B-173957, SEP 7, 1972

B-173957, SEP 7, 1972

CONTRACTS - MODIFICATION - RELOCATION ASSISTANCE FUNDING DECISION REGARDING THE APPLICATION TO CERTAIN CONTRACTS OF THE SOIL CONSERVATION SERVICE OF THE COST-SHARING REQUIREMENTS OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION ACT OF 1970, PUB. L. 91-646, 84 STAT. 1894. DECISION B-173957, NOVEMBER 5, 1971, 51 COMP. GEN. 267, IS NOT PRECEDENT FOR ALLOWING THE SOIL CONSERVATION SERVICE TO AMEND ITS PRE EXISTING CONTRACTS PROVIDING FOR NO RELOCATION COSTS TO PROVIDE FOR 100 PERCENT FEDERAL FUNDING OF RELOCATION COSTS - NO RIGHTS HAVING PREVIOUSLY VESTED UNDER THOSE CONTRACTS FOR SUCH PURPOSES - AND UNDER SECTION 211(A) OF THE ACT, THE EXTENT OF SOIL CONSERVATION SERVICE REIMBURSEMENT OF RELOCATION COST IS LIMITED BY THE COST-SHARING REQUIREMENTS OF THAT SECTION.

TO MR. SECRETARY:

BY LETTER DATED JULY 28, 1972, THE ASSISTANT SECRETARY FOR RURAL DEVELOPMENT AND CONSERVATION REQUESTED OUR DECISION ON A MATTER CONCERNING THE APPLICATION OF THE COST-SHARING REQUIREMENTS OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION ACT OF 1970, APPROVED JANUARY 2, 1971, PUB. L. 91-646, 84 STAT. 1894, 42 U.S.C. 4601.

SECTIONS 202 THROUGH 206 OF THAT ACT PROVIDE FOR RELOCATION ALLOWANCES, REPLACEMENT HOUSING PRIOR TO DISPLACEMENT, AND RELOCATION ASSISTANCE ADVISORY SERVICES TO HOME OWNERS, TENANTS, BUSINESS MEN AND FARMERS DISPLACED BY ANY FEDERAL PROJECT CARRIED OUT BY ANY FEDERAL AGENCY. SECTION 210 OF THE ACT PROVIDES IN EFFECT THAT STATE AND LOCAL GOVERNMENTS RECEIVING FUNDS UNDER GRANTS OR CONTRACTS FROM THE FEDERAL GOVERNMENT FOR ANY PROGRAM OR PROJECT WHICH WILL DISPLACE ANY PERSON ON OR AFTER THE EFFECTIVE DATE OF TITLE II MUST COMPLY WITH THE SAME RELOCATION REQUIREMENTS AS THOSE MADE APPLICABLE TO FEDERAL PROJECTS UNDER SECTIONS 202 THROUGH 205. ON JULY 1, 1972, THE COST-SHARING PROVISIONS OF THE ACT BECAME TOTALLY APPLICABLE TO ALL STATES AND LOCAL GOVERNMENTS. SECTION 211(A) PROVIDES THAT THE COST OF SUCH STATE OR LOCAL GOVERNMENT RELOCATIONS, EXCEPT FOR THE FIRST $25,000 WHICH WILL BE FUNDED ENTIRELY BY THE FEDERAL GOVERNMENT, WILL BE FUNDED IN THE SAME MANNER AND TO THE SAME EXTENT AS OTHER PROGRAM OR PROJECT COSTS.

WITH RESPECT TO AMENDMENTS TO PREVIOUSLY EXISTING CONTRACTS, SECTION 211(C) PROVIDES THAT GRANTS, CONTRACTS, OR AGREEMENTS, EXECUTED BY A STATE AGENCY BEFORE THE EFFECTIVE DATE OF TITLE II UNDER WHICH FEDERAL FINANCIAL ASSISTANCE IS AVAILABLE TO PAY ALL OR PART OF THE COST OF ANY PROGRAM OR PROJECTS WHICH WILL RESULT IN THE DISPLACEMENT OF ANY PERSON ON OR AFTER THE EFFECTIVE DATE OF THE ACT, SHOULD BE AMENDED TO INCLUDE THE COST OF PROVIDING PAYMENT AND SERVICES UNDER SECTIONS 210 AND 305.

WE ARE ADVISED THAT CERTAIN PROJECTS OF THE SOIL CONSERVATION SERVICE THAT WERE UNDER CONTRACT WITH STATE AND LOCAL GOVERNMENTS PRIOR TO THE EFFECTIVE DATE OF THE ACT DID NOT PROVIDE FOR THE PAYMENT OF RELOCATION COSTS BECAUSE THE SERVICE WAS WITHOUT AUTHORITY TO PAY SUCH COSTS. THE SERVICE NOW SEEKS TO AMEND THESE PREVIOUSLY EXISTING CONTRACTS AND GRANTS TO PROVIDE THAT RELOCATION COSTS PAYABLE TO DISPLACED PERSONS BE FUNDED 100 PERCENT WITH FEDERAL FUNDS. IT IS ARGUED THAT OUR DECISION B-173957, NOVEMBER 5, 1971, 51 COMP. GEN. 267, IS SUPPORTIVE OF ALLOWING SUCH AMENDMENTS.

THAT DECISION, WHICH WAS ADDRESSED TO THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT (HUD), HELD THAT THE COST-SHARING REQUIREMENTS WHICH BECAME FULLY EFFECTIVE UNDER PUB. L. 91-646 ON JULY 1, 1972, WERE NOT TO APPLY TO AGREEMENTS PROVIDING FOR RELOCATION PAYMENTS WHICH HUD ENTERED INTO BEFORE JANUARY 2, 1971, THE EFFECTIVE DATE OF THE ACT, AND THAT SUCH PRIOR AGREEMENTS WHICH REQUIRED FULL FEDERAL FUNDING OF RELOCATION COSTS EXTENDED BEYOND THE JULY 1, 1972, DATE. THE RATIONALE OF THE DECISION WAS THAT CERTAIN OF THE SECTIONS OF THE ACT DEMONSTRATED THAT CONGRESS DID NOT INTEND TO ALTER EXISTING CONTRACT RIGHTS WHICH WERE BASED ON PRIOR AGREEMENTS.

THE ESSENTIAL DIFFERENCE BETWEEN THE CONTRACTS OF THE SOIL CONSERVATION SERVICE AND THE HUD CONTRACTS WHICH WERE CONSIDERED IN THE DECISION OF NOVEMBER 5, 1971, IS THAT THE FORMER DO NOT CONTAIN PROVISIONS ALLOWING FOR ANY REIMBURSEMENT OF THE EXPENSE OF RELOCATIONS WHILE THE LATTER PROVIDED FOR 100 PERCENT FEDERAL REIMBURSEMENT OF SUCH COSTS UNDER THE PROVISIONS OF SECTION 114 OF THE HOUSING ACT OF 1949, AS AMENDED (42 U.S.C. 1465) WHICH WAS REPEALED BY PUB. L. 91-646. ACCORDINGLY, THE SUBJECT DECISION IS NOT PRECEDENT FOR ALLOWING THE SOIL CONSERVATION SERVICE TO AMEND ITS PREEXISTING CONTRACTS PROVIDING FOR NO RELOCATION COSTS TO PROVIDE FOR 100 PERCENT FEDERAL FUNDING OF RELOCATION COSTS - NO RIGHTS HAVING PREVIOUSLY VESTED UNDER THOSE CONTRACTS FOR SUCH PURPOSE - AND UNDER SECTION 211(A) OF THE ACT, THE EXTENT OF SOIL CONSERVATION SERVICE REIMBURSEMENT OF RELOCATION COST IS LIMITED BY THE COST-SHARING REQUIREMENTS OF THAT SECTION.

THE DEPARTMENT'S REGULATIONS SHOULD REFLECT THE HOLDING OF THIS DECISION.