No. 94-2058

In the Supreme Court of the United States

OCTOBER TERM, 1995

HIGHLAND FALLS-FORT MONTGOMERY CENTRAL
SCHOOL DISTRICT, ET AL., PETITIONERS

v.

THE UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

DREW S. DAYS, III
Solicitor General

FRANK W. HUNGER
Assistant Attorney General

MICHAEL JAY SINGER
RICHARD A. OLDERMAN
Attorneys

Department of Justice
Washington, D.C. 20530
(202)514-2217

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     QUESTION PRESENTED

The Educational Agencies Financial Aid Act (Im-
pact Aid Act), Pub. L. No. 81-874, 64 Stat. 1100, as
amended, provided that, when congressional appro-
priations for the programs established by the Act
were insufficient adequately to fund each program,
the Secretary of Education was first to fund fully the
Act's "Section 2" assistance program. In annual
appropriation statutes for fiscal years 1989 through
1993, however, Congress appropriated a specific
amount of money for the Section 2 program, and in
each of those years the appropriation was less than
100%. The question presented is
Whether, in fiscal years 1989 through 1993, the
Secretary of Education correctly allocated, for Sec-
tion 2 programs, only the amounts appropriated by
Congress.

(1)

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TABLE OF CONTENTS

Opinions below . . . . 1
Jurisdiction . . . . 1
Statement . . . . 2
Argument . . . . 6
Conclusion . . . 9
     
TABLE OF AUTHORITIES

Cases:

Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U. S.. .837 (1984) . . . . 6, 8
Morton v. Mancuri, 417 U.S. 535 (1974) . . . . 7
Morton v. Ruiz, 415 U.S. 199 (1974) . . . . 8
Pauley v. BethEnergy Mines, Inc., 501 U.S. 680
(1991) . . . . 8
TVA v. Hill, 437 U.S. 153 (1978) . . . . 7

Statutes and regulation:

Act of Aug.8, 1953, ch.402, 57,67 Stat. 534-535 . . . . 3
Act of Aug. 21, 1974, Pub. L. No. 93-380, 5,88 Stat. 530-
531 . . . . 3
Act of Sept. 30, 1976, Pub. L. No. 94439,90 Stat. 1426-
1427 . . . . 4
Act of Sept. 20,1988, Pub. L. No. 100-436, 102 Stat. 1701 . . . . 4
Act of Nov. 5, 1990, Pub. L. No. 101-517, 104 Stat. 2210 . . . . 4
Act of Nov.26, 1991, Pub. L. No. 102-170, 105 Stat. 1128 . . . . 4
Act of Oct. 6,1992, Pub. L. No. 102-394, 106 Stat. 1813 . . . . 4
Educational Agencies Financial Aid Act (Impact Aid
Act), Pub. L. No. 81-874,64 Stat. 1100 (20 U.S.C. 236
et seq.) . . . . 2
  5,64  Stat. 1107 . . . . 2, 3
  20 U.S.C. 236 et seq . . . . 2
  20  U.S.C. 237 (1988 & SUPP. V 1993) . . . . 2
  20 U.S.C. 237(a) . . . . 2
  20 U.S.C. 238 (1988.& SUPP. V 1993) . . . . 2, 3
  20 U.S.C. 239 . . . . 

 (III)

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Statutes and regulation-Continued:          Page
 
 20 U.S.C. 240(c) . . . . 5, 6, 7, 8, 9
 20 U.S.C. 240(c) [1)(A) . . . . 3, 4, 5, 8, 9
 20 U.S.C. 240(c)(I)(B) . . . . 3
 20 U.S.C. 240(c)(1)(C) . . . .3
Improving America's Schools Act of 1994, Pub. L. No.
103-382:
Tit. I, 101, 108 Stat. 3519
    8002(b)(l)(B)), 108 Stat. 3750 . . . . 9
Tit. III, Pt. C,  331(b), 108 Stat. 3965 (20 U.S.C. 7701
  et seq.) . . . . 2, 9
  20 U.S.C. 7702 . . . . 9
  20 U.S-C. 7702(b](l)(B) . . . . 9
31 U.S.C. 1341(a)(l)(A) (1988 "& Supp. V 1993) . . . . 6, 8
31 U.S.C. 1532 . . . . 6, 8-9
34 C.F.R. Pt. 222 . . . . 5

Miscellaneous:

S. Rep. No. 2458, 81st Cong., 2d Sess. (1950) . . . . 2

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IN THE SUPREME COURT OF THE UNITED STATES
 
OCTOBER TERM , 1995

No. 94-2058

HIGHLAND FALLS-FORT MONTGOMERY CENTRAL
SCHOOL DISTRICT, ET AL., PETITIONERS

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
   FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Al-
All) is reported at 48 F.3d 1166. The oral ruling of
the Court of Federal Claims (Pet. App. A12-A14) is
unreported.
       
JURISDICTION

The judgment of the court of appeals was entered on
February 15, 1995. On May 8, 1995, the Chief Justice
extended the time within which to file a petition for a
writ of certiorari to and including June 15, 1995, and
the petition was filed on that date. The jurisdiction of
this Court is invoked under 28 U.S.C. 1254(1).

(1)

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 STATEMENT

The Educational Agencies Financial Aid Act
(Impact Aid Act or Act), Pub. L. No. 81-874, 64 Stat.
1100 (codified, as amended, at 20 U.S.C. 236 et seq.)'
established a framework for "providing] financial
assistance with respect to the operating expenses of
those local school agencies upon which Federal
activities have placed an undue financial burden."
S. Rep. No. 2458, 81t Cong., 2d Sess. 2 (1950). Section
2 of the Act, 20 U.S.C. 237 (1988 & Supp. V 1993),
provided for federal assistance to school districts in
which the value of real property acquired by the
federal government since 1938 exceeded 10% of the
assessed value of all "real property in the district,
where the federal acquisition placed "a substantial
and continuing financial burden on [the district]," and
certain other criteria were met. Districts deter-
mined by the Secretary of Education 2 to meet the
requirements of the Section 2 program in a given
fiscal year were entitled "to receive for such fiscal
year such amount as, in the judgment of the
Secretary, is equal to the [financial burden imposed
on the district by the federal acquisition]." 20 U.S.C.
237(a). Other sections of the Act provided assistance
to school districts experiencing increased attendance
by children of persons who reside and work on federal
property, 20 U.S.C. 238 (1988 & Supp V 1993), and by

___________________(footnotes)

1 The provisions of the Impact Aid Act relevant to this
litigation were repealed, effective October 1, 1994, by the Im-
roving America's Schools Act of 1994, Pub. L. No. 103-382, Tit.
HI, Pt. C,  331(b), 108 Stat. 3965. The new provisions are
codified at 20 U.S.C. 7701 et seq.
2 Formerly the Commissioner of Education. See, e.g., 5, 64
Stat. 1107.

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"sudden and substantial" increases in school attend-
ance due to federal activities. 20 U. S; C. 239.
Section 5 of the Act established a methodology for
addressing instances in which congressional appro-
priations for the Act's programs were insufficient to.
fund each program fully. The statutory language
applicable to the period at issue here,3 20 U.S.C.
240(c)(1)(A), provided that "the Secretary shall first
allocate to each local educational agency which is
entitled to a payment under section 237 of this title
[i.e., the Section 2 program] an amount equal to 100
per centum of the amount to which it is entitled
* * * for such fiscal year." After fully funding the
Section 2 program, the Secretary was authorized to
allocate funds pursuant to 20 U.S.C. 238 (children" `of
persons who reside and work on federal property). 20
U.S.C. 240(c)(1)(B) and (C).
1. In its annual appropriation statutes for. fiscal
years (FY) 1989 through 1993, Congress failed to
appropriate sufficient monies fully to fund entitle-

___________________(footnotes)

3 As originally enacted, the statute provided that when the
funds appropriated for a fiscal year were insufficient, "the
Commissioner [of Education] shall reduce the amounts which he
certifies * *  * for such year for payment to each local
educational agency by the percentage by which the funds so
appropriated are less than the total necessary to pay to such
agencies the full amount to which they are entitled under this
Act."  5, 64 Stat. 1107. In subsequent years, Congress fre-
quently amended the allocation provision, establishing various
methodologies for addressing the problem of inadequate con-
gressional appropriations. See, e.g., Act of Aug. 8, 1953, ch. 402,
7, 67 Stat. 534-535 (proportionate allocation of available appro-
priations among the Sections 2, 3, and 4(a) programs); Act of
Aug. 21, 1974, Pub. L. No. 93-380,  5, 88 Stat. 530-531 (tiered
allocations of funds, with 25% of the funds being allocated in the
first tier for the Sections 2 and 3 programs).

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4

ments under the Act. Pet. App. A5. In lieu of appro-
priating a lump-sum amount for all of the Act's
benefit programs, however, Congress allocated specif-
ic amounts for each program. Ibid. In FY 1989, for
example, Congress appropriated $717 million for en-
titlements, $15 million of which was explicitly ear-
marked for the Section 2 program. See Act of Sept.
20, 1988, Pub. L. No. 100-436, 102 Stat. 1701
("$15,000,000 shall be for entitlements under section 2
of said Act"). Aside from the amounts involved, the
appropriations Acts for FY 1990 through 1993 used
identical language.4
In the years 1989 through 1993, the Secretary of
Education allocated funds under the Act as specified
in the appropriations statutes.  Accordingly, the
Secretary did not apply the allocation formula set
forth in Section 240(c)(1)(A), The Secretary inter-
preted Section 240(c)(I)(A) as applying only to instan-
ces in which Congress made a combined or lump-sum
appropriation in a given year, and the combined appro-
priation fell short of full funding.5 Had the Secretary
applied the Section 240(c)(1)(A) formula, Section 2

___________________(footnotes)

4 See Act of Nov. 5, 1990, Pub. L. No. 101-517, 104 Stat. 2210
("$17,000,000 shall be for Federal property payments under
section 2"); Act of Nov. 26, 1991, Pub. L. No. 102-170, 105 Stat.
1128 ("$16,590,000 shall be for Federal property payments under
section 2"); Act of Oct. 6, 1992, Pub. L. No. 102-394, 106 Stat.
1813 ($16,424,000 shall be for payments under section 2").
5 For example, the FY 1977 appropriations Act, Act of Sept.
30, 1976, Pub. L. No. 94-439, 90 Stat. 1426-1427, provided
$715,500,000 "for payments under sections 2, 3, and 4" of the
Act.  In those circumstances, in which one sum was appro-
priated for all programs, the Secretary considered Section
240(C)(1)(A) to be applicable.

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5

school districts would have received greater amounts
of federal funds.
2. The United States Military Academy at West
Point is located in the Highland Falls-Fort Mont-
gomery Central School District (the District), and
accounts for half of the real property in the District.
Since 1971, the District has annually sought and
received federal funds under Section 2 of the Act.
Pet. App. A5-A6.
Petitioners-the District and seven individual
members of the Highland Falls-Fort Montgomery
Board of Education-brought the instant suit in the
Court of Federal Claims, challenging the Secretary's
interpretation of Section 240(c)(1)(A). Petitioners
sought the payment of $1,998,187 in Section 2 funds
that, they alleged, would have been allocated to their
district during fiscal years 1989 through 1993 if the
Secretary had applied the Section 240(c) formula.
Pet. App. A5, A6.
3. The Court of Federal Claims dismissed petition-
ers' complaint. Pet. App. A12-A14. The court con-
cluded, inter alia, that neither the Impact Aid Act,
nor Education Department regulations promulgated
thereunder, 34 C.F.R. Pt. 222, mandated full funding
of the Section 2 program.  Pet. App. A12. Even
assuming that the Act did require full funding, the
court added, "it was superseded by the Appropriations
Act." Id. at A13.
4. The court of appeals affirmed. Pet. App. Al-All.
Observing that it "ha[d] great difficulty imagining. a 
more direct statement of congressional intent than
the instructions in the appropriations statutes at
issue here" (id. at A9), the court held that the
Secretary's construction of the Impact Aid Act and
appropriation statutes had given effect to the "unam-

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6

biguously expressed intent" of Congress.' Ibid. (quot-
ing Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837,843 (1984)). The
court also noted (Pet. App. A9-AI1) that two addi-
tional federal statutes, 31 U.S.C. 1341(a)(l)(A) (1988 &
Supp. V 1993) and 31 U.S.C. 1532, supported the
Secretary's construction of the Impact Aid Act. See-
tion 1341(a)(l)(A) provides that "[a]n officer or
employee of the United States Government * * * may
not * * * make or authorize an expenditure
*** exceeding an amount available in an
appropriation * * * for the expenditure." Section
1532 states that "[a]n amount available under law may
be withdrawn from one appropriation account and
credited to another * * * only when authorized by
law." The court of appeals concluded that the Secretary's
interpretation of Section 240(c) properly harmonized
that provision with the appropriations Acts, as well as
with the statutes barring the' "raiding" of one appro-
priation account in order to credit another. Pet. App.
A1O-A.11. Finally, the court rejected petitioners'
contention that Section 240(c) should be construed to
confer "transfer authority" on the Education Depart-
ment to fund the Section 2 program fully by taking
funds from other programs. The court concluded that
the specific language of the subsequently enacted
appropriations statutes precluded such an interpre-
tation. Pet. App, All.
       
ARGUMENT

The court of appeals correctly upheld the Secre-
tary's construction of the Impact Aid Act. The
court's decision, moreover, does not conflict with any

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7

decision of this Court or of another court of appeals.
Further review is therefore not warranted.
1. Petitioners contend (Pet. 21-27) that the court of
appeals' decision is contrary to TVA v. Hill, 437 U.S.
153 (1978). Specifically, petitioners assert (Pet. 25)
that the court of appeals erred by construing the
appropriations statutes to "repeal by implication" the
allocation provision of the Impact Aid Act, There is
no conflict with Hill.
Contrary to petitioners' contention, the court of
appeals did not conclude that the appropriation
statutes implicitly or explicitly repealed Section
240(c). Rather, the court approved a construction of
those provisions that effectuated the goals of each.
Pet. App. A10; see Morton v. Mancari, 417 U.S. 535,
551 (1974) ('When two statutes are capable of co-
existence, it is the duty of the courts, absent a clearly
expressed congressional intention to the contrary, to
regard each as effective."). Under that construction,
the Act's allocation formula remained intact, to be
utilized when Congress made a lump-sum Impact Aid
Act appropriation. Only when, as in fiscal years 1989
through 1993, Congress appropriated specific sums to
the Act's particular programs, did the Secretary
interpret Section 240(c) not to be controlling. Be-
cause it preserves the validity of both Section 240(c)
and the explicit appropriation statutes, the court of
appeals' decision does not implicate Hill's admonition
that "repeals by implication are not favored." 437
U.S. at 189 (quoting Morton v. Mancari, 417 U.S. at
549). 2. Petitioners renew their contention (Pet. 23) that
Section 240[c) "constitutes clear transfer authority,"
directing the Secretary fully to fund the Section 2

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8

program, notwithstanding the subsequently enacted
appropriation statutes. That contention lacks merit.
"The power of an administrative agency to admin-
ister a congressionally created * *  * program
necessarily requires the formulation of policy and the
making of rules to fill any gap left, implicitly or
explicitly, by Congress." Morton v. Ruiz, 415 U.S.
199, 231 (1974).  Accordingly, this Court held in
Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Ire., supra, that where Congress has not
expressed its intention as to the precise question at
issue, the courts are to defer to a reasonable
legislative interpretation by the agency charged with
administering the program. 467 U.S. at 844. "[T]he
Secretary's interpretation need not be the best or
most natural one by grammatical or other standards
* * *. Rather, the Secretary's view need be only rea-
sonable to warrant deference."  Pauley v. Beth-
Energy Mines, Inc., 501 U.S. 680,702 (1991).
As petitioners concede (Pet. 23), Congress was
silent as to the way in which the Impact Aid Act's
allocation provision, on the one hand, and the appro-
priations Acts, on the other, should be reconciled. In
light of that ambiguity, the Secretary reasonably
read Section 240(c)(1)(A) to apply only in instances in
which Congress made a lump-sum appropriation. The
court of appeals properly deferred to that inter-
pretation:

___________________(footnotes)

6 As the court of appeals noted (Pet. App. A9-A11),
petitioners' interpretation of Section 240(c) would violate two
additional statutes-31 U.S.C. 1341(a)( l)(A), which makes it
unlawful for an officer or employee of the United States to
"make or authorize an expenditure or obligation exceeding an
amount available in an appropriation * * *," and 31 U.S.C.

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9

3. Finally, because the statutory provision on
which petitioners rely, 20 U.S.C. 240(c)(1)(A), `was"
repealed by the Improving America's Schools Act of
1994 (IASA), Pub. L. No. 103-382,  331(b), 108 Stat.
39-65, effective October 1, 1994, and there is no similar
provision under current law, this case lacks pro-
spective importance.  Section 8002(b)(l)(B) of the
IASA, codified at 20 U.S.C. 7702 (the successor to the
Impact Aid Act), provides that if funds appropriated
for Section 2 payments are insufficient fully to
finance that program, "the Secretary shall ratably
reduce the payment to each eligible local education
agency." 20 U.S.C. 7702(b)(l)(B). The IASA contains
no provision establishing priorities among categories
of aid. Accordingly, the question presented by this
case is unlikely to recur, and does not warrant this
Court's review.

  ___________________(footnotes)

1532, which provides that "[a]n amount available under law may
be withdrawn from one appropriation account and credited to
another * * * only when authorized by law." Petitioners offer
no justification for a construction of Section 240(c) that is con-
trary to those statutes.

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10

       CONCLUSION

The petition for a writ of certiorari should be
denied.
Respectfully submitted.

DREW S. DAYS, III
Solicitor General

FRANK W. HUNGER
Assistant Attorney General

MICHAEL JAY SINGER
RICHARD A. OLDERMAN
Attorneys

AUGUST 1995