APPLICABILITY OF SECTION 163 OF DIVISION B OF PUBLIC LAW 

111-68 TO PAYMENTS IN SATISFACTION OF PRE-EXISTING 

CONTRACTUAL OBLIGATIONS

 Section 163 of Division B (“Continuing Appropriations Resolution, 2010”) of Public Law 

111-68 does not direct or authorize the Department of Housing and Urban Development to 

breach a pre-existing binding contractual obligation to make payments to the Association of 

Community Organizations for Reform Now or its affiliates, subsidiaries, or allied organizations 

where doing so would give rise to contractual liability. 

 October 23, 2009 

MEMORANDUM OPINION FOR THE DEPUTY GENERAL COUNSEL 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

You have asked whether section 163 of Division B (“Continuing 

Appropriations Resolution, 2010”) of Public Law 111-68, 123 Stat. 2023, 2053, 

approved by the President on October 1, 2009, prohibits the Department of Housing 

and Urban Development (“HUD”) from making a payment to the Association of 

Community Organizations for Reform Now (“ACORN”) or its affiliates, subsidiaries, 

or allied organizations to satisfy an existing contractual obligation that arose prior to 

the enactment of that measure. We conclude, in agreement with the views we 

solicited and received, that the language of section 163 is not clear with respect to 

whether its prohibition applies in cases where pre-existing law apart from section 163, 

including the contract itself, compels such a payment and where, accordingly, failure 

to make such a payment would subject the federal Government to contractual 

liability. In accord with established interpretive principles for resolving such lack of 

clarity, we conclude that section 163 does not direct or authorize HUD to refuse 

payment on binding contractual obligations that predate the Continuing 

Appropriations Resolution.1

I. 

Section 163 states, “None of the funds made available by this joint resolution 

or any prior Act may be provided to the Association of Community Organizations for 

Reform Now (ACORN), or any of its affiliates, subsidiaries, or allied organizations.” 

The term “provided to” has no established meaning in appropriations law. As explained 

by the GAO Redbook, “[t]he two basic authorities conferred by an appropriation law are 

the authority to incur obligations and the authority to make expenditures. An obligation 

results from some action that creates a liability or definite commitment on the part of the 

government to make an expenditure. . . . The expenditure is the disbursement of funds 

to pay the obligation.” 1 General Accounting Office, Office of the General Counsel, 

Principles of Federal Appropriations Law 5-3 (3d ed. 2004) (“GAO Redbook”). Thus, 

 

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 This opinion addresses only pre-existing contracts that create binding obligations requiring 

payment and not those that excuse payment in the relevant circumstances. 
Opinions of the Office of Legal Counsel in Volume 33 

“obligate” and “expend” are terms of art that generally describe the commitment and 

payment of funds. See, e.g., 31 U.S.C. § 1341(a)(1) (2006) (“Anti-Deficiency Act”) 

(providing that no federal officer or employee may “make or authorize an expenditure or 

obligation exceeding an amount available in an appropriation or fund for the expenditure 

or obligation”). The term “expenditure,” in particular, is broadly defined as “[t]he actual 

spending of money; an outlay.” Government Accountability Office, A Glossary of Terms 

Used in the Federal Budget Process 48 (2005) (“GAO Glossary”); see also 1 GAO 

Redbook at 5-3 (“The expenditure is the disbursement of funds to pay the obligation.”). 

And an opinion by the Comptroller General suggests that the word “expenditure” in the 

Anti-Deficiency Act prohibits an agency from making a payment to satisfy a contractual 

obligation if a statutory or regulatory funding limitation would thereby be exceeded. See 

In re Currency Exchange Rate Fluctuations, 58 Comp. Gen. 46 (1978). 

By contrast, as we have noted, the term Congress elected to employ in section 

163, “provided to,” has no clearly defined meaning in appropriations law. See, e.g., 

GAO Glossary (containing no definition of “provision” or “provide”). Moreover, 

appropriations case law and reference materials we have consulted, including the GAO 

Redbook, do not shed light on whether “provided to” in section 163 should be understood 

to prohibit a federal agency from making payments to satisfy pre-existing contractual 

obligations. 

To be sure, some common definitions of “provide,” such as “supply” or “furnish,”

American Heritage Dictionary 1411 (4th ed. 2006), would appear to describe any transfer 

of funds, presumably including a transfer in satisfaction of an existing obligation. Other 

definitions, however, connote a discretionary action. For instance, “provide” may mean 

“contribute,” Webster’s New International Dictionary 1994 (2d ed. 1958), or “make 

available,” American Heritage Dictionary 1411 (4th ed. 2006), and “offer” is among its 

synonyms, Roget’s II: The New Thesaurus 780 (3d ed. 1995). And in common parlance, 

the verb “provide” frequently describes discretionary action taken to benefit another. 

Moreover, several of the word’s definitions incorporate a forward-looking aspect, see,

e.g., Webster’s New International Dictionary 1994 (2d ed. 1958) (“to look out for in 

advance”; “to prepare”); Black’s Law Dictionary 1224 (6th ed. 1990) (“[t]o make, 

procure, or furnish for future use, prepare”), consistent with the etymology of “provide,” 

which derives from the Latin providere, meaning to see before, foresee, or be cautious, 

12 Oxford English Dictionary 713 (2d ed. 1989). Definitions of the word “expend,” we 

note, do not carry a similarly discretionary or forward-looking connotation, in keeping 

with the etymology of that word, which comes from the Latin expendere, meaning simply 

to pay or weigh. 5 id. at 561. 

Against this background, we find that the relevant text of section 163 is not clear 

with respect to the precise question before us. Congress had available to it—and yet did 

not use—appropriations language that had previously been construed to prohibit 

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Applicability of Section 163 to Payments in Satisfaction of Pre-Existing Contractual Obligations 

 

payments even on pre-existing contractual obligations.2 It instead used a term that could 

be read to suggest a bar only on payments that result from new discretionary decisions—

including, in particular, payments made pursuant to discretionary choices to incur new 

obligations. Accordingly, although one could read the phrase “None of the funds made 

available by this joint resolution or any prior Act may be provided to [ACORN], or any 

of its affiliates, subsidiaries, or allied organizations” categorically to prohibit any outlay 

of money to the identified entities, including pursuant to pre-existing contractual 

obligations, one could also read the phrase not to prohibit payments made pursuant to 

a prior binding contractual duty. 

II. 

In light of the term Congress chose, we turn to other interpretative tools to resolve 

the question before us. The recent Supreme Court case Cherokee Nation of Oklahoma v. 

Leavitt, 543 U.S. 631 (2005), is instructive. There, contracts between the Government 

and Indian tribes provided that the tribes would supply health services normally furnished 

by the Government and that the Government would in turn pay the “contract support 

costs” the tribes incurred. The Government subsequently refused to pay the full contract 

support costs because, it argued, Congress had not appropriated sufficient funds. Part of 

the Government’s argument rested on a later-enacted statute that stated: 

“Notwithstanding any other provision of law [the] amounts appropriated to or earmarked 

in committee reports for the . . . Indian Health Service . . . for payments to tribes . . . for 

contract support costs . . . are the total amounts available for fiscal years 1994 through 

1998 for such purposes.” Id. at 645 (alterations in original) (emphasis omitted) (quoting 

section 314 of the Department of the Interior and Related Agencies Appropriations Act, 1999, 

112 Stat. 2681-288). The Court noted that, because committee reports in 1994 through 1997 

had earmarked funds for contract support costs, and because those funds had “long since 

been spent,” this language was “open to the interpretation that it retroactively bars payment 

of claims arising under 1994 through 1997 contracts.” Id. In the Court’s view, however, the 

statutory language was also open to a different interpretation that would simply forbid the 

“use of unspent funds appropriated in prior years to pay unpaid ‘contract support costs.’” 

Id. at 646. Thus, the Court concluded: 

On the basis of language alone we would find either interpretation 

reasonable. But there are other considerations. The first interpretation 

would undo a binding governmental contractual promise. A statute that 

retroactively repudiates the Government’s contractual obligation may 

violate the Constitution. And such an interpretation is disfavored. This 

consideration tips the balance against the retroactive interpretation. 

Id. (citations omitted); see also Lynch v. United States, 292 U.S. 571, 580 (1934) 

(“Congress was without power to reduce expenditures by abrogating contractual 

2

 We do not address whether if Congress had used the phrase “may be expended” in section 163 

that phrase would necessarily prohibit payment pursuant to pre-existing legal obligations—a question that 

might depend at least in part on extratextual considerations. 

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Opinions of the Office of Legal Counsel in Volume 33 

obligations of the United States.”); United States v. Winstar Corp., 518 U.S. 839, 876 

(1996) (plurality opinion) (“[I]t is clear that the National Government has some capacity 

to make agreements binding future Congresses by creating vested rights, [although the] 

extent of that capacity, to be sure, remains somewhat obscure.” (citations omitted)); cf. 

Landgraf v. USI Film Prods., 511 U.S. 244, 271 (1994) (“The largest category of cases in 

which we have applied the presumption against statutory retroactivity has involved new 

provisions affecting contractual or property rights, matters in which predictability and 

stability are of prime importance.”).

Reading section 163 to prohibit payments to ACORN or its affiliates, subsidiaries, 

or allied organizations to satisfy a binding contractual obligation undertaken before 

enactment of section 163 would “undo a binding governmental contractual promise.” 

Cherokee Nation, 543 U.S. at 646. In accord with Cherokee Nation, the better reading of 

the section is therefore that it does not prohibit such payments. This reading of “provided 

to” is especially appropriate here because, consistent with the canon of constitutional 

avoidance, see, e.g., Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. 

Trades Council, 485 U.S. 568, 575 (1988), it not only avoids abrogating binding 

governmental contractual promises but also avoids the particular constitutional concerns 

that may be presented by reading the statute, which applies to specific named entities, 

to abrogate such contracts, including even in cases where performance has already been 

completed but payment has not been rendered.3 

 

3 See, e.g., United States v. Lovett, 328 U.S. 303, 315 (1946) (“[L]egislative acts, no matter what 

their form, that apply either to named individuals or to easily ascertainable members of a group in such 

a way as to inflict punishment on them without a judicial trial are bills of attainder prohibited by the 

Constitution.”); Selective Serv. Sys. v. Minn. Pub. Interest Research Group, 468 U.S. 841, 853 (1984) 

(stating that a particular provision imposed “none of the burdens historically associated with punishment” 

because “‘the sanction is the mere denial of a noncontractual governmental benefit’”) (emphasis added) 

(quoting Flemming v. Nestor, 363 U.S. 603, 617 (1960)); Nixon v. Adm’r of Gen. Servs., 433 U.S. 425, 

475-76 (1977) (“[O]ur inquiry is not ended by the determination that the Act imposes no punishment 

traditionally judged to be prohibited by the Bill of Attainder Clause. Our treatment of the scope of the 

Clause has never precluded the possibility that new burdens and deprivations might be legislatively 

fashioned that are inconsistent with the bill of attainder guarantee. The Court, therefore, often has looked 

beyond mere historical experience and has applied a functional test of the existence of punishment, 

analyzing whether the law under challenge, viewed in terms of the type and severity of burdens imposed, 

reasonably can be said to further nonpunitive legislative purposes.”); see also Consol. Edison Co. v. Pataki, 

292 F.3d 338, 346-49 (2d Cir. 2002) (applying the Bill of Attainder Clause to a bill that arguably singled 

out a corporation); cf. Kenneth R. Thomas, Congressional Research Service, The Proposed “Defund 

ACORN Act”: Is it a “Bill of Attainder?” 12 (2009) (considering an earlier bill that would have, inter alia, 

prohibited the award of federal contracts or the provision of federal funds to a “covered organization,” with 

“organization” expressly defined as including ACORN and its affiliates, and concluding that “a court may 

have a sufficient basis to overcome the presumption of constitutionality, and find that the proposed [bill] 

violates the prohibition against bills of attainder”). 

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Applicability of Section 163 to Payments in Satisfaction of Pre-Existing Contractual Obligations 

III. 

In sum, section 163 should not be read as directing or authorizing HUD to breach 

a pre-existing binding contractual obligation to make payments to ACORN or its 

affiliates, subsidiaries, or allied organizations where doing so would give rise to 

contractual liability. 

 /s/ 

 DAVID J. BARRON 

Acting Assistant Attorney General 

 

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