A-65120, SEPTEMBER 12, 1935, 15 COMP. GEN. 204

A-65120: Sep 12, 1935

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IT WAS HIS INTENTION TO SELL THE COMPLETED HOMESTEADS ON THOSE PROJECTS TO INDIVIDUAL HOMESTEADERS ON A COST RECOVERY BASIS. THE PAYMENTS ON THE PURCHASE PRICE WERE EXPECTED TO EXTEND OVER A PERIOD OF YEARS. THE APPLICANTS WERE CAREFULLY INVESTIGATED AS TO FINANCIAL INTEGRITY AND PROBABLE ABILITY TO MEET THE OBLIGATION THEY WOULD INCUR IF THEIR APPLICATIONS WERE ACCEPTED. AFTER SUCH INVESTIGATION MANY OF THOSE PERSONS WERE ACCEPTED AS HOMESTEADERS. WHILE NONE OF THE PROJECTS WERE AS A WHOLE COMPLETED BY THE SECRETARY. MANY INDIVIDUAL HOMESTEADS ON THE PROJECTS WERE COMPLETED. IT WAS. IMPOSSIBLE TO CALCULATE COST UNTIL THE PROJECT AS A WHOLE WAS COMPLETED. IT WAS THOUGHT DESIRABLE THAT AS MANY AS POSSIBLE OF THE ACCEPTED HOMESTEADERS SHOULD COMMENCE OCCUPANCY.

A-65120, SEPTEMBER 12, 1935, 15 COMP. GEN. 204

RESETTLEMENT ADMINISTRATION - SUBSISTENCE HOMESTEADS - DISPOSITION OF COLLECTIONS ALL COLLECTIONS OR REPAYMENTS BY OCCUPANTS OF SUBSISTENCE HOMESTEADS TO THE RESETTLEMENT ADMINISTRATION MUST BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AND MAY NOT BE DEPOSITED TO THE CREDIT OF A REVOLVING FUND.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR, RESETTLEMENT ADMINISTRATION, SEPTEMBER 12, 935:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 29, 1935, AS FOLLOWS:

THE SECRETARY OF THE INTERIOR, WHO HAD BEEN DESIGNATED BY THE PRESIDENT BY EXECUTIVE ORDER NO. 6209 OF JULY 21, 1933, AS THE AGENCY TO ADMINISTER SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT (48 STAT. 200 APPROVED JUNE 16, 1933) COMMENCED THE CONSTRUCTION OF VARIOUS SUBSISTENCE HOMESTEADS PROJECTS. IT WAS HIS INTENTION TO SELL THE COMPLETED HOMESTEADS ON THOSE PROJECTS TO INDIVIDUAL HOMESTEADERS ON A COST RECOVERY BASIS. THE PAYMENTS ON THE PURCHASE PRICE WERE EXPECTED TO EXTEND OVER A PERIOD OF YEARS. IN EFFECT, THE CONTEMPLATED PAYMENTS ON ACCOUNT OF THE PURCHASE PRICE WOULD BE REPAYMENTS OF A LOAN MADE BY THE SECRETARY TO AID IN THE PURCHASE OF A SUBSISTENCE HOMESTEAD AND WOULD HENCE BECOME PART OF THE REVOLVING FUND PROVIDED FOR BY SAID SECTION 208.

AS CONSTRUCTION PROGRESSED, MANY PERSONS MADE APPLICATION TO THE SECRETARY TO BECOME HOMESTEADERS IN ACCORDANCE WITH THE ABOVE-OUTLINED PLAN. THE APPLICANTS WERE CAREFULLY INVESTIGATED AS TO FINANCIAL INTEGRITY AND PROBABLE ABILITY TO MEET THE OBLIGATION THEY WOULD INCUR IF THEIR APPLICATIONS WERE ACCEPTED. AFTER SUCH INVESTIGATION MANY OF THOSE PERSONS WERE ACCEPTED AS HOMESTEADERS.

WHILE NONE OF THE PROJECTS WERE AS A WHOLE COMPLETED BY THE SECRETARY, MANY INDIVIDUAL HOMESTEADS ON THE PROJECTS WERE COMPLETED. IT WAS, OF COURSE, IMPOSSIBLE TO CALCULATE COST UNTIL THE PROJECT AS A WHOLE WAS COMPLETED. NEVERTHELESS, IT WAS THOUGHT DESIRABLE THAT AS MANY AS POSSIBLE OF THE ACCEPTED HOMESTEADERS SHOULD COMMENCE OCCUPANCY. AS A RESULT, THE FEDERAL SUBSISTENCE HOMESTEADS CORPORATION, AN AGENCY USED BY THE SECRETARY IN THE ADMINISTRATION OF SECTION 208, ENTERED INTO SO-CALLED "LICENSING AGREEMENTS" WITH MANY OF THE HOMESTEADERS. THE LICENSING AGREEMENTS WERE SUBSTANTIALLY IN THE FORM ATTACHED. MANY PERSONS ARE IN OCCUPANCY UNDER SUCH AGREEMENTS AND ARE CURRENTLY MAKING PAYMENTS ON THE OBLIGATIONS THUS ASSUMED.

THE AGREEMENT REFERS TO THE FEDERAL SUBSISTENCE HOMESTEADS CORPORATION AS THE "SELLER.' THE AGREEMENT FURTHER PROVIDES AS FOLLOWS:

"7. PURCHASE AGREEMENT.--- IF, WHEN THE TOTAL COST OF THE HOMESTEAD COMMUNITY IS DETERMINED, THE LICENSEE SHALL DESIRE TO PURCHASE THE SAID PROPERTY ON SUCH TERMS AND CONDITIONS AS SHALL BE DETERMINED BY THE CORPORATION, AND THE CORPORATION SHALL DESIRE TO PERMIT THE LICENSEE TO PURCHASE SAID PROPERTY, AND A WRITTEN AGREEMENT SHALL BE ENTERED INTO FOR SUCH SALE AND PURCHASE, ALL AMOUNTS PAID BY THE LICENSEE UNDER THIS AGREEMENT SHALL BE CREDITED UPON THE PURCHASE PRICE AS DETERMINED UPON BY THE CORPORATION.'

THE ADMINISTRATIVE PRACTICE BEFORE JUNE 16, 1935, WAS, IN MOST INSTANCES, TO CREDIT PAYMENTS MADE BY HOMESTEADERS UNDER THIS TYPE OF AGREEMENT TO THE APPROPRIATION.

YOUR OPINION IS ACCORDINGLY REQUESTED AS TO WHETHER THE FACT THAT THE PAYMENTS MADE UNDER THIS AGREEMENT ARE TO BE CREDITED AGAINST THE PURCHASE PRICE OF THE HOMESTEADS, IF AND WHEN THE HOMESTEADERS ENTER INTO PURCHASE AGREEMENTS WITH THE GOVERNMENT, MAKES THESE PAYMENTS PAYMENTS OF A CHARACTER WHICH SHOULD GO INTO THE REVOLVING FUND CONTEMPLATED BY SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT.

SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 205, PROVIDED:

TO PROVIDE FOR AIDING THE REDISTRIBUTION OF THE OVERBALANCE OF POPULATION IN INDUSTRIAL CENTERS $25,000,000 IS HEREBY MADE AVAILABLE TO THE PRESIDENT, TO BE USED BY HIM THROUGH SUCH AGENCIES AS HE MAY ESTABLISH AND UNDER SUCH REGULATIONS AS HE MAY MAKE, FOR MAKING LOANS FOR AND OTHERWISE AIDING IN THE PURCHASE OF SUBSISTENCE HOMESTEADS. THE MONEYS COLLECTED AS REPAYMENT OF SAID LOANS SHALL CONSTITUTE A REVOLVING FUND TO BE ADMINISTERED AS DIRECTED BY THE PRESIDENT FOR THE PURPOSES OF THIS SECTION.

UNDER THE LICENSE AGREEMENTS NO ACTUAL LOANS WERE MADE TO THE HOMESTEADER AND THE PAYMENTS RECEIVED UNDER SUCH AGREEMENTS WERE IN THE NATURE OF INSTALLMENT PAYMENTS. HOWEVER, THE ACTUAL RESULTS WERE MUCH THE SAME AS THOUGH THE HOMESTEADER OR LICENSEE HAD BEEN GRANTED A LOAN FOR THE VALUE OF THE PROPERTY TO BE PURCHASED AND HAD REPAID THE LOAN IN INSTALLMENTS. UNDER THE CIRCUMSTANCES, IT WAS PROPER, PRIOR TO JUNE 16, 1935, TO TREAT THE PAYMENTS AS REPAYMENTS OF LOANS AND TO CREDIT THE AMOUNT THEREOF TO THE REVOLVING FUND PURSUANT TO SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT, SUPRA.

HOWEVER, SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT EXPIRED BY STATUTORY LIMITATION JUNE 16, 1935, AND CONSEQUENTLY THAT SECTION IS NO LONGER AUTHORITY FOR CREDITING REPAYMENTS TO THE REVOLVING FUND PREVIOUSLY ESTABLISHED UNDER THAT SECTION. A-61714, JUNE 3, 1935; 14 COMP. GEN. 812. EXECUTIVE ORDER NO. 7041 OF MAY 15, 1935, TRANSFERRED TO THE RESETTLEMENT ADMINISTRATION ALL PROPERTY AND ALL BALANCES OF APPROPRIATIONS OR FUNDS OF THE SUBSISTENCE HOMESTEADS DIVISION OF THE DEPARTMENT OF THE INTERIOR. THE RESETTLEMENT ADMINISTRATION, HOWEVER, WAS ESTABLISHED BY EXECUTIVE ORDER NO. 7027 OF APRIL 30, 1935, UNDER THE PROVISIONS OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, APPROVED APRIL 8, 1935, 49 STAT. 115. ACCORDINGLY, ON AND AFTER JUNE 16, 1935, THE SUBSISTENCE HOMESTEADS OPERATIONS COULD BE CONTINUED, IF AT ALL, ONLY TO THE EXTENT THAT THEY MAY COME WITHIN THE PROVISIONS OF THE ACTIVITIES AUTHORIZED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935. SAID ACT, INSOFAR AS HERE MATERIAL, PROVIDES:

* * * THIS APPROPRIATION SHALL BE AVAILABLE FOR THE FOLLOWING CLASSES OF PROJECTS, AND THE AMOUNTS TO BE USED FOR EACH CLASS SHALL NOT, EXCEPT AS HEREINAFTER PROVIDED, EXCEED THE RESPECTIVE AMOUNTS STATED, NAMELY: (A) HIGHWAYS, ROADS, STREETS, AND GRADE-CROSSING ELIMINATION, $800,000,000; (B) RURAL REHABILITATION AND RELIEF IN STRICKEN AGRICULTURAL AREAS, AND WATER CONSERVATION, TRANS-MOUNTAIN WATER DIVERSION AND IRRIGATION AND RECLAMATION, $500,000,000; (C) RURAL ELECTRIFICATION, $100,000,000; (D) HOUSING, $450,000,000; * * *.

FUNDS MADE AVAILABLE BY THIS JOINT RESOLUTION MAY BE USED, IN THE DISCRETION OF THE PRESIDENT FOR THE PURPOSE OF MAKING LOANS TO FINANCE, IN WHOLE OR IN PART, THE PURCHASE OF FARM LANDS AND NECESSARY EQUIPMENT BY FARMERS, FARM TENANTS, CROPPERS, OR FARM LABORERS. SUCH LOANS SHALL BE MADE ON SUCH TERMS AS THE PRESIDENT SHALL PRESCRIBE AND SHALL BE REPAID IN EQUAL ANNUAL INSTALLMENTS, OR IN SUCH OTHER MANNER AS THE PRESIDENT MAY DETERMINE.

SEC. 5. IN CARRYING OUT THE PROVISIONS OF THIS JOINT RESOLUTION THE PRESIDENT IS AUTHORIZED (WITHIN THE LIMITS OF THE APPROPRIATION MADE IN SECTION 1) TO ACQUIRE, BY PURCHASE OR BY THE POWER OF EMINENT DOMAIN, ANY REAL PROPERTY OR ANY INTEREST THEREIN, AND IMPROVE, DEVELOP, GRANT, SELL, LEASE (WITH OR WITHOUT THE PRIVILEGE OF PURCHASING), OR OTHERWISE DISPOSE OF ANY SUCH PROPERTY OR INTEREST THEREIN.

WHILE THE QUOTED PROVISIONS AUTHORIZE LOANS, ETC., THE ACT MAKES NO PROVISION FOR A REVOLVING FUND SUCH AS WAS PROVIDED FOR IN SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT. ACCORDINGLY, IN VIEW OF THE SPECIFIC LIMITATIONS WITH RESPECT TO THE AMOUNTS WHICH MAY BE EXPENDED FOR THE VARIOUS LISTED ACTIVITIES, IT WOULD NOT APPEAR THAT ANY REVOLVING FUND WAS CONTEMPLATED, AS CREDITING RECEIPTS OR REPAYMENTS TO A REVOLVING FUND WOULD AUGMENT THE APPROPRIATION AND MIGHT CAUSE THE LIMITATION TO BE EXCEEDED. IT MUST BE HELD, THEREFORE, THAT ALL COLLECTIONS OR REPAYMENTS TO THE RESETTLEMENT ADMINISTRATION MUST BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AND MAY NOT BE DEPOSITED TO THE CREDIT OF A REVOLVING FUND.