Applicability of the Antideficiency Act ApportionmentRequirements to the Nonadministrative Funds of the Federal Savings and Loan Insurance Corporation ( 1983 )

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