B-8434, MARCH 19, 1940, 19 COMP. GEN. 791

B-8434, MARCH 19, 1940, 19 COMP. GEN. 791

STATUTORY CONSTRUCTION AND DISPOSITION OF RECEIPTS FROM PROJECTS IN PUERTO RICO THE AUTHORITY CONTAINED IN THE ACT OF FEBRUARY 11, 1936, 49 STAT. 1135, FOR DEPOSIT OF CERTAIN RECEIPTS FROM PROJECTS IN PUERTO RICO, INTO A REVOLVING FUND CONSTITUTES AN EXCEPTION TO THE RULE THAT RECEIPTS, GENERALLY, ARE REQUIRED TO BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, AND FOR THAT REASON MUST BE STRICTLY CONSTRUED. THE REVOLVING FUND ESTABLISHED UNDER THE ACT OF FEBRUARY 11, 1936, 49 STAT. 1135, FROM RECEIPTS FROM OPERATION, ETC., OF PROJECTS IN PUERTO RICO FINANCED FROM THE SPECIAL FUND AUTHORIZED BY SAID ACT TO BE SET UP FROM FUNDS APPROPRIATED BY THE EMERGENCY RELIEF ACT OF 1935, SHOULD NOT BE CREDITED WITH RECEIPTS FROM OPERATIONS FINANCED, IN WHOLE OR IN PART, OUT OF SUBSEQUENT EMERGENCY RELIEF APPROPRIATIONS--- SUCH RECEIPTS BEING FOR DEPOSIT AS " MISCELLANEOUS RECEIPTS"--- EXCEPT THAT IN CASES OF MIXED RECEIPTS WHERE A SEGREGATION IS POSSIBLE, THE REVOLVING FUND MAY BE CREDITED WITH SUCH PART OF THE RECEIPTS AS CAN BE ESTABLISHED TO RESULT FROM EXPENDITURES FROM THE SPECIAL FUND.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, MARCH 19, 1940:

THERE HAS BEEN CONSIDERED A LETTER DATED FEBRUARY 3, 1940, FROM THE ASSISTANT ADMINISTRATOR, PUERTO RICO RECONSTRUCTION ADMINISTRATION, AS FOLLOWS:

THIS ADMINISTRATION HAS BEEN PROSECUTING A PROGRAM OF APPROVED WORK RELIEF PROJECTS IN PUERTO RICO WITH FUNDS FROM THE TWO FOLLOWING MAIN SOURCES:

1. PUERTO RICO SPECIAL FUND, 1935-1940, CREATED BY ACT OF FEBRUARY 11, 1936, ( PUBLIC, NO. 442--- 74TH CONGRESS), FROM FUNDS ALLOTTED TO PUERTO RICO OUT OF MONEY APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935.

2. EMERGENCY RELIEF APPROPRIATION ACTS OF 1936, 1937, 1938, AND 1939.

BESIDES SETTING UP THE SPECIAL FUND, THE ACT OF FEBRUARY 11, 1936, ALSO PROVIDES THAT: "ALL INCOME DERIVED FROM OPERATIONS FINANCED OUT OF THIS FUND (SPECIAL FUND) AND THE PROCEEDS OF THE DISPOSITION OF PROPERTY ACQUIRED THEREWITH SHALL CONSTITUTE A REVOLVING FUND * * *"

ACCORDINGLY, THE REVOLVING FUND WAS ESTABLISHED (APPROPRIATION 05 0X999, EMERGENCY RELIEF. PUERTO RICO REVOLVING FUND, ACT OF FEBRUARY 11, 1936), AND INCOME AND PROCEEDS RESULTING FROM EXPENDITURES UNDER THE SPECIAL FUND ARE BEING DEPOSITED THEREIN.

THERE ARE SEVERAL PROJECTS BEING PROSECUTED UNDER THE SPECIAL FUND, HOWEVER, WHICH HAVE RECEIVED SUPPLEMENTAL ALLOTMENTS FROM FUNDS APPROPRIATED BY LATER E.R.A. ACTS. THIS HAS BROUGHT UP THE QUESTION AS TO THE DISPOSITION OF INCOME OR PROCEEDS RESULTING FROM A PROJECT WHICH HAS BEEN FINANCED WITH MONIES BOTH FROM THE SPECIAL FUND AND LATER E.R.A. ACTS. IN SOME FEW CASES IT IS POSSIBLE TO SEGREGATE THE INCOME OR PROCEEDS AS TO THE RESPECTIVE FUNDS FROM WHICH THEY RESULTED, BUT IN MOST CASES IT IS IMPOSSIBLE TO DO SO. HOWEVER, IT IS KNOWN THAT IN THE MAJORITY OF CASES THE INCOME AND PROCEEDS RESULT FROM EXPENDITURES UNDER THE SPECIAL FUND, EXPENDITURES FROM LATER E.R.A. ACTS BEING MERELY INCIDENTAL.

FOR THE PURPOSE OF ILLUSTRATION, THREE TYPICAL EXAMPLES ARE LISTED BELOW:

1. SALE OF PRODUCE GROWN ON P.R.R.A. LAND:

(A) LAND PURCHASED UNDER O.P. 5-77, SPECIAL FUND.

(B) EQUIPMENT AND TOOLS PURCHASED UNDER O.P. 501-5-132, E.R.A. ACT OF 1937.

(C) SEEDS AND FERTILIZER PURCHASED UNDER O.P. 705-7-1, E.R.A. ACT OF 1938.

(D) LABOR USED IN PLANTING, CULTIVATING, AND HARVESTING PARTLY PAID FROM O.P. 105-5-36-902, E.R.A. ACT OF 1939.

2. SALE OF ANIMALS OR POULTRY RAISED AT P.R.R.A. FARMS:

(A) ANIMALS AND POULTRY ARE OFFSPRING OF THOSE PURCHASED UNDER O.P. 5-77, SPECIAL FUND.

(B) SHEDS OR BARNS IN WHICH THESE ANIMALS WERE RAISED WERE CONSTRUCTED UNDER O.P. 205-0001, E.R.A. ACT OF 1936.

(C) FEED WAS PURCHASED UNDER O.P. 705-7-1, E.R.A. ACT OF 1938.

(D) LABOR FOR CARING FOR THE ANIMALS AND POULTRY PAID FROM 10.P. 105-5-36 -902, E.R.A. ACT OF 1939.

3. RENT OF LAND AND HOUSES TO RESETTLERS (ONE RENTAL IS CHARGED WHICH INCLUDES BOTH LAND AND HOUSE):

(A) LAND PURCHASED UNDER O.P. 5-77, SPECIAL FUND.

(B) MATERIALS USED IN CONSTRUCTION OF THE HOUSES, PURCHASED PARTLY UNDER O.P. 5-77, SPECIAL FUND; PARITY UNDER O.P. 705-7-3, E.R.A. ACT OF 1938; AND PARTLY UNDER O.P. 105-5-36-903, E.R.A. ACT OF 1939.

(C) LABOR USED IN THE CONSTRUCTION OF THE HOUSES, PAID PARTLY FROM O.P. 705-7-3, E.R.A. ACT OF 1938, AND PARTLY FROM O.P. 105-5-36-903, E.R.A. ACT OF 1939.

THERE ARE CASES OTHER THAN THE EXAMPLES CITED, AND ALSO SOME VARIATIONS OF SUCH EXAMPLES.

UP TO THE PRESENT TIME ALL INCOME AND PROCEEDS RESULTING FROM PROJECTS FINANCED WITH MONIES BOTH FROM THE SPECIAL FUND AND LATER E.R.A. ACTS HAVE BEEN DEPOSITED IN THE REVOLVING FUND.

IN VIEW OF THE FOREGOING FACTS, YOUR OPINION IS REQUESTED AS TO WHETHER:

1. THIS ADMINISTRATION SHOULD CONTINUE TO DEPOSIT IN THE REVOLVING FUND ALL INCOME AND PROCEEDS RESULTING FROM SUCH OPERATIONS.

2. THIS ADMINISTRATION SHOULD CONTINUE TO DEPOSIT IN THE REVOLVING FUND INCOME AND PROCEEDS RESULTING FROM SUCH OPERATIONS EXCEPT WHERE THE INCOME OR PROCEEDS CAN BE SEGREGATED, IN WHICH EVENT THAT PART OF INCOME OR PROCEEDS RESULTING FROM EXPENDITURES FROM THE SPECIAL FUND SHOULD BE DEPOSITED IN THE REVOLVING FUND AND THAT PART RESULTING FROM EXPENDITURES FROM LATER E.R.A. ACTS SHOULD GO TO MISCELLANEOUS RECEIPTS.

3. INCOME AND PROCEEDS RESULTING FROM PROJECTS FINANCED PARTLY UNDER OTHER APPROPRIATIONS BUT MAINLY FROM THE SPECIAL FUND SHOULD BE DEPOSITED IN THE REVOLVING FUND, AND INCOME AND PROCEEDS RESULTING FROM PROJECTS FINANCED MAINLY FROM LATER E.R.A. ACTS SHOULD GO TO MISCELLANEOUS RECEIPTS.

YOUR ADVICE IN THIS MATTER WILL BE VERY MUCH APPRECIATED.

THE ACT OF FEBRUARY 11, 1936, 49 STAT. 1135, PROVIDES IN PERTINENT PART AS FOLLOWS:

THAT ALL SUMS WHICH THE PRESIDENT HAS SEGREGATED OR ALLOTTED OR SHALL SEGREGATE OR ALLOT FOR PROJECTS IN PUERTO RICO OUT OF THE MONEY APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 SHALL CONSTITUTE A SPECIAL FUND TO PROVIDE RELIEF AND WORK RELIEF AND TO INCREASE EMPLOYMENT IN PUERTO RICO. THE FUND THUS ESTABLISHED SHALL CONTINUE AVAILABLE FOR EXPENDITURE UNTIL JUNE 30, 1940. ALL INCOME DERIVED FROM OPERATIONS FINANCED OUT OF THIS FUND AND THE PROCEEDS OF THE DISPOSITION OF PROPERTY ACQUIRED THEREWITH SHALL CONSTITUTE A REVOLVING FUND, WHICH SHALL REMAIN AVAILABLE FOR EXPENDITURE FOR THE PURPOSES AND IN MANNER AUTHORIZED HEREIN AND IN THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935 UNTIL CONGRESS SHALL PROVIDE OTHERWISE, NOTWITHSTANDING ANY LIMITATION OF TIME CONTAINED IN THE SAID EMERGENCY RELIEF APPROPRIATION ACT OF 1935. ANY AGENCY OR AGENCIES LAWFULLY DESIGNATED OR ESTABLISHED TO ADMINISTER FUNDS ALLOTTED HEREUNDER OR THE REVOLVING FUND HEREIN AUTHORIZED MAY BE CONTINUED SO LONG AS THE SAID FUNDS OR ANY OF THEM REMAIN AVAILABLE FOR EXPENDITURE.

UNDER THE PROVISIONS OF SAID ACT INCOME DERIVED FROM OPERATIONS FINANCED OUT OF THE SPECIAL FUND AND THE PROCEEDS OF THE DISPOSITION OF PROPERTY ACQUIRED THEREWITH CONSTITUTE A REVOLVING FUND AND SHOULD BE CREDITED TO SUCH FUND. HOWEVER, THE AUTHORITY WITH RESPECT TO THE SPECIAL FUND RELATES ONLY TO ALLOTMENTS OUT OF MONEY APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935. RECEIPTS DERIVED FROM OPERATIONS FINANCED OUT OF SUBSEQUENT EMERGENCY RELIEF APPROPRIATION ACTS ARE REQUIRED TO BE COVERED INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS AND MAY NOT BE WITHDRAWN EXCEPT IN CONSEQUENCE OF AN APPROPRIATION MADE BY LAW. SEE SECTIONS 3617 AND 3618, REVISED STATUTES. ACCORDINGLY, IN ANSWER TO THE QUESTIONS SUBMITTED I HAVE TO ADVISE AS FOLLOWS:

1. IN THOSE CASES IN WHICH THE PROJECTS INVOLVED ARE FINANCED EXCLUSIVELY OUT OF THE SPECIAL FUND THE ENTIRE INCOME AND PROCEEDS RESULTING THEREFROM ARE FOR DEPOSITING INTO THE REVOLVING FUND.

2. IN CASES WHERE THE PROJECTS ARE FINANCED PARTLY FROM THE SPECIAL FUND AND PARTLY FROM OTHER APPROPRIATIONS, AND A SEGREGATION IS POSSIBLE THERE MAY BE CREDITED TO THE REVOLVING FUND SUCH PORTION OF THE INCOME AND PROCEEDS AS MAY RESULT FROM EXPENDITURES FROM THE SPECIAL FUND. IN ALL SUCH CASES, HOWEVER, A PROPER SHOWING SHOULD BE MADE IN SUPPORT OF EACH DEPOSIT TO THE REVOLVING FUND DISCLOSING THE BASIS OF THE SEGREGATION, ETC.

3. IN ALL OTHER CASES, THAT IS, CASES IN WHICH THE PROJECTS HAVE BEEN FINANCED WITH FUNDS OUT OF THE SPECIAL FUND AND FUNDS DERIVED FROM OTHER APPROPRIATIONS WHERE A SEGREGATION IS NOT PRACTICABLE THE FUNDS SHOULD BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. THE AUTHORITY CONTAINED IN THE ACT OF FEBRUARY 11, 1936, CONSTITUTES AN EXCEPTION TO THE RULE THAT RECEIPTS, GENERALLY, COLLECTED FOR THE USE OF THE UNITED STATES, ARE REQUIRED TO BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, AND FOR THAT REASON MUST BE STRICTLY CONSTRUED. HENCE, IT MUST BE HELD WITH RESPECT TO RECEIPTS WHICH CANNOT BE SHOWN TO REPRESENT INCOME OR PROCEEDS DERIVED FROM EXPENDITURES OUT OF THE SPECIAL FUND, THAT THERE IS NO AUTHORITY UNDER THE ACT OF FEBRUARY 11, 1936, OR OTHER LAW, TO CREDIT THEM TO THE REVOLVING FUND.