b'Obligating Carryover Funds in Violation\nof OMB Zero-Dollar Apportionment Rule\nAt least in circumstances where an agency fails to submit an apportionment request for\ncarryover funds to the Office of Management and Budget before the start of a fiscal\nyear, the automatic zero-dollar apportionment effected by section 120.57 of OMB Circular A-11 is a valid apportionment for purposes of the Anti-Deficiency Act. As a result, in such circumstances, 31 U.S.C. \xc2\xa7 1517 would prohibit an agency from expending or obligating funds exceeding that apportionment of zero.\nSeptember 29, 2016\n\nMEMORANDUM OPINION FOR THE\nASSISTANT GENERAL COUNSEL\nADMINISTRATION AND TRANSACTIONS\nDEPARTMENT OF COMMERCE\nFor purposes of federal fiscal law, an \xe2\x80\x9capportionment\xe2\x80\x9d specifies the\namount of money in an appropriation account an agency can obligate or\nexpend during a particular period of time, or on a particular project or\nfunction. See 31 U.S.C. \xc2\xa7 1512. The Anti-Deficiency Act (\xe2\x80\x9cADA\xe2\x80\x9d or\n\xe2\x80\x9cAct\xe2\x80\x9d) gives the President the authority to apportion the appropriations\navailable to federal agencies. Id. \xc2\xa7 1513(b)(1). The President has delegated this authority to the Office of Management and Budget (\xe2\x80\x9cOMB\xe2\x80\x9d).\nExec. Order No. 6166, \xc2\xa7 16 (June 10, 1933), as amended by Exec. Order\nNo. 12608, \xc2\xa7 2 (Sept. 9, 1987), 3 C.F.R. 245 (1987 comp.). The ADA also\nprovides that United States Government officers and employees may not\nmake or authorize expenditures or obligations of funds \xe2\x80\x9cexceeding . . . an\napportionment.\xe2\x80\x9d 31 U.S.C. \xc2\xa7 1517(a)(1). You have asked whether an\nofficial would violate this provision of the Act if she obligated appropriated funds in violation of an OMB rule that automatically apportions\ncertain kinds of funds in the amount of zero dollars. 1\n1 See Letter for Karl Rem\xc3\xb3n Thompson, Principal Deputy Assistant Attorney General,\nOffice of Legal Counsel, from Rafael A. Madan, Acting Assistant General Counsel for\nAdministration, Department of Commerce (Sept. 18, 2015) (\xe2\x80\x9cCommerce Letter\xe2\x80\x9d). In\npreparing this opinion, we also received the views of OMB. See Letter for Karl Rem\xc3\xb3n\nThompson, Principal Deputy Assistant Attorney General, Office of Legal Counsel, from\nIlona Cohen, General Counsel, Office of Management and Budget (Jan. 8, 2016) (\xe2\x80\x9cOMB\nLetter\xe2\x80\x9d). At our request, both the Department and OMB supplemented their initial views\n\n90\n\n\x0cObligating Carryover Funds in Violation of OMB Zero-Apportionment Rule\n\nThe OMB rule at issue, which appears in section 120.57 of OMB Circular A-11, 2 imposes an automatic zero-dollar apportionment for carryover funds\xe2\x80\x94i.e., unobligated balances that remain available from a prior\nfiscal year\xe2\x80\x94until and unless OMB issues an account-specific apportionment for the same funds. You have explained that, in your view, while\nOMB\xe2\x80\x99s rule is formally structured as an apportionment, it is in effect a\nprohibition on agencies\xe2\x80\x99 obligating carryover funds in advance of later,\naccount-specific apportionments. As you point out, the text of the ADA\nsuggests, and at least one federal court of appeals has held, that while the\nADA expressly forbids obligations in advance of appropriations, it does\nnot similarly bar obligations in advance of apportionments. Relying on\nthat reading of the ADA, you contend that section 120.57 improperly\neliminates this distinction between appropriations and apportionments\nunder the Act; converts a violation of an administrative rule that temporarily precludes the use of funds pending an account-specific apportionment into a full-blown ADA violation; and wrongly imposes ADA penalties on agencies for using carryover funds even after they have made clear\nthat there is a programmatic need to use them. OMB disagrees, explaining\nthat in its view, section 120.57 constitutes a fully valid apportionment that\n\xe2\x80\x9cachieve[s] the most effective and economical use\xe2\x80\x9d of carryover funds, as\nthe ADA itself requires. See 31 U.S.C. \xc2\xa7 1512(a). As a result, OMB\nasserts, any obligation or expenditure made in excess of the zero-dollar\napportionment set forth in section 120.57 would violate the ADA.\nAs explained in more detail below, we conclude that, at least in circumstances where an agency fails to request a non-zero apportionment of\ncarryover funds before the start of a fiscal year, section 120.57 effects a\nvalid apportionment for purposes of the ADA. Nothing in the ADA forby e-mail. See E-mail for Daniel L. Koffsky, Deputy Assistant Attorney General, Office\nof Legal Counsel, from Angelia Talbert-Duarte, Department of Commerce, Re: DOC\nOpinion Request (Feb. 12, 2016, 9:36 AM) (\xe2\x80\x9cTalbert-Duarte E-mail\xe2\x80\x9d); E-mail for Daniel\nL. Koffsky, Deputy Assistant Attorney General, Office of Legal Counsel, from Heather V.\nWalsh, Office of Management and Budget, Re: DOC Opinion Request (May 12, 2016,\n9:37 AM) (\xe2\x80\x9cWalsh E-mail\xe2\x80\x9d); E-mail for Daniel L. Koffsky, Deputy Assistant Attorney\nGeneral, Office of Legal Counsel, from Andrea Torczon, Department of Commerce, Re:\nDOC Opinion Request (June 2, 2016, 9:57 AM) (\xe2\x80\x9cTorczon E-mail\xe2\x80\x9d).\n2 OMB Circular No. A-11, Preparation, Submission, and Execution of the Budget (July\n2016) (\xe2\x80\x9cCircular A-11\xe2\x80\x9d), https://www.whitehouse.gov/sites/default/files/omb/assets/a11_\ncurrent_year/a11_2016.pdf.\n\n91\n\n\x0c40 Op. O.L.C. 90 (2016)\n\nbids automatic zero-dollar apportionments, or requires OMB to issue\naccount-specific apportionments in non-zero amounts. And even if the\nrequirement that OMB apportion carryover funds to achieve \xe2\x80\x9cthe most\neffective and economical use\xe2\x80\x9d of those appropriations imposes a substantive standard whose violation could render an apportionment ineffective\nunder the ADA, we believe OMB\xe2\x80\x99s application of section 120.57 in the\ncircumstances described above would meet that \xe2\x80\x9ceffective and economical\nuse\xe2\x80\x9d standard. Further, under such circumstances, we do not think automatically imposing a zero-dollar apportionment on carryover funds impermissibly eliminates any feature of the ADA, improperly punishes\nviolations of an administrative rule, or improperly imposes ADA penalties\non agencies obligating or expending funds at a time when the ADA suggests that they should be able to use them. As a result, in the circumstances described, an agency\xe2\x80\x99s obligation of carryover funds in excess of the\nrule\xe2\x80\x99s zero-dollar apportionment would be an expenditure \xe2\x80\x9cexceeding . . .\nan apportionment\xe2\x80\x9d in violation of the ADA.\nThis opinion has two parts. In Part I, we discuss the relevant statutory\nand factual background. In Part II, we explain our reasons for concluding\nthat section 120.57 effects a valid apportionment under the ADA.\nI.\nA.\nThe Constitution provides that \xe2\x80\x9c[n]o Money shall be drawn from the\nTreasury, but in Consequence of Appropriations made by Law.\xe2\x80\x9d U.S.\nConst. art. I, \xc2\xa7 9, cl. 7. The Anti-Deficiency Act \xe2\x80\x9creinforces and elaborates on this constitutional limitation.\xe2\x80\x9d Memorandum for Judith R. Starr,\nGeneral Counsel, Pension Benefit Guaranty Corporation, from Troy A.\nMcKenzie, Deputy Assistant Attorney General, Office of Legal Counsel,\nRe: Whether the Pension Benefit Guaranty Corporation May Enter Into\nand Incrementally Fund Multiyear Leases Exceeding Five Years at 3\n(Sept. 30, 2015). A key provision of the Act, 31 U.S.C. \xc2\xa7 1341, states\nthat officers and employees of the United States Government may not\n\xe2\x80\x9cmake or authorize an expenditure or obligation exceeding an amount\navailable in an appropriation or fund for the expenditure or obligation,\xe2\x80\x9d\nor \xe2\x80\x9cinvolve [the] government in a contract or obligation for the payment\n92\n\n\x0cObligating Carryover Funds in Violation of OMB Zero-Apportionment Rule\n\nof money before an appropriation is made unless authorized by law.\xe2\x80\x9d Id.\n\xc2\xa7 1341(a)(1)(A), (B).\nThe ADA also requires appropriated funds to be \xe2\x80\x9capportioned.\xe2\x80\x9d Id.\n\xc2\xa7 1512(a). As suggested above, apportionment is \xe2\x80\x9can administrative\nprocess by which . . . appropriated funds are distributed to agencies in\nportions over the period of their availability.\xe2\x80\x9d 2 Government Accountability Office (\xe2\x80\x9cGAO\xe2\x80\x9d), Principles of Federal Appropriations Law 6-116 (3d\ned. 2006) (\xe2\x80\x9cFederal Appropriations Law\xe2\x80\x9d). 3 The purpose of apportionment is \xe2\x80\x9cto minimize the potential for engaging in expenditures that\nexceed congressional appropriations.\xe2\x80\x9d United States Marshals Service\nObligation to Take Steps to Avoid Anticipated Appropriations Deficiency,\n23 Op. O.L.C. 105, 106 (1999). Consistent with that goal, the ADA requires \xe2\x80\x9cappropriation[s] available for obligation for a definite period\xe2\x80\x9d to\nbe apportioned \xe2\x80\x9cto prevent obligation or expenditure at a rate that would\nindicate a necessity for a deficiency or supplemental appropriation for the\nperiod,\xe2\x80\x9d and \xe2\x80\x9cappropriation[s] for an indefinite period\xe2\x80\x9d\xe2\x80\x94the kind of\nappropriation at issue here\xe2\x80\x94to be apportioned \xe2\x80\x9cto achieve the most effective and economical use\xe2\x80\x9d of those appropriations. 31 U.S.C. \xc2\xa7 1512(a).\nAs noted above, the President has the responsibility to make written\napportionments for the Executive Branch, id. \xc2\xa7 1513(b)(1), and has delegated this responsibility to OMB, Exec. Order No. 6166, \xc2\xa7 16. In exercising this delegated authority, OMB has the discretion to apportion funds by\ntime periods, activities, functions, projects, objects, or some combination\nthereof. 31 U.S.C. \xc2\xa7 1512(b)(1)\xe2\x80\x93(2). In the case of carryover funds\xe2\x80\x94i.e.,\n\xe2\x80\x9cunobligated balances that are available from the prior fiscal year(s) in\nmulti-year and no-year accounts,\xe2\x80\x9d Circular A-11, supra note 2, \xc2\xa7 120.2\xe2\x80\x94\nthe ADA requires agency heads to submit apportionment requests to OMB\nno later than forty days before the beginning of the next fiscal year. 31\nU.S.C. \xc2\xa7 1513(b)(1)(A). OMB, in turn, must apportion the funds not later\nthan twenty days before the start of the fiscal year. Id. \xc2\xa7 1513(b)(2)(A).\n\n3 Although the legal interpretations and opinions of the GAO and the Comptroller\nGeneral are not binding on Executive Branch agencies, they \xe2\x80\x9c\xe2\x80\x98often provide helpful\nguidance on appropriations matters and related issues.\xe2\x80\x99\xe2\x80\x9d State and Local Deputation of\nFederal Law Enforcement Officers During Stafford Act Deployments, 36 Op. O.L.C. 77,\n89 n.8 (2012) (quoting Applicability of Government Corporation Control Act to \xe2\x80\x9cGain\nSharing Benefit\xe2\x80\x9d Agreement, 24 Op. O.L.C. 212, 216 n.3 (2000)).\n\n93\n\n\x0c40 Op. O.L.C. 90 (2016)\n\nIn a provision that resembles, but does not fully parallel, section 1341\xe2\x80\x99s\nprohibition on expenditures and obligations in excess or advance of appropriations, section 1517 of title 31 states that government officers and\nemployees \xe2\x80\x9cmay not make or authorize an expenditure or obligation\nexceeding . . . an apportionment.\xe2\x80\x9d Id. \xc2\xa7 1517(a)(1) (emphasis added).\nUnlike section 1341, section 1517 does not also expressly bar entering\ninto a contract or making an obligation before an apportionment is made.\nIn light of the textual difference between these provisions, at least one\nfederal court of appeals has held that while the ADA prohibits expenditures that \xe2\x80\x9cexceed\xe2\x80\x9d an existing apportionment, it does not prohibit expenditures made in advance of a later apportionment. See Cessna Aircraft\nCo. v. Dalton, 126 F.3d 1442, 1451 (Fed. Cir. 1997). Agency heads must\nreport violations of section 1517 immediately to the President and Congress, and transmit a copy of those reports to the Comptroller General. 31\nU.S.C. \xc2\xa7 1517(b). Officials who violate the section are subject to administrative and criminal penalties, including suspension without pay, removal\nfrom office, and, in the case of knowing and willful violations, a fine and\npossible imprisonment. Id. \xc2\xa7\xc2\xa7 1518, 1519.\nCircular A-11 implements the ADA\xe2\x80\x99s apportionment provisions by giving instructions to agencies about the apportionment process. Section\n120.57 of the Circular addresses the apportionment of carryover funds.\nThat provision, in question-and-answer form, states:\nMust I request that funds apportioned in one fiscal year be apportioned in the next fiscal year if the funds were not obligated and remain available?\nYes. When budgetary resources remain available (unexpired) beyond the end of a fiscal year, you must submit a new apportionment\nrequest for the upcoming fiscal year. You cannot incur obligations in\nany year absent an approved apportionment for that year. For instance, if OMB apportioned $1 million for a no-year [account] in\n[Fiscal Year (\xe2\x80\x9cFY\xe2\x80\x9d)] 2012 and you obligated no funds, you must still\nsubmit an FY 2013 request and receive OMB approval of that request before incurring obligations in FY 2013. Until you receive a\nwritten apportionment from OMB, the amount of carryover apportioned is zero dollars. In addition, apportioned anticipated or estimated resources are not available for obligation until the resources\nare realized.\n94\n\n\x0cObligating Carryover Funds in Violation of OMB Zero-Apportionment Rule\n\nCircular A-11, \xc2\xa7 120.57. Circular A-11 contrasts the apportionment effected by section 120.57, as well as other kinds of \xe2\x80\x9cautomatic apportionments,\xe2\x80\x9d with \xe2\x80\x9cwritten apportionments\xe2\x80\x9d in which OMB approves an agency\xe2\x80\x99s request for an apportionment in a specific amount. Id. \xc2\xa7 120.2. 4 OMB\nalso sometimes refers to these \xe2\x80\x9cwritten apportionments\xe2\x80\x9d as \xe2\x80\x9caccountspecific apportionments.\xe2\x80\x9d See OMB Letter at 2.\nB.\nWe understand that your request for advice was prompted by a situation that arose during Fiscal Year 2014 involving the National Oceanic\nand Atmospheric Administration (\xe2\x80\x9cNOAA\xe2\x80\x9d), an operating unit within the\nDepartment of Commerce (\xe2\x80\x9cDepartment\xe2\x80\x9d). NOAA has a no-year fund\ncalled the \xe2\x80\x9cFisheries Enforcement Asset Forfeiture Fund\xe2\x80\x9d (\xe2\x80\x9cFisheries\nEnforcement AFF\xe2\x80\x9d or \xe2\x80\x9cFund\xe2\x80\x9d), which consists generally of sums received by NOAA as fines, penalties, and forfeitures of property for\nviolations of marine resource laws, along with transferred amounts that\nare \xe2\x80\x9cavailable until expended.\xe2\x80\x9d See Department of Commerce Appropriations Act, 2012, Pub. L. No. 112-55, div. B, \xc2\xa7 110, 125 Stat. 552, 591,\n602 (2011) (establishing the Fund). 5 Because Fiscal Year 2014 began on\nOctober 1, 2013, OMB\xe2\x80\x99s statutory deadline to apportion the unobligated\ncarryover amounts in the Fund fell on September 11, 2013. See 31 U.S.C.\n\xc2\xa7 1513(b)(2)(A). In anticipation of that deadline, the ADA required the\nDepartment to submit an apportionment request to OMB by August 22,\n2013. See id. \xc2\xa7 1513(b)(1)(A). NOAA submitted an initial request to the\nDepartment\xe2\x80\x99s internal Office of Budget (\xe2\x80\x9cOB\xe2\x80\x9d) in August. Commerce\nLetter at 2. However, due to subsequent back-and-forth between OB and\nNOAA, the Department did not submit its apportionment request to OMB\nuntil December 2013. Id. OMB approved a final version of the apportionment request several months later, on April 11, 2014. Id. This final\n4 As Circular A-11 explains, \xe2\x80\x9c[a]n automatic apportionment is approved by the OMB\nDirector in the form of a Bulletin or provision in Circular A-11, and typically describes a\nformula that agencies will use to calculate apportioned amounts. An automatic apportionment is in contrast to the written apportionments, which typically include specific\namounts, and which are approved by an OMB Deputy Associate Director (or designee).\xe2\x80\x9d\nId. \xc2\xa7 120.2.\n5 A no-year appropriation is an appropriation \xe2\x80\x9cthat is available for obligation for an\nindefinite period.\xe2\x80\x9d 1 Federal Appropriations Law at 2-14 (3d ed. 2004).\n\n95\n\n\x0c40 Op. O.L.C. 90 (2016)\n\nversion apportioned the unobligated carryover funds in the Fisheries\nEnforcement AFF by project. Id. The apportionment therefore nominally\ncovered the full fiscal year, even though two quarters of that year had\nalready passed when the apportionment was approved. Until OMB issued\nthis account-specific apportionment in April, however, section 120.57 of\nCircular A-11 was in effect with respect to the relevant funds. As a\nresult, between October 1, 2013, and April 11, 2014, NOAA was operating under an automatic zero-dollar apportionment for the Fisheries Enforcement AFF. NOAA nonetheless \xe2\x80\x9cobligated\xe2\x80\x9d funds from the Fisheries\nEnforcement AFF during Fiscal Year 2014 \xe2\x80\x9cbefore the [account-specific]\napportionment was issued.\xe2\x80\x9d Id. \xe2\x80\x9cThe total Fisheries Enforcement AFF\nobligations during that time,\xe2\x80\x9d however, \xe2\x80\x9cdid not exceed the final apportionment amount for FY 2014\xe2\x80\x9d that OMB approved in April. Id.\nYour opinion request asks us to address whether an agency official violates section 1517 when she obligates funds in violation of OMB\xe2\x80\x99s automatic zero-dollar apportionment under the circumstances just described.\nId. at 1, 4 (\xe2\x80\x9cI am charged with determining whether NOAA\xe2\x80\x99s violation of\nOMB\xe2\x80\x99s rule, [section] 120.57 of OMB Circular A-11, of itself constitutes\na violation of the ADA.\xe2\x80\x9d). As in prior situations involving ADA questions\nprompted by past conduct, we decline to address whether particular past\nactions violated the ADA. See Online Terms of Service Agreements with\nOpen-Ended Indemnification Clauses Under the Anti-Deficiency Act, 36\nOp. O.L.C. 112, 114 (2012). We will, however, use the features of the\nscenario you have described to provide general guidance in response to\nyour question. See id.\nII.\nAs noted above, section 120.57 states in relevant part that \xe2\x80\x9c[u]ntil [an\nagency] receive[s] a written apportionment from OMB, the amount of\ncarryover apportioned [for a given fiscal year] is zero dollars.\xe2\x80\x9d Circular\nA-11, \xc2\xa7 120.57 (emphasis added). By its terms, this provision purports to\nmake a default, automatic apportionment of zero dollars in carryover\nfunds until and unless an agency receives a different written apportionment from OMB. Section 120.57 is thus, as OMB explains, an exercise of\nits delegated statutory authority to apportion appropriations. See OMB\nLetter at 2 (\xe2\x80\x9c[Section] 120.57[] is . . . an application of 31 U.S.C. \xc2\xa7 1513,\nwhich requires that the President (and, by delegation, OMB) apportion\n96\n\n\x0cObligating Carryover Funds in Violation of OMB Zero-Apportionment Rule\n\nappropriations.\xe2\x80\x9d). Assuming section 120.57 is a valid exercise of that\nauthority, it would appear straightforward to conclude that obligations or\nexpenditures made in excess of this zero-dollar apportionment would\nviolate the ADA. See 31 U.S.C. \xc2\xa7 1517(a)(1).\nAnd on its face, the automatic apportionment in section 120.57 does not\nexceed the limits of OMB\xe2\x80\x99s authority to apportion funds under the ADA.\nNothing in the ADA, and no other authority of which we are aware,\nprevents OMB from using categorical rules that operate automatically to\napportion funds in preset amounts, or requires it to issue apportionments\non an account-specific basis. Indeed, OMB often relies on automatic, categorical apportionments: another provision of the Circular automatically\napportions newly enacted full-year appropriations on a pro rata basis, see\nCircular A-11, \xc2\xa7 120.41, and OMB frequently issues automatic apportionments of amounts provided in continuing resolutions, see, e.g., OMB\nBulletin No. 15-03, Apportionment of the Continuing Resolution(s) for\nFiscal Year 2016 (Sept. 30, 2015), https://www.whitehouse.gov/sites/\ndefault/files/omb/bulletins/2015/15-03.pdf (last visited ca. Sept. 2016);\nsee also 2 Federal Appropriations Law at 6-141 (3d ed. 2006) (noting\nOMB\xe2\x80\x99s practice of issuing automatic apportionments in the context of\ncontinuing resolutions). We are likewise aware of nothing in the ADA\nthat would preclude OMB from apportioning carryover funds in the\namount of zero dollars in the circumstances at issue here. 6 And while the\nADA does require apportionments to be \xe2\x80\x9cin writing,\xe2\x80\x9d 31 U.S.C.\n\xc2\xa7 1513(b)(1), OMB\xe2\x80\x99s automatic-apportionment rules\xe2\x80\x94including the one\nthat appears in section 120.57\xe2\x80\x94satisfy this requirement, because they are\nset forth in writing in Circular A-11 or in OMB Bulletins.\nThe ADA does provide that \xe2\x80\x9c[i]n apportioning or reapportioning an appropriation, a\nreserve may be established only\xe2\x80\x94(A) to provide for contingencies; (B) to achieve savings\nmade possible by or through changes in requirements or greater efficiency of operations;\nor (C) as specifically provided by law.\xe2\x80\x9d 31 U.S.C. \xc2\xa7 1512(c)(1). However, we understand\nthat OMB has never considered the zero-dollar apportionments of carryover funds effected by section 120.57 to create \xe2\x80\x9creserves.\xe2\x80\x9d As discussed below, see infra p. 98, the purpose\nof the zero-dollar apportionment in section 120.57 is not to \xe2\x80\x9cset aside\xe2\x80\x9d budgetary resources that might otherwise be used, or be required to be used, in order to \xe2\x80\x9cprovide for\ncontingencies,\xe2\x80\x9d \xe2\x80\x9ceffect savings,\xe2\x80\x9d or for some other purpose. GAO, A Glossary of Terms\nUsed in the Federal Budget Process 25 (Sept. 2005) (defining \xe2\x80\x9creserve\xe2\x80\x9d). Rather, the\npurpose of section 120.57 is simply to ensure that carryover funds will not be used during\nthose portions of their period of availability when they are not needed.\n6\n\n97\n\n\x0c40 Op. O.L.C. 90 (2016)\n\nAutomatic apportionments further the purposes of the ADA by (among\nother things) helping OMB meet the deadlines set forth in that statute. As\nwe explained above, the ADA requires OMB to apportion appropriated\nfunds by a set date\xe2\x80\x94in the case of carryover funds, no later than twenty\ndays before the beginning of the fiscal year for which those funds are\navailable. By requiring apportionments to be in place before the fiscal\nyear starts, these deadlines help ensure that the underlying purposes of\nthe apportionment process are served\xe2\x80\x94\xe2\x80\x9cprevent[ing] obligation or expenditure at a rate that would indicate a necessity for a deficiency or\nsupplemental appropriation for the period\xe2\x80\x9d in the case of time-limited\nappropriations, and ensuring that appropriations are used \xe2\x80\x9ceffective[ly]\nand economical[ly]\xe2\x80\x9d in the case of appropriations available for an indefinite period. 31 U.S.C. \xc2\xa7 1512(a). Automatic apportionments make it\npossible for OMB to meet these statutory deadlines even when doing so\nwould otherwise be difficult, such as when Congress provides temporary\nfunding for agency operations through short-term continuing resolutions,\nor when an agency fails to submit a specific apportionment request prior\nto the statutory deadline. See Walsh E-mail.\nAs was just noted, 31 U.S.C. \xc2\xa7 1512(a) requires OMB to apportion appropriations for an indefinite period to achieve \xe2\x80\x9cthe most effective and\neconomical use\xe2\x80\x9d of those appropriations. See also 2 Federal Appropriations Law at 6-121 (3d ed. 2006) (identifying this provision as the applicable requirement for no-year funds). OMB agrees that \xe2\x80\x9c[a]ll apportionments, including the one in section 120.57, are subject to the requirements\nof section 1512(a).\xe2\x80\x9d Walsh E-mail. It is less clear that if an OMB apportionment failed to meet these requirements, it would then be invalid, such\nthat agencies could make obligations or expenditures in excess of the\npurported apportionment without violating the ADA. We need not resolve\nthis question, however, because we believe that application of the automatic zero-dollar apportionment in section 120.57 in the circumstances at\nissue here satisfies the \xe2\x80\x9ceffective and economical use\xe2\x80\x9d standard.\nTo begin with, in requiring every appropriation to be apportioned by\ncertain time periods, projects, or a combination thereof, 31 U.S.C.\n\xc2\xa7 1512(b)(1), the ADA makes clear that the official designated to make\nan apportionment subject to those requirements must do so \xe2\x80\x9cas the official considers appropriate,\xe2\x80\x9d id. \xc2\xa7 1512(b)(2). The ADA thus gives OMB\nsubstantial discretion in making each apportionment, consistent with the\n98\n\n\x0cObligating Carryover Funds in Violation of OMB Zero-Apportionment Rule\n\nrequirement that the apportionment achieve the most effective and economical use of the funds. And we think that OMB\xe2\x80\x99s exercise of this\ndiscretion in section 120.57 was sound. OMB has explained that when an\nagency \xe2\x80\x9chas not requested the use of carryover funds at the beginning of\nthe fiscal year\xe2\x80\x9d\xe2\x80\x94as was the case with respect to the Fisheries Enforcement AFF\xe2\x80\x94OMB presumes that the agency \xe2\x80\x9chas no present programmatic need for [those] funds.\xe2\x80\x9d Walsh E-mail. In our view, it is reasonable for\nOMB to assume both that agencies are best positioned to evaluate their\nown fiscal needs, and that they have an incentive to seek any necessary\nfunds for their own operations. It is also reasonable for OMB to assume\nthat agencies understand that the ADA itself requires them to submit\napportionment requests for carryover funds forty days prior to the start of\na fiscal year, and requires OMB to complete the apportionments twenty\ndays later. See 31 U.S.C. \xc2\xa7 1513(b)(1)(A), (b)(2)(A). In light of these\nconsiderations, we think it is similarly reasonable to presume that if an\nagency fails to request funds before the start of a fiscal year, it has no\npresent need for those funds. And in that situation, it makes further sense\nthat imposing a default zero-dollar apportionment would not only allow\nOMB to comply with its statutory apportionment deadline, but also\nachieve the most \xe2\x80\x9ceffective and economical use\xe2\x80\x9d of the relevant carryover funds, by ensuring that they are not used during a period when they\nare not needed. 7\nAs we understand its position, the Department does not dispute that\nsection 120.57 is, by its terms, an \xe2\x80\x9capportion[ment].\xe2\x80\x9d Circular A-11,\n\xc2\xa7 120.57; see, e.g., Talbert-Duarte E-mail (\xe2\x80\x9c[W]e recognize that OMB\nstructured \xc2\xa7 120.57 as an apportionment of zero.\xe2\x80\x9d). Rather, we take the\nDepartment\xe2\x80\x99s argument to be that, whatever its formal structure, the\nsubstantive effect of section 120.57 is to prevent agencies from obligating or expending funds in advance of an account-specific apportionment.\n\nBecause we consider only the application of section 120.57 in circumstances where\nan agency has failed to submit an apportionment request for carryover funds before the\nstart of a fiscal year, we express no view on whether OMB could justify an automatic\napportionment of zero dollars by operation of section 120.57 under any other circumstances, including where an agency submits an apportionment request by the agency\xe2\x80\x99s\nforty-day deadline, where the agency submits a request after the forty-day deadline but\nbefore OMB\xe2\x80\x99s twenty-day deadline, or where the agency submits its request after OMB\xe2\x80\x99s\ntwenty-day deadline but before the start of the fiscal year.\n7\n\n99\n\n\x0c40 Op. O.L.C. 90 (2016)\n\nSee Commerce Letter at 1 (Although \xe2\x80\x9c[the] OMB prohibition is structured as an automatic apportionment of carryover amounts at zero,\xe2\x80\x9d\n\xe2\x80\x9c[a]s a consequence of this structure, an agency official who obligates\nfunds in advance of an apportionment violates the OMB rule by exceeding the automatic apportionment amount of zero.\xe2\x80\x9d); Talbert-Duarte\nE-mail (\xe2\x80\x9cFrom the perspective of an agency official to whom the [apportionment rule in section 120.57] applies, the purpose and effect of the\nrule is the same\xe2\x80\x94there can be no obligation before there is an apportionment of an actual dollar amount.\xe2\x80\x9d). According to the Department,\nthis is problematic for three reasons, which we consider in turn.\nFirst, the Department contends that, by creating a situation in which\nagencies can never obligate carryover funds before they are apportioned,\n\xe2\x80\x9cthe statutory distinction between [section] 1341\xe2\x80\x9d\xe2\x80\x94which prohibits\nobligations and expenditures both in advance and in excess of appropriations\xe2\x80\x94\xe2\x80\x9cand [section] 1517\xe2\x80\x9d\xe2\x80\x94which prohibits obligations and expenditures only in excess of apportionments\xe2\x80\x94\xe2\x80\x9cis entirely erased.\xe2\x80\x9d TalbertDuarte E-mail; see id. (noting that OMB itself states that \xe2\x80\x9c[b]y operation\nof \xc2\xa7 120.57, an agency will never be in \xe2\x80\x98advance of \xe2\x80\x99 an apportionment of\ncarryover, because it will always have an apportionment\xe2\x80\x9d (quoting OMB\nLetter at 2)). This argument rests on the premise that, as the Federal Circuit has held, section 1517 does not bar obligations or expenditures in\nadvance of an apportionment. See Cessna Aircraft, 126 F.3d at 1451. We\nwill assume for purposes of this opinion that this conclusion is correct.\nEven with this assumption, we do not think the Department\xe2\x80\x99s argument is\nconvincing. The Department in effect asserts that the ADA prevents OMB\nfrom creating a situation in which an agency will never find itself without\nan apportionment, because it would then never have the opportunity to\nobligate or expend funds in advance of an apportionment. But as we\nexplained above, nothing in the ADA bars automatic apportionments,\nrequires that apportionments be account-specific, or requires that apportionments always be made in non-zero amounts. See supra p. 97. Thus, so\nlong as an automatic apportionment meets the standards for apportionment in the ADA, see supra p. 98 (discussing standards), it is a valid\napportionment, even if it precludes agencies from ever being without an\napportionment. Indeed, such a result seems fully consistent with the\nADA\xe2\x80\x99s statutory design. As discussed earlier, Congress specifically created deadlines for apportionments of carryover funds, seeking to ensure\n100\n\n\x0cObligating Carryover Funds in Violation of OMB Zero-Apportionment Rule\n\nthat they would be completed before the start of any fiscal year. If agencies and OMB adhered to their statutory deadlines, there would\xe2\x80\x94at least\nin the ordinary course\xe2\x80\x94never be a situation in which an agency had\navailable carryover funds without an apportionment. Thus, the mere fact\nthat OMB has created an automatic-apportionment mechanism that ensures that an apportionment will always be in effect does not by itself\nmake section 120.57 invalid, and in fact accords with congressional\ndesign.\nThe Department\xe2\x80\x99s second argument is that section 120.57 should be\nconsidered a kind of administrative rule that \xe2\x80\x9ctemporarily precludes the\nuse of funds as a matter of administrative control\xe2\x80\x9d while enabling \xe2\x80\x9cOMB\nto comply with [its statutory] deadlines,\xe2\x80\x9d rather than an \xe2\x80\x9capportionment\nthat prescribes [the relevant funds\xe2\x80\x99] use in definite amounts by time\nperiods or activities\xe2\x80\x9d\xe2\x80\x94violation of which would trigger potential penalties under the ADA. Torczon E-mail. The Department appears to suggest\nthat, if an OMB rule is merely designed to temporarily prevent agencies\nfrom using funds for purposes of administrative control and to ensure\nOMB\xe2\x80\x99s own ADA compliance, rather than to actually apportion funds\nunder the standards set forth in the ADA, it would not be appropriate to\nsubject agency officials to ADA penalties for violating that rule. Cf.\nTalbert-Duarte E-mail (\xe2\x80\x9c[T]he question we are raising does not concern a\n\xe2\x80\x98zero dollar\xe2\x80\x99 apportionment in a specific situation where programmatic\nneeds dictate that amounts are not necessary for a particular time period.\nOur question concerns only the automatic, across-the-board application\nof [section] 120.57.\xe2\x80\x9d); Torczon E-mail (While \xe2\x80\x9cagencies and OMB are\nrequired to comply with the time deadlines established for submitting and\napproving apportionments,\xe2\x80\x9d \xe2\x80\x9c[a] violation of the deadlines . . . is not a\nreportable violation of the [ADA], and we question the appropriateness\nof factoring the deadlines into the analysis of the issue we raise regarding\na reportable violation of section 1517.\xe2\x80\x9d). We need not decide whether a\nrule that merely precluded the use of funds as a matter of administrative\ncontrol and deadline compliance would be a valid apportionment under\nthe ADA, however, because, at least as applied in situations where an\nagency fails to submit an apportionment request before the start of a\nfiscal year, we do not believe section 120.57 is such a rule. For the reasons explained above, see supra pp. 96\xe2\x80\x9399, OMB\xe2\x80\x99s automatic zero-dollar\napportionment for carryover funds complies with the ADA\xe2\x80\x99s formal\n101\n\n\x0c40 Op. O.L.C. 90 (2016)\n\nrequirements for apportionments, and represents a reasonable exercise of\nOMB\xe2\x80\x99s apportionment discretion. If an agency fails to request an apportionment before the start of a fiscal year, it is reasonable to presume that\nthe agency has no programmatic need for the relevant funds during that\nyear. There is thus no basis to conclude that a rule setting a zero-dollar\napportionment in such a situation is merely an administrative control\nmeasure that prevents obligations and expenditures until OMB has time\nto make an account-specific apportionment.\nFinally, the Department argues that OMB\xe2\x80\x99s \xe2\x80\x9cblanket presumption of no\nprogrammatic need\xe2\x80\x9d is \xe2\x80\x9cinapposite in at least many cases where an agency\nis actively engaged in the apportionment process with OMB.\xe2\x80\x9d Torczon\nE-mail. The Department acknowledges that, in the situation involving\nNOAA that gave rise to its opinion request, \xe2\x80\x9cinternal revisions and delays\nwithin the Department . . . caused the [proposed Fisheries Enforcement\nAFF] apportionment to be submitted late to OMB.\xe2\x80\x9d Id. But it points out\nthat \xe2\x80\x9cissues raised by sequestration (among other things) delayed the\napportionment further for several months after submission to OMB.\xe2\x80\x9d Id.\nOMB\xe2\x80\x99s rationale for its zero-dollar apportionment, the Department suggests, may make sense prior to the point at which an agency makes a\nrequest for a non-zero apportionment, but not during the period after such\na request is made, but before the account-specific apportionment process\nis completed. See id. The Department thus contends that, whether because\nOMB\xe2\x80\x99s rule would not \xe2\x80\x9cachieve the most effective and economical use\xe2\x80\x9d\nof the funds during that period, or because the rule would impermissibly\nundermine Congress\xe2\x80\x99s decision not to subject obligations and expenditures in advance of apportionments to ADA penalties, violation of the rule\nafter a request has been submitted should not give rise to penalties under\nthe ADA. See id.\nAgain, we disagree. For the reasons we have explained, it is in our view\nreasonable for OMB to presume that, if a request for a non-zero apportionment of carryover funds is not pending at the start of a fiscal year, the\nagency has no current need for those funds. An agency\xe2\x80\x99s belated request\nfor a non-zero apportionment might call into question the continuing\nfactual accuracy of OMB\xe2\x80\x99s assumption after the request is made. But we\ndo not think such a belated request somehow undermines the validity of\nthe initial default apportionment. The ADA itself makes the start of each\nfiscal year the critical time for making apportionments for carryover\n102\n\n\x0cObligating Carryover Funds in Violation of OMB Zero-Apportionment Rule\n\nfunds. See 31 U.S.C. \xc2\xa7 1513(b)(2)(A). It is therefore reasonable for OMB\nto set apportionments based on its analysis of the appropriate apportionment as of the start of the fiscal year. The ADA does reflect the possibility that circumstances might change during a fiscal year, by requiring\nOMB to review apportionments at least four times a year. See id.\n\xc2\xa7 1512(d). But the ADA does not provide any specific instructions about\nwhat OMB must do if it determines that an apportionment is no longer\nappropriate after one of its reviews, let alone provide a specific timeline\nfor providing a revised apportionment. The Act thus appears to leave\nthose matters to OMB\xe2\x80\x99s discretion to \xe2\x80\x9capportion an appropriation . . . as\n[it] considers appropriate.\xe2\x80\x9d Id. \xc2\xa7 1512(b)(2). In light of that discretion and\nthe statutory focus on the start of the fiscal year, we do not think the\npassing of several months between an agency\xe2\x80\x99s belated apportionment\nrequest for carryover funds and OMB\xe2\x80\x99s issuance of a new accountspecific apportionment would render the original, default apportionment\ninvalid at any point during the period in which the belated request was\npending. 8\nIII.\nFor the reasons set forth above, we conclude that, at least in circumstances where an agency fails to submit an apportionment request for\ncarryover funds before the start of a fiscal year, the automatic zero-dollar\napportionment in section 120.57 of OMB Circular A-11 is a valid appor8 The Department also argues that, in light of the potential penalties involved, the\nquestion whether violation of section 120.57 constitutes an ADA violation \xe2\x80\x9cshould be\nexamined with an eye to the familiar rule of statutory construction commonly known as\nthe rule of lenity.\xe2\x80\x9d Commerce Letter at 3\xe2\x80\x934; see also Use of Appropriated Funds to\nProvide Light Refreshments to Non-Federal Participants at EPA Conferences, 31 Op.\nO.L.C. 54, 69 (2007) (explaining that the rule of lenity holds that \xe2\x80\x9cif ambiguity remains in\na criminal statute after textual, structural, historical, and precedential analyses have been\nexhausted, the narrower construction should prevail\xe2\x80\x9d). However, we do not believe this\nquestion involves sufficient statutory ambiguity to justify application of the rule of lenity.\nRather, for the reasons explained above, we think it clear that, applying ordinary tools of\nstatutory construction to the relevant provisions in the ADA, section 120.57 effects a\nvalid apportionment under that statute. See Lockhart v. United States, 136 S. Ct. 958, 968\n(2016) (\xe2\x80\x9cWe have used the lenity principle to resolve ambiguity in favor of the defendant\nonly . . . when the ordinary canons of statutory construction have revealed no satisfactory\nconstruction.\xe2\x80\x9d).\n\n103\n\n\x0c40 Op. O.L.C. 90 (2016)\n\ntionment for purposes of the ADA. As a result, in such circumstances, 31\nU.S.C. \xc2\xa7 1517 would prohibit an agency from expending or obligating\nfunds exceeding that apportionment.\nKARL R. THOMPSON\nPrincipal Deputy Assistant Attorney General\nOffice of Legal Counsel\n\n104\n\n\x0c'


b'Steel Industry Compliance Extension Act of 1981\nThe Steel Industry Compliance Extension A ct o f 1981 (A ct) permits the Administrator of\nthe Environm ental Protection Agency to accede to a steel company\xe2\x80\x99s request for an\nextension o f otherwise applicable deadlines for compliance with the Clean A ir Act only\nif the A dm inistrator finds that the company has met its ongoing obligations under its\nexisting consent decrees, or th at any violations are de minimis in nature.\nWhile the term \xe2\x80\x9cde minimis\xe2\x80\x9d is not defined in the Act, the legislative history confirms\nthat it was meant to have its ordinary meaning\xe2\x80\x94that is, \xe2\x80\x9cnegligible\xe2\x80\x9d or \xe2\x80\x9cinsubstantial\no r inconsequential.\xe2\x80\x9d\n\nNovember 9, 1981\nMEMORANDUM FOR THE ASSISTANT ATTORNEY\nG EN ERA L, LAND A ND NATURAL RESOURCES DIVISION\nThis responds to your request for our views concerning the proper\nconstruction of the term \xe2\x80\x9cde minimis\xe2\x80\x9d as used in the Steel Industry\nCompliance Extension Act of 1981, Pub. L. No. 97-23, 95 Stat. 139 (to\nbe codified at 42 U.S.C. \xc2\xa7 7413(e)) (Act), familiarly known as the Steel\nTripartite Amendment, Tripartite, and Steel Stretch-out. We have\nfound nothing in the statute or its legislative history to suggest that de\nminimis was meant to have anything other than its usual meaning\xe2\x80\x94that\nis, negligible, insubstantial, or inconsequential. Anderson v. Mt. Clemens\nPottery Co., 328 U.S. 680, 692, 693 (1946). We therefore conclude that\nthe Act does not permit the Administrator of the Environmental Pro\xc2\xad\ntection Agency (EPA) to enter into or modify a consent decree for the\npurpose of extending compliance deadlines under the Clean Air Act, 42\nU.S.C. \xc2\xa7 7401 et seq. (Supp. IV 1980), unless the Administrator finds\nthat a company is in compliance with its existing consent decrees, or\nany violations are of a de minimis nature, as defined; at the time the\ncompany applies for an extension.\nIn reaching this conclusion, we have carefully reviewed the legisla\xc2\xad\ntive history of the Act, including the House and Senate reports,1 the\n\n1 H.R. Rep. No. 161, 97th Cong., 1st Sess. (1981), H.R. Rep. No. 121, 97th Cong., 1st Sess. (1981);\nS. Rep. No. 133, 97th Cong., 1st Sess. (1981).\n\n326\n\n\x0chearings,2 and the floor debates.3 This material makes it clear that both\nCongress and the members of the Steel Tripartite Committee (Commit\xc2\xad\ntee) who drafted the Act intended that the EPA Administrator have\ndiscretion to grant extensions only to those companies who had met\ntheir ongoing obligations under a consent decree.\nI. Background\nThe Clean Air Act Amendments of 1970, 42 U.S.C. \xc2\xa7 1857 et seq.\n(1976) (amending the Air Quality Act of 1967, Pub. L. No. 90-148, 81\nStat. 485 (codified at 42 U.S.C. \xc2\xa7 1857-1871/) (1970)) (amended 1977),\ndeveloped lists of air pollutants, promulgated national ambient air qual\xc2\xad\nity standards, 42 U.S.C. \xc2\xa7 1857c-4 (1970 ed.), and required each state to\ndevelop a plan to implement the air quality standards. Id. at \xc2\xa7 1857c-5.\nThe state, or, if it failed to act, the EPA, was authorized to prevent the\nconstruction or modification of any new sources of pollution\xe2\x80\x94such as\nfactories\xe2\x80\x94from being built if the construction would prevent attain\xc2\xad\nment or maintenance of the national air quality standards. Id. at\n\xc2\xa7 1875c-5(a) (2)(D), (4). The Clean Air Act Amendments of 1977, 42\nU.S.C. \xc2\xa7 7401 (Supp. IV 1980), extended the deadlines for meeting most\nof the standards for pollutants to December 31, 1982. The EPA Admin\xc2\xad\nistrator was charged with seeking injunctions and recovering civil pen\xc2\xad\nalties against those who violate the Clean Air Act\xe2\x80\x99s provisions. 42\nU.S.C. \xc2\xa7\xc2\xa77413, 7420 (Supp. IV 1980). Through this enforcement mech\xc2\xad\nanism, the Administrator has brought actions and, in most instances,\nobtained consent decrees. Mandatory investment schedules contained in\nthose decrees insure, through the mechanism of the threat of stipulated\ndamages, that the companies meet the 1982 final compliance deadline.4\nBy 1979, when the EPA had reached consent decrees with most of\nthe major steel companies, H.R. Rep. No. 121, supra, at 4-8 (Table 1),\nexpenditures for pollution control had become a major drain on the\nresources available to the steel industry for capital investment. In 1980,\nfor example, 19% of the steel industry\xe2\x80\x99s annual capital expenditure was\nfor pollution control. This was far greater than that spent by compara\xc2\xad\nble heavy industries such as the electric utilities (9.2%) or the automo\xc2\xad\n2 Steel Tripartite Committee Proposal: Hearings on H.R. 1817. H.R. 2024. H.R. 2219. et al. Before the\nSubcomm. on Health and the Environment o f the House Comm, on Energy and Commerce. 97th Cong.,\n1st Sess. (1981) [hereafter cjted as Hearings on H.R. 1817\\\\ Steel Industry Compliance Extension Act o f\n1981: Hearing on S. 63 Before the Senate Comm, on Environment and Public Works. 97th Cong., 1st\nSess. (1981) [hereafter cited as Hearing on S. 63]\\ Report o f the Steel Tripartite Comm. Hearings Before\nthe Senate Comm, on Environment and Public Works. 96th C ong, 2d Sess (1980) [hereafter cited as\nTripartite Hearings).\n3 127 Cong Rec. H3747-52 (daily ed. June 26, 1981); id. at S6985-87 (daily ed. June 25, 1981); id. at\nS6605 (daily ed. June 19, 1981); id. at S6090-93 (daily ed. June 11, 1981); id. at H2463-64 (daily ed.\nMay 28, 1981); id. at H2444-56 (daily ed. May 28, 1981).\n*See C. Stewart, Air Pollution, Human Health and Public Policy 35-48 (1979). See generally.\nEnvironmental Law Institute, Air and W ater Pollution Control Law- 1980 (G. Wetstone, ed. 1980);\nHearing on S. 63. supra, at 62 (Report of the Steel Tripartite Advisory Committee Working Group on\nEnvironmental Protection).\n\n327\n\n\x0ctive industry (5.4%). Id. at 9 (Table 2). Not only was the percentage of\ncapital invested higher, it was also more difficult for the steel industry\nto raise. Id. (Table 3). This, the steel companies argued, was due to\npressure on the industry by the federal government not to raise prices,\nmaking it increasingly difficult to recapture costs, and because of the\nwillingness of the federal government to sacrifice the domestic steel\nindustry to foreign policy considerations by allowing \xe2\x80\x9cdumping\xe2\x80\x9d of\nforeign steel. Hearings on H.R. 1817, supra, at 48-9; Tripartite Hearings,\nsupra, at 101-02 (report prepared by the Congressional Research Serv\xc2\xad\nice).\nThe Steel Tripartite Committee was formed to advise the President\non the steel industry\xe2\x80\x99s problems and to suggest ways to revitalize the\nindustry. It was made up of representatives of the senior management\nof the steel companies, the United Steelworkers of America Union, and\nthe federal government. The Committee\xe2\x80\x99s working group on environ\xc2\xad\nmental issues later added a fourth member, the Natural Resources\nDefense Council (NRDC).5 These disparate groups brought to the\nnegotiating table concerns about the flagging health of the steel indus\xc2\xad\ntry, the protection of local economies threatened by plant closings, the\npromotion of worker health and safety, and the public\xe2\x80\x99s interest in\ncontinued progress toward the goals of the Clean Air Act. Out of their\ndynamic balancing of interests and resultant compromises came the\n1981 amendments embodied in the Act. In order \xe2\x80\x9cto provide the steel\nindustry with vitally needed capital for modernization, while maintain\xc2\xad\ning public health and environmental protection,\xe2\x80\x9d the Committee pro\xc2\xad\nposed that steel companies be given 3 more years in which to meet the\nrequirements of the Clean Air Act. H.R. Rep. No. 121, supra, at 8-9.\nThe \xe2\x80\x9ctrade-off\xe2\x80\x99 for the extension of the deadline for compliance with\nthe Clean Air Act was that the companies obtaining the benefit of the\nextension would invest in modernization efforts the capital resources\nwhich would otherwise have gone into more immediate compliance\nefforts.6 The compromise reflected by the Act was, therefore, to im\xc2\xad\nprove the efficiency and productivity of the American steel industry at\nthe cost of some temporary setbacks in the achievement of the goals for\ncleaner air contained in the Clean Air Act. However, to ensure that the\ncompanies would not abandon progress toward pollution control, each\ncompany applying for an extension would have to meet six carefully\ncrafted conditions. In order to consent to an extension of the schedule\nfor compliance, the EPA Administrator would have to find:\n5T he N R D C is a national environmental group which frequently plays an active role in the\nlegislative process. It was invited to jo in the working group by the Executive Office of the President\nand the United Steelworkers of America Union.\n6 Since the new er equipment would contain the most modern technology, it was argued that it\nwould usually be cleaner than what it was replacing.\n\n328\n\n\x0c(A) That the extension is necessary to allow the com\xc2\xad\npany to make capital investments designed to improve\nefficiency and productivity;\n(B) That funds equal to what would otherwise have\nbeen spent by December, 1982 on pollution control will\nbe spent within two years on capital investments;\n(C) That the company will enter into a consent decree\nestablishing a schedule for bringing all its stationary\nsources of pollution into compliance;\n(D) That the company will have enough money to\ncomply with its consent decrees;\n(E) That the company is in compliance with existing\nfederal consent decrees or that any violations are de ,\nminimis in nature; and\n(F) That any extensioin will not result in degradation of\nair quality during the extension.\nSee Act, \xc2\xa7 113(e)(1) (A)-(F). Each of these requirements was included\n\nin response to objections that the Act was special-interest legislation.\nOn each of the six, the company \xe2\x80\x9cbears the burden of proof.\xe2\x80\x9d H.R.\nRep. No. 121, supra, at 10.\nSection 113(e)(1)(E) is Congress\xe2\x80\x99 response to critics who claimed the\nAct would \xe2\x80\x9cgive relief to those companies which have been avoiding\nthe law and penaliz[e] those who have complied.\xe2\x80\x9d Tripartite Hearings,\nsupra, at 27 (Follow-up Questions for EPA). As finally enacted,\n\xc2\xa7 113(e)(1)(E) requires that\nthe Administrator find[ ], on the basis of information sub\xc2\xad\nmitted by the applicant and other information available to\n[the Administrator] that the applicant is in compliance\nwith existing Federal judicial decrees (if any) entered\nunder section [113] of this Act applicable to its iron- and\nsteel-producing operations or that any violations of such\ndecrees are de minimus [sic] in nature.\nAct, \xc2\xa7 113(e)(1)(E). You have asked us to consider what kind of viola\xc2\xad\ntions can be considered de minimis.\nII. The Meaning of De Minimis Under the Act\n\nDe minimis is not defined in the Act. It was suggested as the\nstandard by Ms. Frances Dubrowski, NRDC representative, during the\nlate stages of the Committee\xe2\x80\x99s drafting of the Act.7 The suggestion was\nmade in response to the steel industry\xe2\x80\x99s suggestion that the test be\n\xe2\x80\x9csubstantial compliance\xe2\x80\x9d with one\xe2\x80\x99s consent decree.8 That the parties\n7 Telephone conversation with Mr. Stephen D. Ramsey, Chief, Environmental Enforcement Sec\xc2\xad\ntion, Land and Natural Resources Division, United States Department of Justice, October 16, 1981.\n8 Id.\n\n329\n\n\x0cintended a narrow definition is supported by the Senate report which\nstates:\nA de minimis violation of an emission limitation is a\nviolation resulting from circumstances beyond the control\nof the source owner or employee which causes no meas\xc2\xad\nurable increase in emissions from a source.\nS. Rep. No. 133, supra, at 4. \xe2\x80\x9cThe intent of this provision is twofold: to\nensure that pollution control expenditures required to be made before\nthe grant of an extension under this act are not deferred and to ensure\nthat only those companies making a good faith effort to comply with\nexisting environmental obligations obtain the benefit of further deadline\nextensions.\xe2\x80\x9d H.R. Rep. No. 121, supra, at 10.\nDe minimis matters have traditionally been defined as \xe2\x80\x9cnegligible,\xe2\x80\x9d\n\xe2\x80\x9ctrifles,\xe2\x80\x9d \xe2\x80\x9cinsubstantial and insignificant.\xe2\x80\x9d Anderson v. Mt. Clemens Pot\xc2\xad\ntery Co., 328 U.S. 680, 692, 693 (1946).9 The legislative history is scanty\non the issue, but what there is reflects this understanding. The Senate\nreport, for instance, defines de minimis violations of a consent decree as\nthose resulting in \xe2\x80\x9cno measurable increase in emissions from a source.\xe2\x80\x9d\nS. Rep. No. 133, supra, at 4. A violation that \xe2\x80\x9cresult[s] from circum\xc2\xad\nstances beyond the control of the source owner\xe2\x80\x9d would bar even a\nminor violation, if caused by the owner\xe2\x80\x99s fault or neglect. Id. And a\nviolation that really causes \xe2\x80\x9cno measurable increase in emissions\xe2\x80\x9d must\nbe one so minor as to be truly insignificant. Id.\nWhether a particular violation is de minimis is a decision that must\ninitially be made by EPA, since the discretion belongs to the Adminis\xc2\xad\ntrator and it is his expertise which will inform your review and will\nguide your judgment as to whether you (on behalf of the Attorney\nGeneral) will approve the modification of the decree. The EPA Imple\xc2\xad\nmentation Manual describes the test to be used.\nIn determining what are insignificant deviations, the\nagency should consider the extent of the delay, the nature\nof the violation, the good faith of the company, and the\nextent to which the delay impacts other provisions of the\ndecree.\nManual, Ex. G., at 2. We assume this involves determinations of issues\nsuch as whether a violation is temporary or, if easily curable, likely to\nbe cured because of the company\xe2\x80\x99s good faith willingness or effort to\ncure. However, \xe2\x80\x9c[w]here emissions limits are in issue, these cannot be\nviewed as \xe2\x80\x98de minimis\xe2\x80\x99 unless they cause no significant increase in\nemissions from a source.\xe2\x80\x9d Id. at 1.\n9 See also Industrial Union Depl v. American Petroleum Institute, 448 U.S. 607, 664 (1980) (Burger,\nJ , concurring) (\xe2\x80\x9c insignificant,\xe2\x80\x9d "scant o r minimal risks\xe2\x80\x9d ); Hunter v. Madison Aye. Corp., 174 F.2d 164,\n167 (6th Cir. 1949) ("inconsequential\xe2\x80\x9d ).\n\n330\n\n\x0cIII. The Role of \xc2\xa7 113(e)(1)(E) and De Minimis Under the Act\n\nThe Administrator should make every effort to give effect to Con\xc2\xad\ngress\xe2\x80\x99 desire to afford economic relief to the steel industry so that it can\ndevote capital resources to modernization. The Act, however, expressly\nand unequivocally conditions the companies\xe2\x80\x99 eligibility for an extension\nof the time deadlines under the Clean Air Act on the Administrator\xe2\x80\x99s\nmaking of two crucial findings: no \xe2\x80\x9cdegradation of air quality,\xe2\x80\x9d\n(\xc2\xa7 113(e)(1)(F)), and no extensions unless a company is \xe2\x80\x9cin compliance\nwith existing Federal judicial decrees (if any) . . . [or] any violations of\nsuch decrees are de minim[i]s in nature.\xe2\x80\x9d (\xc2\xa7 113(e)(1)(E)). If the Admin\xc2\xad\nistrator cannot reasonably make such findings, the Act simply does not\nallow an exercise of discretion that ignores the Act\xe2\x80\x99s language in an\nattempt to maximize the number of steel companies eligible for relief.\nCompliance with the pollution control schedules contained in the con\xc2\xad\nsent decrees is just as integral a part of the Act as the desire to allow\ndiversion of capital from air pollution equipment to improvements in\nplant efficiency.\nCongress clearly contemplated, based in substantial part on the testi\xc2\xad\nmony of representatives of the steel industry, that compliance with\nexisting decrees was a condition which was acceptable to the industry\nand attainable by it. While the provision was being fully debated by the\ncommittee that drafted the statute and the Congress that passed it, there\nwas no indication that the steel companies could not or would not\ncomply. In fact, on March 3, 1981, the EPA testified that most of the\nsteel companies would be in compliance with their respective consent\ndecrees by the end of the year.\nThe steel industry used to have a fairly well-deserved\nreputation as a major polluter of air and water. However,\nthat situation has now changed very much for the better.\nWhere in July 1978 only 32 percent of air pollution\nsources in the steel industry were in compliance or on\ncourt-ordered compliance schedules, by the end of this\nyear that number will be up to approximately 90 percent.\nHearings on S. 63, supra, at 6 (statement of Walter C. Barber, Jr.,\nActing Administrator, EPA); Hearings on H.R. 1817, supra, at 88 (85%)\n(statement of Walter C. Barber, Jr.); Tripartite Hearings, supra, at 13\n\n(84%) (statement of Michele B. Corash, General Counsel, EPA). Since\nthe steel companies\xe2\x80\x99 representatives were present and made no objec\xc2\xad\ntion to these figures,10 Congress must have assumed that this condition\ncould be met by most steel companies.\n10\nThe steel companies complained that because they were complying with their respective consent\ndecrees, they would have no money left for modernization under the Act. See n 13 infra.\n\n331\n\n\x0cThe necessity of complying with outstanding consent decrees was\ndiscussed during the floor debates 11 and the hearings.12 The steel\ncompanies themselves expressly recognized that the failure to be in\ncompliance with their respective consent decrees would bar them from\nrelief under the Act and, therefore, that each day\xe2\x80\x99s delay in enacting\nthe law reduced the value of the Act to them.\nIf I might depart from the Chairman\xe2\x80\x99s questions briefly,\nthe point we most want to make here today is that this\nissue requires immediate legislative action. Those compa\xc2\xad\nnies who have existing consent decrees with the EPA are\non a schedule of compliance which requires weekly and\nsometimes daily commitment of funds to meet the Decem\xc2\xad\nber 31, 1982 deadline. Failure to meet these increments of\nprogress places us in technical violation of the consent\nagreements. S. 63 states that an extension applicant must be\nin compliance with existing consent agreements. [Emphasis\nadded.] If we are to have any funds to defer for modern\xc2\xad\nization, we must have this amendment now.\nHearings on S. 63, supra, at 47 (statement of George A. Stinson, Chair\xc2\xad\n\nman of National Steel Corp.) (March 3, 1981). A few weeks later, the\nsame speaker made the point again.\nThe terms of the agreement, coupled with long leadtimes\nfor construction, require us to commit the funds early in\nthe agreement if we are to meet the 1982 completion\ndates. Some funds for engineering, for site clearance, and\nthe like have already been, expended, and within a very\nfew weeks we will have to make major capital commit\xc2\xad\nments which in many cases will be impossible to defer\nfurther.\nThese commitments are spelled out in the judicial\ndecree with specific dates for action, and failure to meet\nthose dates puts us in technical violation of the agreement.\nA ny violation o f the agreement would in turn make us ineli\xc2\xad\ngible under the provisions o f H.R. 1817 i f it becomes law.\n\nFor these reasons, we and others need this amendment\nvery soon if it is to have any benefit toward a rapid\nmodernization of the industry. Passage of the amendment\nlater this year under the reauthorization of the Clean Air\nAct would be of very little, if any, benefit to the industry.\n11 127 Cong. Rec \' H3750 (daily ed. June 26, 1981); id. at H2447 (daily ed. May 28, 1981).\n12 Tripartite Hearings, supra, at 18 (EPA ), 27 (EPA); Hearings on S. 63, supra, at 91 (NRDC);\nHearings on H .R. 1817, supra, at 132 (statement by Pres. Carter submitted by the White House for the\nrecord).\n\n332\n\n\x0cHearings on H.R. 1817, supra, at 65 (emphasis added) (March 25,\n\n1981).13 David M. Roderick, Chairman of the United States Steel\nCorp., made the same point at the same hearings.\nThe existence or prospects of the consent decrees, as I\nmentioned earlier, is what creates the urgent need for this\nlegislation.............Our willingness to enter into these\nagreements has created binding obligations to make cap\xc2\xad\nital commitments that I mentioned earlier. In order to\ncomply with our consent decrees and make the milestone\nschedules which they contain, we must commit millions\nof dollars virtually every month. Once these funds are\ncommitted, they are no longer available to be considered\nfor stretchout, and we lose the opportunities to use these\nfunds in the interim for modernization.\nId. at 70.\n\nThe Administrator\xe2\x80\x99s flexibility in interpreting the Act is limited by\nthe fact that any modification to any consent decree issued pursuant to\nthe terms of the Act must be approved by the judge in whose court the\nprior consent decree was approved. Act, \xc2\xa7 113(e)(7)(B)(ii). Information\n(unless confidential) used to make the decision and the decision itself\nwill be matters of public record. Id. \xc2\xa7 113(e) (3), (7). The right of\nprivate parties or states to intervene under \xc2\xa7 304 of the Clean Air Act,\n42 U.S.C. \xc2\xa7 7604 (Supp. IV 1980) for violation of emission standards\nremains available, \xc2\xa7 113(e)(8); H.R. Rep. No. 121, supra, at 13, and\nwould no doubt be exercised if such litigants felt that there had been an\nabuse of discretion by the Administrator in consenting to an extension\nwhere the de minimis finding was not defensible. United States v.\nRepublic Steel Corp., 15 Env\xe2\x80\x99t Rep. (BNA) 1463 (N.D. 111. 1980); Fed.\nR. Civ. P. 24. Evaluation of whether a violation is de minimis, there\xc2\xad\n13 The steel companies were obliged to meet schedules in their consent decrees premised on a\ncomplete cleanup by December 1982. The race to get the Act passed before all the money was\ncommitted to compliance as mandated by consent decrees is illustrated in the following exchange\nbetween Rep. Waxman and Mr Stinson, Chairman of National Steel Corp., and Mr. Roderick,\nChairman o f United States Steel Corp.\nMr. Waxman. Mr. Roderick and Mr. Stinson, when is the latest possible date for\npassage of this legislation to be valuable to the industry?\nMr. Stinson. Well, every additional day, Mr Chairman, poses a problem for us. It is\nquite difficult for me to say whether it is March 31 or April 30, but I could definitely\nsay to you that if it were delayed into the late summer, it would be o f virtually no\nbenefit to us.\nMr. Roderick. . . [E]ach month of delay would mean basically about $15 million to\n$20 million that otherwise would be available for modernization would have to go to\nenvironmental commitments, and if by July we didn\xe2\x80\x99t have even the EPA approval by\nthat time, we would pretty well have run the gamut, we would have pretty well have\nhad to commit on almost all the facilities in order to make the 1982 deadline. So I\nwould say legislatively, Mr. Chairman, we would hope that it would be possible to\nhave this legislation sometime no later than the end of April, allowing us time to make\nour presentations to the EPA and satisfy their requirements so that we would not have\nto commit, let\xe2\x80\x99s say, after July.\nHearings on H.R. 1817. supra, at 90. The Act did not become law until July 17, 1981\n\n333\n\n\x0cfore, is not a matter analogous to the exercise of prosecutorial discre\xc2\xad\ntion\xe2\x80\x94it is an administrative decision that will be reviewed by the\ncourts and critiqued by highly interested advocates. Unless supported\nby a cogent rationale, a finding that a violation is de minimis is likely to\nbe rejected.\nIV. Arguments in Favor of a Broader Meaning of De Minimis\n\nWe have evaluated several potential arguments that might be ad\xc2\xad\nvanced to support a broader meaning of de minimis, but they appear to\nbe unsupported by the traditional meaning of the term or the Act\xe2\x80\x99s\nlegislative history.\nA.\nWe have considered whether de minimis might be measured\nagainst a particular company\xe2\x80\x99s entire pollution control program or its\ncompliance rate with all of its consent decrees, rather than measured\nagainst its operations at a particular plant. We do not believe that it\nmay. The Act was an attempt to balance the steel industry\xe2\x80\x99s need for\nextensions so that it could devote capital resources to modernization\nagainst the continuing interest of the public in cleaner air. Exceptions\nunder the Act were to be carefully scrutinized to ensure that all the\nconditions were met. \xe2\x80\x9cT he bill does not authorize the granting of\nextensions on a blanket basis. Each request for an extension with re\xc2\xad\nspect to a specific emission control requirement and facility is to be\nconsidered individually.\xe2\x80\x9d S. Rep. No. 133, supra, at 1. The emphasis\nappears to have been placed quite intentionally on individual stationary\nsources. In fact, rather than a violation at one plant being viewed as de\nminimis because of compliance at 99% of the company\xe2\x80\x99s other plants,\nthe drafters apparently contemplated that a violation at one plant\nwould preclude the granting of an exception even for the 99% of that\ncompany\xe2\x80\x99s plants that are in compliance.\nThe owner of a source which is in violation of an\nemission limitation after a compliance deadline in an exist\xc2\xad\ning decree is not eligible for a compliance extension\nbeyond 1982 for any source which would otherwise be\neligible until the violating source is brought into compli\xc2\xad\nance with the applicable emission limitation.\nId. at 4 (emphasis added).14 We therefore do not believe that determi\xc2\xad\n\nnation of whether a violation is de minimis should be made in the\ncontext of a company\xe2\x80\x99s entire compliance program.\n14\nThis understanding is reflected in a recent letter from the United States Steel Corp. to the EPA.\n\xe2\x80\x9c [T]he A ct appears to contemplate th at the Administrator may make a finding related to only one of\nthe applicant\'s sources which leads to a decision that the applicant is ineligible under the Act, and that\nthe ineligibility then applies to all o f applicant\'s sources.\xe2\x80\x9d Letter from Ms. Dorothy H. Servis, Senior\nGenera] A ttorney, Environmental and Real Estate, United States Steel Corp., to Mr. Michael Alushin,\nD irector, Steel T ripartite Task Force, E PA at 2 (Oct. 23, 1981).\n\n334\n\n\x0cMoreover, this interpretation of de minimis would lead to an incon\xc2\xad\nsistent and unequal application of the de minimis standard. The same\nviolation would be a de minimis violation for a large company with\nmany plants but a substantial violation for a small company with only a\nfew plants. The larger the company, the more violations it could absorb\nand still obtain an exception. This construction would be particularly\nanomalous since the larger companies are also presumably generally\nbetter able to generate the capital necessary to eliminate violations. We\ntherefore do not find support for the argument that whether a violation\nis de minimis should be measured against the total company compliance\nwith the Clean Air Act or all of a particular company\xe2\x80\x99s outstanding\ndecrees.16\nB. We have also considered whether the Administrator could avoid\nthe issue of whether or not a violation is de minimis by agreeing to\nmodifications of the existing consent decrees to remove the require\xc2\xad\nments that give rise to the violations. We believe that the Act does not\nauthorize such a procedure. Not only would this create a major loop\xc2\xad\nhole that would permit the Administrator effectively to eliminate\n\xc2\xa7 113(e)(1)(E) from the Act, but it would also contradict the Act\xe2\x80\x99s\nlanguage and the repeated statements by all parties assuring Congress\nthat the steel companies knew they had to be in compliance and would\nbe in compliance with their consent decrees. Most importantly, it\nwould contradict the clearly expressed desire of Congress that only\ncompanies that had made the effort and expended the funds necessary\nto comply with their outstanding consent decrees were entitled to this\nexception. \xe2\x80\x9c[EJxisting decrees may not be amended so as to make\ncompanies eligible for extensions under this proposal.\xe2\x80\x9d H.R. Rep. No.\n121, supra, at 10. Congress foresaw and precluded this argument.\nC. The same response must be made to the suggestion that the\nAdministrator commence contempt actions against the violators and\nthen settle the actions, collect outstanding stipulated penalties, and\nsubstitute new compliance schedules. Substitution of new compliance\nschedules would effectively amend existing consent decrees, contrary to\nthe letter and spirit of the House report. It would permit companies\nthat had failed to abide by their consent decrees access to the benefits\nof the Act. Since we believe that Congress clearly intended that such\n16 A similar argument was rejected in an early case discussing de minimis, N L R B v. Cowell Portland\nCement Co., 108 F.2d 198 (9th Cir. 1939), in which the issue was whether a company was doing\nenough interstate business to fall within the NLRB\xe2\x80\x99s jurisdiction.\nThe quantity of cement shipped out of state is not de minimis merely because it is but a\nsmall percentage of respondent\'s total sales Otherwise, we would have the anomaly of\none plant under federal regulation because exporting its entire product of 14,000\nbarrels while alongside it another competing plant was under state regulation because,\nthough\' shipping the same amount of 14,000 barrels, they constituted, say, but 4 percent\nof its product. Congress could not have intended that it would subject laboring men or\nemployers to such a confusing and, in business competition, such a destructive anom\xc2\xad\naly.\nId. at 201\n\n335\n\n\x0ccompanies be barred from an extension under the Act, we do not\nbelieve the Administrator may interpret the Act to permit such substi\xc2\xad\ntution of new compliance schedules.\nWe believe that de minimis means what it has traditionally meant\xe2\x80\x94an\ninsignificant or insubstantial matter. Where the violation of a consent\ndecree cannot reasonably be described as insignificant, we do not be\xc2\xad\nlieve that the Administrator can properly authorize an extension under\nthe Act.\nV. Conclusion\n\nWe have not attempted to determine whether any particular com\xc2\xad\npany is or is not in violation of its consent decrees or, if the facts\nsupport a finding that there is a violation, whether that violation is de\nminimis. That would require a factual determination which we are not\nqualified to make and must be made, subject to your approval, by the\nAdministrator. Each applicant, as noted earlier, has the burden of\nestablishing that it is in compliance with the consent decrees or that its\nviolations are de minimis.\nThe normal meaning o f the term de minimis is entirely consistent\nwith the Act\xe2\x80\x99s legislative history. Indeed, all of the legislative history\non the subject supports that conclusion and none of it supports a more\nexpansive definition. Since the EPA and the steel industry and Con\xc2\xad\ngress all seemed to believe that nearly all of the steel companies would\nbe in compliance with their consent decrees, the Act did not contem\xc2\xad\nplate any substantial deviations from the consent decrees. We have no\nway of determining whether Congress would have voted for the Act at\nall if the information had established that the companies were not then\nsubstantially in compliance or capable of placing themselves into such a\nstatus. We certainly cannot attribute to Congress an intent to allow the\nEPA Administrator to ignore or deviate in any material way from one\nof the integral components of the Act.\nT h e o d o r e B. O l s o n\nAssistant Attorney General\nOffice o f Legal Counsel\n\n336\n\n\x0c'


b'Administration of the Ronald Reagan\nCentennial Commission\nThe Ronald Reagan Centennial Commission should create an executive committee,\ncomposed of its five presidentially appointed members, to discharge the purely executive functions of the Commission.\nThe six congressional members, in turn, could participate in nearly all of the Commission\xe2\x80\x99s activities, including in ceremonial functions, and could advise the executive\ncommittee on the formulation of programs that would be technically approved and\nexecuted by non-congressional members.\nMay 7, 2010\n\nMEMORANDUM OPINION FOR THE COUNSEL TO THE PRESIDENT\nYou have forwarded to our Office a letter from four of the presidentially appointed members of the Ronald Reagan Centennial Commission,\nin which they request advice on a plan they have developed in order to\navoid the constitutional concerns raised by the composition of the Commission under the Ronald Reagan Centennial Commission Act of 2009,\nPub. L. No. 111-25, 123 Stat. 1767 (the \xe2\x80\x9cAct\xe2\x80\x9d). See Letter for Robert\nBauer, Counsel to the President, from Peggy Noonan, John F.W. Rogers,\nFrederick J. Ryan Jr., and Fred W. Smith, Re: Operation of the Ronald\nReagan Centennial Commission (Mar. 11, 2010) (\xe2\x80\x9cMarch 11 Letter\xe2\x80\x9d).\nUnder this plan, four of the presidentially appointed members of the\nCommission, and all six congressional members, would vote to delegate\nto the one other presidentially appointed member the responsibility to\nexercise the Commission\xe2\x80\x99s duties under section 3(1) of the Act. The\nremaining ten members would then be limited to advisory and ceremonial\nfunctions, and the eleventh, designated member would exercise all of\nthe Commission\xe2\x80\x99s significant executive responsibilities. See Memorandum on Implementation of the Ronald Reagan Centennial Commission\nAct (\xe2\x80\x9cImplementation Memo\xe2\x80\x9d) at 3 (attached to March 11 Letter). You\nhave asked for our views of this proposal.\nThe proposal, at least in spirit if not in letter, well addresses the concerns that we previously identified. We believe, however, that the precise form of the proposed solution requires some refinement in order to\nensure it conforms to the constitutional understandings on which it\nappears to be premised and to avoid a potential statutory problem. Thus,\n174\n\n\x0cAdministration of the Ronald Reagan Centennial Commission\n\nwe conclude that the Commission should instead follow the recommendation this Office offered in a very similar context in its 1984 opinion\non Appointments to the Commission on the Bicentennial of the Constitution\xe2\x80\x94namely, to create an \xe2\x80\x9cexecutive committee,\xe2\x80\x9d composed of the\nfive presidentially appointed members, which \xe2\x80\x9cwould be legally responsible for discharging the purely executive functions of the Commission.\xe2\x80\x9d\n8 Op. O.L.C. 200, 207 (1984) (\xe2\x80\x9cConstitution Bicentennial Commission\xe2\x80\x9d).\nThese functions would include determining which activities would be\n\xe2\x80\x9cfitting and proper to honor Ronald Reagan on the occasion of the 100th\nanniversary of his birth\xe2\x80\x9d and \xe2\x80\x9cplan[ning], develop[ing], and carry[ing]\nout\xe2\x80\x9d such activities. Pub. L. No. 111-25, \xc2\xa7 3(1). The six congressional\nmembers, in turn, could \xe2\x80\x9cparticipate in nearly all of the Commission\xe2\x80\x99s\nactivities,\xe2\x80\x9d including in ceremonial functions, and could advise the executive committee on \xe2\x80\x9cthe formulation of programs that would be technically\napproved and executed by non-congressional members.\xe2\x80\x9d Constitution\nBicentennial Commission, 8 Op. O.L.C. at 207. At the end of this memorandum, we briefly explain why this recommendation could be implemented in a manner that would not violate the constitutional holding in\nFEC v. NRA Political Victory Fund, 6 F.3d 821 (D.C. Cir. 1993).\nI.\nThe Ronald Reagan Centennial Commission Act created an elevenmember commission with responsibility to \xe2\x80\x9cplan, develop, and carry out\nsuch activities as the Commission considers fitting and proper to honor\nRonald Reagan on the occasion of the 100th anniversary of his birth.\xe2\x80\x9d\nPub. L. No. 111-25, \xc2\xa7 3(1). Six of the eleven commissioners are members of Congress, appointed by congressional leadership. Id. \xc2\xa7 4(a). Four\ncommissioners are appointed by the President, and the remaining commissioner is the Secretary of the Interior. Id.\nAs we explained in a memorandum concerning the constitutionality of\nthe bill before Congress enacted it, the inclusion of members of Congress\nraises significant concerns under the Appointments Clause and the Ineligibility Clause of the Constitution, and in light of the anti-aggrandizement\nprinciple underlying the constitutional separation of powers. See Participation of Members of Congress in the Ronald Reagan Centennial Commission, 33 Op. O.L.C. 193 (2009) (\xe2\x80\x9cReagan Centennial Commission\xe2\x80\x9d).\n175\n\n\x0c34 Op. O.L.C. 174 (2010)\n\nTo ameliorate these concerns, we suggested that the bill be amended to\nprovide for designation of an executive branch official as the officer\nresponsible for considering the advice and recommendations of the commissioners and then \xe2\x80\x9cplanning, developing and carrying out\xe2\x80\x9d the ceremonial events. Congress did not make any such amendment, however. Therefore, when he signed the bill into law President Obama stated that, in\norder to implement the Act in a constitutional manner, \xe2\x80\x9cmembers of\nCongress \xe2\x80\x98w[ould] be able to participate only in ceremonial or advisory\nfunctions of [the] Commission, and not in matters involving the administration of the act.\xe2\x80\x99\xe2\x80\x9d Statement on Signing the Ronald Reagan Centennial\nCommission Act, 2009 Daily Comp. Pres. Doc. No. 424, at 1 (June 2,\n2009) (quoting Statement on Signing the Bill Establishing a Commission\non the Bicentennial of the United States Constitution (Sept. 29, 1983),\n2 Pub. Papers of Pres. Ronald Reagan 1390, 1390 (1983)).\nFour of the five presidentially appointed commissioners (all except the\nSecretary of the Interior) have proposed the following plan to avoid the\nconstitutional problems we previously identified:\nFirst, all Commissioners save one Presidentially appointed Commissioner would elect\xe2\x80\x94subject to their statutory rights\xe2\x80\x94not to exercise\nthe powers set forth in \xc2\xa7 3(1) of the Act. Second, the Commission\nwould carry out its planning and other functions up to the point of\nexecution, and then create a final plan in the form of a resolution.\nThird, the Commission would transmit this resolution to the Presidentially appointed member of the Commission who would be designated to exercise the \xc2\xa7 3(1) power. That designated Commissioner\nwould evaluate and potentially execute the resolution as an Officer\nof the United States.\nImplementation Memo at 3.\nII.\nThis proposal raises the following constitutional concern. The six congressional members, along with four of the five presidentially appointed\nmembers, would vote to delegate statutory duties to the remaining presidentially appointed commissioner. Those duties would include all of the\nstatutory duties of the Commission, including those that may constitution176\n\n\x0cAdministration of the Ronald Reagan Centennial Commission\n\nally be exercised only by Commission members who were presidentially\nappointed. The congressional members lack the authority to exercise the\nsignificant executive authority that, under the proposal, they would purport to confer on another member of the Commission.\nTo avoid this anomaly, and to reflect the allocation of authority the\nConstitution requires, we believe the Commission should follow the\nrecommendation this Office offered in a comparable context in 1984, see\nConstitution Bicentennial Commission, 8 Op. O.L.C. 200\xe2\x80\x94namely, \xe2\x80\x9cto\ncreate an executive committee composed of all [five of the Commission\nmembers who are constitutionally eligible to exercise the duties of the\nCommission] that would be legally responsible for discharging the purely\nexecutive functions of the Commission,\xe2\x80\x9d id. at 207\xe2\x80\x94including, in particular, determining which activities would be \xe2\x80\x9cfitting and proper to honor\nRonald Reagan on the occasion of the 100th anniversary of his birth,\xe2\x80\x9d\nPub. L. No. 111-25, \xc2\xa7 3(1), and giving final approval to all executive\nactions. The six congressional members, in turn, could \xe2\x80\x9cparticipate in\nnearly all of the Commission\xe2\x80\x99s activities,\xe2\x80\x9d could perform ceremonial\nfunctions, and could advise the executive committee as to all of its functions, including \xe2\x80\x9cthe formulation of programs that would be technically\napproved and executed by non-congressional members.\xe2\x80\x9d Constitution\nBicentennial Commission, 8 Op. O.L.C. at 207. Moreover, under this\napproach the entire Commission, including the congressionally appointed\nmembers, could also \xe2\x80\x9cprovide advice and assistance to Federal, State, and\nlocal governmental agencies, as well as civic groups to carry out activities\nto honor Ronald Reagan on the occasion of the 100th anniversary of his\nbirth,\xe2\x80\x9d as section 3(2) of the Act authorizes, since such functions do not\nraise the constitutional problems we have identified.\nWe do not think that the Commission\xe2\x80\x99s establishment of such an \xe2\x80\x9cexecutive committee\xe2\x80\x9d would present the problem identified above. Consistent with the President\xe2\x80\x99s signing statement, and in order to avoid serious constitutional questions, we would construe the Act already to limit\nthe exercise of \xe2\x80\x9cthe purely executive functions of the Commission,\xe2\x80\x9d\nConstitution Bicentennial Commission, 8 Op. O.L.C. at 207, to the five\npresidentially appointed commissioners who would constitute the \xe2\x80\x9cexecutive committee.\xe2\x80\x9d Cf. 58 Fed. Reg. 59,640 (Nov. 10, 1993) (reporting that\nfour days after a court of appeals had held that the presence of two ex\nofficio congressional appointees on the Federal Election Commission was\n177\n\n\x0c34 Op. O.L.C. 174 (2010)\n\nunconstitutional, the FEC \xe2\x80\x9creconstituted itself as a body of six voting\nmembers\xe2\x80\x9d). Thus, there would be no purported \xe2\x80\x9cdelegation\xe2\x80\x9d of significant\nauthority from congressionally appointed officers to presidentially appointed ones. This formal distinction, while effectively resulting in the\nsame allocation of functions to the congressional members as in the\nproposal in the Implementation Memo submitted to you, would not present the constitutional infirmities we discussed in our earlier memorandum, or the anomaly described above. Instead, an executive committee\nwould simply exercise those functions that may be properly exercised\nonly by the presidentially appointed officers.\nMoreover, because this course would involve no delegation of statutory\nauthority within the Commission, it would also avoid a potentially serious\nstatutory problem. The members\xe2\x80\x99 proposal would call for a delegation of\nthe Commission\xe2\x80\x99s statutory duties to a single member. Particularly in light\nof section 4(h) of the Act, which provides that \xe2\x80\x9c[a] majority of the members of the Commission shall constitute a quorum to conduct business, but\ntwo or more members may hold hearings,\xe2\x80\x9d and the fact that the statute\ncontains neither a specific authority to delegate powers to Commission\nmembers, see R.R. Yardmasters of Am. v. Harris, 721 F.2d 1332, 1334\n(D.C. Cir. 1983) (citing 45 U.S.C. \xc2\xa7 154 (1976)), nor a general rulemaking authority from which certain delegation authorities might be inferred,\nsee Fleming v. Mohawk Wrecking & Lumber Co., 331 U.S. 111, 121\n(1947), we do not see any obvious source of authority for the Commission\nto delegate its powers to a subset (or one) of its members. That is another\nreason why the better course would be for the Commission to create an\n\xe2\x80\x9cexecutive committee,\xe2\x80\x9d consisting of the five presidentially appointed\nmembers, to exercise the Commission\xe2\x80\x99s statutory authorities. Were the\nexecutive committee to consist of fewer than five members, it would raise\nthe issue of the statutory authority of the presidentially appointed members to delegate some of their significant executive authority to that\nsmaller group. But so long as the executive committee consists of all\nmembers entitled to exercise significant executive authority under the\nConstitution, there would be no delegation of Commission duties and thus\nno statutory problem.\n\n178\n\n\x0cAdministration of the Ronald Reagan Centennial Commission\n\nIII.\nFinally, the members who sent you the March 11 Letter appear to be\nconcerned (see Implementation Memo at 2) that adopting the \xe2\x80\x9cexecutive\ncommittee\xe2\x80\x9d solution from our 1984 opinion could run afoul of FEC v.\nNRA Political Victory Fund, 6 F.3d 821 (D.C. Cir. 1993). The court in\nthat case declared invalid a section of the Federal Election Campaign Act,\n2 U.S.C. \xc2\xa7 437c(a)(1), which provided that the Secretary of the Senate and\nClerk of the House or their designees were to be members of the Federal\nElection Commission \xe2\x80\x9cex officio and without the right to vote.\xe2\x80\x9d The FEC\nhad argued that the presence of those members was constitutionally harmless because their only formal role was informational and advisory. The\ncourt rejected this argument, reasoning that \xe2\x80\x9cthe mere presence of agents\nof Congress on an entity with executive powers offends the Constitution.\xe2\x80\x9d\n6 F.3d at 827; see also Reagan Centennial Commission, 33 Op. O.L.C. at\n199 & n.8.\nBut this case would be distinguishable in important respects from NRA\nPolitical Victory Fund. As the United States explained in its brief to the\nSupreme Court in that case, the statute at issue there compelled the FEC\n\xe2\x80\x9cto afford the Secretary and Clerk an integral role in all its deliberative\nprocesses. By participating as members in the FEC\xe2\x80\x99s deliberations, the ex\nofficio agents give Congress the ability to express its views from within\nthe Commission on issues involving the execution and administration of\nthe FECA in specific cases and instances.\xe2\x80\x9d Brief for the United States as\nAmicus Curiae at 18 \xe2\x80\x9319, FEC v. NRA Political Victory Fund, 513 U.S. 88\n(1994); see also id. at 20 \xe2\x80\x9321 (warning about the \xe2\x80\x9clack of confidentiality\xe2\x80\x9d\nand explaining that \xe2\x80\x9c[t]he prospect that these congressional employees\nwill report on FEC proceedings to Congress may cause the other members\nto \xe2\x80\x98temper candor with a concern for appearances and for their own interests to the detriment of the decisionmaking process\xe2\x80\x99\xe2\x80\x9d) (quoting United\nStates v. Nixon, 418 U.S. 683, 705 (1974)); NRA Political Victory Fund,\n6 F.3d at 827 (reasoning that entitling congressional agents to be present\nduring the confidential deliberations of the executive officials was analogous to the compelled presence of nonvoting alternate jurors during jury\ndeliberations); Harold H. Bruff, The Incompatibility Principle, 59 Admin. L. Rev. 225, 255\xe2\x80\x9356 (2007) (\xe2\x80\x9cAlthough Congress opened many of\nthe deliberations of multi-member agencies like the FEC to public view\n179\n\n\x0c34 Op. O.L.C. 174 (2010)\n\nthrough the Sunshine Act, the Act contains exceptions allowing confidential discussions, which would lose much of their efficacy if congressional\nmonitors were present for discussions among the Commissioners. . . . The\nvalues underlying both executive privilege and the incompatibility principle suggest the need for some zone of privacy for executive deliberation.\xe2\x80\x9d\n(footnote omitted)).\nThe Ronald Reagan Centennial Commission, by contrast, could implement our 1984 recommendation in a manner that does not raise these\nconcerns: The executive committee would simply choose to consult with\nand receive advice from those members not serving on the executive\ncommittee. Here, the executive committee alone would be responsible for\nexercising significant executive authority, and no one other than the\npresidentially appointed officers would be serving on that decisionmaking body, thereby distinguishing this case from NRA Political Victory\nFund, in which the congressional agents were ex officio members of a\ncommission that was required to deliberate as a whole on its decisions. In\nNRA Political Victory Fund, the congressional agents did not serve on a\nbody in which the decisional and advisory functions were segregated in\nthe manner that our 1984 memorandum suggested and that we recommend\nto be the proper course here. Moreover, absent the particular problem\npresent in NRA Political Victory Fund, there is nothing constitutionally\nproblematic about members of Congress offering advice designed to\ninfluence executive action, as the court in NRA Political Victory Fund\nitself acknowledged. 6 F.3d at 827 (Congress \xe2\x80\x9cenjoys ample channels to\nadvise, coordinate, and even directly influence an executive agency,\xe2\x80\x9d\nincluding by \xe2\x80\x9cdirect communication with the [agency]\xe2\x80\x9d); see also Mistretta v. United States, 488 U.S. 361, 408 (1989) (the Constitution \xe2\x80\x9canticipates that the coordinate Branches will converse with each other on matters of vital common interest\xe2\x80\x9d).\nMARTIN S. LEDERMAN\nDeputy Assistant Attorney General\nOffice of Legal Counsel\n\n180\n\n\x0c'