A-98555, OCTOBER 18, 1938, 18 COMP. GEN. 350

A-98555: Oct 18, 1938

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1938: I HAVE YOUR LETTER OF OCTOBER 13. AS FOLLOWS: YOUR OPINION IS REQUESTED WITH RESPECT TO THE QUESTION HEREINAFTER SET FORTH AND INVOLVING SECTIONS 3 (A). THE RELEVANT PORTIONS OF WHICH ARE AS FOLLOWS: "SEC. 3. (A) THE RECONSTRUCTION FINANCE CORPORATION IS HEREBY AUTHORIZED AND DIRECTED TO MAKE LOANS TO THE ADMINISTRATOR. THE QUESTION HERE PRESENTED IS AS FOLLOWS: IN MAKING THE 50 PERCENTUM ALLOTMENTS IN THE SEVERAL STATES AND IN ENTERING INTO OBLIGATIONS FOR LOANS PURSUANT TO THE ABOVE STATUTORY PROVISIONS. OR SHALL HE USE AS A BASE AT A GIVEN TIME ONLY SUCH SUM AS SHALL HAVE BEEN PREVIOUSLY APPROVED BY THE PRESIDENT? 000 IS. IS WHETHER. PARTICULARLY IN THE NORTHERN PORTIONS OF THE COUNTRY WHERE IT IS HIGHLY DESIRABLE TO START CONSTRUCTION AND THE DIGGING OF POLE HOLES BEFORE WINTER.

A-98555, OCTOBER 18, 1938, 18 COMP. GEN. 350

ALLOTMENTS AND LOANS - RURAL ELECTRIFICATION ADMINISTRATION - STATUTORY LIMITATION INTERPRETATION ALLOTMENTS AND LOANS AMONG THE SEVERAL STATES UNDER SECTIONS 3 (C) AND 3 (D) OF THE RURAL ELECTRIFICATION ACT OF 1936, AS AMENDED BY TITLE IV OF THE WORK RELIEF AND PUBLIC WORKS APPROPRIATION ACT OF 1938, 52 STAT. 818, SHOULD BE ON THE BASIS OF SO MUCH OF THE AMOUNT AUTHORIZED TO BE LOANED TO THE RURAL ELECTRIFICATION ADMINISTRATION BY THE RECONSTRUCTION FINANCE CORPORATION FOR SAID PURPOSES AS HAS BEEN APPROVED BY THE PRESIDENT AND ACTUALLY MADE AVAILABLE FOR EXPENDITURE AND NOT ON THE BASIS OF THE FULL AMOUNT WHICH MAY BE MADE AVAILABLE UPON APPROVAL OF THE PRESIDENT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, RURAL ELECTRIFICATION ADMINISTRATION, OCTOBER 18, 1938:

I HAVE YOUR LETTER OF OCTOBER 13, 1938, AS FOLLOWS:

YOUR OPINION IS REQUESTED WITH RESPECT TO THE QUESTION HEREINAFTER SET FORTH AND INVOLVING SECTIONS 3 (A), (C), AND (D) OF THE RURAL ELECTRIFICATION ACT OF 1936 (49 STAT. 1363), AS AMENDED BY THE RURAL ELECTRIFICATION ACT OF 1938, BEING TITLE IV OF THE WORK RELIEF AND PUBLIC WORKS APPROPRIATION ACT OF 1938 (PUB.RES.NO. 122, 75TH CONG.), THE RELEVANT PORTIONS OF WHICH ARE AS FOLLOWS:

"SEC. 3. (A) THE RECONSTRUCTION FINANCE CORPORATION IS HEREBY AUTHORIZED AND DIRECTED TO MAKE LOANS TO THE ADMINISTRATOR, UPON HIS REQUEST APPROVED BY THE PRESIDENT, NOT EXCEEDING IN AGGREGATE AMOUNT $50,000,000 FOR THE FISCAL YEAR ENDING JUNE 30, 1937, AND $100,000,000 FOR THE FISCAL YEAR ENDING JUNE 30, 1939, . . .

"/C) FIFTY PERCENTUM OF THE ANNUAL SUMS HEREIN MADE AVAILABLE OR APPROPRIATED FOR THE PURPOSES OF THIS ACT SHALL BE ALLOTTED YEARLY BY THE ADMINISTRATOR FOR LOANS IN THE SEVERAL STATES IN THE PROPORTION WHICH THE NUMBER OF THEIR FARMS NOT THEN RECEIVING CENTRAL STATION ELECTRIC SERVICE BEARS TO THE TOTAL NUMBER OF FARMS OF THE UNITED STATES NOT THEN RECEIVING SUCH SERVICE. THE ADMINISTRATOR SHALL, WITHIN NINETY DAYS AFTER THE BEGINNING OF EACH FISCAL YEAR, DETERMINE FOR EACH STATE AND FOR THE UNITED STATES THE NUMBER OF FARMS NOT THEN RECEIVING SUCH SERVICE.

"/D) THE REMAINING 50 PERCENTUM OF SUCH ANNUAL SUMS SHALL BE AVAILABLE FOR LOANS IN THE SEVERAL STATES AND IN THE TERRITORIES, WITHOUT ALLOTMENT AS HEREINABOVE PROVIDED, IN SUCH AMOUNTS FOR EACH STATE AND TERRITORY AS, IN THE OPINION OF THE ADMINISTRATOR, MAY BE EFFECTIVELY EMPLOYED FOR THE PURPOSES OF THIS ACT, AND TO CARRY OUT THE PROVISIONS OF SECTION 7: PROVIDED, HOWEVER, THAT NOT MORE THAN 10 PERCENTUM OF SAID UNALLOTTED ANNUAL SUMS MAY BE EMPLOYED IN ANY ONE STATE, OR IN ALL OF THE TERRITORIES.'

THE QUESTION HERE PRESENTED IS AS FOLLOWS: IN MAKING THE 50 PERCENTUM ALLOTMENTS IN THE SEVERAL STATES AND IN ENTERING INTO OBLIGATIONS FOR LOANS PURSUANT TO THE ABOVE STATUTORY PROVISIONS, SHALL THE ADMINISTRATOR USE THE FULL $100,000,000 MADE AVAILABLE BY THE STATUTE SUBJECT TO THE APPROVAL OF THE PRESIDENT, OR SHALL HE USE AS A BASE AT A GIVEN TIME ONLY SUCH SUM AS SHALL HAVE BEEN PREVIOUSLY APPROVED BY THE PRESIDENT?

TO DATE, THE PRESIDENT HAS APPROVED LOANS TO THE ADMINISTRATOR FROM THE RECONSTRUCTION FINANCE CORPORATION FOR THE CURRENT FISCAL YEAR IN A TOTAL SUM OF $30,000,000. A TOTAL SUM OF $70,000,000 IS, THEREFORE, ACTUALLY AND UNCONDITIONALLY AVAILABLE TO THIS ADMINISTRATION, INCLUDING THE $40,000,000 APPROPRIATED IN THE INDEPENDENT OFFICES APPROPRIATION ACT, 1939. THE SPECIFIC QUESTION, THEREFORE, IS WHETHER, IN MAKING THE 50 PERCENTUM ALLOTMENTS AMONG THE SEVERAL STATES AS REQUIRED BY SECTION 3 (C), AND IN ENTERING INTO LOAN OBLIGATIONS FOR THE REMAINING 50 PERCENTUM, SUBJECT TO THE LIMITATION OF NOT MORE THAN 10 PERCENTUM IN ANY ONE STATE AS PROVIDED BY SECTION 3 (D), THE SUM OF $70,000,000 OR THE SUM OF $140,000,000 SHALL PRESENTLY BE USED.

THE OCCASION FOR THIS REQUESTED OPINION GROWS OUT OF THE FOLLOWING SITUATION. IN SEVERAL STATES, PARTICULARLY IN THE NORTHERN PORTIONS OF THE COUNTRY WHERE IT IS HIGHLY DESIRABLE TO START CONSTRUCTION AND THE DIGGING OF POLE HOLES BEFORE WINTER, THE ADMINISTRATOR DESIRES, IF POSSIBLE, TO ACT FAVORABLY AT THIS TIME UPON APPLICATIONS FOR LOANS IN THE LARGEST SUMS POSSIBLE UNDER THE STATUTE. IF THE 50 PERCENTUM ALLOTMENTS AMONG THE STATES AND THE 10 PERCENTUM RESTRICTION IN ANY ONE STATE WITH REFERENCE TO THE REMAINING 50 PERCENTUM MUST BE BASED UPON THE SAID SUM OF $70,000,000, THE MAXIMUM AMOUNT OF LOANS HAS ALREADY BEEN REACHED IN CERTAIN STATES WHERE IT IS HIGHLY DESIRABLE TO MAKE IMMEDIATE FURTHER LOANS. THIS PRACTICAL PROBLEM IN THE EFFECTIVE ADMINISTRATION OF THE STATUTE WILL BE MET IF THE BASE OF $140,000,000 CAN PRESENTLY BE USED. THE BUREAU OF THE BUDGET TO DATE HAS ADOPTED THE POLICY OF RECOMMENDING TO THE PRESIDENT APPROVALS OF LOANS TO THE ADMINISTRATOR FROM THE RECONSTRUCTION FINANCE CORPORATION ONLY IN SUCH SUMS AS ARE NEEDED FOR DISBURSEMENT IN THE PROGRESS OF CONSTRUCTION. IT IS DESIRED TO CONTINUE THIS POLICY UNLESS THE ABOVE STATUTORY PROVISIONS MUST BE INTERPRETED AS LIMITING THE PRESENT BASE UNDER THE RESTRICTIVE PROVISIONS TO $70,000,000, WITH THE RESULTING INTERFERENCE IN EFFECTIVE ADMINISTRATION OF THE STATUTE IN CERTAIN STATES.

IN SUPPORT OF AN INTERPRETATION THAT A BASE OF $140,000,000 PRESENTLY MAY BE USED, ATTENTION IS CALLED TO THE LANGUAGE OF SECTION 3 (C) TO THE EFFECT THAT THE ALLOTMENTS BETWEEN THE STATES SHALL BE "50 PERCENTUM OF THE ANNUAL SUMS HEREIN MADE AVAILABLE OR APPROPRIATED FOR THE PURPOSES OF THIS ACT.' THE PHRASE "HEREIN MADE AVAILABLE" WAS OBVIOUSLY INTENDED TO REFER TO THE LOANS AUTHORIZED FROM THE RECONSTRUCTION FINANCE CORPORATION AS DISTINGUISHED FROM SUMS APPROPRIATED BY CONGRESS OUT OF THE TREASURY. SINCE THE ACTION OF CONGRESS RELATED TO THE FULL $100,000,000 THERE WOULD SEEM TO BE GOOD REASON FOR THE VIEW THAT THIS IS THE SUM WHICH FITS THE PHRASE "HEREIN MADE AVAILABLE.' THE STATUTE DOES NOT SAY "MADE AVAILABLE FROM TIME TO TIME BY THE PRESIDENT.' ON THE CONTRARY, THE USE OF THE WORD "HEREIN" REFERS TO THE STATUTE AND TO THE LEGISLATIVE ACT, WHICH, SO FAR AS CONGRESS ITSELF IS CONCERNED, MADE $100,000,000 AVAILABLE. THIS VIEW IS SUPPORTED FURTHER BY THE SECOND SENTENCE OF SECTION 3 (C) PROVIDING THAT THE ADMINISTRATOR, WITHIN 90 DAYS AFTER THE BEGINNING OF EACH FISCAL YEAR, SHALL MAKE FINDINGS UPON WHICH THE 50 PERCENTUM ALLOTMENT IS TO BE MADE. THE INFERENCE CAN BE DRAWN THAT CONGRESS INTENDED, EARLY IN THE FISCAL YEAR, A DETERMINATION OF THE MAXIMUM SUM THAT MIGHT BE EXPENDED IN EACH STATE AND AN EARLY PLANNING OF THE PROGRAM WITH RESPECT TO SUCH DETERMINATION.

ALTHOUGH THE ABOVE INTERPRETATION WOULD SEEM TO BE SUPPORTED BY THE LANGUAGE OF THE STATUTE, IT MIGHT BE CONSIDERED THAT THIS INTERPRETATION, UNDER CERTAIN CIRCUMSTANCES, WOULD VIOLATE THE SPIRIT OF THE STATUTE, PARTICULARLY WITH REFERENCE TO THE 10 PERCENTUM LIMITATION IN SECTION 3 (D). IN THE EVENT THAT THE ENTIRE $140,000,000 IS NOT ACTUALLY UTILIZED IN LOANS, THE INTERPRETATION PRESENTED ABOVE MIGHT RESULT IN MORE THAN 10 PERCENTUM OF THE SUMS FINALLY AND ACTUALLY AVAILABLE BEING EMPLOYED IN A GIVEN STATE. IT IS ANTICIPATED THAT THERE WILL BE A DEMAND FOR DESIRABLE LOANS MORE THAN ENOUGH TO CONSUME THE ENTIRE $140,000,000, BUT THE ACTUAL OBLIGATION OF THE FUNDS MUST, OF COURSE, AWAIT THE REQUIRED APPROVAL BY THE PRESIDENT.

THE PROVISIONS OF THE CITED STATUTE MAKING THE SUM OF $100,000,000 AVAILABLE FOR LOAN BY THE RECONSTRUCTION FINANCE CORPORATION TO YOUR ADMINISTRATION ARE NOT SELF-EXECUTING WITH RESPECT TO THE MAKING OF SAID SUMS AVAILABLE FOR ALLOTMENTS AND LOANS BY YOUR ADMINISTRATION FOR THE PURPOSES SPECIFIED BY THE STATUTE. THAT IS TO SAY, THE FUNDS OR ANY PART THEREOF, AUTHORIZED TO BE LOANED TO YOUR ADMINISTRATION BY THE RECONSTRUCTION FINANCE CORPORATION DURING THE FISCAL YEAR 1939, NOT EXCEEDING IN THE AGGREGATE $100,000,000, BECOME AVAILABLE TO YOUR ADMINISTRATION FOR SUCH PURPOSES ONLY IF AND WHEN LOANED TO YOUR ADMINISTRATION WITH THE APPROVAL OF THE PRESIDENT, SO THAT SUCH EXECUTIVE ACTION BECOMES IN EFFECT A CONDITION PRECEDENT TO THE MAKING OF ANY PART OF THAT AMOUNT AVAILABLE TO YOUR ADMINISTRATION FOR THE INDICATED PURPOSES. ANY OTHER CONSTRUCTION WOULD VIOLATE BOTH THE LETTER AND THE SPIRIT OF THE LAW, PARTICULARLY THE LIMITATION CONTAINED IN THE PROVISO IN SECTION 3 (D) OF THE CITED STATUTE, IN THE EVENT THE FULL AMOUNT OF $100,000,000 IS NOT MADE AVAILABLE TO YOUR ADMINISTRATION DURING THE FISCAL YEAR 1939.

ACCORDINGLY, IN SPECIFIC ANSWER TO THE QUESTION PRESENTED IN PARAGRAPH 3 OF YOUR LETTER, SUPRA, YOU ARE ADVISED THAT IN CARRYING OUT THE PROVISIONS OF SUBSECTIONS 3 (C) AND 3 (D) OF THE STATUTE, THERE SHOULD BE USED AS A BASIS FOR MAKING ALLOTMENTS AND OBLIGATING FOR LOANS ONLY THAT PART OF THE $100,000,000 AS HAS BEEN APPROVED BY THE PRESIDENT AND ACTUALLY MADE AVAILABLE TO YOUR ADMINISTRATION.