A-78195, JULY 18, 1936, 16 COMP. GEN. 42

A-78195: Jul 18, 1936

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UNLESS SUCH EXPENSES ARE UNUSUAL OR EXTRAORDINARY. QUESTIONS HAVE ARISEN AS TO WHETHER THE BOARD CAN PROPERLY CERTIFY AMOUNTS WHICH THE STATES WILL SPEND IN CONNECTION WITH LEGAL SERVICES CONNECTED WITH THE UNEMPLOYMENT COMPENSATION LAWS. THE VALIDITY OF A CERTAIN SECTION OF THE STATE LAW HAS BEEN DRAWN INTO QUESTION IN A SUIT IN WHICH NEITHER PARTY IS DISPOSED TO ARGUE IN FAVOR OF ITS VALIDITY. THE DEFENDANT IS THE STATE CONTROLLER. WHO IS INCLINED TO QUESTION THE VALIDITY OF THE SECTION IN QUESTION AND HAS DIRECTED THE STATE ATTORNEY GENERAL TO PLEAD ACCORDINGLY. CASES INVOLVING THE UNEMPLOYMENT COMPENSATION LAW ARE HANDLED BY THE OFFICE OF THE STATE ATTORNEY GENERAL. WE HAVE ASSUMED THAT THE LEGAL SERVICES DESCRIBED ARE NECESSARY IF THE STATE LAW IS TO BE PROPERLY ADMINISTERED.

A-78195, JULY 18, 1936, 16 COMP. GEN. 42

SOCIAL SECURITY - FEDERAL AID TO STATES - LEGAL EXPENSES OF STATE LAW ADMINISTRATION PAYMENTS TO A STATE UNDER SECTION 302 (A) OF THE SOCIAL SECURITY ACT, 49 STAT. 626, MAY NOT INCLUDE EXPENSES OF THE OFFICE OF THE ATTORNEY GENERAL OF THE STATE IN ADMINISTERING THE STATE UNEMPLOYMENT COMPENSATION LAW, EVEN THOUGH SUCH LAW BE INVOLVED IN LITIGATION, UNLESS SUCH EXPENSES ARE UNUSUAL OR EXTRAORDINARY.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, SOCIAL SECURITY BOARD, JULY 18, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 3, 1936, AS FOLLOWS:

SECTION 301 OF THE SOCIAL SECURITY ACT (AUG. 14, 1935, C. 531, TITLE III, 49 STAT. 626) AUTHORIZES THE APPROPRIATION OF CERTAIN SUMS "FOR THE PURPOSE OF ASSISTING THE STATES IN THE ADMINISTRATION OF THEIR UNEMPLOYMENT COMPENSATION LAWS.' SECTION 302 (A) PROVIDES THAT THE BOARD SHALL FROM TIME TO TIME CERTIFY TO THE SECRETARY OF THE TREASURY FOR PAYMENT TO EACH STATE WHICH HAS AN UNEMPLOYMENT COMPENSATION LAW,"SUCH AMOUNTS AS THE BOARD DETERMINES TO BE NECESSARY FOR THE PROPER ADMINISTRATION OF SUCH LAW * * *.'

IN SEVERAL INSTANCES, QUESTIONS HAVE ARISEN AS TO WHETHER THE BOARD CAN PROPERLY CERTIFY AMOUNTS WHICH THE STATES WILL SPEND IN CONNECTION WITH LEGAL SERVICES CONNECTED WITH THE UNEMPLOYMENT COMPENSATION LAWS.

A NUMBER OF STATE LAWS INCLUDE PROVISION FOR THE STATE AGENCY ADMINISTERING THE LAW EMPLOYING COUNSEL TO AID IT DIRECTLY. IN THIS CONNECTION, LEGAL SERVICES WOULD PROBABLY, IN THE MAIN, CONSIST OF CONTINUING LEGAL ADVICE TO THE MEMBERS OF THE STATE COMMISSION ITSELF, ASSISTANCE IN DRAFTING OF RULES AND REGULATIONS OR SUGGESTED STATUTORY AMENDMENTS, AND REPRESENTING THE COMMISSION IN ANY LITIGATION AFFECTING THE STATE LAW.

IN OTHER INSTANCES, THE STATE COMMISSION MAY EMPLOY SPECIAL COUNSEL, FOR A SPECIAL FEE, TO ASSIST IT IN SOME PARTICULAR MATTER. IN ONE CASE, FOR INSTANCE, THE VALIDITY OF A CERTAIN SECTION OF THE STATE LAW HAS BEEN DRAWN INTO QUESTION IN A SUIT IN WHICH NEITHER PARTY IS DISPOSED TO ARGUE IN FAVOR OF ITS VALIDITY. IN THIS CASE, THE DEFENDANT IS THE STATE CONTROLLER, WHO IS INCLINED TO QUESTION THE VALIDITY OF THE SECTION IN QUESTION AND HAS DIRECTED THE STATE ATTORNEY GENERAL TO PLEAD ACCORDINGLY. AS A RESULT, THE STATE COMMISSION FELT THAT ONLY BY EXERCISING ITS POWER TO EMPLOY SPECIAL COUNSEL COULD ALL THE ARGUMENTS BE PROPERLY PRESENTED, WITH A VIEW TOWARD A COURT DECISION EMPOWERING THE COMMISSION TO CONTINUE TO CARRY OUT THE LAW.

IN OTHER STATES, THE COMMISSION DOES NOT EMPLOY COUNSEL DIRECTLY, BUT CASES INVOLVING THE UNEMPLOYMENT COMPENSATION LAW ARE HANDLED BY THE OFFICE OF THE STATE ATTORNEY GENERAL. IN AT LEAST ONE INSTANCE THIS HAS INVOLVED CONSIDERABLE EXPENSE TO THE ATTORNEY GENERAL'S OFFICE, NOT ONLY IN THE TIME CONSUMED IN PREPARING BRIEFS AND ARGUMENTS BUT IN THE COST OF PRINTING, ETC.

IN THE FIRST TWO EXAMPLES GIVEN ABOVE, WE HAVE ASSUMED THAT THE LEGAL SERVICES DESCRIBED ARE NECESSARY IF THE STATE LAW IS TO BE PROPERLY ADMINISTERED, AND HAVE ADVISED THE STATES TO INCLUDE THESE ITEMS IN THEIR ESTIMATES. WE ARE NOT CERTAIN WHETHER THE ADDITIONAL EXPENSE TO THE ATTORNEY GENERAL'S OFFICE IS A COST OF "PROPER ADMINISTRATION" OF THE STATE UNEMPLOYMENT COMPENSATION LAW, ALTHOUGH IT WOULD SEEM THAT MONEY SPENT IN AN EFFORT TO MAKE IT POSSIBLE TO ADMINISTER THE LAW COULD BE SAID TO FALL WITHIN THE WORDS OF THE STATUTE.

WE SHOULD BE GLAD TO BE ADVISED BY YOU, AS SOON AS POSSIBLE, ON THIS MATTER.

SECTIONS 301 AND 302 (A) OF THE SOCIAL SECURITY ACT, APPROVED AUGUST 14, 1935, 49 STAT. 626, ARE AS FOLLOWS:

SECTION 301. FOR THE PURPOSE OF ASSISTING THE STATES IN THE ADMINISTRATION OF THEIR UNEMPLOYMENT COMPENSATION LAWS, THERE IS HEREBY AUTHORIZED TO BE APPROPRIATED, FOR THE FISCAL YEAR ENDING JUNE 30, 1936, THE SUM OF $4,000,000, AND FOR EACH FISCAL YEAR THEREAFTER THE SUM OF $49,000,000 TO BE USED AS HEREINAFTER PROVIDED.

SEC. 302. (A) THE BOARD SHALL FROM TIME TO TIME CERTIFY TO THE SECRETARY OF THE TREASURY FOR PAYMENT TO EACH STATE WHICH HAS AN UNEMPLOYMENT COMPENSATION LAW APPROVED BY THE BOARD UNDER TITLE IX, SUCH AMOUNTS AS THE BOARD DETERMINES TO BE NECESSARY FOR THE PROPER ADMINISTRATION OF SUCH LAW DURING THE FISCAL YEAR IN WHICH SUCH PAYMENT IS TO BE MADE. THE BOARD'S DETERMINATION SHALL BE BASED ON (1) THE POPULATION OF THE STATE; (2) AN ESTIMATE OF THE NUMBER OF PERSONS COVERED BY THE STATE LAW AND OF THE COST OF PROPER ADMINISTRATION OF SUCH LAW; AND (3) SUCH OTHER FACTORS AS THE BOARD FINDS RELEVANT. THE BOARD SHALL NOT CERTIFY FOR PAYMENT UNDER THIS SECTION IN ANY FISCAL YEAR A TOTAL AMOUNT IN EXCESS OF THE AMOUNT APPROPRIATED THEREFOR FOR SUCH FISCAL YEAR.

UNDER THESE PROVISIONS IT IS PRIMARILY FOR THE SOCIAL SECURITY BOARD TO DETERMINE THE AMOUNT OF PAYMENTS TO EACH STATE NECESSARY FOR ADMINISTRATION OF STATE UNEMPLOYMENT COMPENSATION LAWS, SUCH DETERMINATION TO BE BASED ON, INTER ALIA,"SUCH OTHER FACTORS AS THE BOARD FINDS RELEVANT.'

THE USUAL AND ORDINARY EXPENSES OF THE OFFICE OF THE ATTORNEY GENERAL OF A STATE CHARGED GENERALLY WITH THE DUTY OF REPRESENTING THE STATE IN LITIGATION INVOLVING ITS DEPARTMENTS, BOARDS, AND AGENCIES WOULD NOT BE FOR CONSIDERATION IN DETERMINING THE COST OF ADMINISTERING THE UNEMPLOYMENT COMPENSATION LAW OF THE STATE EVEN THOUGH SUCH LAW BE INVOLVED IN LITIGATION. BUT IF SUCH LITIGATION SHOULD IMPOSE UNUSUAL OR EXTRAORDINARY EXPENSES ON THE ATTORNEY GENERAL'S OFFICE, THE AMOUNT THEREOF MAY BE CONSIDERED A RELEVANT FACTOR IN THE ADMINISTRATION OF THE PARTICULAR LAW; AND IF SO DETERMINED BY THE SOCIAL SECURITY BOARD PURSUANT TO THE PROVISIONS OF SECTION 302 (A) OF THE ACT, SUPRA, THIS OFFICE WOULD NOT BE REQUIRED BECAUSE THEREOF TO OBJECT TO THE USE OF THE APPROPRIATION FOR AN OTHERWISE PROPER PAYMENT TO THE STATE.