B-128713, SEPTEMBER 20, 1956, 36 COMP. GEN. 221

B-128713: Sep 20, 1956

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PROVIDED SUCH CONTRIBUTIONS ARE REGULARLY MADE BY THE STATE FOR ITS EMPLOYEES. 1956: REFERENCE IS MADE TO LETTER DATED JULY 20. OUR OPINION IS REQUESTED ON THE FOLLOWING QUESTIONS: * * * WHETHER (1) FEDERAL GRANT FUNDS MAY BE UTILIZED FOR EMPLOYER CONTRIBUTIONS TO A STATE GROUP LIFE INSURANCE PROGRAM FOR STATE EMPLOYEES. (3) IF THE STATE IS NOT PERMITTED TO USE EITHER GRANT OR OFFSET FUNDS FOR EMPLOYER CONTRIBUTIONS. ARE AS FOLLOWS: SEC. 2. * * * IT SHALL BE THE OBJECT AND DUTY OF THE STATE AGRICULTURAL EXPERIMENT STATIONS THROUGH THE EXPENDITURE OF THE APPROPRIATIONS HEREINAFTER AUTHORIZED TO CONDUCT ORIGINAL AND OTHER RESEARCHES. SUCH INVESTIGATIONS AS HAVE FOR THEIR PURPOSE THE DEVELOPMENT AND IMPROVEMENT OF THE RURAL HOME AND RURAL LIFE.

B-128713, SEPTEMBER 20, 1956, 36 COMP. GEN. 221

STATES - FEDERAL GRANTS - AVAILABILITY FOR CONTRIBUTIONS TO EMPLOYEE HEALTH, ACCIDENT AND LIFE INSURANCE PROGRAMS FEDERAL GRANTS TO A STATE FOR AGRICULTURAL RESEARCH PURSUANT TO 7 U.S.C. SUPP. III, 361A-361I, MAY BE USED FOR EMPLOYER CONTRIBUTIONS TO STATE GROUP HEALTH, ACCIDENT, AND LIFE INSURANCE PROGRAMS FOR STATE EMPLOYEES ENGAGED IN AGRICULTURAL RESEARCH, PROVIDED SUCH CONTRIBUTIONS ARE REGULARLY MADE BY THE STATE FOR ITS EMPLOYEES.

TO THE SECRETARY OF AGRICULTURE, SEPTEMBER 20, 1956:

REFERENCE IS MADE TO LETTER DATED JULY 20, 1956, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY REGARDING THE USE OF FUNDS ALLOTTED TO THE STATE OF MASSACHUSETTS PURSUANT TO THE ACT OF AUGUST 11, 1955, 60 STAT. 671, 7 U.S.C., SUPP. III, 361A-361I, FOR EMPLOYER CONTRIBUTIONS TO A GROUP HEALTH AND ACCIDENT INSURANCE AND LIFE INSURANCE PROGRAM ADOPTED BY IT FOR STATE EMPLOYEES. SPECIFICALLY, OUR OPINION IS REQUESTED ON THE FOLLOWING QUESTIONS:

* * * WHETHER (1) FEDERAL GRANT FUNDS MAY BE UTILIZED FOR EMPLOYER CONTRIBUTIONS TO A STATE GROUP LIFE INSURANCE PROGRAM FOR STATE EMPLOYEES; (2) IF NOT, MAY THE OFFSET FUNDS WITH WHICH THE STATE MATCHES CERTAIN OF THE FEDERAL GRANT FUNDS BE UTILIZED FOR EMPLOYER CONTRIBUTIONS; (3) IF THE STATE IS NOT PERMITTED TO USE EITHER GRANT OR OFFSET FUNDS FOR EMPLOYER CONTRIBUTIONS, MAY THE STATE DEDUCT FROM THE COMPENSATION DUE THE EMPLOYEE THE AMOUNT OF THE EMPLOYEE CONTRIBUTION TO THE LIFE INSURANCE PROGRAM.

THE APPROPRIATION " PAYMENTS TO STATES, HAWAII, ALASKA, AND PUERTO RICO" CONTAINED IN THE DEPARTMENT OF AGRICULTURE AND FARM CREDIT ADMINISTRATION APPROPRIATION ACT, 1957, PUBLIC LAW 554, APPROVED JUNE 4, 1956, 70 STAT. 230, PROVIDES:

FOR PAYMENTS TO AGRICULTURAL EXPERIMENT STATIONS TO CARRY INTO EFFECT THE PROVISIONS OF THE HATCH ACT, APPROVED MARCH 2, 1887 (7 U.S.C. 362, 363, 365, 368, 377-379), AS AMENDED BY THE ACT APPROVED AUGUST 11, 1955 (69 STAT. 671), INCLUDING ADMINISTRATION BY THE UNITED STATES DEPARTMENT OF AGRICULTURE, $29,003,708; AND PAYMENTS AUTHORIZED UNDER SECTION 204 (B) OF THE AGRICULTURAL MARKETING ACT, THE ACT APPROVED AUGUST 14, 1946 (7 U.S.C. 1623), $500,000; IN ALL, $29,503,708.

THE PERTINENT PROVISIONS OF THE ACT OF AUGUST 11, 1955, GENERALLY KNOWN AS THE HATCH ACT, AS AMENDED, QUOTED IN THE LETTER, ARE AS FOLLOWS:

SEC. 2. * * * IT SHALL BE THE OBJECT AND DUTY OF THE STATE AGRICULTURAL EXPERIMENT STATIONS THROUGH THE EXPENDITURE OF THE APPROPRIATIONS HEREINAFTER AUTHORIZED TO CONDUCT ORIGINAL AND OTHER RESEARCHES, INVESTIGATIONS, AND EXPERIMENTS BEARING DIRECTLY ON AND CONTRIBUTING TO THE ESTABLISHMENT AND MAINTENANCE OF A PERMANENT AND EFFECTIVE AGRICULTURAL INDUSTRY OF THE UNITED STATES, INCLUDING RESEARCHES BASIC TO THE PROBLEMS OF AGRICULTURE IN ITS BROADEST ASPECTS, AND SUCH INVESTIGATIONS AS HAVE FOR THEIR PURPOSE THE DEVELOPMENT AND IMPROVEMENT OF THE RURAL HOME AND RURAL LIFE, AND THE MAXIMUM CONTRIBUTION BY AGRICULTURE TO THE WELFARE OF THE CONSUMER, AS MAY BE DEEMED ADVISABLE, HAVING DUE REGARD TO THE VARYING CONDITIONS AND NEEDS OF THE RESPECTIVE STATES.

SEC. 4. MONEYS APPROPRIATED PURSUANT TO THIS ACT SHALL ALSO BE AVAILABLE, IN ADDITION TO MEETING EXPENSES FOR RESEARCH AND INVESTIGATIONS CONDUCTED UNDER AUTHORITY OF SECTION 2, FOR PRINTING AND DISSEMINATING THE RESULTS OF SUCH RESEARCH, RETIREMENT OF EMPLOYEES SUBJECT TO THE PROVISIONS OF AN ACT APPROVED MARCH 4, 1940 (54 STAT. 39), ADMINISTRATIVE PLANNING AND DIRECTION, AND FOR THE PURCHASE AND RENTAL OF LAND AND THE CONSTRUCTION, ACQUISITION, ALTERATION, OF REPAIR OF BUILDINGS NECESSARY FOR CONDUCTING RESEARCH. * * * AND MONEYS APPROPRIATED PURSUANT TO THIS ACT SHALL BE AVAILABLE FOR PAYING THE NECESSARY EXPENSES OF PLANNING, COORDINATING, AND CONDUCTING SUCH COOPERATIVE RESEARCH.

THE ADMINISTRATIVE ASSISTANT SECRETARY STATES THAT THE AUTHORITY CONTAINED IN SECTION 4 QUOTED ABOVE TO EXPEND APPROPRIATIONS MADE PURSUANT TO THE ACT FOR CERTAIN SPECIFIED ITEMS OF EXPENDITURE IS NOT REGARDED AS ALL-INCLUSIVE OF THE USES FOR WHICH THE FUNDS MAY BE UTILIZED. ILLUSTRATIVE OF THE ITEMS OF EXPENDITURE CONSIDERED TO BE PROPER CHARGES AGAINST SUCH FUNDS ALTHOUGH NOT MENTIONED IN SAID SECTION 4, 7 U.S.C., SUPP. III, 361D, THERE ARE CITED COST OF LIVING AND QUARTERS ALLOWANCE, TRAVEL, TRANSPORTATION, COMMUNICATIONS, UTILITY SERVICES, SUPPLIES, MATERIALS, EQUIPMENT, AND ANNUAL AND SICK LEAVE FOR STATE EMPLOYEES WHERE A STATE HAS ADOPTED A LEAVE SYSTEM.

HOWEVER, DOUBT AS TO THE USE OF THE FEDERAL GRANT FUNDS FOR THE PURPOSE HERE UNDER CONSIDERATION IS SAID TO ARISE BY REASON OF THE ACT OF MARCH 4, 1940, 54 STAT. 39, 7 U.S.C. 331, REFERRED TO IN SAID SECTION 4, WHICH ACT AUTHORIZED THE STATES TO WITHHOLD FROM EXPENDITURE FROM SUCH FUNDS AMOUNTS DESIGNATED AS EMPLOYER CONTRIBUTIONS TO BE MADE BY THE STATES TO A STATE RETIREMENT SYSTEM. IT IS SAID THAT YOUR DEPARTMENT DOES NOT VIEW THE ACT OF MARCH 4, 1940, SO MUCH AS AN AUTHORIZATION FOR USING FEDERAL GRANT FUNDS IN CONNECTION WITH STATE RETIREMENT PROGRAMS, BUT AS PRESCRIBING THE TERMS AND CONDITIONS INCIDENT TO THE USE OF THE FUNDS. THE VIEW IS EXPRESSED THAT THE ENACTMENT OF SAID LEGISLATION WOULD NOT REQUIRE SIMILAR LEGISLATION TO BE ENACTED IN ORDER TO PERMIT THE USE OF FEDERAL GRANT FUNDS FOR EMPLOYER CONTRIBUTIONS TO AN INSURANCE PROGRAM FOR STATE EMPLOYEES. SPECIFICALLY, IT IS STATED THAT THE QUESTION OF USE OF THE FEDERAL GRANT FUNDS APPEARS TO DEPEND UPON A DETERMINATION OF WHAT CONSTITUTES PROPER COSTS IN CARRYING OUT THE PURPOSES OF THE ENABLING LEGISLATION TO WHICH THE FUNDS ARE MADE AVAILABLE. AND THE BELIEF IS EXPRESSED THAT, WITHIN PROPER ADMINISTRATIVE CONTROLS, SUCH ITEMS AS ARE ACCEPTED IN EMPLOYER-EMPLOYEE RELATIONSHIPS, WHICH COULD BE SAID ADMINISTRATIVELY TO FURTHER THE PROGRAM, AND WHICH ARE NOT SPECIFICALLY PROHIBITED, WOULD CONSTITUTE SUCH A COST PROVIDED THE STATE REGULARLY USES ITS OWN FUNDS FOR THE SAME EMPLOYEE PROGRAM.

THE USE OF PUBLIC FUNDS FOR PAYMENT OF PREMIUMS ON HEALTH AND LIFE INSURANCE OF FEDERAL EMPLOYEES AND TRAINEES HAS BEEN HELD TO BE IMPROPER IN THE ABSENCE OF SPECIFIC AUTHORIZING LEGISLATION. SEE B 62281, DECEMBER 27, 1946 AND B-76442, JULY 6, 1948. AS ILLUSTRATIVE OF SUCH SPECIFIC LEGISLATION, SEE THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954, 68 STAT. 736, 5 U.S.C., SUPP. III, 2091. THIS HOLDING IS BASED UPON THE PRINCIPLE THAT HAZARDS OF ACCIDENT, ILLNESS AND DEATH ARE PERSONAL AND PROTECTION AGAINST SUCH HAZARDS THROUGH THE PURCHASE OF INSURANCE AT GOVERNMENT EXPENSE TO EMPLOYEES OF THE UNITED STATES, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY WOULD APPEAR TO CONTRAVENE SECTION 3 OF THE ACT OF JUNE 20, 1874, 18 STAT. 109, 5 U.S.C. 71, PROVIDING THAT "NO CIVIL OFFICER OF THE GOVERNMENT SHALL RECEIVE ANY COMPENSATION OR PERQUISITES, DIRECTLY OR INDIRECTLY FROM THE TREASURY OR PROPERTY OF THE UNITED STATES BEYOND HIS SALARY OR COMPENSATION ALLOWED BY LAW.' HOWEVER, THE EMPLOYEES HERE CONCERNED ARE NOT EMPLOYEES OF THE UNITED STATES, AND THEIR COMPENSATION AND OTHER CONDITIONS OF EMPLOYMENT ARE NOT FIXED BY FEDERAL LAW. THE FUNDS INVOLVED ARE GRANT FUNDS, WHICH WHEN PAID OVER AND EXPENDED BY THE STATES ARE NOT SUBJECT TO THE VARIOUS RESTRICTIONS IMPOSED BY FEDERAL STATUTE OR OUR DECISIONS WITH RESPECT TO THE EXPENDITURE, BY FEDERAL DEPARTMENTS AND ESTABLISHMENTS, OF APPROPRIATED MONEYS IN THE ABSENCE OF A CONDITION OF THE GRANT SPECIFICALLY PRESCRIBING TO THE CONTRARY. SEE 14 COMP. GEN. 916; 16 ID. 948; 17 ID. 593; 25 ID. 868; 28 ID. 54. HENCE, WHETHER THE FUNDS GRANTED TO THE STATE OF MASSACHUSETTS MAY BE USED FOR EMPLOYER CONTRIBUTIONS TO A STATE GROUP HEALTH AND LIFE INSURANCE PROGRAM IS DEPENDENT UPON THE TERMS AND CONDITIONS OF THE GRANT.

BY THE PROVISIONS OF THE HATCH ACT, AS AMENDED BY THE ACT OF AUGUST 11, 1955, AGRICULTURAL EXPERIMENT STATIONS WERE ESTABLISHED IN CONNECTION WITH AGRICULTURAL LAND GRANT COLLEGES IN THE SEVERAL STATES. FUNDS AUTHORIZED AND APPROPRIATED BY THE CONGRESS TO YOUR DEPARTMENT PURSUANT TO THIS ACT ARE MADE AVAILABLE FOR PAYMENT TO THE STATES, ETC., FOR NECESSARY EXPENSES INCLUDING SPECIFIC ITEMS OF EXPENDITURE FOR AGRICULTURAL RESEARCH, INVESTIGATIONS AND EXPERIMENTS TO PROMOTE PERMANENT AND EFFICIENT AGRICULTURAL INDUSTRY AND IMPROVEMENTS IN THE RURAL HOME AND RURAL LIFE. THE PAYMENTS ARE TO BE MADE ON THE BASIS OF PRESCRIBED FORMULAS AND TO A CERTAIN EXTENT ON A STATE MATCHING REQUIREMENT BASIS EXCEPT AS TO REGIONAL RESEARCH FUNDS. THE SECRETARY OF AGRICULTURE IS REQUIRED TO ASCERTAIN EACH YEAR THE USE MADE BY THE STATES OF THESE ALLOTMENTS AND THEIR ELIGIBILITY TO RECEIVE SUBSEQUENT ALLOTMENTS.

IT IS OBSERVED THAT THE CONGRESS PROVIDED FOR THE USE OF GRANT FUNDS IN GENERAL TERMS AND, IN ADDITION, SPECIFICALLY AUTHORIZED CERTAIN PARTICULAR TYPES OF EXPENDITURE. WHILE THE SPECIFIC ENUMERATION OF CERTAIN TYPES OF EXPENDITURE. WHILE THE SPECIFIC ENUMERATION OF CERTAIN TYPES OF EXPENDITURES GIVES RISE TO THE QUESTION AS TO WHETHER OTHERS NOT ENUMERATED WERE THEREBY INTENDED TO BE EXCLUDED, IF THE COST OF THE INSURANCE REASONABLY IS EMBRACED WITHIN THE AUTHORIZED CATEGORIES OF EXPENDITURES THAT QUESTION NEED NOT BE DECIDED HERE.

THE ACT SPECIFICALLY AUTHORIZES EXPENSES OF AGRICULTURAL RESEARCH WHICH WERE TO BE CARRIED ON BY EMPLOYEES OF THE STATES AND THE PAYMENT OF THEIR COMPENSATION NECESSARILY MUST HAVE BEEN CONTEMPLATED AS AN ITEM OF EXPENSE FOR WHICH THE GRANT FUNDS COULD BE EXPENDED. THE SALARIES, COMPENSATION AND EMOLUMENTS OF SUCH EMPLOYEES ARE NOT FIXED BY FEDERAL LAW BUT ARE LEFT TO ADJUSTMENT BETWEEN THE STATE AND ITS EMPLOYEES UNDER STATE LAW. EMPLOYERS' CONTRIBUTIONS TO GROUP HEALTH, ACCIDENT AND LIFE INSURANCE REASONABLY CONSTITUTE A PART OF THE EMPLOYEES' COMPENSATION. B-82293, JANUARY 3, 1949. AND, SUCH FRINGE BENEFITS ARE UNDERSTOOD TO BE THE FREQUENT SUBJECT OF NEGOTIATION OVER THE BARGAINING TABLE BETWEEN UNIONS AND EMPLOYERS CONCERNING WAGES AND CONDITIONS OF EMPLOYMENT. THUS, WHERE INSURANCE CONTRIBUTIONS REGULARLY ARE MADE BY A STATE IN CONNECTION WITH ITS EMPLOYEES, SUCH COMPENSATION PAID IN CONNECTION WITH AGRICULTURAL RESEARCH IS AN EXPENSE OF THE PROGRAM FOR WHICH THE GRANT FUNDS ARE AUTHORIZED TO BE EXPENDED. CERTAINLY IN THE ABSENCE OF ANY PROVISION IN THE GRANT PROHIBITING CONTRIBUTIONS FOR INSURANCE OR REGULATING THE AMOUNT THAT MIGHT BE CONTRIBUTED THEREFOR (AS IS THE CASE OF CONTRIBUTIONS TO STATE RETIREMENT SYSTEMS) IT DOES NOT APPEAR THAT THE CONGRESS INTENDED TO PROHIBIT THE USE OF GRANT FUNDS FOR SUCH EMPLOYERS' CONTRIBUTIONS AND THUS DENY TO STATE EMPLOYEES ENGAGED IN THE AGRICULTURAL RESEARCH PROGRAM, THE COMPENSATION BENEFITS WHICH OTHER STATE EMPLOYEES ENJOY. THE FIRST QUESTION POSED BY YOU IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE, MAKING UNNECESSARY ANSWERS TO THE SECOND AND THIRD. ALSO, WE ARE IN AGREEMENT GENERALLY WITH THE VIEW EXPRESSED BY THE ADMINISTRATIVE ASSISTANT SECRETARY THAT WITHIN PROPER ADMINISTRATIVE CONTROLS, THE INVOLVED FEDERAL GRANT FUNDS ARE AVAILABLE FOR SUCH ITEMS AS ARE ACCEPTED IN EMPLOYER- EMPLOYEE RELATIONSHIPS, WHICH CAN BE SAID ADMINISTRATIVELY TO FURTHER THE PROGRAM, AND WHICH ARE NOT SPECIFICALLY PROHIBITED (OR REGULATED IN SOME CONTRARY WAY BY THE TERMS OF THE FEDERAL GRANT), PROVIDED THE STATE REGULARLY USES ITS OWN FUNDS FOR THE SAME EMPLOYEE PROGRAM.