Applicability of the Antideficiency Act ApportionmentRequirements to the Nonadministrative Funds of the Federal Savings and Loan Insurance Corporation

Applicability of the Antideficiency Act Apportionment

Requirements to the Nonadministrative Funds of the

Federal Savings and Loan Insurance Corporation

The plain language and legislative history of the apportionment requirements in the Antideficiency

Act, 31 U.S.C. §§ 1511-1519, m ake clear that Congress intended all funds, including

nonadm inistrative funds, of governm ent corporations such as the FSLIC to be subject to

apportionm ent.

The provision in 12 U.S.C. § 1725(c)(5) that the FSLIC shall determine its necessary expendi­

tures “w ithout regard to the provisions o f any other law governing the expenditures of public

funds,” does not specifically exem pt FSLIC funds from the apportionment requirements of

the A ntideficiency Act.

February 18, 1983

M e m o r a n d u m O p in io n for th e C o un sel to the D ir e c t o r ,

O f f ic e of M anagem ent and Budget

Your opinion request raises the issue whether the nonadministrative funds of

the Federal Savings and Loan Insurance Corporation (FSLIC) are subject to the

apportionment requirements of the Antideficiency Act, as recently amended.

31 U.S.C. §§ 1511-1519 (1982). Notwithstanding a General Accounting Of­

fice (GAO) opinion that concluded that the Antideficiency Act applies to such

FSLIC funds, 43 Comp. Gen. 759 (1964), the Federal Home Loan Bank Board

(FHLBB) apparently asserts that the Office of Management and Budget (OMB)

has no authority to apportion nonadministrative funds of the FSLIC.1 Based

upon our independent examination of the language and legislative history of

the Antideficiency Act, we conclude that Congress intended the apportionment

requirements of the Antideficiency Act to apply to the nonadministrative funds

of wholly or partly owned government corporations such as the FSLIC.

I. Background

A. The FSLIC and its Organic Statute

The National Housing Act, Act of July 27, 1934, ch. 847, Title IV, 48 Stat.

1256, (codified as amended at 12 U.S.C. §§ 1725 et seq.), created the FSLIC to

1 In the 1982 co dification, the word “P resident” is substituted for “ D irector o f the O ffice o f M anagement

and B udget,” “O ffice o f M anagement and B udget,” and “D irector,” because §§101 and 102(a) o f Reorgani­

zation Plan No. 2 o f 1970, 84 Stat. 2085, designated the Bureau of the Budget as the O ffice o f M anagement

and B udget and transferred all functions o f the Bureau to the President. See H.R. Rep. No. 651, 97th Cong.,

2d Sess. 75 (1982).

22

insure the accounts of certain eligible institutions, particularly federal savings

and loan associations.2 12 U.S.C. § 1725(a). Congress intended the insurance

of accounts in such savings and loan associations to protect the small savers in

these institutions and to encourage a flow of money into the institutions,

thereby providing more adequate capital for the long-term financing of homes.

See 79 Cong. Rec. 5430 (1935) (remarks of Sen. Buckley). FSLIC funds are

derived from assessments imposed by the FSLIC on the institutions it insures.

The FSLIC prescribes a premium for insurance equal to a specified percentage

of the total amount of all accounts of insured members of the institution. 12

U.S.C. § 1727(b)(1). It may also assess additional premiums for insurance to

cover any FSLIC losses and expenses. Id. § 1727(c). In turn, each institution

insured by the FSLIC is entitled to insurance up to the full withdrawal or

repurchasable value of the accounts of its members and investors holding

shares, investment certificates, or deposits, except that no member or investor,

with certain exceptions, shall be insured for an aggregate amount in excess of

$100,000. Id. § 1728(a).

In the event of a default by an insured institution, the FSLIC must make

payment of each surrendered insured account in that institution either by cash

or provision of an equivalent, transferred account in another insured institution.

12 U.S.C. § 1728(b). However, in order to prevent a default in an insured

institution, the FSLIC is authorized, in its discretion, to make loans or contribu­

tions to, or to purchase the assets of, an insured institution. Id. § 1729(f)(1).

Further, whenever an insured institution is in danger of default, the FSLIC may

purchase assets, assume liabilities, or make loans or. guarantees to facilitate a

merger or consolidation of the endangered institution with another insured

institution. Id. § 1729(f)(2).

The National Housing Act also provides that the FSLIC “shall determine its

necessary expenditures under this chapter and the manner in which the same

shall be incurred, allowed, and paid, without regard to the provisions of any

other law governing the expenditures of public funds.” 12 U.S.C. § 1725(c)(5).3

The FHLBB primarily bases its argument that FSLIC nonadministrative funds

are not subject to apportionment requirements on this provision in the FSLIC

enabling statute. At the outset, we note only that the term “necessary expendi­

tures” in § 1725(c)(5) makes no between administrative and nonadministrative

expenses.

B. The Antideficiency Act

In 1870, Congress enacted a statutory prohibition against Executive depart­

ments or agencies incurring obligations in excess of appropriations or involv­

2 T he FSLIC is required to insure the accounts o f all Federal savings and loan associations and Federal

mutual savings banks. It may insure the accounts o f building and loan, savings and loan, and hom estead

associations and cooperative banks organized and operated according to the laws of the State, D istrict,

Territory, o r possession in which they are chartered o r organized. 12 U S.C. § 1726(a).

3 This provision was added to Title IV o f the National Housing Act by § 22 o f the Act o f M ay 28, 1935, 49

Stat. 298 (1 9 3 5 ).

23

ing the United States in any contract or obligation for the payment of money in

excess of appropriations unless authorized by law. See Act of July 12, 1870, 16

Stat. 230, 251. Since then, Congress has amended this statutory prohibition,

referred to as the Antideficiency Act, seven times.4 While reenacting the

original prohibition against incurring obligations in excess of appropriations in

substantially the same language, Congress attempted, with each amendment, to

prohibit deficiency spending more effectively by requiring with increasing

stringency that agencies apportion their spending throughout the fiscal year.

The apportionment requirement first appeared when the Antideficiency Act

was amended in 1905. See Act of Mar. 3, 1905, ch. 1484, § 4, 33 Stat. 1257.

From 1905 to 1950, Congress authorized the heads of agencies to waive

apportionments administratively in the event of an “extraordinary emergency.”5

Currently, an executive agency head may request, but only the President (or an

official having administrative control of an appropriation available to the

legislative or judicial branch) may make, an apportionment that would indicate

a necessity for a deficiency or supplemental appropriation because of an

emergency expenditure. 31 U.S.C. § 1515(b) (1982).

Moreover, in amending the Antideficiency Act, Congress brought increasing

types and kinds of appropriations within the scope of the Act: no year (indefi­

nite) appropriations as well as annual (definite) appropriations; corporate funds

(which may come from receipts, assessments, user fees) as well as the custom­

ary fiscal year appropriations that Congress makes permitting agencies to make

payments out of Treasury monies. Compare R.S. § 3679, 31 U.S.C. §665

(1946) with 31 U.S.C. §.1511 (1982).6 As recently codified and enacted, the

Antideficiency Act provides that:

(a) (1) An officer or employee of the United States Government

or of the District o f Columbia government may not

(A) make or authorize an expenditure or obligation exceed­

ing an amount available in an appropriation or fund for

the expenditure or obligation; or

(B) involve either government in a contract or obligation for

the payment of money before an appropriation is made

unless authorized by law.

4 A ct o f M ar. 3, 1905, ch. 1484, § 4, 33 S tat. 1257; A ct o f Feb. 27, 1906, ch. 510, § 3, 34 Stat. 48; Act of

Sept. 6, 1950, ch. 896, § 1211, 64 Stat. 765; Pub. L. No. 8 5 -1 7 0 , § 1401, 71 Stat. 440 (1957), Pub. L No.

93198, § 4 2 1 , 87 Stat. 789 (1973); Pub. L. N o. 93 -3 4 4 , § 1002, 88 Stat. 332 (1974); Pub. L. No. 93-618,

§ 175(a)(2), 88 Stat. 2011 (1975).

5 Prior to 1950, apportionm ents could be w aived o r m odified by an executive departm ent head “upon the

happening o f som e extraordinary emergency o r unusual circum stance which could not be anticipated at the

tim e o f m aking such apportionm ent." R.S. § 3679; Act o f M ar. 3, 1905, ch. 1484, § 4, 33 Stat. 1257; Act of

Feb. 27, 1906, ch. 510, § 3, 34 Stat. 48.

A s o f 1933, how ever, § 16 o f Executive O rder No. 6166 (June 10, 1933) transferred the functions of

“m aking, w aiving, and m odifying apportionments o f appropriations" to the D irector o f the Bureau o f the

Budget.

6 See also 96 C ong. Rec. 6 7 2 5 -3 1 , 6835-37 (1950) (legislative debate).

24

31 U.S.C. § 1341(a)(1). Further,

(a) Except as provided in this subchapter, an appropriation

available for obligation for a definite period shall be appor­

tioned to prevent obligation or expenditure at a rate that would

indicate a necessity for a deficiency or supplemental appropria­

tion for the period. An appropriation for an indefinite period and

authority to make obligations by contract before appropriations

shall be apportioned to achieve the most effective and economi­

cal use. An apportionment may be reapportioned under this

section.

Id. § 1512(a).

C. The Present Dispute

As we understand the facts, the FHLBB recently took action to avert the

failures of three financially troubled savings and loan associations by effecting

an FSLIC-assisted merger. See 12 U.S.C. § 1729(f)(2). This action caused the

FSLIC, which operates under the direction of the FHLBB, see 12 U.S.C.

§ 1725(a), to exceed by $2.8 million the amount OMB had apportioned to

provide for the “Purchase of Income Capital Certificates,” a fund line item.

Under the Antideficiency Act, if an officer or employee of an executive agency

authorizes an expenditure exceeding an apportionment, the head of the execu­

tive agency must report immediately to the President and Congress all relevant

facts and a statement of actions taken. 31 U.S.C. § 1517(b). Because the

General Counsel of the FHLBB believes that FSLIC nonadministrative ex­

penses are not subject to apportionment under the Antideficiency Act, how­

ever, the FHLBB informed OMB that no report of the transaction would be

submitted.7 To avoid recurring disagreements regarding the potential

overobligation of FSLIC funds, OMB then requested this Office to determine

whether OMB, on behalf of the President, has authority to apportion FSLIC

nonadministrative funds pursuant to the Antideficiency Act.

II. Analysis

We are confronted with conflicting statutory provisions and our task is to

determine how Congress intended these facially inconsistent statutes to func­

tion. The FSLIC’s organic statute states that the FSLIC shall determine how its

7 We attem pt no definitive categorization o f adm inistrative and nonadm inistrative expenses. The FHLBB

roughly defines adm inistrative expenses as those expenses for which estim ates are subm itted to support an

annual appropriation for the FSLIC pursuant to the G overnm ent Corporation Control A ct, Act o f Dec. 6,

1945, ch. 557, § 2, 59 Stat. 597 (codified as am ended at 31 U .S.C. §§ 9101, 9104). The FSLIC believes

adm inistrative expenses exclude "interest paid, depreciation, properly capitalized expenditures, expenses in

connection w ith liquidation o f insured in s titu tio n s ,. . . liquidations, paym ent o f insurance, and action for or

tow ard the avoidance, term ination, o r m inim izing o f losses in the case o f insured institutions, legal fees and

expenses.”

25

necessary expenses are to be incurred, allowed and paid, “without regard to the

provisions of any other law governing the expenditures of public funds.” 12

U.S.C. § 1725(c)(5). The Antideficiency Act with equal clarity provides that

the President and OMB are to exercise apportionment authority over all appro­

priations or funds available to the Executive Branch, regardless of whether the

funds are available for obligations for a definite or indefinite period. See 31

U.S.C. §§ 1511-1513. We proceed first to examine the provision exempting

the FSLIC from the application of other fiscal statutes and then to analyze the

pertinent Antideficiency Act amendments enacted in 1950. We conclude that

these specifically crafted, later-enacted amendments were intended to super­

sede, to the extent any inconsistencies exist, the earlier, generally worded

FSLIC exempting provision.

A. FSLIC Exemption from Government Control Over Its Funds

In 1935, one year after the FSLIC was established under the National

Housing Act, Congress revisited and amended the Federal Home Loan Bank

Act, the Home Owners’ Loan Act of 1933 and the National Housing Act in

order to provide additional home mortgage relief. See S. Rep. No. 438, 74th

Cong., 1st Sess. 1 (1935); 79 Cong. Rec. 7851-55 (1935) (House Conference

Report). With respect to the FSLIC, Congress primarily intended the statutory

amendments to reduce the cost of insurance of the accounts of savers and

investors in savings and loan associations, thus encouraging the use of such

insurance and stimulating the confidence of the public in home financing

institutions. See S. Rep. No. 438, 74th Cong., 1st Sess. 2 (1935). Congress at

this time also added § 1725(c)(5), which authorizes the FSLIC to determine its

necessary expenditures and the manner in which they shall be incurred and paid

“without regard to the provisions of any other law governing the expenditure of

public funds.” See Act of May 28, 1935, ch. 150, § 22, 49 Stat. 298. Although

many of the 1935 amendments were hotly debated, the legislative history

pertinent to the amendment of 12 U.S.C. § 1725(c)(5) is sparse.8

Initially, when H.R. 6021, which as amended became the 1935 Act, was

reported to the full House, it contained a section that gave the FSLIC free use of

the United States mails and the right to determine its expenditures and assess­

ments “without use of the usual appropriation and routine.” 79 Cong. Rec.

3154 (1935) (remarks of Rep. Hancock) (describing § 16 of proposed bill). As

then explained, “this is necessary as this Corporation collects insurance premi­

ums and must be in position to pay losses and other expenses, which cannot be

budgeted or anticipated in advance.” Id. In the course of the House debate,

however, the portion of this proposed section exempting the FSLIC from any

legal limitations on the expenditure of public funds was deleted. Representa­

tive Williams offered the following explanation for his amendment to strike:

“It simply places the accounts of the FSLIC, in accordance with the Executive

Order of the President, as I understand it on exactly the same basis as all other

8 See 79 C ong. Rec. 3 1 2 1 -3 6 , 3137-68, 3 2 3 9 -7 3 , 3 2 8 9 -316, 347080, 5418-46, 5489-507 (1935).

26

corporations, namely, that they shall submit their expenditure accounts to the

General Accounting Office for audit.” 79 Cong. Rec. 3308 (1935) (remarks of

Rep. Williams).9

When the Senate Committee on Banking and Currency reported H.R. 6021

with amendments to the full Senate, the provision authorizing the FSLIC to

determine its necessary expenditures “without regard to the provisions of any

other law governing the expenditure of public funds” reappeared. See 79 Cong.

Rec. 5420 (1935) (remarks of Sen. Buckley). No explanation of the provision

was offered, however, see id. at 5420-21 (1935) (remarks of Sen. Buckley),

and the Senate Report is noticeably silent with respect to the congressional

intent regarding this provision. See S. Rep. No. 438, 74th Cong., 1st Sess. 5

(1935). We are reluctant to attribute any specific intent to Congress in the face

of such unilluminating evidence. See County o f Washington v. Gunther, 452

U.S. 161, 172 & n.12, 176 (1981). The Senate amendment may have reflected

the same concern expressed earlier in the House: the difficulty of controlling

unanticipated expenses in advance. More probably, the absence of any debate

or explanation suggests that Congress regarded the provision as more of a

customary, general exemption for corporations than a critical statutory protec­

tion specifically designed for the FSLIC’s peculiar needs.10 At that time, after

all, the Government Corporation Control Act, Act of Dec. 6, 1945, ch. 557, 59

Stat. 597 (codified at 31 U.S.C. §§ 9101 et seq.), was not yet in existence and,

as will be explained below, the Antideficiency Act did not apply to the

indefinite or revolving funds of government corporations. See Oliphani v.

Suquamish Indian Tribe, 435 U.S 191,206 (1978) (legislation and treaties to be

read in light of common notions of the day and the assumptions of those who

drafted them).

B. The Antideficiency Act Provisions

1. Statutory Language

The Antideficiency Act provisions, previously set forth at 31 U.S.C. § 665

(1976), were recently revised, codified and enacted without substantive change.

See Pub. L. No. 97-258, 96 Stat. 877, 923-24, 92832 (1982) (codified at 31

9 See Exec. O rder No. 7126 (Aug. 5, 1935)

10 Enabling statutes for other corporations often have com parable provisions. For exam ple, the Saint

Law rence Seaway Corporation has statutory authority to “determ ine the character o f and the necessity for its

obligations and expenditures, and the m anner in which they shall be incurred, allowed and paid,, subject to

provisions o f law specifically applicable to Governm ent corporations.” 33 U.S.C. § 984(a)(9). The C om ptrol­

ler G eneral somewhat ambiguously has held that funds available to the Corporation which are derived from

user fees are appropriated funds (and therefore presum ably subject to the A ntideficiency A ct), but that the

C orporation is not subject to all restrictions governing the use o f appropriated funds by noncorporate federal

entities. W hile failing to draw a line betw een the areas in which C ongress had and had not retained control o f

corporation expenditures, the C om ptroller General suggested that the corporation would be exem pt at least

from statutory restrictions on the expenditure o f appropriated funds for the lodging and feeding o f

nongovernm ent em ployees at conventions. See 31 U.S.C. § 1345 (excepting agencies from travel expenses

prohibition); Comp. Gen. Op. B-193573 (Dec. 19, 1979) (unpublished opinion).

27

U.S.C. §§ 1341-1342, 1511-1519); H.R. Rep. No. 651,97th Cong., 2d Sess. 1,

3 (1982) (“bill makes no substantive change in law”). The apportionment

requirements, 31 U.S.C. §§ 1511-1519, apply to all appropriations which fall

within the following broad definition: (1) appropriated amounts; (2) funds; and

(3) authority to make obligations by contract before appropriations. Id. § 1511(a).

The statutory apportionment requirements do not apply to three narrow catego­

ries: (1) funds for price support and surplus removal of agricultural commodi­

ties, including funds (under 7 U.S.C. § 612c) to encourage exportation and

domestic consumption of agricultural products; (2) corporations getting amounts

to make loans (except paid in capital amounts) without legal liability on the

part of the United States Government; and (3) the Senate, the House of

Representatives, a committee of Congress, or an officer or employee of either

House. See 31 U.S.C. § 1511(b).

For several reasons, the statute on its face indicates that FSLIC funds fall

within the scope of the apportionment requirements. Prior to 1950, the

Antideficiency Act did not subject indefinite or permanent appropriations,

which included the nonadministrative funds of government corporations, to

apportionment. Rather,

all appropriations made for contingent expenses or other general

purposes, except appropriations made in fulfillment o f contract

obligations expressly authorized by law, or fo r objects required

or authorized by law without reference to the amounts annually

appropriated therefor, shall, on or before the beginning of each

fiscal year, be so apportioned by monthly or other allotments as

to prevent expenditures in one portion of the year which may

necessitate deficiency or additional appropriations to complete

the service of the fiscal year for which said appropriations are

made. . . .

R.S. § 3679 (codified as amended at 31 U.S.C. § 665 (1946)) (emphasis added).

The 1950 amendments considerably expanded the types of funds subject to

apportionment so as to provide:

Except as otherwise provided in this section, all appropria­

tions or funds available for obligation for a definite period of

time shall be so apportioned as to prevent obligation or expendi­

ture thereof in a manner which would indicate a necessity for

deficiency or supplemental appropriations for such period; and

all appropriations or funds not limited to a definite period o f

time, and all authorizations to create obligations by contract in

advance of appropriations, shall be so apportioned as to achieve

the most effective and economical use thereof.

Act of Sept. 6, 1950, ch. 896, 64 Stat. 765 (codified at 31 U.S.C. § 665(c)(1)

(1976)) (emphasis added). Apportionment no longer was limited to Congress’

28

annual appropriations; instead, all appropriations or funds were to be appor­

tioned. Congress further indicated that the agency appropriations requiring

apportionment were to include FSLIC funds by specifying that

When used in this section, the term ‘agency’ means any execu­

tive department, agency, commission, authority, administration,

board, or other independent establishment in the executive branch

of the Government, including any corporation wholly or partly

owned by the United States which is an instrumentality o f the

United States. .. .

31 U.S.C. § 665(d)(2) (1976) (emphasis added).11 If these 1950 statutory

changes meant anything, they were clearly intended to bring funds other than

annual appropriations, such as the FSLIC funds from assessments (regardless

of whether they are defined as revolving or trust funds) within the scope of the

apportionment requirements.12 Importantly, these 1950 amendments, with only

minor subsequent changes, provide the substance for the 1982 codification and

enactment.

Another 1950 statutory change, which permitted designated officers to ex­

empt certain trust funds, working funds, working capital funds and revolving

funds from apportionment, further supports the position that such funds are

subject, as a general rule, to the Antideficiency Act apportionment provisions.

31 U.S.C. § 665(f) (1976).13 Were trust funds and revolving funds not included

11 O ne superficial difference betw een the 1982 enactm ent o f Title 3) and the earlier codification is the

deletion o f this definition o f agency In its place, the general definitions included in T itle 31 provide that

agency “m eans a departm ent, agency, or instrum entality o f the U nited States G overnm ent," 31 U S C. § 101

(1982), and executive agency “means a departm ent, agency, or instrum entality in the executive branch o f the

U nited States G overnm ent.'’ Id. § 102. The apportionm ent requirem ents are exercised (1) by officials having

control o f appropriations available to the legislative branch, the judicial branch, the U nited States Interna­

tional Trade C om m ission, or the District o f C olum bia governm ent, or (2) by the President if an executive

agency is involved. Because the FSLIC does not belong to the legislative or judicial branches it must be an

executive agency for purposes o f 31 U.S C. § 1513 (1982), even though the definition of executive agency no

longer specifically includes wholly ow ned governm ent corporations, as the earlier version did. Cf. 31 U .S.C.

§ 665(d)(2) (1976). Clearly, C ongress intended governm ent corporations to be covered by the Act, because

the Act contains a provision that such corporations which make loans without legal liability on the part o f the

U nited States are specifically exem pted. See 31 U.S.C. § 1511(b)(2) (1982)

12 Although the FSLIC refers to its nonadm inistrative funds as “ trust revolving funds” and OMB defines

such funds as “public enterprise revolving funds," resolution o f this disagreem ent is not necessary for

disposition o f the issue we are addressing.

13 A fter the 1950 am endm ents, 31 U.S.C. § 665(f)(1) read:

The officers designated in subsection (d) o f this section to make apportionm ents and reappor­

tionm ents may exem pt from apportionm ents trust funds and w orking funds expenditures from

w hich have [sic] no significant effect on the financial operations o f the G overnm ent, working

capital and revolving funds established for intragovem m ental operations, receipts from indus­

trial and pow er operations available under law . .

A s codified and enacted in 1982, the equivalent provision, 31 U.S.C. § 1516, states:

An official designated in section 1513 o f this title to make apportionm ents may exem pt from

apportionm ent

(1) a trust fund o r w orking fund if an expenditure from the fund has no significant effect on

the financial operations o f the United States Governm ent;

(2) a working capital fund or a revolving fund established for intragovem m ental operations;

[or]

(3) receipts from industrial and pow er operations available under la w ; . . . .

29

initially within the scope of the Act, it would not be necessary to make special

provision for their exemption.

Finally, the FSLIC does not fit within any of the narrowly defined excep­

tions, specified in 1950 and preserved unchanged in the 1982 codification,

from the Antideficiency Act’s coverage. Compare Act of Sept. 6,1950,64 Stat.

765 (codified at 31 U.S.C. § 665(d)(2) (1976)) with 31 U.S.C. § 1511(b)

(1982). Unlike Federal Home Loan Banks, which fall within the definition of

excepted corporations because they obtain funds for making loans without

legal liability on the part of the United States, see 31 U.S.C. § 1511(b)(2), the

FSLIC apparently is not a lending institution whose operations are without

liability on the part of the United States.14 See FSLIC v. Quinn, 419 F.2d 1014

(7th Cir. 1969) (FSLIC acting as instrumentality of United States may assert

defense of sovereign immunity to extent that United States could); see also 12

U.S.C. §§ 1725(c)(4), 1728(c).

Thus, relying solely on the plain language of the statute, we would conclude

that FSLIC funds, whether administrative or nonadministrative, are subject to

apportionment.

2. Legislative History

Examination of the legislative history buttresses the conclusion we have

reached in reliance on the plain language of the statute. Indeed, the legislative

history clearly illustrates that an important objective of the 1950 revisions was

to subject all funds of government corporations to apportionment. Moreover,

because the 1950 amendments constitute the modern version of the

Antideficiency Act, with subsequent amendments making only minor changes,

the legislative history regarding these statutory changes carries particular

weight.15 Representative Norrell, a sponsor of the 1950 Antideficiency Act

amendments, explained their significance in the debate on the floor of the House:

For years and years we have been creating corporations,

giving them power to incur indebtedness on behalf of the Gov­

ernment and authorizing the Treasury Department to transfer

money to them .. . . The idea is that the Bureau of the Budget and

the Congress at the beginning of each year should have a look at

the total indebtedness to be created during ensuing fiscal year

[sic] by these independent corporations, so that we can weigh

that with the indebtedness we create by virtue of our appropria­

tion bills for such fiscal year.

14 The gov ern in g statute for the Federal H om e Loan B anks expressly requires that “all obligations of

Federal H om e Loan B anks shall plainly state that such o bligations are not obligations o f the United States and

are not g u aran teed by the U nited States.” 12 U .S.C . § 1435.

15 C ongress stressed that m ere changes in term inology and style resulting from the 1982 enactm ent o f Title

31 into positive law should not be interpreted as intended to m ake any substantive change in the law. See H.R.

R ep. No. 651, 97th C ong., 2d Sess. 3 (1982).

30

96 Cong. Rec. 6725 (1950) (remarks of Rep. Norrell).16 Should there remain

any doubt that Congress intended all funds of government corporations, includ­

ing nonadministrative funds, to be subject to apportionment, the section-by-

section analysis in the legislative record removes any ambiguities:

The first part of this provision [which enacted 31 U.S.C. § 665(c)]

relates to the so-called no-year appropriations and to funds, such

as funds used by corporations for purposes other than adminis­

trative expenses which are available indefinitely and without

relation to any particular fiscal year. .. .

It is necessary that no-year appropriations and funds (includ­

ing all funds of corporations, whether for administrative ex­

penses or for other purposes) and contract authorizations be

included in the apportionment system and be controlled to the

extent necessary to insure efficiency and economy in carrying

out the purpose for which such appropriations and authoriza­

tions are granted by the Congress.

96 Cong. Rec. 6836 (1950) (remarks of Rep. Norrell).

In hearings before the Senate it was again emphasized that, whereas the

proposals of the Bureau of the Budget and GAO provided for apportionment

only of corporate funds available for administrative expenses, the House bill,

which after minor amendments was enacted as the Act of Sept. 6, 1950,

provided for apportionment of all corporate funds. See General Provisions,

General Appropriations Act, 1951, Hearings on H.R. 7786 before the Senate

Comm, on Appropriations, 81 st Cong., 2d Sess. 3 (1950) (statement of Frederick

J. Lawton, Director, Bureau of the Budget) (Hearings). Moreover, the Hearings

clarified that the specific exemption for corporations which obtain funds for

making loans without legal liability on the part of the United States applied to

the Central Bank for Cooperatives, the Regional Bank for Cooperatives, the

Federal Home Loan Bank, and the Federal Intermediate Credit Corporation. Id.

at 6. Understandably, the FSLIC was not mentioned.

Therefore, the legislative history of the Antideficiency Act clearly indicates

that Congress intended all funds — including nonadministrative funds — of

the FSLIC to be subject to apportionment.

C. Countervailing Considerations

In light of the clear language and fully consistent legislative history of the

Antideficiency Act, the contention that the FSLIC’s organic act exempts FSLIC

16 A nother C ongressm an was assured that

what is sought to be accom plished by one provision o f this rule is to give the C om m ittee on

A ppropriations and the Congress the opportunity to look at the operation o f these Governm ent

corporations that do not operate on direct appropriations, but which are given the authority to transfer

their bonds directly to the Treasury and thus secure the money to cany on their operation without any

look or supervision so far as the Congress is concerned at the expenditure of those fu n d s.. . .

96 Cong. Rec. 6728 (1950) (rem arks o f Rep. K eefe)

31

nonadministrative funds from the apportionment requirement is not persuasive.

We recognize, of course, the importance of the doctrine of in pari materia,

namely, that “where there is no clear intention otherwise, a specific statute will

not be controlled or nullified by a general one, regardless of the priority of

enactment.” Radzanower v. Touche Ross & Co., 426 U.S. 148, 153 (1976)

(citing Morton v. Mancari, 417 U.S. 535, 550-51 (1974)). However, we are

convinced neither that the FSLIC’s exempting provision in 12 U.S.C.

§ 1725(c)(5) functions as a “specific” statute nor that the applicable

Antideficiency Act provisions, 31 U.S.C. §§ 1511-1519, operate as “general”

provisions. To the contrary, 12 U.S.C. § 1725(c)(5) does not specifically

exempt FSLIC funds from apportionment requirements; rather, it generally

insulates the necessary expenditures of the FSLIC from the provisions of other

laws governing the expenditures of public funds. On the other hand, the

Antideficiency Act was amended expressly to apply to all funds, specifically

including those of all wholly or partly owned government corporations and

explicitly exempting only those of corporations that make loans without legal

liability on the part of the United States.

Concededly, a related rule, that “repeals by implication are not favored,”

Posadas v. National City Bank, 296 U.S. 497, 503 (1936), applies with special

force when the allegedly repealing measure is a provision in an appropriations

bill, as is the case with the 1950 amendments to the Antideficiency Act. See

TVA v. Hill, 437 U.S. 153,190 (1978). Nevertheless, when Congress desires to

alter or repeal an existing statutory provision, “there can be no doubt th at. . . it

could accomplish its purpose by an amendment to an appropriation bill, or

otherwise.” United States v. Dickerson, 310 U.S. 554, 555 (1940) (quoted in

United States v. Will, 449 U.S. 200,222 (1980)). The question is entirely one of

congressional intent as expressed in the statutes. See United States v. Mitchell,

109 U.S. 146, 150(1883).

Here, the enactment of the relevant 1950 Antideficiency Act amendments as

one title in a general appropriations act is not dispositive. As indicated in the

legislative history set forth above, Congress specifically intended the

Antideficiency Act provisions to apply to an extremely broad definition of

funds, including the nonadministrative funds of independent corporations. Cf.

TVA v. Hill, 437 U.S. at 189 & n.35 (appropriations for Tellico Dam did not

implicitly repeal provisions of Endangered Species Act because appropriations

did not identify the projects for which the sums had been intended and Tellico

Dam funds represented relatively minor component of a lump sum amount).

The Senate held hearings that expressly addressed the matter of extending the

Antideficiency Act provisions to encompass the funds of independent corpora­

tions. See Hearings, supra, at 3-14. Both Houses considered whether the

amendments might effectively limit or be construed to limit the powers and

duties of independent agencies. See 96 Cong. Rec. 11780-86 (1950) (amend­

ment of Sen. Johnson proposing to exempt certain appropriations for the Civil

Aeronautics Board from requirements of proposed bill); 96 Cong. Rec. 6725-

31 (1950) (remarks of Reps. Eberharter and Keefe) (fear that Antideficiency

32

Act amendments would negate corporations’ enabling statutes). Congress in

enacting the 1950 amendments clearly intended that the Antideficiency Act

apply to funds of independent corporations.

Moreover, there is at best a minor distinction between the substantive

legislation and the “appropriations” legislation in this particular instance. The

provision in the FSLIC’s substantive legislation, 12 U.S.C. § 1725(c)(5), is a

minor amendment that was adopted during the course of other major revisions

without extensive, if any, comment. The “appropriations” measure, however,

was not simply an authorization for funding due to expire at the end of the year,

but a permanent, substantial change in the budget procedure that attracted

congressional attention and was the focus of much debate.

In addition, the arguments that apportionment is futile, insofar as the FSLIC

may well encounter unanticipated expenses, and that the FSLIC’s “fiduciary

duties” to the private party insureds are incompatible with the normal budget

process, are objections that Congress addressed to its satisfaction by providing

for mandatory and permissive exemptions in the Antideficiency Act itself. At

the time Congress was considering the 1950 amendments, independent agen­

cies claimed that the revisions would interfere, even if unintentionally, with

their existing statutory powers and duties. See 96 Cong. Rec. 11780-86 (1935)

(offering amendment, on behalf of the Civil Aeronautics Board, to exempt

appropriations for the transportation of mail from the Antideficiency Act).

Similarly, Congress was concerned that the amendments might hamper the

government’s obligation to match the state’s payments for social security or to

meet comparable statutory entitlements. See 96 Cong. Rec. 6730-31 (1950)

(remarks of Reps. Forand and Rabaut). Congress took care to clarify that the

designated apportioning official could exempt from apportionment, inter alia,

appropriations for expenditures which are paid in accordance with formulae

prescribed by law. See 31 U.S.C. § 1516 (previously 31 U.S.C. § 665(f));

Hearings, supra, at 10, 18. Significant for present purposes is that Congress

chose to resolve problems of flexibility and accommodation between budget

oversight and corporate authority primarily by permissive exemptions rather

than absolute exclusions from the Antideficiency Act.17

Furthermore, there is no evidence of any long-settled or congressionally

ratified practice under 12 U.S.C. § 1725(c)(5) of holding the FSLIC exempt

from all laws governing the expenditure of public funds. To the contrary, from

the time of the First Deficiency Appropriation Act, Act of June 22, 1936, ch.

687, § 7, 49 Stat. 1597, 1647, which required that “notwithstanding any other

provision of law,” the FSLIC, among others, shall not “incur any obligations

for administrative expenses, except pursuant to an annual appropriation spe­

cifically therefor,” the FSLIC has submitted, and Congress has acted upon,

annual estimates for the FSLIC’s administrative expenses. Since 1945, the

FSLIC has submitted annual estimates of its administrative expenses to Con­

gress pursuant to the requirements of the Government Corporation Control

17 As noted above, the FSLIC does not fall w ithin the lim ited mandatory exem ptions from the A ct 31

U.S.C. § 1511(b). The perm issive exem ptions, how ever, may well apply to FSLIC funds.

33

Act, Act of Dec. 6, 1945, ch. 557, § 2, 59 Stat. 597 (codified at 31 U.S.C.

§§ 9101 et seq.).iS Although compliance with the above statutes may not, as a

practical matter, affect the FSLIC’s ability to determine its necessary expenses

as it sees fit, the FSLIC has not refused to comply with these laws governing

the expenditure of public funds or otherwise asserted that 12 U.S.C. § 1725(c)(5)

confers a sufficient exemption from their application.

U nless the FSLIC is to argue that necessary expenses include

nonadministrative expenses but not administrative expenses, its own past prac­

tices undermine its present position. Yet the statute itself — both on its face and

in the legislative history — does not define necessary expenditures in terms of

nonadministrative or administrative expenses. Absent a congressional determi­

nation that administrative expenses are somehow less necessary, we presume

that Congress intended necessary expenditures to include both types of ex­

penses. Just as it is ordinarily inferred that a statute “carries with it all means

necessary and proper to carry out properly the purposes of the law,” any

administrative expenses incurred in the actions taken to prevent a default of

insured institutions must be viewed as necessary expenditures necessary to

effectuate the statutory obligations of the FSLIC. United States v. Louisiana, 265 F.

Supp. 703, 708 (E.D. La. 1966) (three judge court), affd, 386 U.S. 270 (1967).

Of equal importance, in the 1950 revisions to the Antideficiency Act, Con­

gress expressly declined to distinguish between adm inistrative and

nonadministrative expenses for purposes of that Act. If 12 U.S.C. § 1725(c)(5)

does not insulate FSLIC administrative expenses from the requirements of the

Act, then it cannot provide a basis for exempting nonadministrative expenses

from the Antideficiency Act. Indeed, we presume that the distinction itself

arose in the days when the Antideficiency Act applied to annual appropriations

for the administrative expenses of corporations but not to indefinite or perma­

nent funds. Although the distinction may continue to have some meaning in the

context of other statutes, see, e.g., 31 U.S.C. § 9104(a)(3), it has no signifi­

cance in a statute that has abandoned any recognition of a difference between

administrative and nonadministrative funds.

D. Exercise o f Apportionment Authority

Having determined that the nonadministrative funds of the FSLIC are sub­

ject to the apportionment requirements of the Antideficiency Act does not end

the matter. A subsequent consideration, as you noted in your letter to us, is how

that authority is to be exercised. At the time of the 1950 amendments, which

brought all corporate funds within the coverage of the Antideficiency Act,

18 31 U S.C . § 9 104(a) em pow ers Congress to make appropriations authorized by law and to make corporate

financial resources available for operating a n d adm inistrative expenses. Adm ittedly, 31 U.S C. § 9104(b)

expressly accom m odates the pow ers and d u tie s o f corporations to a g reater extent than the A ntideficiency

A ct, it states that its provisions do not “prevent a w holly ow ned G overnm ent corporation from carrying out or

financing its activ ities as authorized under another law .” N evertheless, C ongress’ appropriations power

necessarily restricts to som e degree the d iscretio n o f the FSLIC to determ ine the m anner in which expendi­

tures w ill be m ade.

34

some members of Congress expressed concern that in adopting the amend­

ments Congress “would negative every act . . . passed setting up these corpora­

tions . . . , would take control over every legislative committee on matters

already passed on by the House, and in this appropriation bill forbid [these

corporations] to obligate the Government contrary to the laws of Congress.” 96

Cong. Rec. 6727 (1950) (remarks of Rep. Eberharter). In response, representa­

tives knowledgeable about the proposed revisions offered assurances that the

purpose of the amendments was simply to give the Appropriations Committee

the authority “to check and be sure the fiscal policies of these corporations are

such that they do not spend all the money Congress grants them in the first few

months.” 96 Cong. Rec. 6727 (1950) (remarks of Rep. Brown). Significantly, it

was emphasized that “[i]f this authority is given, it does not mean that the

Committee on Appropriations can change any basic law or activity which has

been granted to the corporation.” 96 Cong. Rec. 6728 (1950) (remarks of Rep.

Keefe). Thus, in subjecting corporations to budgetary supervision, Congress

did not intend to alter the duties and obligations of those corporations as set

forth in their enabling acts.

We recognize that the power to authorize apportionments indicating a neces­

sity for a deficiency and the power to make exemptions from apportionment are

discretionary powers, resting in the President or the official having administra­

tive control of an appropriation available to the legislative or judicial branch.

See 31 U.S.C. §§ 1515, 1516. Moreover, we have not been specifically asked

whether expenses incurred by the FSLIC pursuant to statutory authority to

avert the default of an insured institution would constitute “an emergency

involving ... the protection of property, or the immediate welfare of individu­

als,” 31 U.S.C. § 1515(b)(1)(B), or whether the FSLIC’s insurance assess­

ments qualify as a “trust or working fund” which may be exempted from

apportionment. See id. § 1516. We point out, though, that because the FSLIC is

both authorized, in its discretion, to incur expenses to avoid the default of

insured institutions and ultimately is obligated to make payment on each

insured account in the event of a default by an insured institution, these statutory

powers and obligations should be weighed appropriately in the apportionment

process.

Conclusion

Accordingly, we conclude that OMB, acting on behalf of the President, has

the authority to apportion FSLIC nonadministrative funds. We express no

opinion on how that authority should be exercised.

R a lph W . T a rr

Deputy Assistant Attorney General

Office o f Legal Counsel

35