B-149270, JUN 23, 1971, 50 COMP GEN 857

B-149270: Jun 23, 1971

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THE "NO-YEAR" PROVISION IN THE AUTHORIZATION ACT IS NOT INCORPORATED IN THE APPROPRIATION ACT SO AS TO MEET THE REQUIREMENTS OF 31 U.S.C. 718. THE FUNDS APPROPRIATED FOR THE INTEREST ADJUSTMENT PAYMENTS BY THE FEDERAL HOME LOAN BANKS ARE NOT AVAILABLE FOR OBLIGATION BEYOND JUNE 30. FOR WHICH FUNDS WERE APPROPRIATED ON A FISCAL YEAR BASIS. WILL COME INTO BEING AT THE TIME MEMBER INSTITUTIONS REQUEST COMMITMENTS FOR ALLOWANCE FUNDS FROM THE FEDERAL HOME LOAN BANK OF WHICH THEY ARE A MEMBER. UNUSED COMMITMENTS WILL BECOME DEOBLIGATED AND MAY NOT BE REOBLIGATED IF THE PERIOD OF OBLIGATION HAS EXPIRED. THE CERTIFICATIONS REQUIRED BY 31 U.S.C. 200(C) ARE NOT TO BE MADE BY PERSONS BELOW THE LEVEL OF CHIEF ACCOUNTING OFFICER.

B-149270, JUN 23, 1971, 50 COMP GEN 857

APPROPRIATIONS - NO YEAR - AUTHORIZATION V APPROPRIATION ACT NOTWITHSTANDING SECTION 101 OF THE EMERGENCY HOME FINANCE ACT OF 1970 AUTHORIZED THE APPROPRIATION OF FUNDS WITHOUT FISCAL YEAR LIMITATION FOR THE PURPOSE OF ADJUSTING THE EFFECTIVE INTEREST CHARGED BY FEDERAL HOME LOAN BANKS ON BORROWINGS, THE CONGRESS HAVING IN SECTION 509 OF THE INDEPENDENT OFFICES AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT APPROPRIATION ACT, 1971, WHICH PROVIDED THE FUNDS TO IMPLEMENT THE ENABLING ACT, RESTRICTED THE AVAILABILITY OF THE FUNDS APPROPRIATED BY THE ACT TO THE CURRENT FISCAL YEAR UNLESS OTHERWISE EXPRESSLY PROVIDED, THE "NO-YEAR" PROVISION IN THE AUTHORIZATION ACT IS NOT INCORPORATED IN THE APPROPRIATION ACT SO AS TO MEET THE REQUIREMENTS OF 31 U.S.C. 718, AND, THEREFORE, THE FUNDS APPROPRIATED FOR THE INTEREST ADJUSTMENT PAYMENTS BY THE FEDERAL HOME LOAN BANKS ARE NOT AVAILABLE FOR OBLIGATION BEYOND JUNE 30, 1971. APPROPRIATIONS - OBLIGATION - SECTION 1311, SUPPLEMENTAL APPROPRIATION ACT, 1955 - LOANS - INTEREST ADJUSTMENT IN THE IMPLEMENTATION OF THE PROGRAM AUTHORIZED BY SECTION 101 OF THE EMERGENCY HOME FINANCE ACT OF 1970 FOR THE ADJUSTMENT OF INTEREST CHARGED BY FEDERAL HOME LOAN BANKS ON BORROWINGS, AND FOR WHICH FUNDS WERE APPROPRIATED ON A FISCAL YEAR BASIS, AN OBLIGATION WITHIN THE MEANING OF SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, AS AMENDED, 31 U.S.C. 200, WILL COME INTO BEING AT THE TIME MEMBER INSTITUTIONS REQUEST COMMITMENTS FOR ALLOWANCE FUNDS FROM THE FEDERAL HOME LOAN BANK OF WHICH THEY ARE A MEMBER. HOWEVER, SO AS NOT TO NULLIFY THE FISCAL YEAR LIMITATION, THE EXPIRATION OF THE COMMITMENT SHOULD OCCUR AT THE END OF A REASONABLE PERIOD. MOREOVER, THE HOME LOAN BANK RECORDS CONSTITUTE EVIDENCE OF THE OBLIGATION, UNUSED COMMITMENTS WILL BECOME DEOBLIGATED AND MAY NOT BE REOBLIGATED IF THE PERIOD OF OBLIGATION HAS EXPIRED, AND THE CERTIFICATIONS REQUIRED BY 31 U.S.C. 200(C) ARE NOT TO BE MADE BY PERSONS BELOW THE LEVEL OF CHIEF ACCOUNTING OFFICER.

TO THE CHAIRMAN, FEDERAL HOME LOAN BANK BOARD, JUNE 23, 1971:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 19 AND JUNE 14, 1971, REQUESTING OUR DECISION CONCERNING SEVERAL QUESTIONS THAT HAVE ARISEN IN CONNECTION WITH THE ADMINISTRATION OF THE PROGRAM AUTHORIZED BY SECTION 101 OF THE EMERGENCY HOME FINANCE ACT OF 1970, PUBLIC LAW 91 351, APPROVED JULY 24, 1970, 84 STAT. 450.

SECTION 101 PROVIDES AS FOLLOWS:

SEC. 101. (A) THERE IS AUTHORIZED TO BE APPROPRIATED NOT TO EXCEED $250,000,000, WITHOUT FISCAL YEAR LIMITATION, TO BE USED BY THE FEDERAL HOME LOAN BANK BOARD FOR DISBURSEMENT TO FEDERAL HOME LOAN BANKS FOR THE PURPOSE OF ADJUSTING THE EFFECTIVE INTEREST CHARGED BY SUCH BANKS ON SHORT -TERM AND LONG-TERM BORROWING TO PROMOTE AN ORDERLY FLOW OF FUNDS INTO RESIDENTIAL CONSTRUCTION. THE DISBURSEMENT OF SUMS APPROPRIATED HEREUNDER SHALL BE MADE UNDER SUCH TERMS AND CONDITIONS AS MAY BE PRESCRIBED BY THE BOARD TO ASSURE THAT SUCH SUMS ARE USED TO ASSIST IN THE PROVISION OF HOUSING FOR LOW - AND MIDDLE-INCOME FAMILIES, AND THAT SUCH FAMILIES SHARE FULLY IN THE BENEFITS RESULTING FROM THE DISBURSEMENT OF SUCH SUMS. MEMBER OF A FEDERAL HOME LOAN BANK SHALL USE FUNDS THE INTEREST CHARGES ON WHICH HAVE BEEN ADJUSTED PURSUANT TO THE PROVISIONS OF THIS SECTION TO MAKE ANY LOAN, IF

(1) THE EFFECTIVE RATE OF INTEREST ON SUCH LOAN EXCEEDS THE EFFECTIVE RATE OF INTEREST ON SUCH FUNDS PAYABLE BY SUCH MEMBER BY A PERCENTILE AMOUNT WHICH IS IN EXCESS OF SUCH AMOUNT AS THE BOARD DETERMINES TO BE APPROPRIATE IN FURTHERANCE OF THE PURPOSES OF THIS SECTION; OR

(2) THE PRINCIPAL OBLIGATION OF ANY SUCH LOAN WHICH IS SECURED BY A MORTGAGE ON A RESIDENTIAL STRUCTUR EXCEEDS THE DOLLAR LIMITATIONS ON THE MAXIMUM MORTGAGE AMOUNT, IN EFFECT ON THE DATE THE MORTGAGE WAS ORIGINATED, WHICH WOULD BE APPLICABLE IF THE MORTGAGE WAS INSURED BY THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT UNDER SECTION 203(B) OR 207 OF THE NATIONAL HOUSING ACT.

(B) NOT MORE THAN 20 PER CENTUM OF THE SUMS APPROPRIATED PURSUANT TO SUBSECTION (A) SHALL BE DISBURSED IN ANY ONE FEDERAL HOME LOAN BANK DISTRICT.

FUNDS TO FINANCE THE PROGRAM WERE PROVIDED TO THE FEDERAL HOME LOAN BANK BOARD IN TITLE IV OF THE INDEPENDENT OFFICES AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT APPROPRIATION ACT, 1971, PUBLIC LAW 91 556, APPROVED DECEMBER 17, 1970, 84 STAT. 1461, WHICH CONTAINS THE FOLLOWING APPROPRIATION:

FOR PAYMENTS TO FEDERAL HOME LOAN BANKS FOR THE PURPOSE OF ADJUSTING THE EFFECTIVE INTEREST RATES CHARGED BY SUCH BANKS, AS AUTHORIZED BY SECTION 101 OF THE EMERGENCY HOME FINANCE ACT OF 1970, $85,000,000.

THE FIRST QUESTION PRESENTED FOR OUR DECISION IS WHETHER THE ABOVE MENTIONED $85 MILLION APPROPRIATION IS AVAILABLE FOR OBLIGATION AFTER JUNE 30, 1971.

RELATIVE TO SUCH MATTER THERE IS FOR CONSIDERATION SECTION 7 OF THE ACT OF AUGUST 24, 1912, AS AMENDED, 31 U.S.C. 718, WHICH PROVIDES THAT

NO SPECIFIC OR INDEFINITE APPROPRIATION MADE SUBSEQUENT TO AUGUST 24, 1912, IN ANY REGULAR ANNUAL APPROPRIATION ACT SHALL BE CONSTRUED TO BE PERMANENT OR AVAILABLE CONTINUOUSLY WITHOUT REFERENCE TO A FISCAL YEAR UNLESS IT BELONGS TO ONE OF THE FOLLOWING FOUR CLASSES: "RIVERS AND HARBORS," "LIGHTHOUSES," "PUBLIC BUILDINGS," AND "PAY OF THE NAVY AND MARINE CORPS," *** OR UNLESS IT IS MADE IN TERMS EXPRESSLY PROVIDING THAT IT SHALL CONTINUE AVAILABLE BEYOND THE FISCAL YEAR FOR WHICH THE APPROPRIATION ACT IN WHICH IT IS CONTAINED MAKES PROVISION.

ALSO THERE IS FOR CONSIDERATION SECTION 509 OF THE HERE-INVOLVED APPROPRIATION ACT WHICH PROVIDES THAT -

NO PART OF ANY APPROPRIATION CONTAINED IN THIS ACT SHALL REMAIN AVAILABLE FOR OBLIGATION BEYOND THE CURRENT FISCAL YEAR UNLESS EXPRESSLY SO PROVIDED HEREIN.

AS POINTED OUT IN YOUR LETTER WE HAVE STATED THAT IN THE ABSENCE OF LEGISLATIVE HISTORY TO THE CONTRARY, APPROPRIATION LANGUAGE SPECIFICALLY REFERRING TO AN AUTHORIZATION ACT WHICH PROVIDES THAT APPROPRIATIONS MADE PURSUANT THERETO SHALL REMAIN AVAILABLE FOR LONGER THAN A FISCAL YEAR OPERATES TO INCORPORATE THE PROVISIONS OF THE AUTHORIZING ACT INTO THE PROVISIONS OF THE APPROPRIATION. WE HAVE HELD THAT SUCH INCORPORATION BY REFERENCE IS SUFFICIENT TO OVERCOME THE IMPLICATION OF FISCAL YEAR AVAILABILITY DERIVING FROM THE ENACTING CLAUSE OF A REGULAR ANNUAL APPROPRIATION ACT AND SERVES TO MEET THE REQUIREMENTS OF 31 U.S.C. 718. SEE 45 COMP. GEN. 236 (1965) AND 508 (1966).

YOU URGE THAT SUCH REFERENCE TO THE AUTHORIZATION ACT IN THE APPROPRIATION LANGUAGE ALSO SERVES TO MEET THE REQUIREMENT OF SECTION 509 OF THE APPROPRIATION ACT QUOTED ABOVE.

WHILE WE HAVE FOUND NOTHING IN THE LEGISLATIVE HISTORY OF SECTION 509 OR OF SIMILAR LANGUAGE CONTAINED IN VARIOUS OTHER APPROPRIATION ACTS, WHICH PRECISELY DESCRIBES THE INTENT OF SUCH LANGUAGE, IT SEEMS EVIDENT THAT THE PURPOSE THEREOF IS TO OVERCOME THE EFFECT OF OUR DECISIONS, SUCH AS THOSE REFERRED TO ABOVE, REGARDING THE REQUIREMENTS OF 31 U.S.C. 718. SEE THE DISCUSSION OF THIS MATTER IN HOUSE REPORT NO. 1040, 88TH CONGRESS, PP. 55- 56, WHICH APPARENTLY GAVE RISE TO THE GENERAL PRACTICE OF INCLUDING PROVISIONS SIMILAR TO SECTION 509 IN APPROPRIATION ACTS. IN OTHER WORDS THE EFFECT OF SUCH LANGUAGE IS TO REQUIRE THE ACT MAKING THE APPROPRIATION TO EXPRESSLY PROVIDE (RATHER THAN BY INCORPORATION BY REFERENCE) FOR AVAILABILITY LONGER THAN 1 YEAR IF THE ENACTING CLAUSE IS TO BE OVERCOME AS TO ANY SPECIFIC APPROPRIATION CONTAINED THEREIN. OTHERWISE, THE USE OF SUCH LANGUAGE IN AN APPROPRIATION ACT WOULD APPEAR TO SERVE LITTLE IF ANY PURPOSE.

ASIDE FROM THE EFFECT OF SECTION 509, WE BELIEVE THE LEGISLATIVE HISTORY OF THIS PARTICULAR APPROPRIATION SUPPORTS THE VIEW THAT THE CONGRESS INTENDED THAT THE APPROPRIATION NOT BE AVAILABLE FOR OBLIGATION BEYOND JUNE 30, 1971. PRIOR TO THE ENACTMENT OF THE AUTHORIZATION ACT, THE PRESIDENT SUBMITTED AN ESTIMATE FOR AN APPROPRIATION OF $250 MILLION, SUCH APPROPRIATION TO BE EFFECTIVE ONLY UPON THE ENACTMENT OF THE THEN PENDING AUTHORIZATION OR SIMILAR LEGISLATION. THE SENATE COMMITTEE ON APPROPRIATIONS, IN FAVORABLY REPORTING THE THEN PENDING APPROPRIATION BILL RECOMMENDED INCLUSION OF THIS ITEM TOGETHER WITH LANGUAGE MAKING SUCH SUM "AVAILABLE UNTIL EXPENDED" AND IN SUCH FORM THE BILL WAS PASSED BY THE SENATE.

BEFORE THE BILL CAME OUT OF CONFERENCE THE AUTHORIZATION ACT WAS ENACTED, AND THE COMMITTEE OF CONFERENCE RECOMMENDED AGREEMENT ON LANGUAGE TO REDUCE THE AMOUNT TO $85 MILLION. ALSO, THE LANGUAGE WHICH IT RECOMMENDED CONTAINED NO PROVISION MAKING SUCH SUM AVAILABLE UNTIL EXPENDED. CONCERNING SUCH ACTION, THE STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE, PRINTED WITH THE CONFERENCE REPORT IN HOUSE REPORT NO. 1345, EXPLAINS THAT THE RECOMMENDED LANGUAGE -

APPROPRIATES $85,000,000 FOR INTEREST ADJUSTMENT PAYMENTS TO FEDERAL HOME LOAN BANKS INSTEAD OF $250,000,000 AS PROPOSED BY THE SENATE. THE AMOUNT PROVIDES FUNDS FOR THE FIRST YEAR OF THIS NEW PROGRAM. A REQUEST FOR ADDITIONAL FUNDS CAN BE CONSIDERED WHEN THERE IS DEMONSTRATED NEED FOR ADDITIONAL FUNDING AND SPECIFIC PLANS ARE DEVELOPED.

AS INDICATED ABOVE, IN VIEW OF SUCH EXPLANATION AND THE OMISSION OF SENATE-APPROVED LANGUAGE THAT SPECIFICALLY WOULD HAVE MADE THE APPROPRIATION AVAILABLE UNTIL EXPENDED IT IS OUR BELIEF THAT THE CONGRESS WHEN IT ADOPTED THE CONFERENCE RECOMMENDATION DID NOT INTEND THAT THIS APPROPRIATION BE AVAILABLE FOR OBLIGATION BEYOND JUNE 30, 1971.

YOU ALSO ASK WHEN, UNDER THIS APPROPRIATION AND THE REGULATIONS ISSUED PURSUANT TO SECTION 101 OF THE EMERGENCY HOME FINANCE ACT OF 1970, DOES THERE COME INTO BEING WITH RESPECT TO THE APPROPRIATION AN OBLIGATION WITHIN THE MEANING OF SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, AS AMENDED, 31 U.S.C. 200. YOUR LETTER SUGGESTS THREE POSSIBLE ANSWERS. FIRST, YOU ASK WHETHER SUCH OBLIGATIONS CONSIST OF -

THE OUTSTANDING COMMITMENTS MADE BY FEDERAL HOME LOAN BANKS TO MEMBER INSTITUTIONS UNDER PARAGRAPH (B) OF SECTION 527.4 OF THE REGULATIONS? SO, MAY THE "DOCUMENTARY EVIDENCE" REQUIRED BY SUBSECTION (A) OF THE OBLIGATION STATUTE AND THE "RECORDS" REQUIRED BY SUBSECTION (C) OF THAT STATUTE CONSIST OF THE RECORDS OF THE FEDERAL HOME LOAN BANKS RESPECTING SUCH COMMITMENTS, AND MAY THE FEDERAL HOME LOAN BANK BOARD DESIGNATE OFFICERS OR EMPLOYEES OF SAID BANKS AS OFFICIALS TO MAKE THE CERTIFICATIONS REQUIRED BY SUBSECTION (C) OF THE OBLIGATION STATUTE?

IT IS OUR UNDERSTANDING THAT UNDER THE PROGRAM AUTHORIZED BY SECTION 101, REFERRED TO IN THE REGULATIONS, 12 CFR 527, AS THE "HOUSING OPPORTUNITY ALLOWANCE PROGRAM," FUNDS PROVIDED THEREFOR ARE ALLOCATED BY THE FEDERAL HOME LOAN BANK BOARD IN ACCORDANCE WITH A FORMULA ESTABLISHED THEREIN TO THE 12 FEDERAL HOME LOAN BANKS. BASED, IN GENERAL, ON A FORMULA INVOLVING THE AMOUNT OF OUTSTANDING MORTGAGES ON SINGLE-FAMILY DWELLINGS HELD BY THEM, MEMBER INSTITUTIONS REQUEST COMMITMENTS FOR ALLOWANCE FUNDS FROM THE DISTRICT BANK OF WHICH THEY ARE MEMBERS.

SECTION 527.4 OF THE REGULATIONS REFERRED TO ABOVE READS, IN PART, AS FOLLOWS:

SEC 527.4 CREDITS TO MEMBER INSTITUTIONS.

(A) GENERAL. EACH MEMBER INSTITUTION HAVING A COMMITMENT FOR ALLOWANCE FUNDS AS PROVIDED IN PARAGRAPH (B) OF THIS SECTION WILL, TO THE EXTENT OF SUCH COMMITMENT, RECEIVE FROM THE BANK OF WHICH IT IS A MEMBER A CREDIT AGAINST INTEREST DUE ON ADVANCES IN AN AMOUNT EQUAL TO THE TOTAL AMOUNT OF ALLOWANCES WHICH THE MEMBER INSTITUTION HAS PROPERLY CREDITED ON QUALIFYING LOANS AS PROVIDED IN SEC 527.3.

(B) COMMITMENTS FOR ALLOWANCE FUNDS. ANY MEMBER INSTITUTION MAY REQUEST IN WRITING A COMMITMENT FOR ALLOWANCE FUNDS FROM THE BANK OF WHICH IT IS A MEMBER. COMMITMENTS WILL BE GRANTED BY SUCH BANK, ON SUCH BASIS AND FOR SUCH TIME PERIODS AS THE BANK MAY DEEM ADVISABLE, UNTIL THE BANK'S ALLOCATION OF FUNDS IS EXHAUSTED.

(C) PROCEDURE. EACH MEMBER INSTITUTION WHICH HAS PAID ONE OR MORE ALLOWANCES DURING A MONTH SHALL, BY THE 20TH DAY OF THE SUCCEEDING MONTH, SUBMIT A REPORT TO THE BANK OF WHICH IT IS A MEMBER, PURSUANT TO PARAGRAPH (D) OF THIS SECTION. SUCH MEMBER SHALL DEDUCT, FROM ANY SUBSEQUENT BILL FOR INTEREST DUE ON OUTSTANDING ADVANCES FROM THE BANK, AN AMOUNT EQUAL TO THE ALLOWANCES SO REPORTED, REMITTING ONLY THE NET AMOUNT TO THE BANK.

AS INDICATED ABOVE, YOUR LETTER SETS FORTH TWO ADDITIONAL ALTERNATIVES, HOWEVER, YOU STATE THAT THE BOARD PRESENTLY IS OPERATING ON THE BASIS THAT AN OBLIGATION MEETING THE REQUIREMENTS OF 31 U.S.C. 200(A)(5) COMES INTO BEING WHEN COMMITMENTS ARE MADE BY THE FEDERAL HOME LOAN BANKS TO MEMBER INSTITUTIONS UNDER PARAGRAPH (B) OF SECTION 527.4 OF THE REGULATIONS QUOTED ABOVE.

WITH RESPECT TO GRANTS OR SUBSIDIES 31 U.S.C. 200 PROVIDES THAT -

(A) *** NO AMOUNT SHALL BE RECORDED AS AN OBLIGATION OF THE GOVERNMENT OF THE UNITED STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY EVIDENCE OF -

(5) A GRANT OR SUBSIDY PAYABLE (I) FROM APPROPRIATIONS MADE FOR PAYMENT OF OR CONTRIBUTIONS TOWARD, SUMS REQUIRED TO BE PAID IN SPECIFIC AMOUNTS FIXED BY LAW OR IN ACCORD WITH FORMULAE PRESCRIBED BY LAW, OR (II) PURSUANT TO AGREEMENT AUTHORIZED BY, OR PLANS APPROVED IN ACCORD WITH AND AUTHORIZED BY, LAW; OR

(B) REPORT BY AGENCY HEADS IN CONNECTION WITH REQUESTS FOR PROPOSED APPROPRIATIONS.

HEREAFTER, IN CONNECTION WITH THE SUBMISSION OF ALL REQUESTS FOR PROPOSED APPROPRIATIONS TO THE BUREAU OF THE BUDGET, THE HEAD OF EACH FEDERAL AGENCY SHALL REPORT THAT ANY STATEMENT OF OBLIGATIONS FURNISHED THEREWITH CONSISTS OF VALID OBLIGATIONS AS DEFINED IN SUBSECTION (A) OF THIS SECTION.

(C) SAME; CERTIFICATIONS AND RECORDS; RETENTION FOR AUDIT; PROHIBITION AGAINST REDELEGATION OF RESPONSIBILITY.

EACH REPORT MADE PURSUANT TO SUBSECTION (B) OF THIS SECTION SHALL BE SUPPORTED BY CERTIFICATIONS OF THE OFFICIALS DESIGNATED BY THE HEAD OF THE AGENCY, AND SUCH CERTIFICATIONS SHALL BE SUPPORTED BY RECORDS EVIDENCING THE AMOUNTS WHICH ARE REPORTED THEREIN AS HAVING BEEN OBLIGATED. SUCH CERTIFICATIONS AND RECORDS SHALL BE RETAINED IN THE AGENCY IN SUCH FORM AS TO FACILITATE AUDIT AND RECONCILIATION FOR SUCH PERIOD AS MAY BE NECESSARY FOR SUCH PURPOSES. THE OFFICIALS DESIGNATED BY THE HEAD OF THE AGENCY TO MAKE CERTIFICATIONS MAY NOT REDELEGATE THE RESPONSIBILITY.

AN EXAMINATION OF THE SAMPLE COMMITMENT FORMS ISSUED BY THE FEDERAL HOME LOAN BANKS TO MEMBER INSTITUTIONS DISCLOSE THAT THE PROVISIONS THEREOF ARE NOT UNIFORM. WHILE THE TERMS OF SOME OF THE COMMITMENTS COULD BE CONSTRUED AS BEING FIRM AND UNCONDITIONAL, OTHERS APPARENTLY COULD BE REVOKED OR WITHDRAWN AT LEAST TO THE EXTENT THAT THE MEMBER INSTITUTION HAD NOT COMMITTED ITSELF TO SPECIFIC BORROWERS. ALSO, THE FORMS DO NOT ESTABLISH A DATE AS TO WHEN THE COMMITMENT IF NOT UTILIZED WILL EXPIRE.

HOWEVER, IN YOUR LETTER OF JUNE 14, 1971, YOU ENCLOSED A COPY OF A DRAFT LETTER WHICH YOUR GENERAL COUNSEL HAS PREPARED FOR USE BY THE DISTRICT BANKS. WHILE THAT DRAFT LETTER WOULD UNCONDITIONALLY COMMIT A SPECIFIC NUMBER OF LOANS TO A MEMBER INSTITUTION, IT TOO MAKES NO PROVISION FOR A CUTOFF DATE. NEVERTHELESS, YOUR LETTER INDICATES THAT YOU WOULD HAVE NO OBJECTION TO INCLUDING A CUTOFF DATE IN THE COMMITMENT LETTER IF IT IS BELIEVED TO BE NECESSARY. SINCE THE FUNDS HERE INVOLVED ARE FISCAL YEAR FUNDS IT WOULD APPEAR A COMMITMENT ISSUED TO A MEMBER INSTITUTION WITHOUT ANY PROVISION FOR ITS EXPIRATION, COULD, IN EFFECT, NULLIFY THE FISCAL YEAR LIMITATION ON THE AVAILABILITY OF THE FUNDS. ACCORDINGLY, IF PROVISION IS MADE IN THE COMMITMENT LETTER THAT SUCH COMMITMENT WILL EXPIRE AT THE END OF A REASONABLE SPECIFIED PERIOD OF TIME, IT IS OUR VIEW THAT SUCH COMMITMENT LETTER WOULD MEET THE OBLIGATION REQUIREMENTS OF 31 U.S.C. 200(A)(5) AND THE RECORDS OF THE FEDERAL HOME LOAN BANKS RESPECTING SUCH COMMITMENTS MAY BE CONSIDERED AS CONSTITUTING THE DOCUMENTARY EVIDENCE OF SUCH OBLIGATIONS AS REQUIRED BY SAID SUBSECTION (A). TO THE EXTENT, OF COURSE, THAT A MEMBER INSTITUTION HAS NOT EXECUTED LOANS AS OF THE CUTOFF DATE SPECIFIED IN THE COMMITMENT LETTER, THE AMOUNT OF THE UNUSED COMMITMENT WILL BECOME DEOBLIGATED AND SUCH AMOUNT MAY NOT BE REOBLIGATED IF THE PERIOD FOR OBLIGATION HAS EXPIRED.

ALSO, WHILE WE AGREE THAT THE FEDERAL HOME LOAN BANK BOARD MAY DESIGNATE OFFICERS OR EMPLOYEES OF THE FEDERAL HOME LOAN BANKS TO MAKE THE CERTIFICATIONS REQUIRED BY 31 U.S.C. 200(C), SUCH PERSONS SHOULD NOT BE BELOW THE LEVEL OF THE CHIEF ACCOUNTING OFFICER. IN THIS CONNECTION, YOUR ATTENTION IS INVITED TO PAGE 18 OF THE CONFERENCE REPORT ON THE SUPPLEMENTAL APPROPRIATION BILL, 1955, HOUSE REPORT NO. 2663, 83D CONGRESS, WHEREIN IT IS STATED THAT -

AS TO SUBSECTION (C) IT IS THE INTENTION OF THE COMMITTEE OF CONFERENCE THAT THE OFFICIALS DESIGNATED BY THE HEAD OF (AN) AGENCY TO MAKE CERTIFICATIONS OF OBLIGATIONS SHALL BE THOSE OFFICIALS HAVING OVERALL RESPONSIBILITY FOR THE RECORDING OF OBLIGATIONS AS DISTINGUISHED FROM THOSE ENGAGED IN DETAILED RECORDING OPERATIONS AND IN NO EVENT SHOULD THE DESIGNATION BE BELOW THE LEVEL OF THE CHIEF ACCOUNTING OFFICER OF A MAJOR BUREAU, SERVICE, OR CONSTITUENT ORGANIZATIONAL UNIT.