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agency which determines whether the application meets the statutory and administrative criteria. ESEA, 105(a). To participate in the program each State must file an application with the Commissioner containing required assurances regarding the State's administration of the program. ESEA, § 106 (a). The Commissioner is required to approve a State application which meets the statutory criteria, § 106 (b), and disapproval of the application is subject to judicial review, § 133. There is no specific provision for judicial review at the instance of a local educational agency.
Title I is similar to P.L. 874 and P.L. $15 in that there is no specific dollar authorization for appropriations. The authorization consists of the aggregate eligibility computed under the statutory formula, and the Commissioner is directed to apply the appropriations for Title I to the satisfaction of such eligibility.
The language of the statute seems clear as to the mandatory nature of the program. Section 102 provides, "The Commissioner shall, in accordance with the provisions of this part, make payments to State educational agencies for grants to local educational agencies * * *." Section 107 (a) (1) provides, “The Commissioner shall * * * pay to each State * * * the amount which it and the local educational agencies of that State are eligible to receive under this part.” The State agencies are, in turn, directed to distribute the payments to the local agencies, $ 107 (a) (2).
Section 108 supplies additional evidence of the mandatory nature of the program. It provides that "if the sums appropriated for any fiscal year * * * are not sufficient to pay in full the total amounts which all local and State educational agencies are eligible to receive under this part for such year," the eligibilities will be paid in accordance with a prescribed formula. Section 108 contemplates no shortfall between the appropriation for making grant payments and sums actually available for that purpose, for if it did the formula would presumably be based on availability and not on appropriations. Furthermore, if funds were to be impounded, the Commissioner would either have to interpret the word "appropriated" in section 108 as if it read "available," cf. P.L. 90–218, $ 204, or he would have to depart from the Congressional intent with respect to the allocation of funds in the event of shortfall.
For the reasons set forth above we conclude that Title I of ESEA is a mandatory program, and that funds appropriated to it may not be impounded."
TITLES II AND III, ELEMENTARY AND SECONDARY EDUCATION ACT H.R. 13111 would appropriate $50 million to carry out Title II of the Elementary and Secondary Education Act of 1965, 20 U.S.C. 821–27, and $164,876,000 to carry out Title III of that Act, 20 U.S.C. 841-45.
Title II provides for nonmatching grants to States for the acquisition of school library resources, textbooks and other instructional materials. The statutory scheme is a fairly typical State plan-State grant arrangement. The Commissioner is directed to allot the sums appropriated to carry out the title among the States on the basis of total elementary and secondary school enrollment. ESEA, | 202. Each State desiring to participate must submit a plan for the Commissioner's approval. The Commissioner must approve a plan which complies with the statutory criteria, 203 (b), and the State is entitled to obtain judicial review of disapproval of a plan or a determination by the Commissioner that the State has failed to comply with its plan, $ 207. Section 204 (a) provides, “From the amounts allotted to each State under section 202 the Commissioner shall pay to that State an amount equal to the amount expended by the State in carrying out its State plan."
This formula. rather complex as set forth in the statute, is further complicated by the provision in H.R. 13111 that the amounts available to each State shall be no less than 92% of the amounts allocated to local agencies in such State in fiscal 1968.
7 This conclusion is subject to minor qualifications. Under Section 103 (a) (1), an amount equal to 3% of the amount appropriated for grants to or through the States shall be allotted among Puerto Rico and the Insular Possessions, and for payments with respect to Indian children. The Commissioner probably has sufficient discretion here to withhold some of the funds available for this purpose. There is similar discretionary authority in other formula grant statutes with respect to the allotment of funds to Puerto Rico and the Possessions, see e.g., EOSEA. & 302. 20 U.S.C. 842. but in view of the small sums involven and the unresirability of imposing a burden on those iurisdictions not shared by the States, we will omit further consideration of this possibility.
Our conclusion is also based on the assumption that the Title I funds presently carried in H.R. 13111 will not be sufficient to pay the aggregate eligibility in full. These funds, added to last vear's advance funding would bring total fiscal '70 appropriations for Title I to about $1.4 billion. whereas HEW's budget justification estimated the total authorization at $2.36 billion.
From this sketch of Title II it appears that the Commissioner has little if any discretionary authority to decline to spend funds appropriated to the program. The allotment is carried out by mathematical formula, the State plan must be approved if it complies with the statute, and payments must be made in the amounts expended by the State in carrying out the plan.
There is, however, one point at which discretion may be exercised. Section 202 (b) provides, “The amount of any State's allotment * * * which the Commissioner determines will not be required for such fiscal year shall be available for reallotment from time to time * * * to other States in proportion to the original allotments * me me." It is not entirely clear from the language of the title whether such a determination by the Commissioner must be made in the context of a partial disapproval of the State plan, in which case the determination would presumably be subject to judicial review, or whether such determination is left entirely to the discretion of the Commissioner. (Since allotments must be made annually, while there is no requirement for annual filing of a plan, it appears that the determination to reallot is not part of the process of approving a plan. Office of Education regulations also indicate that reallotment does not occur at the time plans are approved, but at a later time and on the basis of the States' statements of anticipated need, 45 C.F.R. 117.46.) There is legislative history to the effect that the question of reallotment is within the discretion of the Commissioner. Obviously, to withhold funds for reallotment on the basis of a determination of comparative need is quite different from an across-the-board cut in allotments for budgetary reasons, and it does not follow that because the Commissioner is authorized to do the former, he may also do the latter. Nevertheless, this reallotment provision at least supports the argument that a State with an approved plan does not have a "vested right” to its full allotment. Consequently, while on balance we do not believe that Title II funds may be impounded, we believe that there is a better argument for doing so than with respect to either Title I of ESEA or P.L. 874.
Title III of ESEA provides for a program of grants for supplementary educational centers and services. As enacted in 1965 Title III provided for direct grants from the Office of Education to local educational agencies out of sums apportioned among the States. However, the Elementary and Secondary Education Amendments of 1967 ("P.L. 90–247") revised Title III so that it provides for a State grant-State plan program very similar to that in Title II.
Section 302 (a) provides for an allotment of the appropriation among the States under a formula based partly on school age population and partly on total population. Section 302 (c) provides reallotment authority similar to that in section 202 (b). States are required to file plans annually for the use of the funds. The Commissioner shall approve a plan that meets the statutory criteria, $ 305 (b), and the State may obtain judicial review if the plan is disapproved, $ 305(e) (3). The States, in turn, receive and act on grant applications from local educational agencies in accordance with standards prescribed in section 304. The local educational agency is entitled to obtain judicial review of the State agency's action with respect to its application, $ 305(f).
Section 307 provides, "From the allotment to each State pursuant to section 302, for any fiscal year, the Commissioner shall pay to each State, which has had a plan approved pursuant to section 305 for that fiscal year, the amount necessary to carry out its State plan as approved."
8 In response to a question from Senator Prouty as to whether the Commissioner would have full authority to decide whether a State needs its full allotment. HEW replied in a memorandum that the language in section 202(b) was similar to that found in other education legislation. The memorandum stated further :
"The Office of Education has had experience in administering this provision without any difficulty or cutback on State programs. The Commissioner does have authority to decide whether or not a State needs its full allotment. Administratively. this has been carried out by the Commissioner polling each of the States: (1) whether they will need their full allotment and, if not. how much be [sic] available for reallocation: (2) what additional funds could the State prudently use if they have already used their entire original allotment. On this advice of the States, the Commissioner then carries out his reallotment authority." Hearings on the Elementary and Secondary Education Act of 1965 before a Subcommittee of the Senate Committee on Labor and Public Welfare. 89th Cong.. 1st Sess., p. 1190.
PL. 90-247 provided for a gradual transition from direct Federal grants to local agencies to grants through the States. In fiscal 70 the States are eligible to receive their entire allotments less those sums, not in excess of 25 %. necessary for direct grants to complete local projects previously initiated. $$ 305(d), 306(c).
On the question of authority to impound, we see no significant difference between Title III and Title II, and our conclusion is, therefore, the same. Vocational education
H.R. 13111 appropriates $488,716,000 for carrying out the Vocational Education Act of 1963, 20 U.S.C. 1241-1391, and section 402 of P.L. 90-247, 20 U.S.C. 1222,of which "not to exceed $356,836,000” shall be for State vocational education programs under Part B of the Act and $40,000,000 shall be for programs under section 102(b) of the Act.
Parts A and B of the Vocational Education Act provide for formula grants to the States for vocational education programs. The basic grants are provided under Part B, while section 102(b) authorizes a separate appropriation for programs for persons with "academic, socioeconomic, or other handicaps" that prevent them from succeeding in regular vocational education programs. The distinction between the two items is not important, for the same allotment formula and other administrative provisions are applicable to both the appropriation for Part B and that for section 102 (b)."
Section 102(a) of the Act authorizes an appropriation for Part B and C, of which 90% would be available for B, basic grants, and 10% for C, research and training. However, H.R. 13111 carries "not to exceed $357,836,000" for Part B, making no mention of Part C. Whether or not the full sum must be made available to Part B, a question to which we will return, it is evident that it may be used for Part B, without any deduction for Part C.
Section 103(a) provides that out of sums appropriated pursuant to section 102(a) the Commissioner shall reserve up to $5 million for transfer to the Secretary of Labor to finance certain studies. (This sum, we believe, can be impounded.) The remainder of the sums appropriated under section 102 (a) and all sums appropriated under section 102 (b) "shall be allotted among the States" under a rather complicated formula based on population in various age groups and per capita income in the States. In other respects the provisions of Parts A and B are similar to those in the Elementary and Secondary Education Act. States must file plans with the Commissioner; the Commissioner shall approve a State plan upon making the prescribed determinations, $ 123(a). The State may seek judicial review from unfavorable action by the Commissioner on the plan, § 123 (c), and a local educational agency dissatisfied with the State's action on its application may likewise obtain judicial review, $ 123(d).
Section 124 (a) provides, “The Commissioner shall pay, from the amount available to the State for grants under this part, to each State an amount equal to 50 per centum of the State and local expenditures in carrying out its State plan * * *” As in Titles II and III of ESEA there is provision for reallotment of funds on the basis of the Commissioner's determination that they will not be required. However, the reallotment provision, $ 102(c), is more narrowly drawn than its counterparts in the ESEA. Funds shall be available for reallotment "on the basis of criteria established by regulation, first among programs authorized by other parts of this title within that State and then among other States, * * *" (emphasis added). In view of Congress' evident concern that a State should not lose funds through the reallotment process, the argument of no vested right we suggested earlier would have less validity here.
One further point needs to be touched upon. Our analysis thus far indicates that the funds appropriated for Part B must be made available for that program. However, the appropriation reads "not to exceed $357,836,000," which implies that less may be allocated to that part. We have no explanation for this language, which is apparently deliberate." In the absence of any positive evidence that the intended effect of this language is to permit the Commissioner to allot less than the full sum in accordance with the statutory formula, we would still view these funds as not subject to impounding.
20 The reference to section 402 is puzzling since $9.25 million is specifically provided for section 402 earlier in the bill.
11 However, Part B grants are 50% matching grants, while the Commissioner has discretion to walve the matching requirement with respect to section 102(b) funds. $ 124 (a).
13 Since Part B is a 50% matching grant program, it may be that Congress anticipates that all the funds will not be used, and wishes to provide that in such event the money will be available for other purposes under the Vocational Education Act.
Higher education appropriations
H.R. 13111 appropriates $859,633,000 for various higher education programs. This includes three items for carrying out the Higher Education Act of 1965 : $159.6 million for educational opportunity grants under Title IV, Part A; $63.9 million for loan insurance under Title IV, Part B; and $154 million for college work-study programs under Title IV, Part C.
Section 401 of Title IV, Part A, of the Higher Education Act authorizes appropriations for educational opportunity grants. These grants are made by the Office of Education to institutions of higher education, which, in turn, award grants to financially needy full time students. Section 401 authorizes the appropriation of $100 million for initial year grants and such sums as may be necessary for second., third-, and fourth-year grants.13
Section 405 provides that from the sums appropriated for initial year grants the Commissioner shall make an allotment to each State in accordance with its total full time enrollment. Sums appropriated for continuation grants are not allotted according to formula, but presumably in accordance with the need to follow up previous initial year grants.
Although funds are allotted among the States, payments are not made through the States. The Office of Education allocates funds within each State in accordance with "equitable criteria," $ 406. Recipient institutions must enter into agreements with the Commissioner in order to be eligible to participate in the program.
Despite the provision for allotments by States, we believe that this program is discretionary. The Commissioner has broad discretion as to which institutions to make grants to and how much each is to receive; there is no provision for judicial review. Furthermore, because of the lump sum appropriation, the Commissioner is also granted discretion in allotting funds between initial year and continuation grants. It is extremely doubtful, therefore, that any institution could claim that it was entitled to a grant. It does not necessarily follow that because there is no designated or ascertainable recipient, there is no duty to spend. However, since there is at least a plausible case for regarding the program as discretionary, and, in our view, little likelihood that such a conclusion could be challenged in court, we believe that as a practical matter these funds may be impounded.
H.R. 13111 appropriates $63.9 million, to remain available until expended, for loan insurance programs under Title IV, Part B of the Higher Education Act. While participation in this program is apparently discretionary with the Commissioner, the major part of this appropriation, according to the budget justification, is for anticipated losses due to the death or disability of borrowers, § 437. Therefore, impounding of these funds may not be feasible.
H.R. 13111 appropriates $154 million for work-study programs under Title IV, Part C of the Higher Education Act. These sums are used to provide parttime employment for students. The program is generally similar to Title IV, Part A, in that the Commissioner is required to allot funds among the States on a formula basis, but enters into agreements with institutions of his own selection within the States. For the reasons cited in our discussion of Part A, we believe these funds may be impounded.
H.R. 13111 appropriates $222,100,000 for Federal capital contributions to student loan funds pursuant to section 204 of the National Defense Education Act of 1958, 20 U.S.C. 424.
Title II, NDEA, provides that sums appropriated for this purpose shall be allotted among the States in accordance with total college enrollment figures. $ 202 (a). Section 204 authorizes the Commissioner to enter into agreements with institutions of higher education for Federal capital contributions to the institution's student loan fund. Section 203 provides that the institutions with
13 The appropriation itself does not indicate how much is for initial year and how much for continuation grants. Presumably, Congress assumes that the Commissioner will determine how much is necessary for the continuation grants, and the balance will be available for initial year grants. Since the budget estimate was $1756 million for both kinds of grants, we assume that at least $75.6 million is expected to be usert for continuation grants.
It might be noted that the special programs for low income students anthorizen by section 408 of Part A are apparently not intended to be funded out of the $159 6 million appropriated for educational opportunitr grants, but would be funded. if at all. out of
he $859.633.000 appropriation not earmarked for specific programs.
which the Commissioner has agreements must file applications for such capital contributions. If the total amount applied for exceeds the State allotment available for the purpose, the contributions are made pro rata, & 203.
Although there is no provision for judicial review in Title II, the terms of the statute appear mandatory, and the recipients are identifiable. Consequently, the statute appears mandatory at least to the extent that eligible institutions apply for the full State allotment. Where a State's allotment has not been applied for, the Commissioner “may” reallot it, but apparently he is not obligated to do so. Other programs
We have concentrated in this memorandum on a few large-item appropriations in H.R. 13111. Obviously, we have been unable in the time available to examine in detail the smaller items in the Office of Education appropriation, some of which, at least, appear on cursory consideration to be for discretionary programs. We might point out, however, that of the $859.6 million appropriated for higher education programs, $160 million is not earmarked for specific programs. This sum is apparently intended to be available for application in the Commissioner's discretion to those programs to which specific sums were not allocated. These programs appear to us to be discretionary, and the $160 million may, in our view, be impounded. Remedies
We expressed the view in our previous memorandum that where the statute directs expenditures and the recipient is ascertainable, a judicial remedy would probably lie. Whether it would take the form of a suit against the United States in the Court of Claims or an action against the Commissioner of Education is not certain.
Where the statutes provided for judicial review, it is possible that that procedure could be used to challenge an impounding of funds, even though it could be contended that such review is authorized only for actions involving the disapproval of a plan or the withholding of funds for noncompliance with a plan. The point is that while precedents in this field are few, the trend in the law has been to supply the remedy once the right is recognized. If, therefore, a court can be persuaded that a prospective recipient has been injurd by the failure of the Commissioner of Education to comply with the direction of the statute, it will in all likelihood devise a means of relief.
WILLIAM H. REHNQUIST,
Office of Legal Counsel.
The Library of Congress Legislative Reference Service
IMPOUNDMENT BY THE EXECUTIVE DEPARTMENT OF FUNDS
(By Mary Louise Ramsey, Legislative Attorney,
I. INTRODUCTION The phrase "impoundment of funds" is used to describe a variety of actions of the executive department with respect to the expenditure of funds appropriated by Congress. It may refer to a direction by the President to the head of the department or agency affected, to refuse to expand, or delay the expenditure of the funds so appropriated, or to a similar decision by the Head of the Department himself, or it may refer to an order of the Bureau of the Budget purporting to apportion certain of the appropriated moneys as reserves.
Various arguments have been advanced from time to time in support of such actions. The Bureau of the Budget cites 31 U.S.C. 665(c)(d) which authorizes it to apportion reserves in certain cases. At other times it is argued that appropriations are permissive, rather than mandatory. Occasionally, it has been asserted that funds may be impounded by, or upon authorization of, the President by virtue of his inherent constitutional powers.
* An applicant institution must put up one dollar for each nine dollars of Federal money, $ 204 (2).