BE OBLIGATED OR EXPENDED FOR THE RENT OF ANY BUILDING OR PART OF A BUILDING TO BE OCCUPIED FOR GOVERNMENT PURPOSES AT A RENTAL IN EXCESS OF THE PER ANNUM RATE OF 15 PER CENTUM OF THE FAIR MARKET VALUE OF THE RENTED PREMISES AT THE DATE OF THE LEASE UNDER WHICH THE PREMISES ARE TO BE OCCUPIED BY THE GOVERNMENT NOR FOR ALTERATIONS, IMPROVEMENTS, AND REPAIRS OF THE RENTED PREMISES IN EXCESS OF 25 PER CENTUM OF THE AMOUNT OF THE RENT FOR THE FIRST YEAR OF THE RENTAL TERM, OR FOR THE RENTAL TERM IF LESS THAN ONE YEAR. ***" /6/

WHILE ADMITTEDLY THE PURPOSE OF THIS PROVISIONS WAS TO LIMIT THE AMOUNT THE GOVERNMENT EXPENDED IN REPAIRS, ALTERATIONS OR IMPROVEMENTS TO LEASED PREMISES, IT OTHERWISE LEFT UNCHANGED THE BASIC AUTHORITY OF GOVERNMENT AGENCIES TO MAKE PERMANENT IMPROVEMENTS TO PRIVATELY OWNED PROPERTY. WAS IDENTIFIED IN LATER DECISIONS AS BEING BOTH A LIMITATION ON AGENCY AUTHORITY TO REPAIR AND IMPROVE LEASED PREMISES AND AN AUTHORIZATION TO ACT UP TO THE STATED PERCENTAGE LIMITATIONS WHEN MAKING REPAIRS AND IMPROVEMENTS TO LEASED PREMISES. /7/ THESE DECISIONS DID NOT CONCLUDE THAT THE INHERENT AUTHORITY OF GOVERNMENT OFFICERS TO MAKE PERMANENT IMPROVEMENTS TO PRIVATE PROPERTY AS PART OF THE BARGAINED-FOR CONSIDERATION OF A LEASE WAS AFFECTED BY THE PROVISIONS. /8/

THEREAFTER, WHEN CONSIDERING THE SCOPE OF THE ECONOMY ACT OF 1932, WE HELD THAT THE LIMITATION ON REPAIRS, ALTERATIONS AND IMPROVEMENTS APPLIED ONLY TO PERMANENT IMPROVEMENTS AND NOT TO TEMPORARY, REMOVABLE TENANT'S FIXTURES; /9/ THAT IT DID NOT APPLY TO UNIMPROVED LAND; /10/ AND THAT IT APPLIED ONLY TO ALTERATIONS AND REPAIRS PAID FOR DIRECTLY BY THE GOVERNMENT. /11/

ADDITIONALLY, IMMEDIATELY FOLLOWING CREATION OF GSA BY SECTION 103 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (1949 ACT), AS AMENDED, 40 U.S.C. SEC. 753 (1982), THE 1949 ACT WAS AMENDED BY ADDITION OF A NEW SECTION 210, WHICH PROVIDES AS FOLLOWS:

OPERATION OF BUILDINGS AND RELATED ACTIVITIES SEC. 210. (A) WHENEVER AND TO THE EXTENT THAT THE ADMINISTRATOR HAS BEEN OR HEREAFTER MAY BE AUTHORIZED BY ANY PROVISION OF LAW OTHER THAN THIS SUBSECTION TO MAINTAIN, OPERATE, AND PROTECT ANY BUILDING, PROPERTY, OR GROUNDS SITUATED IN OR OUTSIDE THE DISTRICT OF COLUMBIA, INCLUDING THE CONSTRUCTION, REPAIR, PRESERVATION, DEMOLITION, FURNISHING, AND EQUIPMENT THEREOF, HE IS AUTHORIZED IN THE DISCHARGE OF THE DUTIES SO CONFERRED UPON HIM * * * * *

(8) TO REPAIR, ALTER, AND IMPROVE RENTED PREMISES, WITHOUT REGARD TO THE 25 PER CENTUM LIMITATION OF SECTION 322 OF THE ACT OF JUNE 30, 1932 (47 STAT. 412), AS AMENDED, UPON A DETERMINATION BY THE ADMINISTRATOR THAT BY REASON OF CIRCUMSTANCES SET FORTH BY THE ADMINISTRATOR IN SUCH DETERMINATION THE EXECUTION OF SUCH WORK, WITHOUT REFERENCE TO SUCH LIMITATION, IS ADVANTAGEOUS TO THE GOVERNMENT IN TERMS OF ECONOMY, EFFICIENCY, OR NATIONAL SECURITY. *** 40 U.S.C. SEC. 490(A)(8) (1982).

WE NOTE THAT PRIOR TO JUNE 30, 1949, THE AUTHORITY TO ACQUIRE SPACE FOR USE OF FEDERAL AGENCIES (BY CONSTRUCTION, PURCHASE OR LEASING) AND THE RESPONSIBILITY FOR CUSTODY, CONTROL AND MANAGEMENT OF GOVERNMENT OWNED OR GOVERNMENT-LEASED SPACE (WITH CERTAIN EXCEPTIONS) WAS VESTED IN THE FEDERAL WORKS AGENCY (INCLUDING ITS CONSTITUENT ELEMENT, THE PUBLIC BUILDINGS ADMINISTRATION). /12/ SECTION 103 OF THE 1949 ACT, AS AMENDED, 40 U.S.C. SEC. 753 (1982), TRANSFERRED TO THE ADMINISTRATOR OF GENERAL SERVICES ALL FUNCTIONS OF THE FEDERAL WORKS AGENCY AND ALL AGENCIES THEREOF (INCLUDING THE PUBLIC BUILDINGS ADMINISTRATION) AND ALL FUNCTIONS OF THE PUBLIC WORKS ADMINISTRATOR AND THE COMMISSIONER OF PUBLIC BUILDINGS.

WE NOTE THAT SECTION 210(F) OF THE 1949 ACT, AS AMENDED, 40 U.S.C. SEC. 490(F) (1982), ESTABLISHED THE FEDERAL BUILDINGS FUND FROM WHICH THE CONGRESS ANNUALLY APPROPRIATES FUNDS FOR REAL PROPERTY MANAGEMENT. THESE APPROPRIATIONS ARE MADE "AVAILABLE FOR NECESSARY EXPENSES OF REAL PROPERTY MANAGEMENT AND RELATED ACTIVITIES NOT OTHERWISE PROVIDED FOR *** INCLUDING OPERATION, MAINTENANCE, AND PROTECTION OF FEDERALLY-OWNED AND LEASED BUILDINGS." /13/

THUS, THERE IS AMPLE AUTHORITY FOR THE ADMINISTRATOR OF GENERAL SERVICES TO MAKE ALTERATIONS, REPAIRS AND IMPROVEMENTS TO PRIVATE PROPERTY, INCLUDING LEASED PREMISES WITHOUT REGARD TO THE LIMITATIONS CONTAINED IN SECTION 322 OF THE ECONOMY ACT OF 1932. /14/

APPLICABILITY OF PUBLIC BUILDINGS ACT OF 1959 TO REPAIRS AND ALTERATIONS OF LEASED BUILDINGS

MEMBERS OF THE COMMITTEE STAFF HAVE SUGGESTED THAT REPAIRS AND ALTERATIONS TO LEASED PREMISES ARE SUBJECT TO PROSPECTUS APPROVAL UNDER SECTION 7(A) OF THE 1959 ACT ON THE GROUNDS THAT ALTERATIONS TO ALL PUBLIC BUILDINGS ARE COVERED BY SECTION 7(A) AND THAT LEASED PREMISES ARE PUBLIC BUILDINGS UNDER THE 1959 ACT. WE HAVE REVIEWED THE 1959 ACT AND RELEVANT AMENDMENTS TO THE 1959 ACT AS WELL AS THE LEGISLATIVE HISTORIES OF THESE LAWS BUT DO NOT FIND SUPPORT FOR THIS POSITION. OUR REVIEW PERSUADES US THAT REPAIRS AND ALTERATIONS TO LEASED PREMISES ARE NOT SUBJECT TO PROSPECTUS APPROVAL UNDER SECTION 7(A) OF THE 1959 ACT.

SECTION 7(A) OF THE 1959 ACT, AS INITIALLY ENACTED PROVIDED:

IN ORDER TO INSURE THE EQUITABLE DISTRIBUTION OF PUBLIC BUILDINGS THROUGHOUT THE UNITED STATES WITH DUE REGARD FOR THE COMPARATIVE URGENCY OF NEED FOR SUCH BUILDINGS, EXCEPT AS PROVIDED IN SECTION 4, NO APPROPRIATION SHALL BE MADE TO CONSTRUCT ANY PUBLIC BUILDING OR TO ACQUIRE ANY BUILDING TO BE USED AS A PUBLIC BUILDING INVOLVING AN EXPENDITURE IN EXCESS OF $100,000, AND NO APPROPRIATION SHALL BE MADE TO ALTER ANY PUBLIC BUILDING INVOLVING AN EXPENDITURE IN EXCESS OF $200,000, IF SUCH CONSTRUCTION, ALTERATION, OR ACQUISITION HAS NOT BEEN APPROVED BY RESOLUTIONS ADOPTED BY THE COMMITTEE ON PUBLIC WORKS OF THE SENATE AND HOUSE OF REPRESENTATIVES, RESPECTIVELY. /15/

MEANING OF ACQUISITION

SECTION 13 OF THE 1959 ACT, WHICH PROVIDES DEFINITIONS FOR MANY OF THE WORDS OR TERMS USED IN THAT ACT, DOES NOT INCLUDE A DEFINITION FOR THE WORD "ACQUIRE." SECTION 3 OF THE 1959 ACT, PROVIDES THAT:

THE ADMINISTRATOR IS AUTHORIZED TO ACQUIRE, BY PURCHASE, CONDEMNATION, DONATION, EXCHANGE, OR OTHERWISE, ANY BUILDING AND ITS SITE WHICH HE DETERMINES TO BE NECESSARY TO CARRY OUT HIS DUTIES UNDER THIS ACT. /16/

THE REPORT OF THE HOUSE COMMITTEE ON PUBLIC WORKS EXPLAINS THE PURPOSE OF THIS PROVISION AS FOLLOWS:

THE THIRD SECTION AUTHORIZES THE ADMINISTRATOR TO ACQUIRE ANY BUILDING AND ITS SITE WHICH HE DETERMINES TO BE NECESSARY TO CARRY OUT HIS DUTIES UNDER THE BILL. THE ADMINISTRATOR IS AUTHORIZED TO ACQUIRE ANY SUCH BUILDING BY PURCHASE, CONDEMNATION, DONATION, EXCHANGE OR ANY OTHER FASHION WHICH WOULD RESULT IN THE UNITED STATES BECOMING THE OWNER OF THE PROPERTY. H.R. REP. NO. 557, 86TH CONG., 1ST SESS., 7 (1959).

A STATEMENT IN THE SENATE COMMITTEE ON PUBLIC WORKS REPORT ACCOMPANYING THE BILL WHICH ULTIMATELY BECAME THE 1959 ACT ALSO SUGGESTS THE FINDING THAT BUILDING ACQUISITIONS UNDER SECTION 3 OF THE 1959 ACT DID NOT INCLUDE ACQUISITION THROUGH LEASING. IT FOLLOWS THAT PROSPECTUS APPROVALS UNDER SECTION 7 OF THE 1959 ACT, REQUIRED IN CONNECTION WITH THE ACQUISITION OF PUBLIC BUILDINGS, LIKEWISE DID NOT INCLUDE PROPOSED ACQUISITIONS BY LEASING SINCE THE SAME TERMS OR WORDS USED IN DIFFERENT SECTIONS OF THE SAME ACT SHOULD BE CONSTRUED CONSISTENTLY UNLESS THERE IS CLEAR LEGISLATIVE INTENT TO THE CONTRARY.

MEANING OF PUBLIC BUILDING

ON THE QUESTION OF WHETHER THE TERM "PUBLIC BUILDING" AS USED IN THE 1959 ACT SHOULD BE INTERPRETED AS INCLUDING LEASED SPACE, WE NOTE THAT THERE IS NO RULE GOVERNING WHETHER A LEASED BUILDING SHOULD BE CONSIDERED TO BE A "PUBLIC BUILDING" IN CONSTRUING THAT TERM IN ANY GIVEN STATUTE. IT IS NOT A WORD OF ART.

WHILE SECTION 13(1) OF THE 1959 ACT, 40 U.S.C. SEC. 612 (1982) DEFINES THE TERM "PUBLIC BUILDING," /17/ IT DOES NOT MENTION WHETHER LEASED BUILDINGS ARE INCLUDED WITHIN ITS SCOPE. HOWEVER, THE LEGISLATIVE HISTORY SUGGESTS THAT LEASED SPACE WAS NOT INTENDED TO BE INCLUDED. FOR EXAMPLE, THE SENATE REPORT ON THE BILL WHICH ULTIMATELY BECAME THE 1959 ACT STATED AS FOLLOWS CONCERNING SECTION 13:

THIS SECTION DEFINES SEVEN TERMS WHICH ARE USED THROUGHOUT THE BILL IN ORDER TO INSURE THAT THEY WILL HAVE THE SAME MEANING THROUGHOUT THE BILL. ONE OF THE MOST IMPORTANT OF THE DEFINED TERMS IS THAT OF "PUBLIC BUILDINGS." THE DEFINITION OF THIS TERM IS SUBSTANTIALLY THAT WHICH THE CONGRESS HAS ESTABLISHED IN THE PUBLIC BUILDINGS ACT OF 1926 AND IN THE VARIOUS ACTS WHICH AMEND IT AND WHICH SUPPLEMENT IT. THE DEFINITION IS EXPLICIT IN STATING THOSE BUILDINGS WHICH ARE INCLUDED WITHIN THE SCOPE OF THE BILL, AS WELL AS THOSE WHICH ARE EXCLUDED. IT IS LIMITED TO THOSE TYPES AND CLASSES OF BUILDINGS WHICH HISTORICALLY HAVE BEEN THE RESPONSIBILITY OF THE ADMINISTRATOR AND HIS PREDECESSORS IN FUNCTION. FURTHER, FLEXIBILITY IN COVERAGE IS ALLOWED BY PERMITTING THE PRESIDENT TO INCLUDE OR EXCLUDE BUILDINGS OR CONSTRUCTION PROJECTS WHICH HE DEEMS TO BE JUSTIFIED IN THE PUBLIC INTEREST EXCEPT THAT HE MAY NOT BRING A SPECIFICALLY EXCLUDED TYPE OF BUILDING UNDER THE LAW." S.REP. NO. 694, 86TH CONG., 1ST SESS., 8 (1959). SINCE THE PUBLIC BUILDINGS ACT OF 1926, AS AMENDED, WAS CONCERNED WITH THE CONSTRUCTION OR PURCHASES, AS OPPOSED TO THE LEASING, OF BUILDINGS BY THE GOVERNMENT, THE SENATE REPORT SUPPORTS AN INTERPRETATION OF THE TERM "PUBLIC BUILDINGS" WHICH WOULD NOT INCLUDE THOSE ACQUIRED BY LEASE. IN ADDITION, THE REPORTS OF THE HOUSE AND SENATE PUBLIC WORKS COMMITTEES ACCOMPANYING THE 1959 ACT FOCUS THEIR ATTENTION UPON A HISTORICAL ANALYSIS OF LAWS RELATING TO ACQUISITION OF OWNERSHIP INTEREST BY THE GOVERNMENT WHEN SPEAKING OF PUBLIC BUILDINGS. SEE S.REP. NO. 694, 86TH CONG., 1ST SESS. 1-3 (1959) AND H.R. REP. NO. 557, 86TH CONG., 1ST SESS., 3-7 (1959). FURTHERMORE, A READING OF THE LAW AS PASSED IN 1959 SHOWS THE TERM "PUBLIC BUILDING" IS GENERALLY USED IN CONJUNCTION WITH THE WORDS CONSTRUCTION OR ACQUISITION, BUT NOT LEASING. AS WE HAVE ALREADY INDICATED, THE TERM "ACQUIRE" WHEN USED IN THE 1959 ACT DOES NOT INCLUDE ACQUIRING BUILDINGS BY LEASING.

FINALLY, SECTION 16 OF THE 1959 ACT, AS AMENDED, 40 U.S.C. SEC. 615, PROVIDES:

NOTHING IN THIS ACT SHALL BE CONSTRUED TO LIMIT OR REPEAL-- (1) EXISTING AUTHORIZATION FOR THE LEASING OF BUILDINGS BY AND FOR THE USE OF THE GENERAL SERVICES ADMINISTRATION ***.

THIS PROVISION FURTHER DEMONSTRATES THAT THE PROSPECTUS APPROVAL PROVISION OF THE 1959 ACT, WHEN ENACTED, DID NOT APPLY TO LEASED BUILDINGS.

EFFECT OF 1972 AMENDMENT TO SECTION 7(A) OF 1959 ACT

THE PUBLIC BUILDINGS AMENDMENTS OF 1972 AMENDED THE PROSPECTUS APPROVAL REQUIREMENT OF SECTION 7(A) OF THE 1959 ACT TO READ AS FOLLOWS:

IN ORDER TO INSURE THE EQUITABLE DISTRIBUTION OF PUBLIC BUILDINGS THROUGHOUT THE UNITED STATES WITH DUE REGARD FOR THE COMPARATIVE URGENCY OF NEED FOR SUCH BUILDINGS, EXCEPT AS PROVIDED IN SECTION 4, NO APPROPRIATION SHALL BE MADE TO CONSTRUCT, ALTER, PURCHASE, OR TO ACQUIRE ANY BUILDING TO BE USED AS A PUBLIC BUILDING WHICH INVOLVES A TOTAL EXPENDITURE IN EXCESS OF $500,000 IF SUCH CONSTRUCTION, ALTERATION, PURCHASE, OR ACQUISITION HAS NOT BEEN APPROVED BY RESOLUTIONS ADOPTED BY THE COMMITTEE ON PUBLIC WORKS OF THE SENATE AND HOUSE OF REPRESENTATIVES, RESPECTIVELY. NO APPROPRIATION SHALL BE MADE TO LEASE ANY SPACE AT AN AVERAGE ANNUAL RENTAL EXCESS OF $500,000 FOR USE FOR PUBLIC PURPOSES IF SUCH LEASE HAS NOT BEEN APPROVED BY RESOLUTIONS ADOPTED BY THE COMMITTEE ON PUBLIC WORKS OF THE SENATE AND HOUSE OF REPRESENTATIVES, RESPECTIVELY. 40 U.S.C. SEC. 606(A) (1982).

WHILE SECTION 7 (A) WAS THUS CHANGED, NO CHANGE WAS MADE TO SECTION 3 TO INCLUDE LEASING WITHIN THE AMBIT OF ACQUISITIONS AUTHORIZED BY THAT SECTION OR TO SECTION 13 TO SPECIFICALLY INCLUDE IT WITHIN THE DEFINITION OF PUBLIC BUILDINGS.

THE AMENDMENT QUOTED ABOVE EXPRESSLY ADDED A SEPARATE REQUIREMENT FOR PROSPECTUS APPROVAL FOR APPROPRIATIONS MADE TO "LEASE ANY SPACE AT AN AVERAGE ANNUAL RENTAL IN EXCESS OF $500,000 FOR USE FOR PUBLIC PURPOSES" RATHER THAN INCLUDING LEASING WITHIN THE FIRST PROHIBITION EVEN THOUGH THE FIRST PROHIBITION ALSO WAS AMENDED TO REQUIRE PROSPECTUS APPROVAL PRIOR TO APPROPRIATIONS MADE TO "CONSTRUCT, ALTER, PURCHASE, OR TO ACQUIRE ANY BUILDING TO BE USED AS A PUBLIC BUILDING." IN OUR VIEW, THIS DEMONSTRATES AN INTENT TO DISTINGUISH BETWEEN THE USE OF THE TERM "PUBLIC BUILDINGS" AND THE USE OF THE PHRASE "SPACE FOR USE FOR PUBLIC PURPOSES" IN THE TWO PROSPECTUS APPROVAL REQUIREMENTS. IN SUMMARY, WE HAVE FOUND THAT THE TERM, "PUBLIC BUILDINGS", DID NOT INCLUDE LEASED PROPERTY PRIOR TO THE 1972 AMENDMENTS FOR PURPOSES OF THE 1959 ACT, AND THE 1972 AMENDMENT TO SECTION 7 OF THE 1959 ACT DID NOTHING TO CHANGE THIS. CONSEQUENTLY, SINCE THE REQUIREMENT FOR PROSPECTUS APPROVAL FOR ALTERATIONS IN EXCESS OF $500,000 APPLIES ONLY TO ALTERATIONS TO PUBLIC BUILDINGS, WE AGREE WITH GSA THAT IT IS NOT REQUIRED TO OBTAIN PROSPECTUS APPROVAL OF ALTERATIONS TO LEASED PREMISES.

/1/ 5 COMP.GEN. 696 (1926); 5 COMP.GEN. 366 (1925); 2 COMP.GEN. 606 (1923); 6 COMP.DEC. 142 (1899); AND, 5 COMP.DEC. 473 (1899).

/2/ A-33513, OCT 10, 1930; 5 COMP.GEN. 696 (1926); 5 COMP.GEN. 366 (1925); 2 COMP.GEN. 606 (1923); 6 COMP.DEC. 943 (1900); 6 COMP.DEC. 142, 146 (1899); 6 COMP.DEC. 135 (1899); AND 3 COMP.DEC. 196 (1896). SEE 18 COMP.DEC. 70 (1911) HOLDING THAT THE GOVERNMENT WOULD NOT BE LIABLE FOR THE EXPENSES OF PERMANENT IMPROVEMENTS OR REPAIRS AND ALTERATIONS TO RENTED BUILDINGS UNLESS PROVIDED FOR IN THE LEASE.

/3/ 6 COMP.DEC. 943, 944 (1900) AND 6 COMP.DEC. 135, 141 (1899) DECISIONS BY THE COMPTROLLER GENERAL SUPPORTING THIS PROPOSITION WERE ALL FOUND TO BE MADE SINCE 1932. SEE, FOR EXAMPLE, 53 COMP.GEN. 351, 352 (1973), 42 COMP.GEN. 480 (1963); 39 COMP.GEN. 304, 306 (1959); 35 COMP.GEN. 143 (1958); AND 35 COMP.GEN. 715 (1956).

/4/ B-198629, JULY 28, 1980; B-187482, FEB. 17, 1977; 55 COMP.GEN. 872 (1976); 53 COMP.GEN. 351 (1973); 47 COMP.GEN. 61 (1967); 46 COMP.GEN. 25 (1966); AND 42 COMP.GEN. 480 (1963).

/5/ ACT OF JUNE 30, 1932, CH 314. 47 DYSY. 412, 40 U.S.C. SEC. 278A (1940).

/6/ THIS PROVISION WAS INTENDED TO ADDRESS THE PROBLEM CAUSED BY AGENCIES REQUESTING AND RECEIVING EXTENSIVE REPAIRS TO QUARTERS THAT WERE INTENDED FOR AGENCY OCCUPATION ONLY TEMPORARILY, PENDING CONSTRUCTION OF PUBLIC BUILDINGS. S.REP. NO. 756. 72D CONG., 1ST SESS., ACCOMPANYING THE LEGISLATIVE BRANCH APPROPRIATION BILL, 1933 (ECONOMY ACT), 15 (1932).

/7/ 53 COMP.GEN. 317 (1973); 42 COMP.GEN. 480 (1963), 29 COMP.GEN. 279 (1949); 21 COMP.GEN. 906 (1942); AND B-198629, JULY 28, 1980.

/8/ SEE 27 COMP.GEN. 389 (1948) EXPLAINING THAT THIS PROVISION WAS INTENDED TO SERVE AS A LIMITATION ON PRIOR AUTHORITY.

/9/ 30 COMP.GEN. 76 (1950); 29 COMP.GEN. 279 (1949); 20 COMP.GEN. 105 (1940); 18 COMP.GEN. 144 (1938); B-71640, DEC. 30, 1947, AND, B-50694, AUG. 2, 1945. 35 COMP.GEN. 143 (1958) AND B-126950, MARCH 12, 1956.

/10/

/11/ 59 COMP.GEN. 658 (1980).

/12/ 40 U.S.C. SECS. 1, 8-13, 14, 15-19, 36, 37A, 285, 304A-304E, 341-348 (1946 AND SUPP. III 1949).

/13/ SEE FOR EXAMPLE, 1986, TREASURY, POSTAL SERVICE AND GENERAL GOVERNMENT APPROPRIATION ACT FOR 1986 (H.R. 3036) AS ADOPTED BY SECTION 101(H) OF THE JOINT RESOLUTION MAKING FURTHER CONTINUING APPROPRIATIONS FOR THE FISCAL YEAR 1986, PUB.L. NO. 99-109, DECEMBER 19, 1985, 99 STAT. 1291 AND THE 1985 TREASURY, POSTAL SERVICE AND GENERAL GOVERNMENT APPROPRIATION ACT FOR 1985 (H.R. 5798) AS ADOPTED BY SECTION 101(J) OF THE JOINT RESOLUTION MAKING CONTINUING APPROPRIATIONS FOR THE FISCAL YEAR 1985, PUBLIC LAW 99-473, OCTOBER 12, 1984, 98 STAT. 1963.

/14/ THE LIMITATION ON ANNUAL RENTAL NOT EXCEEDING 15 PER CENTUM OF THE FAIR MARKET VALUE OF THE PREMISES AT THE TIME OF THE LEASE WAS PERMANENTLY SUSPENDED IN 1983. SEE OUR DECISION TO THE FEDERAL AVIATION ADMINISTRATION-- LIMITS ON RENT PAYMENTS, B-217884, FEB. 18, 1986, 65 COMP.GEN. 302.

/15/ PUB.L. NO. 86-249, SEC. 7(A), SEPTEMBER 9, 1959, 73 STAT. 480, 40 U.S.C. SEC. 606(A) (1964).

/16/ 40 U.S.C. SEC. 602 (1982).

/17/ 40 U.S.C. SEC. 612(1) PROVIDES:

AS USED IN THIS CHAPTER--

(1) THE TERM "PUBLIC BUILDING" MEANS ANY BUILDING, WHETHER FOR SINGLE OR MULTITENANT OCCUPANCY, ITS GROUNDS, APPROACHES, AND APPURTENANCES, WHICH IS GENERALLY SUITABLE FOR OFFICE OR STORAGE SPACE OR BOTH FOR THE USE OF ONE OR MORE FEDERAL AGENCIES OR MIXED OWNERSHIP CORPORATIONS, AND SHALL INCLUDE (I) FEDERAL OFFICE BUILDINGS (II) POST OFFICE, (III) CUSTOMHOUSES, (IV) COURTHOUSES, (V) APPRAISERS STORES, (VI) BORDER INSPECTION FACILITIES, (VII) WAREHOUSES, (VIII) RECORD CENTERS, (IX) RELOCATION FACILITIES, AND (X) SIMILAR FEDERAL FACILITIES, AND (XI) ANY OTHER BUILDINGS OR CONSTRUCTION PROJECTS THE INCLUSION OF WHICH THE PRESIDENT MAY DEEM, FROM TIME TO TIME HEREAFTER, TO BE JUSTIFIED IN THE PUBLIC INTEREST; ***.