B-154459, APR. 6, 1965, 44 COMP. GEN. 607

B-154459, APR. 6, 1965, 44 COMP. GEN. 607

JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS - MATCHING FEDERAL APPROPRIATIONS - CONVERSION OF PLEDGES ALTHOUGH TO THE EXTENT THAT EXISTING PRIVATE PLEDGES OF GIFTS IN KIND TO THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS ARE CONVERTED OR REDUCED TO CASH BY THE BOARD OF TRUSTEES OF THE CENTER WITHOUT CREATING A CORRESPONDING LIABILITY CHARGEABLE TO THE CENTER, THE CASH OBTAINED CONSTITUTES THE ACQUISITION OF FUNDS AVAILABLE TO MEET THE "DOLLAR-FOR- DOLLAR" BASIS REQUIREMENT OF SECTION 8 OF THE JOHN F. KENNEDY CENTER ACT, AS INDICATED BY THE LEGISLATIVE HISTORY OF THE ACT, FOR MATCHING THE FEDERAL APPROPRIATION CONTAINED IN THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATION ACT, 1965, THE DETERMINATION WHETHER A PARTICULAR ARRANGEMENT FOR CONVERTING OR REDUCING THE PLEDGES TO CASH THAT DOES NOT RESULT IN A CORRESPONDING LIABILITY TO THE CENTER COMPLIES WITH, OR HAS BEEN AUTHORIZED BY THE JOHN F. KENNEDY CENTER ACT MUST AWAIT THE FORMULATION AND PRESENTATION OF A SPECIFIC PLAN.

TO THE CHAIRMAN OF THE BOARD OF TRUSTEES, JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS, APRIL 6, 1965:

LETTER DATED MARCH 18, 1965, FROM THE GENERAL COUNSEL OF THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS (CENTER), CONCERNS A QUESTION WHICH HAS ARISEN IN CONNECTION WITH MATCHING ALL OR PART OF THE FEDERAL APPROPRIATION OF NOT TO EXCEED $15.5 MILLION FOR THE CENTER PRIOR TO JULY 1, 1965, AS REQUIRED BY PERTINENT LAW.

THE JOHN F. KENNEDY CENTER ACT (FORMERLY THE NATIONAL CULTURAL CENTER ACT) 72 STAT. 1698, AS AMENDED BY PUBLIC LAW 88-260, 78 STAT. 4, PROVIDES, IN PART, AS FOLLOWS:

SEC. 8. THERE IS HEREBY AUTHORIZED TO BE APPROPRIATED TO THE BOARD FOR USE IN ACCORDANCE WITH THIS ACT, AMOUNTS WHICH IN THE AGGREGATE WILL EQUAL GIFTS, BEQUESTS, AND DEVISES OF MONEY, SECURITIES, AND OTHER PROPERTY, HELD BY THE BOARD UNDER THIS ACT, EXCEPT THAT NOT TO EXCEED $15,500,000 SHALL BE APPROPRIATED PURSUANT TO THIS SECTION.

THE FOLLOWING EXPLANATION OF THE ABOVE PROVISION OF LAW APPEARS ON PAGES 3 AND 4 OF H.REPT. NO. 1050, 88TH CONG., 2D SESS.:

FOURTH: APPROPRIATIONS ARE AUTHORIZED TO BE MADE WHICH IN THE AGGREGATE WILL EQUAL GIFTS, BEQUESTS, AND DEVISES HELD BY THE BOARD. THESE APPROPRIATIONS ARE TO MATCH ON A DOLLAR-FOR-DOLLAR BASIS PRIVATE CONTRIBUTIONS AND FEDERAL EXPENDITURES FOR THIS PURPOSE ARE LIMITED TO $15,500,000. PLEDGES ARE NOT TO BE CONSIDERED AS HAVING BEEN RECEIVED OR HELD BY THE BOARD FOR PURPOSES OF MATCHING BY THE FEDERAL GOVERNMENT UNTIL SUCH TIME AS THOSE PLEDGES ARE REDUCED TO MONEY OR OTHER ASSETS ACTUALLY HELD BY THE BOARD.

THE AUTHORIZED APPROPRIATION IS INCLUDED IN THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATION ACT, 1965, PUBLIC LAW 88 356,78 STAT. 273, 289, AND READS AS FOLLOWS:

FOR EXPENSES, NOT OTHERWISE PROVIDED, NECESSARY TO ENABLE THE BOARD OF TRUSTEES OF THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS TO CARRY OUT THE PURPOSES OF THE ACT OF SEPTEMBER 2, 1958 (72 STAT. 1698), AS AMENDED, INCLUDING CONSTRUCTION, SUCH AMOUNTS WHICH IN THE AGGREGATE WILL EQUAL GIFTS, BEQUESTS, AND DEVISES OF MONEY, SECURITIES, AND OTHER PROPERTY, RECEIVED BY THE BOARD FOR THE BENEFIT OF THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS PRIOR TO JULY 1, 1965, AND AVAILABLE OR USED FOR EXPENDITURES DIRECTLY INCIDENT TO THE PLANNING, CONTRACTING, AND CONSTRUCTION OF THE CENTER: PROVIDED, THAT THE TOTAL AMOUNT APPROPRIATED BY THIS PARAGRAPH SHALL NOT EXCEED $15,500,000.

IT IS CLEAR FROM THE ABOVE-CITED STATUTES AND THE LEGISLATIVE HISTORIES THEREOF THAT THE $15.5 MILLION APPROPRIATION IS AVAILABLE FOR THE PURPOSE SET FORTH THEREIN, ONLY TO THE EXTENT THAT MATCHING CONTRIBUTIONS ARE AVAILABLE FROM NONFEDERAL SOURCES AND THAT PLEDGES MAY NOT BE USED FOR MATCHING PURPOSES UNTIL REDUCED TO CASH OR OTHER ASSETS AND HELD BY THE BOARD. IN OTHER WORDS THE APPROPRIATION MAY BE USED ONLY TO MATCH ON A DOLLAR-FOR-DOLLAR BASIS PRIVATE CONTRIBUTIONS COLLECTED OR HELD BY THE BOARD.

THE GENERAL COUNSEL STATES THAT SOME OF THE PLEDGES RATHER THAN BEING MONEY, ARE PLEDGES OF GIFTS IN KIND, SUCH AS MARBLE, CEMENT, ALUMINUM INGOTS, AN ORGAN, ETC. THE GENERAL COUNSEL STATES THE FINANCIAL STATEMENTS OF THE CENTER SHOW THAT AS OF MARCH 12, 1965, "THE CENTER NEEDS $661,000 TO MATCH THE FEDERAL GRANT (INCLUDING THE ITALIAN MARBLE PLEDGE); " AND THAT THE OUTSTANDING PLEDGES AS OF MARCH 12 AMOUNT TO $3,629,530.92. ADVISES THAT THE BOARD OF TRUSTEES IS DILIGENTLY CONTINUING TO RAISE THE MATCHING FUNDS AND MORE, AND HAVE EVERY PROSPECT OF MATCHING THE APPROPRIATION BY JULY 1, 1965. THE GENERAL COUNSEL STATES, HOWEVER, THAT IT WAS DEEMED ADVISABLE TO TAKE THE PRECAUTIONARY STEP TO SEEK TO CONVERT OR REDUCE THE UNREDEEMED PLEDGES TO MONEY IN THE EVENT THAT CONVEYANCE OF TITLE TO GIFTS IN KIND (MARBLE, CEMENT, ORGAN, ETC.), MORE THAN SUFFICIENT TO MEET THE MATCHING OBLIGATION, CANNOT BE ARRANGED.

WE ARE ADVISED THAT AT THE ANNUAL MEETING OF THE BOARD OF TRUSTEES OF THE KENNEDY CENTER, HELD DECEMBER 2, 1964, THE FOLLOWING RESOLUTION WAS PASSED:

"RESOLVED: THAT THE BOARD HEREBY DELEGATES TO ITS EXECUTIVE COMMITTEE THE AUTHORITY TO TAKE SUCH STEPS AS MAY BE NECESSARY, INCLUDING THE REDUCTION OR CONVERSION OF THE PLEDGES TO CASH, AND LEAVES THE METHOD OF DOING SO TO THE EXECUTIVE COMMITTEE PROVIDED IT DOES NOT EXCEED THE PROPERLY DELEGATED AUTHORITY OF THE BOARD AS SET FORTH IN THE ACT AND THE BY-LAWS.'

IN CONNECTION WITH THE MATTER THE GENERAL COUNSEL PRESENTS TO US THE FOLLOWING QUESTION:

* * * DO YOU CONCUR IN MY OPINION THAT ANY ARRANGEMENT WHEREBY SOME OR ALL OF THE EXISTING PLEDGES WERE CONVERTED OR REDUCED TO CASH WHICH DID NOT RESULT IN ANY CORRESPONDING LIABILITY CHARGEABLE TO THE CENTER, WOULD SATISFY THE PROVISIONS OF H.R. REPORT 1050 AND CONSTITUTE THE ACQUISITION OF MATCHING FUNDS?

HE STATES THAT THE OFFICERS OF THE CENTER ARE EXPLORING METHODS OF ACHIEVING THIS END, ASSUMING ITS GENERAL ACCEPTABILITY; AND THAT WHEN A SPECIFIC PLAN HAS BEEN AGREED UPON, IT WILL BE IMMEDIATELY COMMUNICATED TO US FOR OUR SPECIFIC OPINION. PENDING A SPECIFIC PLAN, HOWEVER, OUR OPINION AND ADVICE IS REQUESTED AS TO THE QUESTION RAISED ABOVE.

IN OUR OPINION THERE IS NO QUESTION BUT THAT TO THE EXTENT THAT EXISTING PLEDGES ARE CONVERTED OR REDUCED TO CASH BY THE BOARD WITHOUT CREATING A CORRESPONDING LIABILITY CHARGEABLE TO THE CENTER, THE CASH OBTAINED BY THE BOARD THEREBY WOULD CONSTITUTE THE ACQUISITION OF FUNDS AVAILABLE TO MATCH THE FEDERAL APPROPRIATIONS CONTAINED IN PUBLIC LAW 88-356. HOWEVER, PENDING YOUR FORMULATION OF A SPECIFIC PLAN, WE EXPRESS NO OPINION AS TO WHETHER "ANY ARRANGEMENT" FOR CONVERTING OR REDUCING THE PLEDGES TO CASH NOT RESULTING IN ANY CORRESPONDING LIABILITY TO THE CENTER WOULD OTHERWISE BE IN COMPLIANCE WITH, OR AUTHORIZED BY, THE JOHN F. KENNEDY CENTER ACT.