B-175155 "The conferees recognized that the parties--ConRail deficiency statute (31 U.S.C. 665) would not apply to 11 Cong. Rec., March 25, 1976 (daily ed.), S4331-32. See also the remarks of Representative McFall during the House debate on the conference report, id., at H2385-86, in which he expressed misgivings concerning an immediate purchase but recognized the possibility of purchase on an installment payment basis: A "The issue of Amtrak's control over the Northeast "*** With regard to the proposed purchase of the B-175155 TERMS OF THE ACQUISITION During the course of negotiations, Amtrak had taken the position that it would purchase the Northeast Corridor properties as recommended in the Final System Plan, and that it would not accept a lease. DOT strongly opposed purchase but favored a lease with purchase option. As indicated above, Congress deleted funds for outright purchase. ConRail and Amtrak then negotiated an alternative arrangement whereby none of the purchase price would be due in the current fiscal year. The following summary is taken from a letter from ConRail to Amtrak dated March 23, 1976: (1) The purchase price is to be paid- "*** by Amtrak to ConRail over a period of eight years (2) ConRail will hold a purchase money mortgage as security for payment of the full purchase price. (3) ConRail will retain certain exclusively freight-related facilities and trackage rights for freight and commuter services. (4) The parties will determine trackage rights fees payable by ConRail to Amtrak based on "ConRail's fair and equitable share of the cost to Amtrak of operating the Northeast Corridor occasioned by ConRail's exercise of its trackage rights." (5) Trackage fees will be set off against purchase price installments as follows: "The sums determined to be due as trackage rights ... such credits equal the total thereof. B-175155 rights payments falling due thereafter shall also DISCUSSION AND CONCLUSIONS Subsection (a) of the Antideficiency Act, 31 U.S.C. § 665(a) (1970), provides: "No officer or employee of the United States shall make or authorize an expenditure from or create or authorize Also relevant is 31 U.S.C. § 628 (1970), which provides that: "Except as otherwise provided by law, sums appropriated for the various branches of expenditure in the public service shall be applied solely to the objects for which they are respectively made, and for no others." DOT states that the purchase arrangement as described above-- Noting the refusal by Congress in Pub. L. No. 94-252 to appropriate funds for direct purchase of the Corridor, DOT argues that the Antideficiency Act B-175155 prohibits it (DOT) from providing funds to Amtrak to finance the purchase, either directly or indirectly through increased operating subsidies. DOT further points out that Congress has not approved a "spending plan" including purchase of the Corridor, as provided in 45 U.S.C. § 601, supra, and that therefore the use of funds authorized by section 601 to finance the acquisition would amount to using those funds for other than their intended purpose. However, we do not believe that these objections go to the legality of the purchase as such. The purchase arrangement as summarized above purports to be a binding agreement for the payment of funds by Amtrak in subsequent fiscal years. Such an agreement could not be entered into by a Government agency without proper authority. Amtrak and ConRail, however, are not Government agencies. 45 U.S.C. §§ 541 and 741(b), supra. Also, the agreement does not--nor could it--obligate DOT to provide appropriated funds. Thus, the purchase agreement itself--viewed apart from any funding that may subsequently be provided by DOT--does not violate the Antideficiency Act. It remains to consider whether indirect financing of the acquisition through the payment by DOT of increased operating subsidies could be deemed, in the circumstances presented, an expenditure in excess or in advance of appropriations, or a use of funds for other than their intended purpose. It is important to note that "acquisition" of the Corridor by Amtrak was not merely authorized but directed by the kegional Rail Reorganization Act of 1973 and the Railroad Revitalization and Regulatory Reform Act of 1976. See Pub. L. No. 93-236, § 206(c)(1)(C), and Pub. L. No. 94-210, §§ 701(b) and 705(b), quoted supra. The deletion of direct purchase funds in Pub. L. No. 94-252, viewed in light of the previously cited legislative history, while limiting one financing alternative, did not extinguish this mandate. Thus the legal effect seems to be as stated in the conference report on Pub. L. No. 94-252--H. R. Rep. No. 94-941, cited above--i.c., the determination of whether to lease or purchase the Corridor was to be made by Amtrak and ConRail. As we understand it, DOT does not challenge the legality of the purchase agreement as such. Rather, it views the financing arrangement as, in effect, diverting operating expense grant funds to a capital purpose without provision therefor in congressionally approved spending plans under 45 U.S.C. § 601, supra. From this perspective, DOT apparently contends that it (DOT) would violate 31 U.S.C. §§ 625 and 665, supra, by taking operating grant payments to Amtrak for purposes of implementing the agree ment. We do not agree that DOT's legal objections are dispositive at the present time. First, we note that the major impact of the purchase agreement will occur in fiscal year 1977 and future fiscal years, so that the B-175155 Congress will be able to adopt spending plans to address this impact in connection with consideration of future appropriation requests for grants to Amtrak. For example, the House Appropriations Committee report on the Department of Transportation and related agencies appropriation bill for fiscal year 1977 observes with respect to grants for Amtrak: "The Committee believes that the amount recommended will enable the Corporation to operate the entire Amtrak system for fiscal year 1977, except for the incremental amounts necessary for the operation of passenger services in the Northeast Corridor. The Committee will consider these latter costs when the agreements between ConRail and Antrak concerning ownership and operation of the corridor have been finally consummated and a budget request has been submitted by the Administration." H. R. Rep. No. 94-1221, 33-34 (1976) (Emphasis supplied.) Accordingly, any objections to grant payments for implementation of the purchase agreement from future appropriations are now premature. The issue thus becomes whether any consequences of the purchase agreement prior to October 1, 1976, affect DOT's legal authority to make grant payments to Amtrak from current appropriations. In this regard, it is our understanding that, pursuant to the purchase agreement, ConRail has since April 1, 1976, retained and credited against the purchase price trackage fees which would otherwise be payable to Amtrak for ConRail's use of the Northeast Corridor. DOT maintains that Amtrak's nonreceipt of these trackage fees has created a corresponding increase in its operating assistance needs. We understand that, for this reason, DOT has withheld from operating grant payments to Amtrak amounts equivalent to the trackage fees retained by ConRail. However, even assuming that DOT would be justified in refusing to make grant payments for the purpose of implementing the purchase, we fail to see how the instant withholding can be justified on this basis. In the first place, it appears to us that the trackage fees withheld from Amtrak by ConRail would to some extent compare with the trackage fees Amtrak would have had to pay to ConRail for its own use of the line had the purchase not been consummated. Thus we question whether there really was a "corresponding" increase in Amtrak's operating assistance needs. Second, our review of the budget justification materials, other hearing documents, committee reports, and floor debates on the 1976 and transition quarter appropriations made for grants to Amtrak in Pub. L. No. 94-134, supra, does not disclose spending plans concerning Amtrak's acquisition of the Northeast Corridor either by lease or purchase, rather it appears that the appropriations made therein were based on consideration of Amtrak's |