B-150579, OCTOBER 15, 1963, 43 COMP. GEN. 385

B-150579: Oct 15, 1963

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SHALL DEPOSIT INTO THE TREASURY AS MISCELLANEOUS RECEIPTS THE COST OF RETIREMENT ADMINISTRATION ATTRIBUTABLE TO THE EMPLOYEES IS SUSPENDED. THE REVOLVING FUND IS UNAVAILABLE TO CONTRIBUTE RETIREMENT COSTS. FOR AS LONG AS THE LOAN ACTIVITIES OF SECTIONS 6 AND 7 OF THE ACT ARE FINANCED FROM APPROPRIATED FUNDS. 1963: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 10. IS STILL IN EFFECT. QUESTION WHETHER THE ADMINISTRATION MUST MAKE THE CONTRIBUTIONS PROVIDED FOR IN SECTION 9 (C) ARISES BECAUSE THE FUNDS AVAILABLE TO FINANCE THE LOAN PROGRAMS HAVE BEEN APPROPRIATED ANNUALLY BY THE CONGRESS AND HAVE NOT BEEN OBTAINED BY BORROWINGS FROM THE TREASURY. AS A MATTER OF FACT THE ADMINISTRATION IS PRECLUDED FROM BORROWING FUNDS FROM THE TREASURY BECAUSE OF THE PROHIBITION CONTAINED IN THE LANGUAGE OF THE ANNUAL ACTS PROVIDING APPROPRIATED FUNDS FOR THE ADMINISTRATION.

B-150579, OCTOBER 15, 1963, 43 COMP. GEN. 385

RETIREMENT - CIVILIAN - GOVERNMENT'S SHARE OF COST - AREA REDEVELOPMENT ADMINISTRATION THE REQUIREMENT IN SECTION 9 (C) OF THE AREA REDEVELOPMENT ACT, 42 U.S.C. 2508 (C), THAT THE REVOLVING FUND ESTABLISHED UNDER SECTION 9 (B) OF THE ACT, 42 U.S.C. 2508 (B), BY BORROWINGS FROM THE TREASURY OF THE UNITED STATES, SECTION 9 (A), 42 U.S.C. 2508 (A), SHALL CONTRIBUTE TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND THE FULL RETIREMENT COST IN EXCESS OF CONTRIBUTIONS BY EMPLOYEES PERFORMING LOAN ACTIVITIES UNDER SECTIONS 6 AND 7 OF THE ACT, 42 U.S.C. 2505 AND 2506, AND SHALL DEPOSIT INTO THE TREASURY AS MISCELLANEOUS RECEIPTS THE COST OF RETIREMENT ADMINISTRATION ATTRIBUTABLE TO THE EMPLOYEES IS SUSPENDED, THE FINANCING OF THE PROGRAM BY DIRECT APPROPRIATIONS THAT PROHIBIT THE PAYMENT OF ADMINISTRATIVE EXPENSES PREVENTING BORROWING FROM THE TREASURY FOR USE OF THE REVOLVING FUND, THE REVOLVING FUND IS UNAVAILABLE TO CONTRIBUTE RETIREMENT COSTS, AND, THEREFORE, THE COSTS SHOULD BE FINANCED IN ACCORDANCE WITH SECTION 4 OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED, 5 U.S.C. 2254, FOR AS LONG AS THE LOAN ACTIVITIES OF SECTIONS 6 AND 7 OF THE ACT ARE FINANCED FROM APPROPRIATED FUNDS.

TO THE UNITED STATES CIVIL SERVICE COMMISSION, OCTOBER 15, 1963:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 10, 1963, REQUESTING OUR DECISION AS TO WHETHER SECTION 9 (C) OF THE AREA REDEVELOPMENT ACT, APPROVED MAY 1, 1961, PUBLIC LAW 87-27, 75 STAT. 54, 42 U.S.C. 2508 (C), IS STILL IN EFFECT.

SECTION 9 (C) OF THE AREA REDEVELOPMENT ACT PROVIDES THAT THE FUND ESTABLISHED BY SECTION 9 (B) OF THE ACT, 42 U.S.C. 2508 (B), SHALL CONTRIBUTE TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND THE FULL RETIREMENT COST, IN EXCESS OF EMPLOYEE CONTRIBUTIONS, FOR EMPLOYEES PERFORMING ACTIVITIES UNDER SECTION 6 AND 7 OF THAT ACT, 42 U.S.C. 2505 AND 2506, RESPECTIVELY, AND TO DEPOSIT INTO THE TREASURY AS MISCELLANEOUS RECEIPTS THE COST OF RETIREMENT ADMINISTRATION ATTRIBUTABLE TO THOSE EMPLOYEES.

SECTIONS 6 AND 7 OF THE ACT PROVIDE FOR THE MAKING OF LOANS AND PARTICIPATION IN LOANS TO AID IN FINANCING INDUSTRIAL PROJECTS WITHIN REDEVELOPMENT AREAS. SECTION 9 (A), 42 U.S.C. 2508 (A), PROVIDES THAT FUNDS FOR SUCH PROGRAM SHALL BE OBTAINED BY BORROWINGS FROM THE TREASURY OF THE UNITED STATES AND SECTION 9 (B) ESTABLISHED IN THE TREASURY A REVOLVING FUND INTO WHICH FUNDS OBTAINED FROM THE TREASURY WOULD BE DEPOSITED. THIS SECTION ALSO PROVIDES THAT THE FUND SHALL BE USED TO EXTEND THE FINANCIAL ASSISTANCE AUTHORIZED BY SECTIONS 6 AND 7 AND THAT RECEIPTS ARISING FROM THE ASSISTANCE PROGRAMS SHALL BE CREDITED TO THE FUND. SECTION 9 (C) PROVIDES THAT THE CONTRIBUTIONS TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND AS SET FORTH ABOVE SHALL BE PAID FROM THE REVOLVING FUND ESTABLISHED BY SECTION 9 (B).

QUESTION WHETHER THE ADMINISTRATION MUST MAKE THE CONTRIBUTIONS PROVIDED FOR IN SECTION 9 (C) ARISES BECAUSE THE FUNDS AVAILABLE TO FINANCE THE LOAN PROGRAMS HAVE BEEN APPROPRIATED ANNUALLY BY THE CONGRESS AND HAVE NOT BEEN OBTAINED BY BORROWINGS FROM THE TREASURY. AS A MATTER OF FACT THE ADMINISTRATION IS PRECLUDED FROM BORROWING FUNDS FROM THE TREASURY BECAUSE OF THE PROHIBITION CONTAINED IN THE LANGUAGE OF THE ANNUAL ACTS PROVIDING APPROPRIATED FUNDS FOR THE ADMINISTRATION. REPRESENTATIVE OF SUCH LANGUAGE IS THAT CONTAINED IN SUPPLEMENTAL APPROPRIATION ACT, 1962, APPROVED SEPTEMBER 30, 1961, PUBLIC LAW 87-332, 75 STAT. 734, WHICH APPROPRIATED FUNDS FOR AREA REDEVELOPMENT ASSISTANCE BUT PROVIDED THAT "* * * NO PART OF THIS APPROPRIATION SHALL BE USED FOR ADMINISTRATIVE EXPENSES IN CONNECTION WITH LOANS AND PARTICIPATIONS FINANCED OR TO BE FINANCED WITH FUNDS BORROWED FROM THE SECRETARY OF THE TREASURY.'

IT IS REPORTED THAT THE ADMINISTRATION BELIEVES THAT SINCE IT HAS BEEN RECEIVING APPROPRIATIONS EACH YEAR INSTEAD OF BEING PERMITTED TO BORROW FUNDS FROM THE TREASURY AND ACCOUNT FOR ITS OPERATIONS UNDER THE REVOLVING FUND ESTABLISHED BY SECTION 9 (B) IT SHOULD NOT HAVE TO MAKE THE FULL CONTRIBUTION REQUIRED BY SECTION 9 (C), BUT SHOULD CONTRIBUTE AT THE SAME RATE AS AGENCIES GENERALLY WHICH OPERATE WITH APPROPRIATED FUNDS.

THE FINANCING OF THIS PROGRAM BY DIRECT APPROPRIATIONS AND THE DENIAL OF THE USE OF SUCH APPROPRIATIONS FOR ADMINISTRATIVE EXPENSES IN CONNECTION WITH LOANS AND PARTICIPATIONS FINANCED OR TO BE FINANCED WITH FUNDS BORROWED FROM THE SECRETARY OF THE TREASURY DURING THE FISCAL YEARS 1962 AND 1963, HAVE EFFECTIVELY PREVENTED BOTH THE BORROWING OF FUNDS FROM THE TREASURY UNDER SECTION 9 (A) AND THE USE OF THE REVOLVING FUND ESTABLISHED BY SECTION 9 (B) FOR ANY PURPOSE. SUCH FUND THEREFORE IS CLEARLY NOT AVAILABLE TO CONTRIBUTE ANY RETIREMENT COSTS TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND AS PROVIDED IN SECTION 9 (C) SO LONG AS THE PROGRAM IS FINANCED BY DIRECT APPROPRIATIONS. SINCE THE SOURCE OF FINANCING SUCH COSTS IS SPECIFICALLY DESIGNATED IN SECTION 9 (C) AS THE "FUND," THERE IS NO LEGAL REQUIREMENT THAT SUCH COSTS BE PAID FROM ANY APPROPRIATIONS MADE TO THE AREA REDEVELOPMENT ADMINISTRATION. NEITHER DO WE FIND ANYTHING IN THE LEGISLATIVE HISTORIES OF THE 1962 AND 1963 APPROPRIATION ACTS HERE INVOLVED INDICATING THAT THIS PROGRAM SHALL PAY ANY GREATER RETIREMENT COSTS THAN ANY OTHER PROGRAM IN THE GOVERNMENT FINANCED BY DIRECT APPROPRIATIONS. IN FACT, IT SEEMS TO US TO HAVE BEEN INTENDED THAT THIS PROGRAM BE FINANCED FROM DIRECT APPROPRIATIONS IN THE SAME MANNER AS ANY OTHER PROGRAM WHICH IS SO FINANCED. RETIREMENT COSTS WOULD THUS BE FINANCED IN ACCORDANCE WITH SECTION 4 OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED, 5 U.S.C. 2254.

ANSWERING YOUR QUESTION SPECIFICALLY THE EFFECT OF SECTION 9 (C) OF THE AREA REDEVELOPMENT ACT HAS BEEN SUSPENDED DURING THE FISCAL YEARS 1962 AND 1963 AND WILL CONTINUE TO BE SUSPENDED AS LONG AS THE ACTIVITIES UNDER SECTIONS 6 AND 7 OF THE ACT ARE FINANCED UNDER APPROPRIATION LANGUAGE SIMILAR TO THAT USED DURING THOSE YEARS.

A COPY OF THIS DECISION IS BEING FURNISHED TO THE SECRETARY OF COMMERCE.