B-153551, JUNE 3, 1964, 43 COMP. GEN. 759

B-153551: Jun 3, 1964

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THE FACT THAT THE CORPORATION HAS AUTHORITY TO DETERMINE ITS NECESSARY EXPENDITURES AND THE MANNER IN WHICH THEY ARE INCURRED. 1964: THIS IS IN REGARD TO YOUR LETTER DATED FEBRUARY 18. REQUESTING ADVICE AS TO WHETHER NONADMINISTRATIVE EXPENDITURES OF THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION ARE SUBJECT TO THE APPORTIONMENT PROVISIONS OF SECTION 3679 OF THE REVISED STATUTES. THE APPORTIONMENT REQUIREMENTS OF SECTION 3679 OF THE REVISED STATUTES WERE STRENGTHENED WHEN THAT SECTION WAS AMENDED GENERALLY BY SECTION 1211 OF THE GENERAL APPROPRIATION ACT. SPECIFICALLY INCLUDES WITHIN THE APPLICABILITY OF THE SECTION CORPORATIONS WHOLLY OR PARTLY OWNED BY THE UNITED STATES WHICH ARE INSTRUMENTALITIES OF THE UNITED STATES.

B-153551, JUNE 3, 1964, 43 COMP. GEN. 759

APPROPRIATIONS - APPORTIONMENT - FUNDS, ETC., SUBJECT TO IN VIEW OF THE PURPOSE OF THE 1950 AMENDMENT TO THE APPORTIONMENT REQUIREMENTS OF SECTION 3679, REVISED STATUTES, 31 U.S.C. 665, TO INCLUDE ALL TYPES OF FUNDS AND APPROPRIATIONS NOT SPECIFICALLY EXCEPTED, NONADMINISTRATIVE FUNDS OF THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION MUST BE REGARDED AS SUBJECT TO APPORTIONMENT, AND THE FACT THAT THE CORPORATION HAS AUTHORITY TO DETERMINE ITS NECESSARY EXPENDITURES AND THE MANNER IN WHICH THEY ARE INCURRED, ALLOWED, AND PAID DOES NOT EXCLUDE THE CORPORATION FROM THE APPORTIONMENT REQUIREMENTS OF SECTION 3679, REVISED STATUTES.

TO THE CHAIRMAN, FEDERAL HOME LOAN BANK BOARD, JUNE 3, 1964:

THIS IS IN REGARD TO YOUR LETTER DATED FEBRUARY 18, 1964, AND ENCLOSURES, AS SUPPLEMENTED BY YOUR GENERAL COUNSEL'S LETTER OF APRIL 24, 1964, REQUESTING ADVICE AS TO WHETHER NONADMINISTRATIVE EXPENDITURES OF THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION ARE SUBJECT TO THE APPORTIONMENT PROVISIONS OF SECTION 3679 OF THE REVISED STATUTES, AS AMENDED, 31 U.S.C. 665.

THE APPORTIONMENT REQUIREMENTS OF SECTION 3679 OF THE REVISED STATUTES WERE STRENGTHENED WHEN THAT SECTION WAS AMENDED GENERALLY BY SECTION 1211 OF THE GENERAL APPROPRIATION ACT, 1951, APPROVED SEPTEMBER 6, 1950, CH. 896, 64 STAT. 765, 31 U.S.C. 665 (C) (1). SECTION 3679 PROVIDES IN PERTINENT PART THAT:

(C) (1) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, ALL APPROPRIATIONS OR FUNDS AVAILABLE FOR OBLIGATION FOR A DEFINITE PERIOD OF TIME SHALL BE SO APPORTIONED AS TO PREVENT OBLIGATION OR EXPENDITURE THEREOF IN A MANNER WHICH WOULD INDICATE A NECESSITY FOR DEFICIENCY OR SUPPLEMENTAL APPROPRIATIONS OF FUNDS FOR SUCH PERIOD; AND ALL APPROPRIATIONS OR FUNDS NOT LIMITED TO A DEFINITE PERIOD OF TIME, AND ALL AUTHORIZATIONS TO CREATE OBLIGATIONS BY CONTRACT IN ADVANCE OF APPROPRIATIONS, SHALL BE SO APPORTIONED AS TO ACHIEVE THE MOST EFFECTIVE AND ECONOMICAL USE THEREOF. AS USED HEREAFTER IN THIS SECTION, THE TERM "APPROPRIATION" MEANS APPROPRIATIONS, FUNDS, AND AUTHORIZATIONS TO CREATE OBLIGATIONS BY CONTRACT IN ADVANCE OF APPROPRIATIONS.

SUBSECTION (D) (2), 31 U.S.C. 665 (D) (2), REQUIRES THE APPORTIONMENT TO BE MADE IN WRITING BY THE DIRECTOR OF THE BUREAU OF THE BUDGET, AND SPECIFICALLY INCLUDES WITHIN THE APPLICABILITY OF THE SECTION CORPORATIONS WHOLLY OR PARTLY OWNED BY THE UNITED STATES WHICH ARE INSTRUMENTALITIES OF THE UNITED STATES. CONCERNING EXCLUSIONS FROM THE OPERATION OF THE SECTION, SUBSECTION (D) (2) PROVIDES:

* * * NOTHING IN THIS SUBSECTION SHALL BE SO CONSTRUED AS TO INTERFERE WITH THE INITIATION, OPERATION, AND ADMINISTRATION OF AGRICULTURAL PRICE SUPPORT PROGRAMS AND NO FUNDS (OTHER THAN FUNDS FOR ADMINISTRATIVE EXPENSES) AVAILABLE FOR PRICE SUPPORT, SURPLUS REMOVAL, AND AVAILABLE UNDER SECTION 32 OF THE ACT OF AUGUST 24, 1935, AS AMENDED (7 U.S.C. 612 (C1), WITH RESPECT TO AGRICULTURAL COMMODITIES SHALL BE SUBJECT TO APPORTIONMENT PURSUANT TO THIS SECTION. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO ANY CORPORATION WHICH OBTAINS FUNDS FOR MAKING LOANS, OTHER THAN PAID IN CAPITAL FUNDS, WITHOUT LEGAL LIABILITY ON THE PART OF THE UNITED STATES.

PURSUANT TO THE AFOREMENTIONED STATUTORY REQUIREMENTS THE BUREAU OF THE BUDGET HAS APPORTIONED FUNDS OF THE CORPORATION TO BE USED FOR THE PRESENT FISCAL YEAR. THIS APPORTIONMENT INCLUDES FUNDS WHICH ARE TO BE USED FOR NONADMINISTRATIVE AS WELL AS ADMINISTRATIVE EXPENSES AND IT IS THE APPLICATION OF THE APPORTIONMENT PROCEDURE TO THE NONADMINISTRATIVE EXPENSES TO WHICH OBJECTION IS MADE IN YOUR LETTER. IT IS THE POSITION OF THE FEDERAL HOME LOAN BANK BOARD THAT THE AUTHORITY IN SECTION 402 (C) (5) OF TITLE IV OF THE NATIONAL HOUSING ACT AS INCLUDED IN SECTION 22 OF THE ACT APPROVED MAY 28, 1935, CH. 150, 49 STAT. 298, 12 U.S.C. 1725 (C) (5), WHICH PROVIDES THAT THE CORPORATION "SHALL DETERMINE ITS NECESSARY EXPENDITURES UNDER THIS ACT AND THE MANNER IN WHICH THE SAME SHALL BE INCURRED, ALLOWED, AND PAID, WITHOUT REGARD TO THE PROVISIONS OF ANY OTHER LAW GOVERNING THE EXPENDITURE OF PUBLIC FUNDS" REMOVES THE NONADMINISTRATIVE EXPENDITURES FROM THE APPORTIONMENT PROVISIONS OF SECTION 3679 OF THE REVISED STATUTES, AS AMENDED.

THE APPLICABILITY OF THE APPORTIONMENT REQUIREMENTS TO THE CORPORATION HAS BEEN THE SUBJECT OF CONSIDERABLE DISCUSSION WITH THE BUREAU OF THE BUDGET, THE AGENCY PRIMARILY RESPONSIBLE FOR SEEING THAT THE PROVISIONS OF SECTION 3679 OF THE REVISED STATUTES, AS AMENDED, ARE MET, AS INDICATED BY THE COPIES OF CORRESPONDENCE ENCLOSED WITH YOUR LETTER. IN HIS LETTER TO YOU OF OCTOBER 26, 1963, THE DIRECTOR POINTED OUT THAT THE CHANGES MADE IN SECTION 3679 IN 1950 ENLARGED THE SCOPE OF THE APPORTIONMENT SYSTEM TO EMBRACE "ALL APPROPRIATIONS OR FUNDS," WITH CERTAIN STATED EXCEPTIONS AND REFERRED TO THE REPORT OF THE COMMITTEE WHICH RECOMMENDED THE AMENDMENT AND ITS SHOWING THAT THE CHANGE WAS INTENDED TO OVERCOME THE GAPS WHICH WERE THEN PREVAILING IN THE APPORTIONMENT SYSTEM.

THE SCOPE OF SECTION 3679 OF THE REVISED STATUTES, AS AMENDED, IS SPECIFICALLY SET FORTH AND EXCEPTIONS TO ITS PROVISIONS ARE NAMED. WHILE THERE IS NO AMBIGUITY IN THE STATUTE AS TO WHETHER ITS COVERAGE EXTENDS TO CORPORATE FUNDS NOR AS TO THE EXTENT OF THE EXCEPTIONS STATED THEREIN THEREBY NECESSITATING A REVIEW OF ITS LEGISLATIVE HISTORY, AN EXAMINATION HAS NEVERTHELESS BEEN MADE IN VIEW OF YOUR CONCERN IN THE MATTER. NOTHING WAS FOUND TO SUPPORT A VIEW THAT AUTHORITY OF CORPORATION TO DETERMINE ITS NECESSARY EXPENDITURES AND THE MANNER IN WHICH THE SAME SHALL BE INCURRED, ALLOWED, AND PAID, WOULD OPERATE TO EXCLUDE SUCH CORPORATION FROM THE APPORTIONMENT REQUIREMENTS. AS OPPOSED TO THE POSITION STATED IN YOUR LETTER, IT IS INDICATED IN H.REPT.NO. 1797, 81ST CONGRESS, 2D SESSION, PAGE 9, THAT STRENGTHENING OF SECTION 3679 WAS REQUIRED BECAUSE SUCH SECTION WAS ANTIQUATED AND THAT BECAUSE THE STRUCTURE OF THE GOVERNMENT HAD BECOME SO INVOLVED THE LAW HAD BECOME INOPERATIVE IN MANY CASES. THE PURPOSE OF THE AMENDMENT OF THE SECTION WAS TO "REQUIRE CAREFUL APPORTIONMENT OF ALL TYPES OF FUNDS.'

THE ACTION OF THE BUREAU OF THE BUDGET IN APPLYING THE APPORTIONMENT REQUIREMENTS TO FUNDS FOR NONADMINISTRATIVE EXPENDITURES OF THE FEDERAL SAVINGS AND LOAN CORPORATION IS, IN OUR VIEW, LEGALLY JUSTIFIED IN THE ABSENCE OF A PROVISION OF LAW SPECIFICALLY EXEMPTING SUCH FUNDS FROM APPORTIONMENT.

WE ARE FORWARDING A COPY OF THIS DECISION TO THE DIRECTOR OF THE BUREAU OF THE BUDGET.