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Office of the General Counsel:
March 2005:
Principles of Federal Appropriations Law:
2004 Update of the Third Edition:
GAO-05-354SP:
Preface:
We are pleased to present the first annual update of the third edition
of Volume I of Principles of Federal Appropriations Law. Our objective
in this publication is to present a cumulative supplement to the
published third edition text that includes all relevant decisions from
January 1 to December 31, 2004. After the third editions of the other
volumes of Principles are published, they will also be updated
annually. Each year the annual update will be posted electronically on
GAO's Web site (Hyperlink, http://www.gao.gov) under "GAO Legal
Products." These annual updates will not be issued in hard copy and
should be used as electronic supplements. Therefore, users should
retain hard copies of the third edition volumes and refer to the
cumulative updates for newer material. The page numbers identified in
the annual update as containing new material are the page numbers in
the hard copy of the third edition. New information appears as bolded
text.
[End of section]
Chapter 1: Forward:
Page i - Insert the following as footnote number 1 at the end of the
first paragraph (after "GAO Legal Products."[Footnote 1]):
[1] Recently, section 8 of the GAO Human Capital Reform Act of 2004,
Pub. L. No. 108-271, 118 Stat. 811, 814 (July 7, 2004), 31 U.S.C. § 702
note, changed GAO's name to the "Government Accountability Office."
This change was made to better reflect GAO's current mission. See S.
Rep. No. 108-216, at 8 (2003); H.R. Rep. No. 108-380, at 12 (2003).
Therefore, any reference in this volume to the "General Accounting
Office" should be read to mean "Government Accountability Office." The
acronym "GAO" as used in the text now refers to the Government
Accountability Office.
[End of section]
Chapter 1: Introduction:
B. The Congressional "Power of the Purse"
Page 1-4 - Replace footnote 6 with the following:
[6] Numerous similar statements exist. See, e.g., Knote v. United
States, 95 U.S. 149, 154 (1877); Marathon Oil Co. v. United States, 374
F.3d 1123, 1133-34 (Fed. Cir. 2004); Gowland v. Aetna, 143 F.3d 951,
955 (5 CIR. 1998); Hart's Case, 16 Ct. Cl. 459, 484 (1880), aff'd, Hart
v. United States, 118 U.S. 62 (1886); Jamal v. Travelers Lloyds of
Texas Insurance Co., 131 F. Supp. 2d 910, 919 (S.D. Tex. 2001); Doe v.
Mathews, 420 F. Supp. 865, 870-71 (D. N.J. 1976).
Page 1-9 - Replace the first paragraph with the following:
In Kansas v. United States, 214 F.3d 1196, 1201-1202, n.6 (10TH Cir.
2000), the court noted that there were few decisions striking down
federal statutory spending conditions. [Footnote 9] However, there are
two recent interesting examples of situations in which courts
invalidated a spending condition on First Amendment grounds. In Legal
Services Corp. v. Velasquez, 531 U.S. 533 (2001), a conditional
provision (contained in the annual appropriations for the Legal Service
Corporation (LSC) since 1996) was struck down as inconsistent with the
First Amendment. This provision prohibited LSC grantees from
representing clients in efforts to amend or otherwise challenge
existing welfare law. The Supreme Court found this provision interfered
with the free speech rights of clients represented by LSC-funded
attorneys. [Footnote 10] In American Civil Liberties Union v. Mineta,
319 F. Supp. 2d 69 (D.D.C. 2004), the court declared unconstitutional
an appropriation provision forbidding the use of federal mass transit
grant funds for any activity that promoted the legalization or medical
use of marijuana, for example, posting an advertisement on a bus.
Relying on Legal Services Corp. v. Velasquez, the court held that the
provision constituted "viewpoint discrimination" in violation of the
First Amendment. 319 F. Supp. 2d at 83-87.
Page 1-10 - Insert the following after the first partial paragraph:
There have been some recent court cases upholding congressional actions
attaching conditions to the use of federal funds that require states to
waive their sovereign immunity from lawsuits under the Eleventh
Amendment. In these cases, courts found the condition a legitimate
exercise of Congress's spending power. For example, the court in
Barbour v. Washington Metropolitan Transit Authority, 374 F.3d 1161
(D.C. Cir. 2004), upheld a statutory provision known as the "Civil
Rights Remedies Equalization Act," 42 U.S.C. § 2000d-7, which clearly
conditioned a state's acceptance of federal funds on its waiver of its
Eleventh Amendment immunity to suits under various federal
antidiscrimination laws. Among other things, the court rejected an
argument based on South Dakota v. Dole, supra, that the condition was
not sufficiently related to federal spending. The opinion observed that
the Supreme Court has never overturned Spending Clause legislation on
"relatedness grounds." 374 F.3d at 1168.
Similarly, two courts rejected challenges to section 3 of the Religious
Land Use and Institutionalized Persons Act of 2000 (RLUIPA), 42 U.S.C.
§ 2000cc-1, which limits restrictions on the exercise of religion by
persons institutionalized in a program or activity that receives
federal financial assistance. Charles v. Verhagen, 348 F.3d 601 (7TH
Cir. 2003); Williams v. Bitner, 285 F. Supp. 2d 593 (M.D. Pa. 2003). In
Charles v. Verhagen, the court held that RLUIPA "falls squarely within
Congress' pursuit of the general welfare under its Spending Clause
authority." 348 F.3d at 607. The court also rejected the argument that
the statute's restrictions could not be related to a federal spending
interest because the state corrections program at issue received less
than two percent of its budget from federal funding: "Nothing within
Spending Clause jurisprudence, or RLUIPA for that matter, suggests that
States are bound by the conditional grant of federal money only if the
State receives or derives a certain percentage . . . of its budget from
federal funds." Id. at 609.
Page 1-10 - Replace the second paragraph with the following:
For some additional recent cases upholding statutory funding
conditions, see Biodiversity Associates v. Cables, 357 F.3d 1152 (10TH
Cir.), cert. denied, ___ U.S. ___, 125 S. Ct. 54 (2004) (upholding an
appropriations rider that explicitly superseded a settlement agreement
the plaintiffs had reached with the Forest Service in environmental
litigation); Kansas v. United States, 214 F.3d 1196 (10TH Cir. 2000)
(upholding the statutory requirement conditioning receipt of federal
block grants used to provide cash assistance and other supportive
services to low income families on a state's participation in and
compliance with a federal child support enforcement program); Litman v.
George Mason University, supra (state university's receipt of federal
funds was validly conditioned upon waiver of the state's Eleventh
Amendment immunity from federal antidiscrimination lawsuits);
California v. United States, 104 F.3d 1086, 1092 (9TH Cir. 1997)
(acknowledging that although it originally agreed to the condition for
receipt of federal Medicaid funds on state provision of emergency
medical services to illegal aliens, California now viewed that
condition as coerced because substantial increases in illegal
immigration left California with no choice but to remain in the program
to prevent collapse of its medical system; the complaint was dismissed
for failure to state a claim upon which relief could be granted); and
Armstrong v. Vance, 328 F. Supp. 2d 50 (D.D.C. 2004) and Whatley v.
District of Columbia, 328 F. Supp. 2d 15 (D.D.C. 2004) (two related
decisions upholding appropriations provisions that imposed a cap on the
District of Columbia's payment of attorney fees awarded in litigation
under the Individuals with Disabilities Education Act, 20 U.S.C. §§
1400 et seq.). See also Richard W. Garnett, The New Federalism, the
Spending Power, and Federal Criminal Law, 89 Cornell L. Rev. 1
(November 2003), an article that provides more background on this
general subject.
Page 1-12 - Replace the second bullet in the first paragraph with the
following:
* Agencies may not spend, or commit themselves to spend, in advance of
or in excess of appropriations. 31 U.S.C. § 1341 (Antideficiency Act).
GAO has said that because the Antideficiency Act (ADA) is central to
Congress's core constitutional power of the purse, GAO will not
interpret general language in another statute, such as the
"notwithstanding any other provision of law" clause, to imply a waiver
of the ADA without some affirmative expression of congressional intent
to give the agency the authority to obligate in advance or in excess of
an appropriation. B-303961, Dec. 6, 2004.
E. The Role of the Accounting Officers: Legal Decisions:
2. Decisions of the Comptroller General:
Page 1-42 - Replace the third full paragraph with the following:
For example, as we discussed earlier in this chapter, effective June
30, 1996, Congress transferred claims settlement authority under 31
U.S.C. § 3302 to the Director of the Office of Management and Budget
(OMB). Congress gave the director of OMB the authority to delegate this
function to such agency or agencies as he deemed appropriate. See,
e.g., B-302996, May 21, 2004 (GAO no longer has authority to settle a
claim for severance pay); B-278805, July 21, 1999 (the International
Trade Commission was the appropriate agency to resolve the subject
claims request).
Page 1-42 - Replace the fourth full paragraph with the following:
Other areas where the Comptroller General will decline to render
decisions include questions concerning which the determination of
another agency is by law "final and conclusive." Examples are
determinations on the merits of a claim against another agency under
the Federal Tort Claims Act (28 U.S.C. § 2672) or the Military
Personnel and Civilian Employees' Claims Act of 1964 (31 U.S.C. §
3721). See, e.g., B-300829, Apr. 4, 2004 (regarding the Military
Personnel and Civilian Employees' Claims Act). Another example is a
decision by the Secretary of Veterans Affairs on a claim for veterans'
benefits (38 U.S.C. § 511). See 56 Comp. Gen. 587, 591 (1977); B-
266193, Feb. 23, 1996; B-226599.2, Nov. 3, 1988 (nondecision letter).
[End of section]
Chapter 1: The Legal Framework:
B. Some Basic Concepts:
1. What Constitutes an Appropriation:
Page 2-20 - Insert the following after the second full paragraph:
Subsequent to the Core Concepts and AINS decisions, the Third Circuit
Court of Appeals had occasion to weigh in on the issue of revolving
funds in a non-Tucker Act situation in American Federation of
Government Employees (AFGE) v. Federal Labor Relations Authority
(FLRA), 388 F.3d 405 (3RD Cir. 2004). In that case, AFGE, representing
Army depot employees, had proposed an amendment to the employees'
collective bargaining agreement that would have required the Army to
pay reimbursements of personal expenses incurred by the depot employees
as a result of cancelled annual leave from a defense working capital
fund. When the Army objected that it had no authority to use the
working capital fund for personal expenses, AFGE appealed to FLRA. FLRA
agreed with the Army and ruled that the provision was "nonnegotiable."
Citing FLRA decisions, Comptroller General decisions, and federal court
cases, FLRA concluded that the working capital fund, a revolving fund,
is treated as a continuing appropriation and, as such, the fund was not
available for reimbursement of personal expenses.
The court agreed with FLRA that the defense working capital fund
consists of appropriated funds and is thus not available to pay the
personal expenses of Army employees. The court, however, rejected what
it called "FLRA's blanket generalization that revolving funds are
always appropriations." AFGE, 388 F.3d at 411. Instead, the court
applied a standard used by the Federal Circuit and the Court of Federal
Claims when addressing the threshold issue of Tucker Act jurisdiction,
a "clear expression" standard; that is, funds should be regarded as
"appropriated" absent a "clear expression by Congress that the agency
was to be separated from the general federal revenues." Id. at 410. The
court observed in this regard:
"While that 'clear expression' standard arises in the context of Tucker
Act jurisprudence, we think it accurately reflects the broader
principle that one should not lightly presume that Congress meant to
surrender its control over public expenditures by authorizing an entity
to be entirely self-sufficient and outside the appropriations process.
. . . For this reason, the courts have sensibly treated agency money as
appropriated even when the agency is fully financed by outside
revenues, so long as Congress has not clearly stated that it wishes to
relinquish the control normally afforded through the appropriations
process.
* * * * * * * * * *
"...[W]e think the correct rule is that the characterization of a
government fund as appropriated or not depends entirely on Congress'
expression, whatever the actual source of the money and whether or not
the fund operates on a revolving rather than annualized basis."
Id. at 410-411. In applying this standard to the particular funding
arrangement at issue, the court determined that the defense working
capital fund was not a nonappropriated fund instrumentality and upheld
the FLRA decision. "What matters is how Congress wishes to treat
government revenues, not the source of the revenues." Id. at 413.
3. Transfer and Reprogramming:
Page 2-24 - Replace footnote 40 with the following:
[40] 7 Comp. Gen. 524 (1928); 4 Comp. Gen. 848 (1925); 17 Comp. Dec.
174 (1910). Cases in which adequate statutory authority was found to
exist are B-302760, May 17, 2004 (the transfer of funds from the
Library of Congress to the Architect of the Capitol for construction of
a loading dock at the Library is authorized) and B-217093, Jan. 9, 1985
(the transfer from Japan-United States Friendship Commission to
Department of Education to partially fund a study of Japanese education
is authorized).
C. Relationship of Appropriations to Other Types of Legislation:
2. Specific Problem Areas and the Resolution of Conflicts:
Page 2-69 - Insert the following new paragraphs after the first full
paragraph:
Recently, two courts have interpreted appropriation restrictions to
avoid repeal by implication: City of Chicago v. Department of the
Treasury, 384 F.3d 429 (7TH Cir. 2004), and City of New York v. Beretta
U.S.A. Corp., 222 F.R.D. 51 (E.D. N.Y. 2004). In the first case, the
City of Chicago had sued the former Bureau of Alcohol, Tobacco, and
Firearms under the Freedom of Information Act (FOIA), 5 U.S.C. § 552,
to obtain access to certain information from the agency's firearms
databases. The Court of Appeals for the Seventh Circuit held that the
information was not exempt from disclosure under FOIA. City of Chicago
v. Department of the Treasury, 287 F.3d 628 (7TH Cir. 2002). The agency
then appealed to the Supreme Court. While the appeal was pending,
Congress enacted appropriations language for fiscal years 2003 and 2004
providing that no funds shall be available or used to take any action
under FOIA or otherwise that would publicly disclose the information.
Pub. L. No. 108-7, div. J, title VI, § 644, 117 Stat. 11, 473 (Feb. 20,
2003); Pub. L. No. 108-99, div. B, title I, 118 Stat. 3, 53 (Jan. 23,
2004). The Supreme Court remanded the case to the Seventh Circuit to
consider the impact, if any, of the appropriations language. Department
of Justice v. City of Chicago, 537 U.S. 1229 (2003). In City of Chicago
v. Department of the Treasury, 384 F.3d 429 (7TH Cir. 2004), the court
decided that the appropriations language had essentially no impact on
the case. Citing a number of cases on the rule disfavoring implied
repeals (particularly by appropriations act), the court held that the
appropriations rider did not repeal FOIA or otherwise affect the
agency's legal obligation to release the information in question. The
court concluded that "FOIA deals only peripherally with the allocation
of funds--its main focus is to ensure agency information is made
available to the public." Id. at 435. In this regard, the court
repeatedly emphasized the minimal costs entailed in complying with the
access request and concluded that "there is no 'irreconcilable
conflict' between prohibiting the use of federal funds to process the
request and granting the City access to the databases." Id.
The second case, City of New York v. Beretta U.S.A. Corp., 222 F.R.D.
51 (E.D. N.Y. 2004), concerned access to firearms information that was
subject to the same appropriations language for fiscal year 2004 in
Public Law 108-199. In this case, the demand for access took the form
of subpoenas seeking discovery of the records in a tort suit by the
City of New York and others against firearms manufacturers and
distributors. The court in City of New York denied the agency's motion
to quash the subpoenas, which was based largely on the appropriations
language. The court held that the appropriations language, which
prohibited public disclosure, was inapplicable by its terms since
discovery could be accomplished under a protective order that would
keep the records confidential. 222 F.R.D. at 56-65.
D. Statutory Interpretation: Determining Congressional Intent:
1. The "Plain Meaning" Rule:
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By far the most important rule of statutory construction is this: You
start with the language of the statute. Countless judicial decisions
reiterate this rule. E.g., BedRoc Limited, LLC v. United States, 541
U.S. 176 (2004); Lamie v. United States Trustee, 540 U.S. 526 (2004);
Hartford Underwriters Insurance Co. v. Union Planters Bank, N.A., 530
U.S. 1 (2000); Robinson v. Shell Oil Co. v. 519 U.S. 337 (1997);
Connecticut National Bank v. Germain, 503 U.S. 249 (1992); Mallard v.
United States District Court for the Southern District of Iowa, 490
U.S. 296, 300 (1989). The primary vehicle for Congress to express its
intent is the words it enacts into law. As stated in an early Supreme
Court decision:
"The law as it passed is the will of the majority of both houses, and
the only mode in which that will is spoken is in the act itself; and we
must gather their intention from the language there used ..."
Aldridge v. Williams, 44 U.S. (3 How.) 9, 24 (1845). A somewhat better
known statement is from United States v. American Trucking Ass'ns, 310
U.S. 534, 543 (1940):
"There is, of course, no more persuasive evidence of the purpose of a
statute than the words by which the legislature undertook to give
expression to its wishes."
3. The Limits of Literalism: Errors in Statutes and "Absurd
Consequences"
Page 2-80 - Insert the following after the first paragraph:
The Supreme Court's recent decision in Lamie v. United States Trustee,
540 U.S. 526 (2004), contained an interesting discussion of drafting
errors and what to do about them. For reasons that are described at
length in the opinion but need not be repeated here, the Court found an
"apparent legislative drafting error" in a 1994 statute. 540 U.S. at
530. Nevertheless, the Court held that the amended language must be
applied according to its plain terms. While the Court in Lamie
acknowledged that the amended statute was awkward and ungrammatical,
and that a literal reading rendered some words superfluous and could
produce harsh results, none of these defects made the language
ambiguous. Id. at 534-36. The Court determined that these flaws did not
"lead to absurd results requiring us to treat the text as if it were
ambiguous." Id. at 536. The Court also drew a distinction between
construing a statute in a way that, in effect, added missing words as
opposed to ignoring words that might have been included by mistake. Id.
at 538.
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Recent Supreme Court decisions likewise reinforce the need for caution
when it comes to departing from statutory language on the basis of its
apparent "absurd consequences." See Lamie v. United States Trustee, 540
U.S. 526, 537-38 (2004) ("harsh" consequences are not the equivalent of
absurd consequences); Barnhart v. Thomas, 540 U.S. 20, 28-29 (2003)
("undesirable" consequences are not the equivalent of absurd
consequences).
4. Statutory Aids to Construction:
Page 2-84 - Replace the first full paragraph with the following:
Occasionally, the courts use the Dictionary Act to assist in resolving
questions of interpretation. E.g., Gonzalez v. Secretary for the
Department of Corrections, 366 F.3d 1253, 1263-64 (11TH Cir. 2004)
(applying the Dictionary Act's general rule that "words importing the
singular include and apply to several persons, parties, or things," 1
U.S.C. § 1); United States v. Reid, 206 F. Supp. 2d 132 (D. Mass. 2002)
(an aircraft is not a "vehicle" for purposes of the USA PATRIOT Act);
United States v. Belgarde, 148 F. Supp. 2d 1104 (D. Mont.), aff'd, 300
F.3d 1177 (9TH Cir. 2001) (a government agency, which the defendant was
charged with burglarizing, is not a "person" for purposes of the Major
Crimes Act). Courts also hold on occasion that the Dictionary Act does
not apply. See United States v. Ekanem, 383 F.3d 40 (2ND Cir. 2004)
("victim" as used in the Mandatory Victims Restitution Act (MRVA) is
not limited by the default definition of "person" in the Dictionary Act
since that definition does not apply where context of MVRA indicates
otherwise); Rowland v. California Men's Colony, 506 U.S. 194 (1993)
(context refutes application of the Title 1, United States Code,
definition of "person").
5. Canons of Statutory Construction:
Page 2-86 - Replace the first full paragraph with the following:
Like all other courts, the Supreme Court follows this venerable canon.
E.g., United States v. Cleveland Indians Baseball Co., 532 U.S. 200,
217 (2001) ("it is, of course, true that statutory construction 'is a
holistic endeavor' and that the meaning of a provision is 'clarified by
the remainder of the statutory scheme'"); FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120 (2000); Gustafson v. Alloyd Co., Inc., 513
U.S. 561, 569 (1995) ("the Act is to be interpreted as a symmetrical
and coherent regulatory scheme, one in which the operative words have a
consistent meaning throughout"); Brown v. Gardner, 513 U.S. 115, 118
(1994) ("[a]mbiguity is a creature not of definitional possibilities
but of statutory context"). See also Hibbs v. Winn, ___ U.S. ___, 124
S. Ct. 2276, 2285 (2004) (courts should construe a statute so that
"effect is given to all its provisions, so that no part will be
inoperative or superfluous, void or insignificant"); General Dynamics
Land Systems, Inc. v. Cline, 540 U.S. 581, 598 (2004) (courts should
not ignore "the cardinal rule that statutory language must be read in
context since a phrase gathers meaning from the words around it").
Page 2-87 - Add the following bullet to the first full paragraph and
revise the second bullet as follows:
* B-302335, Jan. 15, 2004: When read as a whole, the Emergency Steel
Loan Guarantee Act of 1999, 15 U.S.C. § 1841 note, clearly appropriated
loan guarantee programs funds to the Loan Guarantee Board and not the
Department of Commerce.
* B-303961, Dec. 6, 2004: Despite use of the phrase "notwithstanding
any other provision of law" in a provision of an appropriation act,
nothing in the statute read as a whole or its legislative history
suggested an intended waiver of the Antideficiency Act. See also B-
290125.2, B-290125.3, Dec. 18, 2002 (redacted) (viewed in isolation,
the phrase "notwithstanding any other provision of law" might be read
as exempting a procurement from GAO's bid protest jurisdiction under
the Competition in Contracting Act; however, when the statute is read
as a whole, as it must be, it does not exempt the procurement from the
Act).
Page 2-88 - Add the following bullets to the first paragraph:
* Hibbs v. Winn, ___ U.S. ___, 124 S. Ct. 2276, 2285 (2004): "The rule
against superfluities complements the principle that courts are to
interpret the words of a statute in context."
* Alaska Department of Environmental Conservation v. EPA, 540 U.S. 461,
489 n.13 (2004): A statute should be construed so that, "if it can be
prevented, no clause, sentence, or word shall be superfluous, void, or
insignificant."
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Although frequently invoked, the no surplusage canon is less absolute
than the "whole statute" canon. One important caveat, previously
discussed, is that words in a statute will be treated as surplus and
disregarded if they were included in error. E.g., Chickasaw Nation v.
United States, 534 U.S. 84, 94 (2001) (emphasis in original):
"The canon requiring a court to give effect to each word 'if possible'
is sometimes offset by the canon that permits a court to reject words
'as surplusage' if 'inadvertently inserted or if repugnant to the rest
of the statute ...'"
Citing Chickasaw Nation, the Court also recently observed that the
canon of avoiding surplusage will not be invoked to create ambiguity in
a statute that has a plain meaning if the language in question is
disregarded. Lamie v. United States Trustee, 540 U.S. 526, 536 (2004).
Page 2-89 - Replace the first and second paragraphs with the following:
When words used in a statute are not specifically defined, they are
generally given their "plain" or ordinary meaning rather than some
obscure usage. E.g., Engine Manufacturers Ass'n v. South Coast Air
Quality Management District, 541 U.S. 246 (2004); BedRoc Limited, LLC
v. United States, 541 U.S. 176 (2004); Asgrow Seed Co. v. Winterboer,
513 U.S. 179, 187 (1995); Federal Deposit Insurance Corp. v. Meyer, 510
U.S. 471, 476 (1994); Mallard v. United States, 490 U.S. 296, 301
(1989); 70 Comp. Gen. 705 (1991); 38 Comp. Gen. 812 (1959); B-261193,
Aug. 25, 1995.
One commonsense way to determine the plain meaning of a word is to
consult a dictionary. E.g., Mallard, 490 U.S. at 301; American Mining
Congress v. EPA, 824 F.2d 1177, 1183-84 & n. 7 (D.C. Cir. 1987). Thus,
the Comptroller General relied on the dictionary in B-251189, Apr. 8,
1993, to hold that business suits did not constitute "uniforms," which
would have permitted the use of appropriated funds for their purchase.
See also B-302973, Oct. 6, 2004; B-261522, Sept. 29, 1995.
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Several different canons of construction revolve around these seemingly
straightforward notions. Before discussing some of them, it is
important to note once more that these canons, like most others, may or
may not make sense to apply in particular settings. Indeed, the basic
canon that the same words have the same meaning in a statute is itself
subject to exceptions. In Cleveland Indians Baseball Club, the Court
cautioned:
"Although we generally presume that identical words used in different
parts of the same act are intended to have the same meaning, ...the
presumption is not rigid, and the meaning [of the same words] well may
vary with the purposes of the law."
532 U.S. at 213 (citations and quotation marks omitted). To drive the
point home, the Court quoted the following admonition from a law review
article:
"The tendency to assume that a word which appears in two or more legal
rules, and so in connection with more than one purpose, has and should
have precisely the same scope in all of them ...has all the tenacity of
original sin and must constantly be guarded against."
Id. See also General Dynamics Land Systems, Inc. v. Cline, 540 U.S.
581, 594-96 and fn. 8 (2004) (quoting the same law review passage,
which it notes "has become a staple of our opinions"). Of course, all
bets are off if the statute clearly uses the same word differently in
different places. See Robinson v. Shell Oil Co., 519 U.S. 337, 343
(1997) ("[o]nce it is established that the term 'employees' includes
former employees in some sections, but not in others, the term standing
alone is necessarily ambiguous").
Page 2-93 - Replace the first full paragraph with the following:
Likewise, a statute's grammatical structure is useful but not
conclusive. Lamie v. United States Trustee, 540 U.S. 526, 534-35 (2004)
(the mere fact that a statute is awkwardly worded or even ungrammatical
does not make it ambiguous). Nevertheless, the Court sometimes gives
significant weight to the grammatical structure of a statute. For
example, in Barnhart v. Thomas, 540 U.S. 20, 26 (2003), the Court
rejected the lower court's construction of a statute in part because it
violated the grammatical "rule of the last antecedent." Also, in
Arcadia, Ohio v. Ohio Power Co., 498 U.S. 73 (1991), the Court devoted
considerable attention to the placement of the word "or" in a series of
clauses. It questioned the interpretation proffered by one of the
parties that would have given the language an awkward effect, noting:
"In casual conversation, perhaps, such absentminded duplication and
omission are possible, but Congress is not presumed to draft its laws
that way." Arcadia, Ohio, 498 U.S. at 79. By contrast, in Nobelman v.
American Savings Bank, 508 U.S. 324, 330 (1993), the Court rejected an
interpretation, noting: "We acknowledge that this reading of the clause
is quite sensible as a matter of grammar. But it is not compelled."
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The same considerations apply to a statute's popular name and to the
headings, or titles, of particular sections of the statute. See Intel
Corp. v. Advanced Micro Devices, Inc., ___ U.S. ___, 124 S. Ct. 2466,
2470 (2004) ("A statute's caption . . . cannot undo or limit its text's
plain meaning"). See also Immigration & Naturalization Service v. St.
Cyr, 533 U.S. 289, 308-309 (2001); Pennsylvania Department of
Corrections v. Yeskey, 524 U.S. 206, 212 (1998). In St. Cyr, the
Supreme Court concluded that a section entitled "Elimination of Custody
Review by Habeas Corpus" did not, in fact, eliminate habeas corpus
jurisdiction. It found that the substantive terms of the section were
less definitive than the title. See also McConnell v. Federal Election
Commission, 540 U.S. 93, 180 (2003).
Page 2-94 - Replace the second full paragraph with the following:
Preambles. Federal statutes often include an introductory "preamble" or
"purpose" section before the substantive provisions in which Congress
sets forth findings, purposes, or policies that prompted it to adopt
the legislation. Such preambles have no legally binding effect.
However, they may provide indications of congressional intent
underlying the law. Sutherland states with respect to preambles:
"[T]he settled principle of law is that the preamble cannot control the
enacting part of the statute in cases where the enacting part is
expressed in clear, unambiguous terms. In case any doubt arises in the
enacted part, the preamble may be resorted to to help discover the
intention of the law maker."
2A Sutherland, § 47:04 at 221-22.80 For a recent example in which the
Court used statutory findings to inform its interpretation of
congressional intent, see General Dynamics Land Systems, Inc. v Cline,
540 U.S. 581, 589-91 (2004).
6. Legislative History:
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Statements by the sponsor of a bill are also entitled to somewhat more
weight. E.g., Schwegmann Brothers v. Calvert Distillers Corp., 341 U.S.
384, 394-95 (1951); Ex Parte Kawato, 317 U.S. 69, 77 (1942). However,
they are not controlling. General Dynamics Land Systems, Inc. v. Cline,
540 U.S. 581, 597-99 (2004); Chrysler Corp. v. Brown, 441 U.S. 281, 311
(1979).
Page 2-105 - Add the following to the third full paragraph:
* Doe v. Chao, 540 U.S. 614, 621-23 (2004): Congress deleted from the
bill language that would have provided for the type of damage award
sought by the petitioner.
See also F. Hoffman-La Roche Ltd v. Empagran S.A., ___ U.S. ___, 124 S.
Ct. 2359, 2365 (2004); Resolution Trust Corp. v. Gallagher, 10 F.3d 416
423 (7TH Cir. 1993); Davis v. United States, 46 Fed. Cl. 421 (2000).
7. Presumptions and "Clear Statement" Rules:
Page 2-113 - Replace the first full paragraph with the following:
There is a strong presumption against waiver of the federal
government's immunity from suit. The courts have repeatedly held that
waivers of sovereign immunity must be "unequivocally expressed." E.g.,
United States v. Nordic Village, Inc., 503 U.S. 30 (1992); Marathon Oil
Co. v. United States, 374 F.3d 1123, 1127 (Fed. Cir. 2004); Shoshone
Indian Tribe of the Wind River Reservation, Wyoming v. United States,
51 Fed. Cl. 60 (2001) and cases cited. Legislative history does not
help for this purpose. The relevant statutory language in Nordic
Village was ambiguous and could have been read, evidently with the
support of the legislative history, to impose monetary liability on the
United States. The Court rejected such a reading, applying instead the
same approach as described above in its federalism jurisprudence:
"[L]egislative history has no bearing on the ambiguity point. As in the
Eleventh Amendment context, see Hoffman, supra, ...the 'unequivocal
expression' of elimination of sovereign immunity that we insist upon is
an expression in statutory text. If clarity does not exist there, it
cannot be supplied by a committee report."
503 U.S. at 37.
[End of section]
Chapter 1: Agency Regulations and Administrative Discretion:
A. Agency Regulations:
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As a conceptual starting point, agency regulations fall into three
broad categories. First, every agency head has the authority, largely
inherent but also authorized generally by 5 U.S.C. § 3011, to issue
regulations to govern the internal affairs of the agency. Regulations
in this category may include such subjects as conflicts of interest,
employee travel, and delegations to organizational components. This
statute is nothing more than a grant of authority for what are called
"housekeeping" regulations. Chrysler Corp. v. Brown, 441 U.S. 281, 309
(1979); Smith v. Cromer, 159 F.3d 875, 878 (4TH Cir. 1998), cert.
denied, 528 U.S. 826 (1999); NLRB v. Capitol Fish Co., 294 F.2d 868,
875 (5TH Cir. 1961). It confers "administrative power only." United
States v. George, 228 U.S. 14, 20 (1913); B-302582, Sept. 30, 2004; 54
Comp. Gen. 624, 626 (1975). Thus, the statute merely grants agencies
authority to issue regulations that govern their own internal affairs;
it does not authorize rulemaking that creates substantive legal rights.
Schism v. United States, 316 F.3d 1259, 1278-84 (Fed. Cir. 2002), cert.
denied, 539 U.S. 910 (2003).
1. The Administrative Procedure Act:
Page 3-6 - Replace the cite after the quoted language carried over from
page 3-5 with the following paragraph:
Richard J. Pierce, Jr., Administrative Law Treatise, § 7.4 at 442 (4TH
ed. 2000) (citations omitted). Two recent decisions make clear that the
courts will insist upon at least some ascertainable and coherent
rationale: Northeast Maryland Waste Disposal Authority v. EPA, 358 F.3d
936, 948 (D.C. Cir. 2004) (the court remanded a rule to the agency
because it was "frankly, stunned to find" that the agency had provided
"not one word in the proposed or final rule" (emphasis in original) to
explain a key aspect of its rule), and International Union, United Mine
Workers of America v. Department of Labor, 358 F.3d 40, 45 (D.C. Cir.
2004) (finding that the agency's stated rationale to withdraw a
proposed rule was disjointed and conclusory, the court returned the
matter to the agency "so that it may either proceed with the . . .
rulemaking or give a reasoned account of its decision not to do so").
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As a starting point, anything that falls within the definition of a
"rule" in 5 U.S.C. § 551(4) and for which formal rulemaking is not
required, is subject to the informal rulemaking procedures of 5 U.S.C.
§ 553 unless exempt. This statement is not as encompassing as it may
seem, since section 553 itself provides several very significant
exemptions. These exemptions, according to a line of decisions by the
U.S. Court of Appeals for the District of Columbia Circuit, will be
"narrowly construed and only reluctantly countenanced." Jifry v.
Federal Aviation Administration, 370 F.3d 1174, 1179 (D.C. Cir. 2004);
Utility Solid Waste Activities Group v. EPA, 236 F.3d 749, 754 (D.C.
Cir. 2001); Asiana Airlines v. Federal Aviation Administration, 134
F.3d 393, 396-97 (D.C. Cir. 1998); Tennessee Gas Pipeline Co. v.
Federal Energy Regulatory Commission, 969 F.2d 1141, 1144 (D.C. Cir.
1992); New Jersey Department of Environmental Protection v. EPA, 626
F.2d 1038, 1045 (D.C. Cir. 1980). [Footnote 8] Be that as it may, they
appear in the statute and cannot be disregarded. For example, section
553 does not apply to matters "relating to agency management or
personnel or to public property, loans, grants, benefits, or
contracts." 5 U.S.C. § 553(a)(2).
Page 3-9 - Replace footnote 8 with the following:
[8] In Utility Solid Waste Activities Group, the court held that the
"good cause" exemption in section 553(b) does not allow an agency to
forego notice and comment when correcting a technical error in a
regulation. 236 F.3d at 754-55. Likewise, the court held that agencies
have no "inherent power" to correct such technical errors outside of
the APA procedures. Id. at 752-54. The decision in Jifry provides an
example of a case upholding an agency's use of the good cause exemption
based on emergency conditions involving potential security threats.
Jifry v. Federal Aviation Administration, 370 F.3d at 1179.
4. Waiver of Regulations:
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Sometimes legislative regulations or the statutes they implement do
explicitly authorize "waivers" in certain circumstances. Here, of
course, the waiver authority is an integral part of the underlying
statutory or regulatory scheme. Accordingly, courts give effect to such
waiver provisions and, indeed, they may even hold that an agency's
failure to consider or permit waiver is an abuse of discretion.
However, the courts usually accord considerable deference to agency
decisions on whether or not to grant discretionary waivers. For
illustrative cases, see BDPCS, Inc. v. FCC, 351 F.3d 1177 (D.C. Cir.
2003); People of the State of New York & Public Service Commission of
the State of New York v. FCC, 267 F.3d 91 (2ND Cir. 2001); BellSouth
Corporation v. FCC, 162 F.3d 1215 (D.C. Cir. 1999); Rauenhorst v.
United States Department of Transportation, 95 F.3d 715 (8TH Cir. 1996).
B. Agency Administrative Interpretations:
1. Interpretation of Statutes:
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In what is now recognized as one of the key cases in determining how
much "deference" is due an agency interpretation, Chevron, Inc. v.
Natural Resources Defense Council, 467 U.S. 837 (1984), the Court
formulated its approach to deference in terms of two questions. The
first question is "whether Congress has directly spoken to the precise
question at issue." Id. at 842. If it has, the agency must of course
comply with clear congressional intent, and regulations to the contrary
will be invalidated. Thus, before you ever get to questions of
deference, it must first be determined that the regulation is not
contrary to the statute, a question of delegated authority rather than
deference. "If a court, employing traditional tools of statutory
construction, ascertains that Congress had an intention on the precise
question at issue, that intention is the law and must be given effect."
Id. at 843 n.9. A recent example is General Dynamics Land Systems, Inc.
v. Cline, 540 U.S. 581 (2004), in which the Court declined to give
Chevron deference, or any lesser degree of deference, to an agency
interpretation that it found to be "clearly wrong" as a matter of
statutory construction, since the agency interpretation was contrary to
the act's text, structure, purpose, history, and relationship to other
federal statutes.
Page 3-30 - Replace the second full paragraph with the following:
When the agency's interpretation is in the form of a regulation with
the force and effect of law, the deference, as we have seen, is at its
highest. [Footnote 30] The agency's position is entitled to Chevron
deference and should be upheld unless it is arbitrary or capricious.
There should be no question of substitution of judgment. If the agency
position can be said to be reasonable or to have a rational basis
within the statutory grant of authority, it should stand, even though
the reviewing body finds some other position preferable. See, e.g.,
Household Credit Services, Inc. v. Pfennig, 541 U.S. 232 (2004);
Barnhart v. Thomas, 540 U.S. 20 (2003); Yellow Transportation, Inc. v.
Michigan, 537 U.S. 36 (2002); Shalala v. Illinois Council on Long Term
Care, Inc., 529 U.S. 1, 20-21 (2000); American Telephone & Telegraph
Corp. v. Iowa Utility Board, 525 U.S. 366 (1999). Chevron deference is
also given to authoritative agency positions in formal adjudication.
See Immigration & Naturalization Service v. Aguirre-Aguirre, 526 U.S.
415 (1999) (holding that a Bureau of Indian Affairs statutory
interpretation developed in case-by-case formal adjudication should be
accorded Chevron deference). For an extensive list of Supreme Court
cases giving Chevron deference to agency statutory interpretations
found in rulemaking or formal adjudication, see United States v. Mead
Corp., 533 U.S. 218, 231 at n.12 (2001).
Page 3-32 - Replace the third bulleted paragraph with the following:
* Evidence (or lack thereof) of congressional awareness of, and
acquiescence in, the administrative position. United States v. American
Trucking Ass'n, 310 U.S. 534, 549-50 (1940); Helvering v. Winmill, 305
U.S. 79, 82-3 (1938); Norwegian Nitrogen Products Co. v. United States,
288 U.S. 294, 313-15 (1933); Collins v. United States, 946 F.2d 864
(Fed. Cir. 1991); Davis v. Director, Office of Workers' Compensation
Programs, Department of Labor, 936 F.2d 1111, 1115-16 (10TH Cir. 1991);
41 Op. Att'y Gen. 57 (1950); B-114829-O.M., July 17, 1974.
Interestingly, in Coke v. Long Island Care At Home, Ltd., 376 F.3d 118
(2ND Cir. 2004), the court acknowledged the potential relevance of
congressional acquiescence to a 30-year-old regulation, noting that
Congress had amended the applicable statute seven times over the life
of the regulation without expressing any disapproval of it. However,
the court ultimately rejected the congressional acquiescence argument-
-according to the court, "affectionately known as the 'dog didn't bark
canon'"--and held the regulation invalid. Id. at 130 and n.5.
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More recent decisions further indicate that Chevron deference may
extend beyond legislative rules and formal adjudications. Most notably,
the Supreme Court observed in dicta in Barnhart v. Walton, 535 U.S. at
222, that Mead Corp. "denied [any] suggestion" in Christensen that
Chevron deference was limited to interpretations adopted through formal
rulemaking. The Barnhart opinion went on to say that:
"In this case, the interstitial nature of the legal question, the
related expertise of the Agency, the importance of the question to the
administration of the statute, the complexity of that administration,
and the careful consideration the Agency has given the question over a
long period of time all indicate that Chevron provides the appropriate
legal lens through which to view the legality of the Agency
interpretation here at issue."
Id. at 222.33 See also General Dynamics Land Systems, Inc. v. Cline,
540 U.S. 581 (2004); Edelman v. Lynchburg College, 535 U.S. 106, 114
(2002). Two additional decisions are instructive in terms of the limits
of Chevron. In both cases the Court found that the issuances containing
agency statutory interpretations were entitled to some weight, but not
Chevron deference. Raymond B. Yates, M.D., P.C., Profit Sharing Plan v.
Hendon, 541 U.S. 1 (agency advisory opinion); Alaska Department of
Environmental Conservation v. EPA, 540 U.S. 461 (2004) (internal agency
guidance memoranda).
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Circuit court decisions have added to the confusion. See Coke v. Long
Island Care at Home, Ltd., 376 F.3d 118 (2ND Cir. 2004) (the court
found that a regulation was not entitled to Chevron deference, despite
congressional acquiescence and even though the statute was ambiguous
and the regulation was issued through notice and comment rulemaking,
because evidence showed the agency intended the regulation to be only
an "interpretive" as opposed to a "legislative" rule); Doe v. United
States, 372 F.3d 1347, 1357-59 (Fed. Cir. 2004) (court applied Chevron
deference to an Office of Personnel Management regulation issued under
general rulemaking authority); James v. Von Zemenszky, 301 F.3d 1364
(Fed. Cir. 2002) (ignoring Barnhart factors because the agency
statutory interpretation contained in a directive and handbook "f[e]ll
within the class of informal agency interpretations that do not
ordinarily merit Chevron deference"); Federal Election Commission v.
National Rifle Ass'n, 254 F.3d 173 (D.C. Cir. 2001) (holding that
Federal Election Committee (FEC) advisory opinions are entitled to
Chevron deference); Matz v. Household International Tax Reduction
Investment Plan, 265 F.3d 572 (7TH Cir. 2001) (holding that an Internal
Revenue Service (IRS) statutory interpretation in an amicus brief,
supported by an IRS Revenue Ruling and agency manual, was not entitled
to Chevron deference); Klinedinst v. Swift Investments, Inc., 260 F.3d
1251 (11TH Cir. 2001) (holding that a Department of Labor handbook was
not due Chevron deference); Teambank v. McClure, 279 F.3d 614 (8TH Cir.
2001) (holding that Office of the Controller of the Currency informal
adjudications are due Chevron deference); In re Sealed Case, 223 F.3d
775 (D.C. Cir. 2000) (holding that FEC's probable cause determinations
are entitled to Chevron deference). As Professor Pierce notes:
"After Mead, it is possible to know only that legislative rules and
formal adjudications are always entitled to Chevron deference, while
less formal pronouncements like interpretative rules and informal
adjudications may or may not be entitled to Chevron deference. The
deference due a less formal pronouncement seems to depend on the
results of judicial application of an apparently open-ended list of
factors that arguably qualify as 'other indication[s] of a comparable
congressional intent' to give a particular type of agency pronouncement
the force of law." [Footnote 34]
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The deference principle does not apply to an agency's interpretation of
a statute that is not part of its program or enabling legislation or is
a statute of general applicability. See Adams v. SEC, 287 F.3d 183
(D.C. Cir. 2002); Contractor's Sand & Gravel v. Federal Mine Safety &
Health Commission, 199 F.3d 1335 (D.C. Cir. 2000); Association of
Civilian Technicians v. Federal Labor Relations Authority, 200 F.3d 590
(9TH Cir. 2000). In "split-jurisdiction" situations, where multiple
agencies share specific statutory responsibility, courts have
determined that Chevron deference is due to the primary executive
branch enforcer and the agency accountable for overall administration
of the statutory scheme. See Martin v. Occupational Safety and Health
Review Commission, 499 U.S. 144 (1991); Collins v. National
Transportation Safety Board, 351 F.3d 1246 (D.C. Cir. 2003).
2. Interpretation of Agency's Own Regulations:
Page 3-38 - Insert the following new paragraph after the quote at the
top of the page:
Recent cases according Seminole Rock deference to agency
interpretations of their regulations include: Entergy Services, Inc. v.
Federal Energy Regulatory Commission, 375 F.3d 1204, 1209 (D.C. Cir.
2004); Castlewood Products, L.L.C. v. Norton, 365 F.3d 1076, 1079 (D.C.
Cir. 2004); In re Sullivan, 362 F.3d 1324, 1328 (Fed. Cir. 2004). In
WHX Corp. v. SEC, 362 F.3d 854, 860 (D.C. Cir. 2004), the court did not
defer to an agency interpretation because the interpretation rested
entirely on staff advice and there was no formal agency precedent or
official interpretative guideline on point.
C. Administrative Discretion:
1. Introduction:
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Under the Administrative Procedure Act (APA), action that is "committed
to agency discretion by law" is not subject to judicial review. 5
U.S.C. § 701(a)(2). As the Supreme Court has pointed out, this is a
"very narrow exception" applicable in "rare instances" where, quoting
from the APA's legislative history, "statutes are drawn in such broad
terms that in a given case there is no law to apply." Citizens to
Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971). As
noted, the "no law to apply" exception is uncommon, and most exercises
of discretion will be found reviewable at least to some extent.37 See
Raymond Proffitt Foundation v. Corps of Engineers, 343 F.3d 199, 207
(3RD Cir. 2003); Drake v. Federal Aviation Administration, 291 F.3d 59
(D.C. Cir. 2002); Fox Television Stations, Inc. v. FCC, 280 F.3d 1027
(D.C. Cir. 2002); City of Los Angeles v. Department of Commerce, 307
F.3d 859 (9TH Cir. 2002); Diebold v. United States, 947 F.2d 787 (6TH
Cir. 1992).
Page 3-41 - Replace footnote number 37 with the following:
[37] However, agency inaction in declining to initiate enforcement or
other regulatory action is subject to "a presumption of
unreviewability," although that presumption is rebuttable. Heckler v.
Chaney, 470 U.S. 821 (1985). Another obvious exception is if a statute
explicitly precludes judicial review. See Jordan Hospital, Inc. v.
Shalala, 276 F.3d 72 (1st Cir. 2002); National Coalition to Save Our
Mall v. Norton, 269 F.3d 1092 (D.C. Cir. 2001) (construction of World
War II memorial); Ismailov v. Reno, 263 F.3d 851 (8th Cir. 2001)
(refusal to extend deadline for asylum application). See also Ohio
Public Interest Research Group, Inc. v. Whitman, 386 F.3d 792 (6th Cir.
2004); Godwin v. Secretary of Housing and Urban Development, 356 F.3d
310 (D.C. Cir. 2004).
Page 3-42 - Insert the following new paragraphs after the last bulleted
paragraph:
Even where the APA does not flatly preclude judicial review, the courts
will entertain a lawsuit under the Act only if it involves an "agency
action" that is subject to redress under the Act. In Norton v. Southern
Utah Wilderness Alliance, ___ U.S. ___, 124 S. Ct. 2373 (2004), the
Court rejected a suit under the APA to compel the Interior Department
to regulate the use of off-road vehicles on certain federal wilderness
lands. The Court concluded that there was no legal mandate requiring
the agency to take such action. The Court described the jurisdictional
parameters of the APA as follows:
"The APA authorizes suit by '[a] person suffering legal wrong because
of agency action, or adversely affected or aggrieved by agency action
within the meaning of a relevant statute.' 5 U.S.C. § 702. Where no
other statute provides a private right of action, the 'agency action'
complained of must be 'final agency action.' § 704 (emphasis added).
'Agency action' is defined in § 551(13) to include 'the whole or a part
of an agency rule, order, license, sanction, relief, or the equivalent
or denial thereof, or failure to act.' (Emphasis added.) The APA
provides relief for a failure to act in § 706(1): 'The reviewing court
shall . . . compel agency action unlawfully withheld or unreasonably
delayed.'
"Sections 702, 704, and 706(1) all insist upon an 'agency action,'
either as the action complained of (in § § 702 and 704) or as the
action to be compelled (in § 706(1))."
124 S. Ct. at 2378. Thus, the Court held that in order to be viable, an
APA claim seeking to compel an agency to act must point to "a discrete
agency action that it is required to take." Id. at 2379 (emphasis in
original). This standard precludes "broad programmatic attack[s]." Id.
at 2379-80. The Court added:
"The principal purpose of the APA limitations we have discussed--and of
the traditional limitations upon mandamus from which they were derived-
-is to protect agencies from undue judicial interference with their
lawful discretion, and to avoid judicial entanglement in abstract
policy disagreements which courts lack both expertise and information
to resolve."
Id. at 2381.
[End of section]
Chapter 1: Availability of Appropriations: Purpose:
Page 4-3 - Replace part of the index for section 11 as follows:
11. Lobbying, Publicity or Propaganda, and Related Matters:
a. Introduction...:
b. Penal Statutes...:
c. Appropriation Act Restrictions...:
(1) Origin and general considerations:
(2) Self-aggrandizement:
(3) Covert propaganda:
(4) Purely partisan materials:
(5) Pending legislation: Overview:
(6) Cases involving "grassroots" lobbying violations:
(7) Pending legislation: Cases in which no violation was found:
(8) Pending legislation: Providing assistance to private lobbying
groups:
(9) Promotion of legislative proposals: Prohibited activity short of
grass roots lobbying:
(10) Federal employees' communications with Congress:
A. General Principles:
1. Introduction: 31 U.S.C. § 1301(a):
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Simple, concise, and direct, this statute was originally enacted in
1809 (ch. 28, § 1, 2 Stat. 535, (Mar. 3, 1809)) and is one of the
cornerstones of congressional control over the federal purse. Because
money cannot be paid from the Treasury except under an appropriation
(U.S. Const. art. I, § 9, cl. 7), and because an appropriation must be
derived from an act of Congress, it is for Congress to determine the
purposes for which an appropriation may be used. Simply stated, 31
U.S.C. § 1301(a) says that public funds may be used only for the
purpose or purposes for which they were appropriated. It prohibits
charging authorized items to the wrong appropriation, and unauthorized
items to any appropriation. See, e.g., B-302973, Oct. 6, 2004 (agency
could not charge authorized activities such as cost comparison studies
to an appropriation that specifically prohibits its use for such
studies). Anything less would render congressional control largely
meaningless. An earlier Treasury Comptroller was of the opinion that
the statute did not make any new law, but merely codified what was
already required under the Appropriations Clause of the Constitution. 4
Lawrence, First Comp. Dec. 137, 142 (1883).
2. Determining Authorized Purposes:
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Once the purposes have been determined by examining the various pieces
of legislation, 31 U.S.C. § 1301(a) comes into play to restrict the use
of the appropriation to these purposes only, together with one final
generic category of payments--payments authorized under general
legislation applicable to all or a defined group of agencies and not
requiring specific appropriations. For example, legislation enacted in
1982 amended 12 U.S.C. § 1770 to authorize federal agencies to provide
various services, including telephone service, to employee credit
unions. Pub. L. No. 97-320, § 515, 96 Stat. 1469, 1530 (Oct. 15, 1982).
Prior to this legislation, an agency would have violated 31 U.S.C. §
1301(a) by providing telephone service to a credit union, even on a
reimbursable basis, because this was not an authorized purpose under
any agency appropriation. 60 Comp. Gen. 653 (1981). The 1982 amendment
made the providing of special services to credit unions an authorized
agency function, and hence an authorized purpose, which it could fund
from unrestricted general operating appropriations. 66 Comp. Gen. 356
(1987). Similarly, a recently enacted statute gives agencies the
discretion to use appropriated funds to pay the expenses their
employees incur for obtaining professional credentials. 5 U.S.C. §
5757(a); B-289219, Oct. 29, 2002. See also B-302548, Aug. 20, 2004
(section 5757(a) does not authorize the agency to pay for an employee's
membership in a professional association unless membership is a
prerequisite to obtaining the professional license or certification).
Prior to this legislation, agencies could not use appropriated funds to
pay fees incurred by their employees in obtaining professional
credentials. See, e.g., 47 Comp. Gen. 116 (1967). Other examples are
interest payments under the Prompt Payment Act (31 U.S.C. §§ 3901-3907)
and administrative settlements less than $2,500 under the Federal Tort
Claims Act (28 U.S.C. §§ 2671 et seq.).
B. The "Necessary Expense" Doctrine:
1. The Theory:
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In addition to recognizing the differences among agencies when applying
the necessary expense rule, we act to maintain a vigorous body of case
law responsive to the changing needs of government. In this regard, our
decisions indicate a willingness to consider changes in societal
expectations regarding what constitutes a necessary expense. This
flexibility is evident, for example, in our analysis of whether an
expenditure constitutes a personal or an official expense. As will be
discussed more fully later in the chapter, use of appropriations for
such an expenditure is determined by continually weighing the benefit
to the agency, such as the productivity, safety, recruitment, and
retention of a dynamic workforce and other considerations enabling
efficient, effective, and responsible government. We recognize,
however, that these factors can change over time. B-302993, June 25,
2004 (modifying earlier decisions to reflect determination that
purchase of kitchen appliances for use by agency employees in an agency
facility is reasonably related to the efficient performance of agency
activities, provides other benefits such as assurance of a safe
workplace, and primarily benefits the agency, even though employees
enjoy a collateral benefit); B-286026, June 12, 2001(overruling GAO's
earlier decisions based on reassessment of the training opportunities
afforded by examination review courses); B-280759, Nov. 5, 1998
(overruling GAO's earlier decisions on the purchase of business cards).
See also 71 Comp. Gen. 527 (1992) (eldercare is not a typical employee
benefit provided to the nonfederal workforce and not one that the
federal workforce should expect); B-288266, Jan. 27, 2003 (GAO
explained it remained "willing to reexamine our case law" regarding
light refreshments if it is shown to frustrate efficient, effective,
and responsible government).
2. General Operating Expenses:
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Outplacement assistance to employees may be regarded as a legitimate
matter of agency personnel administration if the expenditures are found
to benefit the agency and are reasonable in amount. 68 Comp. Gen. 127
(1988); B-272040, Oct. 29, 1997. The Government Employees Training Act
authorizes training in preparation for placement in another federal
agency under conditions specified in the statute. 5 U.S.C. § 4103(b).
Similarly, employee retirement education and retirement counseling,
including individual financial planning for retirement, fall within the
legitimate range of an agency's discretion to administer its personnel
system and therefore are legitimate agency expenses. B-301721, Jan. 16,
2004.
C. Specific Purpose Authorities and Limitations:
5. Entertainment - Recreation - Morale and Welfare:
Page 4-119 - Replace the third paragraph with the following:
The purchase of equipment for use in other than an established
cafeteria may also be authorized when the agency determines that the
primary benefit of its use accrues to the agency by serving a valid
operational purpose, such as providing for an efficient working
environment or meeting health needs of employees, notwithstanding a
collateral benefit to the employees. In B-302993, June 25, 2004, GAO
approved the purchase of kitchen appliances, ordinarily considered to
be personal in nature, for common use by employees in an agency
facility. The appliances included refrigerators, microwaves, and
commercial coffee makers. The agency demonstrated that equipping the
workplace with these appliances was reasonably related to the efficient
performance of agency activities and provided other benefits to the
agency, including the assurance of a safe workplace. GAO also advised
the agency that it should establish policies for uniform procurement
and use of such equipment. In developing a policy, the agency should
address the ongoing need for specific equipment throughout the
building, the amount of the agency's appropriation budgeted for this
purpose, price limitations placed on the equipment purchases, and
whether the equipment should be purchased centrally or by individual
units within headquarters. It is important that the policy ensure that
appropriations are not used to provide any equipment for the sole use
of an individual, and that the agency locate refrigerators, microwaves,
and coffee makers acquired with appropriated funds only in common areas
where they are available for use by all personnel. It should also be
clear that appropriated funds will not be used to furnish goods, such
as the coffee itself or microwaveable frozen foods, to be used in the
kitchen area. These remain costs each employee is expected to bear.
The decision in B-302993, June 25, 2004, represented a departure from
earlier cases which permitted such purchases under more restrictive
circumstances where the agency could identify a specific need:
* B-173149, Aug. 10, 1971: purchase of a set of stainless steel cooking
utensils for use by air traffic controllers to prepare food at a flight
service station where there were no other readily accessible eating
facilities and the employees were required to remain at their post of
duty for a full 8-hour shift.
* B-180272, July 23, 1974: purchase of a sink and refrigerator to
provide lunch facilities for the Occupational Safety and Health Review
Commission where there was no government cafeteria on the premises.
* B-210433, Apr. 15, 1983: purchase of microwave oven by Navy facility
to replace nonworking stove. Facility was in operation 7 days a week,
some employees had to remain at their duty stations for 24-hour shifts,
and there were no readily accessible eating facilities in the area
during nights and weekends.
* B-276601, June 26, 1997: purchase of a refrigerator for personal food
items of Central Intelligence Agency (CIA) employees. CIA headquarters
facility was relatively distant from private eating establishments, the
CIA did not permit delivery service to enter the facility due to
security concerns, and the cafeteria served only breakfast and lunch.
Page 4-122 - Replace the first full paragraph with the following:
The decision at 60 Comp. Gen. 303 was expanded in B-199387, Mar. 23,
1982, to include small "samples" of ethnic foods prepared and served
during a formal ethnic awareness program as part of the agency's equal
employment opportunity program. In the particular program being
considered, the attendees were to pay for their own lunches, with the
ethnic food samples of minimal proportion provided as a separate event.
Thus, the samples could be distinguished from meals or refreshments,
which remain unauthorized. (The decision did not specify how many
"samples" an individual might consume in order to develop a fuller
appreciation.) Compare that situation to the facts in B-301184, Jan.
15, 2004, where GAO found that the U.S. Army Corps of Engineers'
appropriation was not available to pay for the costs of food offered at
the Corps' North Atlantic Division's February 2003 Black History Month
program. The evidence in the record, including the time of the program,
the food items served, and the amounts available, indicated that a
meal, not a sampling of food, was offered.
Page 4-123 - Insert the following after the first full paragraph:
Similarly, GAO advised that serving refreshments purchased with
appropriated funds to local children as part of the Forest Service's
"Kid's Fishing Day" did not promote cultural awareness. While it may
have been important that children learn to fish and appreciate the
outdoors, such a goal did not advance federal EEO objectives. B-302745,
July 19, 2004.
7. Firefighting and Other Municipal Services:
Page 4-154 - Insert the following after the first full paragraph:
In B-302230, Dec. 30, 2003, GAO found the District of Columbia's 9-1-1
emergency telephone system surcharge as originally enacted to be an
impermissible tax on the federal government because the legal incidence
of the tax fell on the federal government. Subsequently, the District
of Columbia amended its law such that the legal incidence of the tax
falls on the providers of telephone service, not the users of telephone
service. Thus, federal agencies could pay bills that itemize the
surcharge that the vendors must pay. Id.
8. Gifts and Awards:
Page 4-166 - Replace the first full paragraph with the following:
The Incentive Awards Act applies to civilian agencies, civilian
employees of the various armed services and specified legislative
branch agencies. 5 U.S.C. § 4501. Within the judicial branch, it
applies to the United States Sentencing Commission. Id. [Footnote 103]
While it does not apply to members of the armed forces, the Defense
Department has very similar authority for military personnel in 10
U.S.C. § 1124.
Page 4-166 - Replace footnote number 103 with the following:
[103] The Sentencing Commission had not been covered prior to a 1988
amendment to the statute. See 66 Comp. Gen. 650 (1987). The
Administrative Office of the United States Courts is no longer covered
by the statute. Pub. L. No. 101-474, § 5(f), 104 Stat. 1100 (Oct. 30,
1990). The District of Columbia is also no longer covered. When the
District of Columbia Home Rule Act was enacted into law, Pub. L. No. 93-
198, 87 Stat. 777 (Dec. 24, 1973), the Act provided for the
continuation of federal laws applicable to the District of Columbia
government and its employees (that for the most part were in title 5 of
the United States Code) until such time as the District enacted its own
laws covering such matters. The District has adopted a number of laws
exempting its employees from various provisions of title 5, and
sections 4501 through 4506 are specifically superseded. See D.C.
Official Code, 2001 ed. §1-632.02.
11. Lobbying and Related Matters:
Page 4-188 - Replace the title of section 11 with the following:
11. Lobbying, Publicity or Propaganda, and Related Matters:
Page 4-189 - Insert the following after the first full paragraph:
In addition to restrictions on lobbying, this section will explore
restrictions on publicity or propaganda. Since 1951, appropriation acts
have included provisions precluding the use of the appropriations for
"publicity or propaganda." While Congress has never defined the meaning
of publicity or propaganda, GAO has recognized three types of
activities that violate the publicity or propaganda prohibitions: self-
aggrandizement, covert propaganda, and materials that are purely
partisan in nature.
Page 4-196 - Insert the following as the first paragraph under "(1)
Origin and general considerations"
In addition to penal statutes imposing restrictions on lobbying,
lobbying restrictions are found in appropriations acts. Restrictions on
publicity or propaganda are found only in appropriations acts.
Page 4-197 - Replace the first paragraph and quotation with the
following:
The publicity or propaganda prohibition made its first appearance in
1951. Members of Congress expressed concern over a speaking campaign
promoting a national healthcare plan undertaken in the early 1950s by
Oscar R. Ewing, the Administrator of the Federal Security Agency, a
predecessor to the Department of Health and Human Services and the
Social Security Administration. In reaction to this activity,
Representative Lawrence R. Smith introduced the following provision,
which was enacted in the Labor-Federal Security appropriation for 1952,
Pub. L. No. 134, ch. 373, § 702, 65 Stat. 209, 223 (Aug. 31, 1951):
"No part of any appropriation contained in this Act shall be used for
publicity or propaganda purposes not heretofore authorized by the
Congress."
Later versions of this provision prohibit activity throughout the
government:
"No part of any appropriation contained in this or any other Act shall
be used for publicity or propaganda purposes within the United States
not heretofor authorized by the Congress." [Footnote 117]
Page 4-197 - Replace footnote number 117 with the following:
[117] See, e.g., the Transportation, Treasury, and related agencies'
appropriations for 2005, Pub. L. No. 108-447, div. H, title VI, § 624,
118 Stat. 2809, 3278 (Dec. 8, 2004) (emphasis added).
Page 4-198 - Insert the following after the quotation and before the
second full paragraph:
Although the publicity and propaganda prohibition has appeared in some
form in the annual appropriations acts since 1951, the prohibitions
themselves provide little definitional guidance as to what specific
activities are publicity or propaganda. GAO has identified three
activities that are prohibited by the publicity or propaganda
prohibition--self-aggrandizement, covert propaganda, and purely
partisan materials.
Page 4-198 - Replace the second full paragraph with the following:
In evaluating whether a given action violates a publicity or propaganda
provision, GAO will rely heavily on the agency's administrative
justification. In other words, the agency gets the benefit of any
legitimate doubt. GAO will not accept the agency's justification where
it is clear that the action falls into one of these categories. Before
discussing these categories, two threshold issues must be noted.
Page 4-199 - Replace the first three paragraphs under "(2) Self-
aggrandizement" and move the heading as follows:
As noted above, the broadest form of the publicity and propaganda
restriction prohibits the use of appropriated funds "for publicity or
propaganda purposes not authorized by Congress." A fiscal year 2005
governmentwide variation limits these restrictions to activities
"within the United States." [Footnote 121]
(2) Self-aggrandizement:
The Comptroller General first had occasion to construe this provision
in 31 Comp. Gen. 311 (1952). The National Labor Relations Board asked
whether the activities of its Division of Information amounted to a
violation. Reviewing the statute's scant legislative history, the
Comptroller General concluded that it was intended "to prevent
publicity of a nature tending to emphasize the importance of the agency
or activity in question." Id. at 313. Therefore, the prohibition would
not apply to the "dissemination to the general public, or to particular
inquirers, of information reasonably necessary to the proper
administration of the laws" for which an agency is responsible. Id. at
314. Based on this interpretation, GAO concluded that the activities of
the Board's Division of Information were not improper. The only thing
GAO found that might be questionable, the decision noted, were certain
press releases reporting speeches of members of the Board.
Thus, 31 Comp. Gen. 311 established the important proposition that the
statute does not prohibit an agency's legitimate informational
activities. See also B-302992, Sept. 10, 2004; B-302504, Mar. 10, 2004;
B-284226.2, Aug. 17, 2000; B-223098.2, Oct. 10, 1986. It also
established that the publicity or propaganda restriction prohibits
"publicity of a nature tending to emphasize the importance of the
agency or activity in question." 31 Comp. Gen. at 313. See also B-
302504, Mar. 10, 2004; B-212069, Oct. 6, 1983. Such activity has become
known as "self-aggrandizement."
Page 4-199 - Replace footnote number 121 with the following:
[121] Pub. L. No. 108-447, div. H, title VI, § 624, 118 Stat. 2809,
3278 (Dec. 8, 2004).
Page 4-200 - Replace the first full paragraph with the following:
In B-302504, Mar. 10, 2004, GAO considered a flyer and television and
print advertisements that the Department of Health and Human Services
(HHS) produced and distributed to inform Medicare beneficiaries of
recently enacted changes to the Medicare program. While the materials
had notable factual omissions and other weaknesses, GAO concluded that
the materials were not self-aggrandizement because they did not
attribute the enactment of new Medicare benefits to HHS or any of its
agencies or officials.
Page 4-200 - Replace the third full paragraph with the following:
Other cases, in which GAO specifically found no self-aggrandizement,
are B-284226.2, Aug. 17, 2000 (Department of Housing and Urban
Development report and accompanying letter providing information to
agency constituents about the impact of program reductions being
proposed in Congress); B-212069, Oct. 6, 1983 (press release by
Director of Office of Personnel Management excoriating certain Members
of Congress who wanted to delay a civil service measure the
administration supported); and B-161686, June 30, 1967 (State
Department publications on Vietnam War). In none of these cases were
the documents designed to glorify the issuing agency or official.
Page 4-202 - Replace the first paragraph under the heading "(3) Covert
propaganda" with the following:
Another type of activity that GAO has construed as prohibited by the
"publicity or propaganda not authorized by Congress" statute is "covert
propaganda," defined as "materials such as editorials or other articles
prepared by an agency or its contractors at the behest of the agency
and circulated as the ostensible position of parties outside the
agency." B-229257, June 10, 1988. A critical element of the violation
is concealment from the target audience of the agency's role in
sponsoring the material. Id.; B-303495, Jan. 4, 2005; B-302710, May 19,
2004.
Page 4-202 - Insert the following after the second full paragraph:
In B-302710, May 19, 2004, GAO found that the Department of Health and
Human Services (HHS) violated the prohibition when it produced and
distributed prepackaged video news stories that did not identify the
agency as the source of the news stories. Prepackaged news stories,
ordinarily contained in video news releases, or "VNRs," have become a
popular tool in the public relations industry. The prepackaged news
stories may be accompanied by a suggested script, video clips known as
"B-roll" film which news organizations can use either to augment their
presentation of the prepackaged news story or to develop their own news
reports in place of the prepackaged story, and various other
promotional materials. These materials are produced in the same manner
in which television news organizations produce materials for their own
news segments, so they can be reproduced and presented as part of a
newscast by the news organizations. The HHS news stories were part of a
media campaign to inform Medicare recipients about new benefits
available under the recently enacted Medicare Prescription Drug,
Improvement, and Modernization Act of 2003. HHS designed its
prepackaged video news stories to be indistinguishable from video
segments produced by private news broadcasters, allowing broadcasters
to incorporate them into their broadcasts without alteration. The
suggested anchor lead-in scripts included in the package facilitated
the unaltered use of the prepackaged news stories, announcing the
package as a news story by fictional news reporters. HHS, however, did
not include any statement in the news stories to advise the television
viewing audience, the target of the purported news stories, that the
agency wrote and produced the prepackaged news stories, and the
television viewing audiences did not know that the stories they watched
on television news programs about the government were, in fact,
prepared by the government. See also B-303495, Jan. 4, 2005
(prepackaged news stories produced by the Office of National Drug
Control Policy were covert propaganda in violation of the prohibition).
Page 4-202 - Insert the following after the last paragraph:
In B-302992, Sept. 10, 2004, the Forest Service produced video and
print materials to explain and defend its controversial land and
resource management plan for the Sierra Nevada Forest. Because the
video and print materials clearly identified the Forest Service and the
Department of Agriculture as the source of the materials, GAO concluded
that they did not constitute covert propaganda. See also B-301022, Mar.
10, 2004 (the Office of National Drug Control Policy was clearly
identified as the source of materials sent to members of the National
District Attorneys Association concerning the debate over the
legalization of marijuana).
(4) Purely partisan materials:
A third category of materials identified in GAO case law as violating
the publicity or propaganda prohibition is purely partisan materials.
To be characterized as purely partisan in nature, the offending
materials must be found to have been "designed to aid a political party
or candidate." B-147578, Nov. 8, 1962. It is axiomatic that funds
appropriated to carry out a particular program would not be available
for political purposes. See B-147578, Nov. 8, 1962.
It is often difficult to determine whether materials are political or
not because "the lines separating the nonpolitical from the political
cannot be precisely drawn." Id.; B-144323, Nov. 4, 1960. See also B-
130961, Oct. 16, 1972. An agency has a legitimate right to explain and
defend its policies and respond to attacks on that policy. B-302504,
Mar. 10, 2004. A standard GAO applies is that the use of appropriated
funds is improper only if the activity is "completely devoid of any
connection with official functions." B-147578, Nov. 8, 1962. As stated
in B-144323, Nov. 4, 1960:
"[The question is] whether in any particular case a speech or a release
by a cabinet officer can be said to be so completely devoid of any
connection with official functions or so political in nature that it is
not in furtherance of the purpose for which Government funds were
appropriated, thereby making the use of such funds ...unauthorized.
This is extremely difficult to determine in most cases as the lines
separating the nonpolitical from the political cannot be precisely
drawn.
"...As a practical matter, even if we were to conclude that the use of
appropriated funds for any given speech or its release was
unauthorized, the amount involved would be small, and difficult to
ascertain; and the results of any corrective action might well be more
technical than real."
While GAO has reviewed materials to determine whether they are partisan
in nature, to date there are no opinions or decisions of the
Comptroller General concluding that an agency's informational materials
were so purely partisan as to constitute impermissible publicity or
propaganda. In 2000, GAO concluded that an information campaign by the
Department of Housing and Urban Development (HUD) using a widely
disseminated publication, entitled Losing Ground: The Impact of
Proposed HUD Budget Cuts on America's Communities, had not violated the
prohibition. B-284226.2, Aug. 17, 2000. In the publication, HUD
criticized what it called "deep cuts" in appropriations that were
proposed by the House Appropriations Committee for particular HUD
programs. The publications stated that, if enacted, the "cuts would
have a devastating impact on families and communities nationwide." GAO
found that this publication was a legitimate exercise of HUD's duty to
inform the public of government policies, and that HUD had a right to
justify its policies to the public and rebut attacks against those
policies.
In B-302504, Mar. 10, 2004, GAO examined a flyer and print and
television advertisements about changes to Medicare enacted by the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003,
Pub. L. No. 108-173, 117 Stat. 2066 (Dec. 8, 2003). The flyer contained
information about new prescription drug benefits and price discount
cards. GAO noted that while the materials contained opinion and notable
factual omissions, the materials did not constitute impermissible
publicity or propaganda. GAO explained:
"To restrict all materials that have some political content or express
support of an Administration's policies would significantly curtail the
recognized and legitimate exercise of the Administration's authority to
inform the public of its policies, to justify its policies and to rebut
attacks on its policies. It is important for the public to understand
the philosophical underpinnings of the policies advanced by elected
officials and their staff in order for the public to evaluate and form
opinions on those policies."
Id. at 10.
In B-302992, Sept. 10, 2004, GAO upheld the Forest Service's right to
produce and distribute a brochure and video materials regarding its
controversial policy on managing wildfire in the Sierra Nevada Forest.
Because the materials sought to explain hundreds of pages of scientific
data, official opinions, and documents of the Forest Service, they were
not comprehensive and did not explain all the positive and negative
aspects of the thinning policies adopted in its regional forest plan.
GAO concluded that the Forest Service had the authority to disseminate
information about its programs and policies and to defend those
policies.
Apart from considerations of whether any particular law has been
violated, GAO has taken the position in two audit reports that the
government should not disseminate misleading information. In 1976, the
former Energy Research and Development Administration (ERDA) published
a pamphlet entitled Shedding Light On Facts About Nuclear Energy.
Ostensibly created as part of an employee motivational program, ERDA
printed copies of the pamphlet far in excess of any legitimate program
needs, and inundated the state of California with them in the months
preceding a nuclear safeguards initiative vote in that state. While the
pamphlet had a strong pro-nuclear bias and urged the reader to "Let
your voice be heard," the pamphlet did not violate any anti-lobbying
statute because applicable restrictions did not extend to lobbying at
the state level. B-130961-O.M., Sept. 10, 1976. However, GAO's review
of the pamphlet found it to be oversimplified and misleading. GAO
characterized it as propaganda not suitable for distribution to anyone,
employees or otherwise, and recommended that ERDA cease further
distribution and recover and destroy any undistributed copies. See GAO,
Evaluation Of the Publication and Distribution Of "Shedding Light On
Facts About Nuclear Energy," EMD-76-12 (Washington, D.C.: Sept. 30,
1976).
In a later report, GAO reviewed a number of publications related to the
Clinch River Breeder Reactor Project, a cooperative government/industry
demonstration project, and found several of them to be oversimplified
and distorted propaganda, and as such questionable for distribution to
the public. However, the publications were produced by the private
sector components of the Project and paid for with utility industry
contributions and not with federal funds. GAO recommended that the
Department of Energy work with the private sector components in an
effort to eliminate this kind of material, or at the very least ensure
that such publications include a prominently displayed disclaimer
statement making it clear that the material was not government
approved. GAO, Problems With Publications Related To The Clinch River
Breeder Reactor Project, EMD-77-74 (Washington, D.C.: Jan. 6, 1978).
Page 4-203 - Renumber section (4) as follows:
(5) Pending legislation: Overview:
Page 4-207 - Renumber section (5) as follows:
(6) Cases involving "grassroots" lobbying violations:
Page 4-210 - Renumber section (6) as follows:
(7) Pending legislation: Cases in which no violation was found:
Page 4-213 - Renumber section (7) as follows:
(8) Pending legislation: Providing assistance to private lobbying
groups:
Page 4-215 - Renumber section (8) as follows:
(9) Promotion of legislative proposals: Prohibited activity short of
grass roots lobbying:
Pages 4-218 to 4-219 - Delete the entire section (9) entitled
"Dissemination of political or misleading information"; the information
contained therein has been integrated into the new section "(4) Purely
partisan materials," above.
Page 4-219 - Insert the following after the third paragraph as a new
section 11.c.(10):
(10) Federal employees' communications with Congress:
Since 1998, annual appropriations acts each year have contained a
governmentwide prohibition on the use of appropriated funds to pay the
salary of any federal official who prohibits or prevents another
federal employee from communicating with Congress. See Pub. L. No. 105-
61, § 640, 111 Stat. 1272, 1318 (1997). Specifically, this provision
states:
"No part of any appropriation contained in this or any other Act shall
be available for the payment of the salary of any officer or employee
of the Federal Government, who . . . prohibits or prevents, or attempts
or threatens to prohibit or prevent, any other officer or employee of
the Federal Government from having any direct oral or written
communication or contact with any Member, committee, or subcommittee of
the Congress in connection with any matter pertaining to the employment
of such other officer or employee or pertaining to the department or
agency of such other officer or employee in any way, irrespective of
whether such communication or contact is at the initiative of such
other officer or employee or in response to the request or inquiry of
such Member, committee, or subcommittee."
Pub. L. No. 108-199, div. F, title VI, § 618, 188 Stat. 3, 354 (Jan.
23, 2004); Pub. L. No. 108-7, div. J, title VI, § 620, 117 Stat. 11,
468 (Feb. 20, 2003). This provision has its antecedents in several
older pieces of legislation, including section 6 of the Lloyd-La
Follette Act of 1912, Pub. L. No. 336, ch. 389, 66 Stat. 539, 540 (Aug.
24, 1912), which stated:
"The right of persons employed in the civil service of the United
States, either individually or collectively, to petition Congress, or
any Member thereof, or to furnish information to either House of
Congress, or to any committee or member thereof, shall not be denied or
interfered with."
Congress enacted section 6 in response to concern over executive orders
by Presidents Theodore Roosevelt and Howard Taft that prohibited
federal employees from contacting Congress except through the head of
their agency. The legislative history of this provision indicates that
Congress intended to advance two goals: to preserve the First Amendment
rights of federal employees regarding their working conditions and to
ensure that Congress had access to programmatic information from
frontline federal employees. See H.R. Rep. No. 62-388, at 7 (1912); 48
Cong. Rec. 5634, 10673 (1912).
In B-302911, Sept. 7, 2004, GAO concluded that the Department of Health
and Human Services violated this provision by paying the salary of the
Director of the Centers for Medicare & Medicaid Services (CMS) who
prohibited the CMS Chief Actuary from providing certain cost estimates
of Medicare legislation to Congress. The Director specifically
instructed the Chief Actuary not to respond to any requests for
information and advised that there would be adverse consequences if he
released any information to Congress. GAO recognized that certain
applications of the provision could raise constitutional separation of
powers concerns; however, there was no controlling judicial opinion
declaring the provision unconstitutional. GAO found that the provision,
as applied to the facts in this case, precluded the payment of the CMS
Director's salary because he specifically prevented another employee
from communicating with Congress, particularly in light of the narrow,
technical nature of the information requested by Congress and
Congress's need for the information in carrying out its constitutional
legislative duties.
Page 4-227 - Replace the third full paragraph with the following:
A 1983 decision illustrates another form of information dissemination
that is permissible without the need for specific statutory support.
Military chaplains are required to hold religious services for the
commands to which they are assigned. 10 U.S.C. § 3547. Publicizing such
information as the schedule of services and the names and telephone
numbers of installation chaplains is an appropriate extension of this
duty. Thus, GAO advised the Army that it could procure and distribute
calendars on which this information was printed. 62 Comp. Gen. 566
(1983). Applying a similar rationale, the decision also held that
information on the Community Services program, which provides various
social services for military personnel and their families, could be
included. See also B-301367, Oct. 23, 2003 (affixing decals of the
major units assigned to an Air Force base onto a nearby utility company
water tower to inform the public of military activity in the area is a
permissible use of appropriated funds); B-290900, Mar. 18, 2003
(approving the Bureau of Land Management's use of appropriated funds to
pay its share of the costs of disseminating information under a
cooperative agreement); B-280440, Feb. 26, 1999 (allowing the Border
Patrol's use of appropriated funds to purchase uniform medals that, in
part, served to advance "knowledge and appreciation for the agency's
history and mission").
Page 4-232 - Replace the first full paragraph with the following:
A statute originally enacted in 1913, now found at 5 U.S.C. § 3107,
provides:
"Appropriated funds may not be used to pay a publicity expert unless
specifically appropriated for that purpose."
This provision applies to all appropriated funds. GAO has consistently
noted certain difficulties in enforcing the statute. In GAO's first
substantive discussion of 5 U.S.C. § 3107, the Comptroller General
stated "[i]n its present form, the statute is ineffective." A-61553,
May 10, 1935. The early cases151 identified three problem areas,
summarized in B-181254(2), Feb. 28, 1975.
Page 4-233 - Insert the following after the second paragraph:
The legislative history of section 3107 provides some illumination.
While it is not clear what was meant by "publicity expert," there are
indications that the provision would prohibit the use of press agents
"to extol or to advertise" the agency or individuals within the agency.
See, e.g., 50 Cong. Rec. 4410 (1913) (comments of Representative
Fitzgerald, chairman of the committee that reported the bill)). There
are also indications that the provision should not interfere with
legitimate information dissemination regarding agency work or services.
When some members expressed concern that the provision may affect the
hiring of experts to "mak[e] our farm bulletins more readable to the
public and more practical in their make-up," supporters indicated that
such activities would not be restricted by passage of the provision.
Id. at 4410 (colloquy between Representatives Lever and Fitzgerald).
Page 4-234 - Insert the following after the first partial paragraph:
GAO recently revisited the statute in B-302992, Sept. 10, 2004. The
Forest Service had hired a public relations firm to help produce and
distribute materials regarding its controversial land and resource
management plan in the Sierra Nevada Forest, a plan consisting of
hundreds of pages of scientific data and opinion. The Forest Service
had hired the public relations firm to help make the plan's scientific
content more understandable to the public and media. GAO concluded that
the Forest Service had not violated section 3107. GAO said that section
3107 was not intended to impede legitimate informational functions of
agencies, and does not prohibit agencies from paying press agents and
public affairs officers to facilitate and manage dissemination of
agency information. GAO stated:
"Instead, what Congress intended to prohibit with section 3107 is
paying an individual 'to extol or to advertise' the agency, an activity
quite different from disseminating information to the citizenry about
the agency, its policies, practices, and products."
B-302992, Sept. 10, 2004.
12. Membership Fees:
Page 4-234 - Replace the first full paragraph with the following and
insert new footnote number 152a as follows:
Appropriated funds may not be used to pay membership fees of an
employee of the United States in a society or association. 5 U.S.C. §
5946. The prohibition does not apply if an appropriation is expressly
available for that purpose, or if the fee is authorized under the
Government Employees Training Act. Under the Training Act, membership
fees may be paid if the fee is a necessary cost directly related to the
training or a condition precedent to undergoing the training. 5 U.S.C.
§ 4109(b). [Footnote 152A]
Page 4-234 - Insert the following for new footnote number 152a:
[152A] The District of Columbia has specifically exempted its employees
from the provisions of 5 U.S.C. § 5946 as well as the Government
Employees Training Act, 5 U.S.C. §§ 4101 et seq. See D.C. Official
Code, 2001 ed. §1-632.02.
Page 4-239 - Replace the second paragraph with the following:
Compare that case with the decision in B-286026, June 12, 2001, in
which the Pension Benefit Guaranty Corporation (PBGC) asked whether it
could use appropriated funds to pay, as training costs, fees for
actuary accreditation. PBGC employs a number of actuaries to calculate
pension benefits. Although actuaries do not need a professional license
for employment, as part of a collective bargaining agreement PBGC
proposed to use training funds to send actuaries to the examination
review courses, provide on-the-job study time, and pay for the
accreditation examinations. PBGC determined that this course of study
and testing would enhance the ability of the PBGC actuaries to carry
out their assignments. PBGC has the discretion under the Government
Employees Training Act to determine that the review courses constitute
appropriate training for its actuaries. Accordingly, GAO agreed that
PBGC has authority, under 5 U.S.C. § 4109(a), to use appropriated funds
for review courses and on-the-job study time. However, there was no
authority to pay the cost of the accreditation examination itself,
since a licensing accreditation examination does not fall within the
Government Employees Training Act's definition of training. In the
absence of statutory authority, an agency may not pay the costs of its
employees taking licensing examinations since professional
accreditation is personal to the employee and should be paid with
personal funds. Here, the actuarial accreditation belongs to the
employee personally and would remain so irrespective of whether the
employee remains with the federal government.
The PBGC decision, B-286026, June 12, 2001, predated enactment of 5
U.S.C. § 5757, which gave agencies the discretionary authority to
reimburse employees for expenses incurred in obtaining professional
credentials, including the costs of examinations. In B-302548, Aug. 20,
2004, GAO determined that under 5 U.S.C. § 5757, an agency may pay only
the expenses required to obtain the license or official certification
needed to practice a particular profession. In that case, an employee
who was a certified public accountant (CPA) asked her agency to pay for
her membership in the California Society of Certified Public
Accountants, which is voluntary and not a prerequisite for obtaining a
CPA license in California. GAO held that payment for voluntary
memberships in organizations of already credentialed professionals is
prohibited under 5 U.S.C. § 5946, and section 5757 does not provide any
authority to pay such fees where the membership in the organization is
not a prerequisite to obtaining the professional credential. Section
5757 is discussed in more detail in this chapter in the next section on
attorneys' expenses related to admission to the bar, and in section
C.13.e on professional qualification expenses.
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In 2001, section 1112 of the National Defense Authorization Act for
Fiscal Year 2002, Pub. L. No. 107-107, 115 Stat. 1238 (Dec. 28, 2001)
amended Title 5, United States Code, by adding a new section 5757.
Under 5 U.S.C. § 5757(a), agencies may, at their discretion, use
appropriated funds to pay expenses incurred by employees to obtain
professional credentials, state-imposed and professional licenses,
professional accreditations, and professional certifications, including
the costs of examinations to obtain such credentials. This authority is
not available to pay such fees for employees in or seeking to be hired
into positions excepted from the competitive service because of the
confidential, policy-determining, policymaking, or policy-advocating
character of the position. 5 U.S.C. § 5757(b). Nothing in the statute
or its legislative history defines or limits the terms "professional
credentials," "professional accreditation," or "professional
certification." Agencies have the discretion to determine whether
resources permit payment of credentials, and what types of professional
expenses will be paid under the statute. Thus, if an agency determines
that the fees its attorneys must pay for admission to practice before
federal courts are in the nature of professional credentials or
certifications, the agency may exercise its discretion under 5 U.S.C. §
5757 and pay those fees out of appropriated funds. B- 289219, Oct. 29,
2002. Also, GAO has stated that under 5 U.S.C. § 5757 an agency may pay
the expenses of employees' memberships in state bar associations when
membership is required to maintain their licenses to practice law. See
B-302548, Aug. 20, 2004 (note that this decision concerned membership
in a certified public accountants' (CPA) professional organization that
was not required as a condition of the CPA license).
13. Personal Expenses and Furnishings:
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Neither the statute nor its legislative history defines the terms
"professional credentials," "professional accreditation," and
"professional certification." The statute and the 1994 decision
together appear to cover many, if not most, qualification expenses that
GAO previously found to be personal to the employee, including
actuarial accreditation (B-286026, June 12, 2001), licenses to practice
medicine (B-277033, June 27, 1997), a Certified Government Financial
Manager designation (B-260771, Oct. 11, 1995), and professional
engineering certificates (B-248955, July 24, 1992). See also B-302548,
Aug. 20, 2004 (certified public accountant fees) and section C.12.b of
this chapter for a discussion of attorneys' bar membership fees.
15. State and Local Taxes:
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The rule that the government is constitutionally immune from a "vendee
tax" but may pay a valid "vendor tax"--even if the government
ultimately bears its economic burden--has been recognized and applied
in numerous Comptroller General decisions. E.g., B-302230, Dec. 30,
2003; B-288161, Apr. 8, 2002; 46 Comp. Gen. 363 (1966); 24 Comp. Gen.
150 (1944); 23 Comp. Gen. 957 (1944); 21 Comp. Gen. 1119 (1942); 21
Comp. Gen. 733 (1942). The same rule applies to state tax levies on
rental fees. See 49 Comp. Gen. 204 (1969); B-168593, Jan. 13, 1971; B-
170899, Nov. 16, 1970.
[End of section]
Chapter 1: Availability of Appropriations: Time:
B. The Bona Fide Needs Rule:
8. Multiyear Contracts:
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If an agency is contracting with fiscal year appropriations and does
not have multiyear contracting authority, one course of action, apart
from a series of separate fiscal year contracts, is a fiscal year
contract with renewal options, with each renewal option (1) contingent
on the availability of future appropriations and (2) to be exercised
only by affirmative action on the part of the government (as opposed to
automatic renewal unless the government refuses). Leiter v. United
States, 271 U.S. 204 (1926); 66 Comp. Gen. 556 (1987); 36 Comp. Gen.
683 (1957); 33 Comp. Gen. 90 (1953); 29 Comp. Gen. 91 (1949); 28 Comp.
Gen. 553 (1949); B-88974, Nov. 10, 1949. The inclusion of a renewal
option is key; with a renewal option, the government incurs a financial
obligation only for the fiscal year, and incurs no financial obligation
for subsequent years unless and until it exercises its right to renew.
The government records the amount of its obligation for the first
fiscal year against the appropriation current at the time it awards the
contract. The government also records amounts of obligations for future
fiscal years against appropriations current at the time it exercises
its renewal options. The mere inclusion of a contract provision
conditioning the government's obligation on future appropriations
without also subjecting the multiyear contract to the government's
renewal option each year would be insufficient. Cray Research, Inc. v.
United States, 44 Fed. Cl. 327, 332 (1999). Thus, in 42 Comp. Gen. 272
(1962), the Comptroller General, while advising the Air Force that
under the circumstances it could complete that particular contract,
also advised that the proper course of action would be either to use an
annual contract with renewal options or to obtain specific multiyear
authority from Congress. Id. at 278.
Page 5-43 - Insert the following after the quoted language in the first
partial paragraph:
Another course of action for an agency with fiscal year money to cover
possible needs beyond that fiscal year is an indefinite-delivery/
indefinite-quantity (IDIQ) contract. An IDIQ contract is a form of an
indefinite-quantity contract, which provides for an indefinite quantity
of supplies or services, within stated limits, during a fixed period.
48 C.F.R. § 16.504(a). Under an IDIQ contract, actual quantities and
delivery dates remain undefined until the agency places a task or
delivery order under the contract. When an agency executes an
indefinite-quantity contract such as an IDIQ contract, the agency must
record an obligation in the amount of the required minimum purchase. At
the time of award, the government commits itself to purchase only a
minimum amount of supplies or services and has a fixed liability for
the amount to which it committed itself. See 48 C.F.R. §§ 16.501-
2(b)(3) and 16.504(a)(1). The agency has no liability beyond its
minimum commitment unless and until it places additional orders. An
agency is required to record an obligation at the time it incurs a
legal liability. 65 Comp. Gen. 4, 6 (1985); B-242974.6, Nov. 26, 1991.
Therefore, for an IDIQ contract, an agency must record an obligation
for the minimum amount at the time of contract execution. In B-302358,
Dec. 27, 2004, GAO determined that the Bureau of Customs and Border
Protections' (Customs) Automated Commercial Environment contract was an
IDIQ contract. As such, Customs incurred a legal liability of $25
million for its minimum contractual commitment at the time of contract
award. However, Customs failed to record its $25 million obligation
until 5 months after contract award. GAO determined that to be
consistent with the recording statute, 31 U.S.C. § 1501(a)(1), Customs
should have recorded an obligation for the contract minimum of $25
million against a currently available appropriation for the authorized
purpose at the time the IDIQ contract was awarded.
9. Specific Statutes Providing for Multiyear and Other Contracting
Authorities:
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The Federal Acquisition Streamlining Act of 1994 (FASA) and related
statutes extended multiyear contracting authority with annual funds to
nonmilitary departments. [Footnote 30] FASA authorizes an executive
agency to enter into a multiyear contract for the acquisition of
property or services for more than 1, but not more than 5 years, if the
agency makes certain administrative determinations. 41 U.S.C. § 254c.
Related laws extend this authority to various legislative branch
agencies. [Footnote 31] Through FASA and the related laws, Congress has
relaxed the constraints of the bona fide needs rule by giving agencies
the flexibility to structure contracts to fund the obligations up
front, incrementally, or by using the standard bona fide needs rule
approach. B-277165, Jan. 10, 2000. To the extent an agency elects to
obligate a 5-year contract incrementally, it must also obligate
termination costs. Cf. B-302358, Dec. 27, 2004 (since the contract at
issue was an indefinite-delivery/indefinite-quantity contract, it was
not subject to the requirements of 41 U.S.C. § 254c and the agency did
not need to obligate estimated termination costs at the time of
contract award).
D. Disposition of Appropriation Balances:
3. Expired Appropriations Accounts:
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During the 5-year period, the expired account balance may be used to
liquidate obligations properly chargeable to the account prior to its
expiration.[Footnote 50] The expired account balance also remains
available to make legitimate obligation adjustments, that is, to record
previously unrecorded obligations and to make upward adjustments in
previously under recorded obligations. For example, Congress
appropriated funds to provide education benefits to veterans under the
so-called "GI bill," codified at 38 U.S.C. § 1662. Prior to the
expiration of the appropriation, the Veterans Administration (VA)
denied the benefits to certain Vietnam era veterans. The denial was
appealed to the courts. The court determined that certain veterans may
have been improperly denied benefits and ordered VA to entertain new
applications and reconsider the eligibility of veterans to benefits. VA
appealed the court order. Prior to a final resolution of the issue, the
appropriation expired. GAO determined that, consistent with 31 U.S.C. §
1502(b), [Footnote 51] the unobligated balance of VA's expired
appropriation was available to pay benefits to veterans who filed
applications prior to the expiration of the appropriation or who VA
determined were improperly denied education benefits. 70 Comp. Gen. 225
(1991). For a further discussion of the availability of funds between
expiration and closing of an account, see B-301561, June 14, 2004 and B-
265901, Oct. 14, 1997.
4. Closed Appropriation Accounts:
Page 5-73 - Replace the third full paragraph with the following:
Once an account has been closed:
"[O]bligations and adjustments to obligations that would have been
properly chargeable to that account, both as to purpose and in amount,
before closing and that are not otherwise chargeable to any current
appropriation account of the agency may be charged to any current
appropriation account of the agency available for the same purpose."
31 U.S.C. § 1553(b)(1). See also B-301561, June 14, 2004.
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