b"August 10, 1979\n\n79-59\n\nMEMORANDUM OPINION FOR THE\nCOUNSEL TO THE PRESIDENT\nFederal Advisory Committee Act (5 U.S.C.\nApp. I)\xe2\x80\x94United States-Japan Consultative Group\non Economic Relations\n\nThis responds to your request that we summarize the advice we have\nprovided you by telephone concerning two questions that involve the\nU .S.-Japan Consultative G roup on Economic Relations (the G roup). The\nquestions are the following: (1) is the G roup covered by the Federal A d\xc2\xad\nvisory Committee Act; and (2) would an individual appointed to serve as\nthe chief of staff for the American members o f the G roup be subject to the\nFederal conflict o f interest statutes? Given the facts as we understand\nthem, the answer to the first question is no, and the answer to the second\nquestion is yes.\nThe United States-Japan Consultative G roup on Economic Relations\nhas been established by agreement between the President and the Prime\nMinister o f Japan. It is to be composed o f eight members, with four serv\xc2\xad\ning from each country; to date, only the lead representatives o f each na\xc2\xad\ntion have been appointed. The G roup is to meet at regular intervals for a\ntotal o f a few days per year. Its mission, in the broadest terms, is to pro\xc2\xad\nvide a forum for discussion o f m ajor economic issues\xe2\x80\x94involving trade,\nfinance, commerce, and related matters\xe2\x80\x94o f significance to both nations\nand, ultimately, to bilateral relations between them.\nThere are to be two chiefs o f staff, one for the G roup\xe2\x80\x99s Japanese\nmembers and one for the American members. The American chief o f staff\nis to be formally appointed either by the President or by the Secretary of\nState. The actual work o f the staff director would include the identifica\xc2\xad\ntion, analysis, and m onitoring o f economic issues crucial to the Govern\xc2\xad\nment\xe2\x80\x99s economic policy vis-a-vis Japan.\n321\n\n\x0cThe Federal Advisory Committee Act\nIt is our opinion that as a m atter o f statutory construction Congress did\nnot intend the Federal Advisory Committee Act (FACA), 5 U.S.C. App.\n(Supp. Ill, 1979), to apply to such a body created jointly by the United\nStates and another nation. The FA C A \xe2\x80\x99s definition o f an advisory commit\xc2\xad\ntee, in \xc2\xa7 3(2), does not specifically mention international bodies. A broad\nand literal reading o f the definition might encompass an international\ncommission, assuming that it has the function o f advising the President or\na Federal agency. But, as we concluded in 1976 in the context of interna\xc2\xad\ntional joint commissions in which the United States participates, such a\nreading would be inappropriate.\nFirst, it should not be assumed, absent clear evidence to the contrary,\nthat Congress intended the FACA to apply, in this country or abroad, to\ngroups created jointly by, and serving jointly, the United States and\nanother sovereign state. For to conclude otherwise would in effect impose\ncertain duties on the members o f the group who are citizens o f a foreign\nnation, and would empower U.S. officials to take control o f aspects o f the\ngroup\xe2\x80\x99s operation as required by the FACA. See, e.g., FACA, \xc2\xa7 10(d)-(f).\nSuch a consequence might prove offensive to the foreign nation and its\nmembers, and would violate the accepted principle o f statutory construc\xc2\xad\ntion that, absent contrary indication, Federal legislation will not extend\nbeyond the boundaries o f the United States in order to avoid offending the\n\xe2\x80\x9c dignity or right o f sovereignty\xe2\x80\x9d o f other nations. Vermilya-Brown Co. v.\nConnell, 335 U.S. 377, 381 (1948); Steele v. Bulova Watch C o., 344 U.S.\n280, 285 (1952). In addition, substantial issues o f constitutionality con\xc2\xad\ncerning the extent o f the President\xe2\x80\x99s power to conduct foreign relations\nshould be avoided in the construction o f statutes. See, e.g., United States\nv. Vuitch, 402 U.S. 62, 70 (1971). For these reasons, we conclude that the\nFACA should not be viewed as applying to the U .S.-Japan Consultative\nG roup.'\nConflict o f Interest Statutes\n\nThe second question you have raised is whether the staff director for the\nAmerican members o f the G roup should be considered an \xe2\x80\x9c officer\xe2\x80\x9d or\n\xe2\x80\x9c employee\xe2\x80\x9d o f the United States, and thereby subject to the conflict o f in\xc2\xad\nterest restrictions imposed on such persons. As you know, there are basic\xc2\xad\nally two types o f Government employees for purposes o f the conflict o f in\xc2\xad\nterest statutes: regular employees, and \xe2\x80\x9c special Government employees.\xe2\x80\x9d\nIf one fits within either category, he or she must meet certain standards set\ndown by the conflict o f interest statutes; however, the standards applicable\n\n'It should be noted that there is a second ground upon which it might be concluded that the\nFACA is inapplicable. The Act applies only to groups whose functions are \xe2\x80\x9c advisory\xe2\x80\x9d in\nnature, and this group\xe2\x80\x94serving as an instrument o f U .S. foreign policy\xe2\x80\x94might be regarded\nas \xe2\x80\x9c operational\xe2\x80\x9d rather than advisory. Because we think the result clear for the alternative\nreason stated above, we have not studied in detail this second ground.\n\n322\n\n\x0cto special Government employees, who are appointed to perform services\n(with or without compensation) for not more than 130 o f the succeeding\n365 days, are somewhat less stringent. For both categories, the threshold\ntest is whether a person is an \xe2\x80\x9c officer\xe2\x80\x9d or \xe2\x80\x9c employee\xe2\x80\x9d o f the United\nStates.\nIn light o f the facts as explained to us, there seems to be little doubt that\nthe staff director would be an officer or employee o f the Government for\npresent purposes. First, such an individual would be appointed to his posi\xc2\xad\ntion. Thus, there will be a clear formal relationship between the individual\nand the Government. In addition, the staff director is to perform func\xc2\xad\ntions that would appear plainly to be governmental in character. He will,\nfor instance, assist in identifying issues o f sensitivity to the U.S. Govern\xc2\xad\nment in its economic relations with Japan. He will call upon officials in the\nGovernment with expertise in this area\xe2\x80\x94such as in the Department of\nState and Commerce\xe2\x80\x94and may ask them for background papers on m at\xc2\xad\nters o f importance to the Nation. He will help assemble information\nneeded in formulating advice to the President. He will also m onitor\nJapanese responses to the G roup\xe2\x80\x99s activities. Furtherm ore, he is to be\ndirectly supervised by the lead American representative among the\nG roup\xe2\x80\x99s members, who is himself a full-time, regular Government\nemployee. These facts, in their totality, lead us to conclude, on the basis of\nthe tests we have applied in other circumstances, that the staff director\nwould be at least a special Government employee, if not a regular Govern\xc2\xad\nment employee.2\nThe designation o f an officer or employee o f the United States as a\nspecial Government employee, as that term is defined in 18 U.S.C. \xc2\xa7 202,\ndepends on a good faith estimate by the employing agency, made at the\ntime o f appointm ent, that the individual concerned will not actually per\xc2\xad\nform services on all or part o f more than 130 o f the succeeding 365 days.\nThe designation o f a special Government employee remains in effect for\nthe entire 365 days, even if it should turn out that the individual in fact\nserves for more than 130 days. See, Federal Personnel Manual, Chapter\n735, Appendix C, at 2.\nL arry A . H\n\nammond\n\nActing Assistant A ttorney General\nOffice o f Legal Counsel\n\n\xe2\x80\x98See also B. M anning, Federal Conflict o f Interest Law 27, 34 (1964).\n\n323\n\n\x0c"


b'Legal Authority to Approve Changes in Use of Property Under\nSection 414 of the Housing and Urban Development Act of 1969\nT he proposed sale o f property at its fair m arket value in o rder to raise funds to build low and m oderate\nincom e housing on d ifferent property constitutes a change in the use o f property under section\n414 o f the H ousing and U rban D evelopm ent Act o f 1969 and the term s o f the deed o f the 1974\nsale o f the property.\nT he D epartm ent o f H ousing and U rban D evelopm ent and the G eneral Services A dm inistration could\napprove the proposed sale o f property to a public body w ithout violating section 414.\n\nM a rch 5, 1996\n\nM e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l\nG e n e r a l S e r v ic e s A d m in is t r a t io n\n\nThis memorandum responds to your request for our legal opinion on the proper\ninterpretation of section 414 of the Housing and Urban Development Act of 1969,\n40 U.S.C. \xc2\xa7484b as applied to a proposed transaction relating to certain property\nin the San Patricio area of San Juan, Puerto Rico. The transaction at issue involves\nproperty that was sold pursuant to section 414 on September 27, 1974, to the\nPuerto Rico Urban Renewal and Housing Corporation (known by its Spanish acro\xc2\xad\nnym \xe2\x80\x9c CRUV\xe2\x80\x9d ), a public corporation in San Juan, Puerto Rico. During the suc\xc2\xad\nceeding twenty years, CRUV and its successor attempted without success to facili\xc2\xad\ntate the development of low and moderate income housing on the property.\nCRUV\xe2\x80\x99s successor recently asked the United States for permission to sell the prop\xc2\xad\nerty at its fair market value without restriction concerning its use and to use the\nsale proceeds, in part, to build low and moderate income housing in other areas\nof Puerto Rico.\nWe have been asked to address whether the proposed transaction would con\xc2\xad\nstitute a change in the use of the property and if so, whether the United States\ncould approve such change under the strictures of section 414. As discussed\nbelow, we conclude that the proposed sale would constitute a change in the use\nof the property, which under the terms of the deed must be approved by the appro\xc2\xad\npriate agencies of the United States government. We believe that the Department\nof Housing and Urban Development (\xe2\x80\x9c HUD\xe2\x80\x9d ) and the General Services Adminis\xc2\xad\ntration (\xe2\x80\x9c GSA\xe2\x80\x9d ) could provide the required approval without violating section\n414. We have not addressed, however, the policy implications of or merits in\napproving the proposed transaction.\n\n91\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nI. Background\nA. Section 4 1 4\nAt the time of the sale of the property to CRUV in 1974, section 414 of the\nHousing and Urban Development Act of 1969, 40 U.S.C. \xc2\xa7484b, stated in relevant\npart:\n(a) . . . any surplus real property . . . may in the discretion of\nthe Administrator of General Services be transferred to the Sec\xc2\xad\nretary of Housing and Urban Development at his request for sale\nor lease by him at its fair value for use in the provision of housing\nto be occupied by families or individuals of low or moderate in\xc2\xad\ncome, [and for related public facilities and for related commercial\nand industrial facilities approved by the Secretary.] Any such sale\nor lease of surplus land shall be made only to (1) a public body\nwhich will use the land in connection with the development of a\nlow-rent housing project assisted under the United States Housing\nAct of 1937, or under a State or local program found by the Sec\xc2\xad\nretary of Housing and Urban Development to have the same general\npurposes as the Federal program under such Act, or (2) a purchaser\nor lessee who will use the land in connection with the development\nof housing (A) with respect to which annual payments will be made\nto the housing owner pursuant to section 1701s of Title 12, (B)\nfinanced with a mortgage which receives the benefit of the interest\nrate provided for in the proviso in section 1751(d)(5) of Title 12,\nor (C) with respect to which interest reduction payments will be\nmade under section 1715z or 1715z-1 of Title 12 . . . .\n(b) As a condition to any sale or lease of surplus land under\nthis section to a purchaser or lessee other than a public body, the\nSecretary shall obtain such undertakings as he may consider appro\xc2\xad\npriate to assure that the property will be used in the provision of\nhousing and related facilities to be occupied by families or individ\xc2\xad\nuals of low or moderate income for a period of not less than forty\nyears. If during such period the property is used for any purpose\nother than the purpose for which it was sold or leased it shall revert\nto the United States (or, in the case of leased property, the lease\nshall terminate) unless the Secretary and the Administrator of Gen\xc2\xad\neral Services, after the expiration of the first twenty years of such\nperiod, have approved the use of the property for such other pur\xc2\xad\npose. The Secretary shall notify the Committees on Banking and\n92\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nCurrency and the Committees on Government Operations of the\nSenate and House of Representatives whenever any surplus land\nis sold or leased by him, or he and the Administrator of General\nServices approve a change in the use of any surplus land therefore\nsold or leased by him, pursuant to the authority of this section.1\nSection 414 was originally adopted by Congress on December 24, 1969, as\npart of the Housing and Urban Development Act of 1969, Pub. L. No. 91-152,\ntit. IV, \xc2\xa7414, 83 Stat. 379, 400. The purpose of the 1969 Act was to extend\nexisting housing and urban development programs, provide funding for these pro\xc2\xad\ngrams and to improve programs to make them more helpful to low- and moderateincome families. See House Comm, on Banking and Currency, 91st Cong., Hous\xc2\xad\ning and Urban D evelopm ent Act o f 1969 (Comm. Print 1969); H.R. Conf. Rep.\nNo. 91-740 (1969); H.R. Rep. No. 91-539 (1969); S. Rep. No. 91-392 (1969).\nThe statute was amended in 1978 and 1980 and repealed in 1983. The most\nnotable changes in the 1978 amendment included the addition of language to sub\xc2\xad\nsection (a) allowing for the property to \xe2\x80\x9c be occupied predominantly by families\nor individuals of low and moderate income\xe2\x80\x9d and an expansion of the eligible\nhousing programs that could provide assistance. Subsection (b) was modified by\nchanging forty years to thirty years and requiring that the property be used \xe2\x80\x9c to\nthe maximum practicable extent\xe2\x80\x9d for the required housing. The reporting require\xc2\xad\nments to Congress were also deleted. See Housing and Community Development\nAmendments of 1978, Pub. L. No. 95-557, \xc2\xa7 317(a), (b), 92 Stat. 2080, 2100.\nThe 1980 amendment added the Secretary of Agriculture as an eligible recipient\nof surplus property. See Housing and Community Development Act of 1980, Pub.\nL. No. 96-399, 94 Stat. 1614, 1669.\nWith the 1980 amendments, the statute stated in relevant part:\n( a ) . . . any Federal surplus real property . . . may, in the discre\xc2\xad\ntion of the Administrator of General Services, be transferred to the\nSecretary of Housing and Urban Development or the Secretary of\nAgriculture at the request of either such Secretary for sale or lease\nby either Secretary at its fair value for use in the provision of hous\xc2\xad\ning to be occupied predominantly by families or individuals of lowor moderate-income, assisted under a Federal housing assistance\nprogram administered by the Secretary of Housing and Urban De\xc2\xad\nvelopment or the Secretary of Agriculture or under a State or local\nprogram found by the appropriate Secretary to have the same gen\xc2\xad\n1 The statute had been amended once since its original adoption, making minor changes not relevant to the issues\nhere. See Housing and Urban Development Act o f 1970, Pub. L. No. 9 1-609, 84 Stat. 1770, 1816.\n\n93\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\neral purpose, and for related public commercial or industrial facili\xc2\xad\nties approved by the appropriate Secretary. . . .\n(b)\nAs a condition of any disposition by the Secretary of Federal\nsurplus real property under this section to an entity other than a\npublic body, the Secretary shall obtain such undertakings as the\nSecretary may consider appropriate to assure that the property will\nbe used, to the maximum practicable extent, in the provision of\nhousing and related facilities to be occupied by families or individ\xc2\xad\nuals of low and moderate income for a period of not less than thirty\nyears. If during such period the property is used for any purpose\nother than the purpose for which it was disposed of it shall revert\nto the United States (or, in the case of leased property, the lease\nshall terminate) unless the Secretary and the Administrator, after\nthe expiration of the first twenty years of such period, have ap\xc2\xad\nproved the use of the property for such other purposes.\nAlthough section 414 was repealed in 1983, Congress provided that the terms\nof section 414 continue with regard to requests for transfer of surplus property\nthat were made prior to enactment of the repealing statute. Supplemental Appro\xc2\xad\npriations Act of 1984, Pub. L. No. 98-181, 97 Stat. 1153, 1175 (1983). Congress\nalso provided that \xe2\x80\x9c section 414(b) . . . shall continue to apply, where applicable,\nto all property transferred by either Secretary pursuant to section 414.\xe2\x80\x9d Id.\nB. San P atricio P roperty\nBetween 1940 and 1943, the United States acquired through condemnation pro\xc2\xad\nceedings 52.86 acres of land located in the San Patricio area of San Juan, Puerto\nRico. The property was used by the Department of Navy for defense housing\npurposes. In 1970, a report was filed by the Department of Navy with the GSA\ndeclaring the 52.86 acres of land, with improvements, to be surplus property. The\nimprovements on the property consisted of 206 buildings, including 194. duplex\nhousing units, miscellaneous structures, paved streets, gutters, sidewalks and utili\xc2\xad\nties. Most of the buildings had been erected in 1941 and were in poor condition\nby 1970.\nIn a letter to the GSA Administrator, dated June 29, 1972, HUD formally re\xc2\xad\nquested the transfer of the 52.86 acres of San Patricio property for sale to the\nCommonwealth of Puerto Rico pursuant to section 414 of the Housing and Urban\nDevelopment Act of 1969, 40 U.S.C. \xc2\xa7484b. Letter for Arthur F. Sampson, Ad\xc2\xad\nministrator, GSA, from Samuel C. Jackson, Assistant Secretary for Community\nPlanning and Management, HUD (June 29, 1972) (\xe2\x80\x9c Jackson June 29, 1972 Let\xc2\xad\nter\xe2\x80\x99\xe2\x80\x99). The letter listed certain information regarding the proposed sale as required\n94\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nby GSA\xe2\x80\x99s regulations. As stated in those regulations, certain information was\nneeded for use by \xe2\x80\x9c GSA in preparing and submitting a statement relative to the\nproposed transaction to the Senate and House Committees on Government Oper\xc2\xad\nations prior to the transfer of the property to HUD.\xe2\x80\x9d 41 C.F.R. \xc2\xa7101-47-3086(f)(7) (1974).\nThe information submitted in HUD\xe2\x80\x99s Jackson June 29, 1972 Letter included,\nin relevant part, \xe2\x80\x9c what reversionary provisions [would] be included in the deed.\xe2\x80\x9d\n41 C.F.R. \xc2\xa7 101-47-308-6(f)(7) (1974). The letter stated:\nSection 414(b) does not require that reversionary provisions be in\xc2\xad\ncluded in the deed when the sale is to a public body; however,\nlanguage will be included which will make clear the purposes for\nwhich the land is to be used.\nJackson June 29, 1972 Letter at 2. Also included in the letter was a summary\nof the proposed development plan for the property.\nThe proposed development is medium to high density residential\nconsisting of approximately 1,920 housing units, with supporting\ncommunity and commercial facilities. Total Project cost is esti\xc2\xad\nmated to be $75 million. Housing is to be developed with Federal\nassistance under HUD\xe2\x80\x99s Public Housing, Section 235 and Section\n236 Programs. . . .\nIt is estimated that construction can begin within two years of the\ndate of sale of the property. Planning and development of a project\nof this size will require several years, therefore a completion date\nfor all construction is not estimated.\nId.\n\nThe letter also stated that HUD had determined the property\xe2\x80\x99s fair value for\nuse in providing the required housing to be $1,655,000 and that HUD proposed\nto sell the property at that price. Id. at 1. The estimated fair market value of\nthe San Patricio property as of July 20, 1972, was $2,964,500. Disposal Plan,\nReal Property and Related Personal Property (July 20, 1972).\nGSA concluded that the proposed transfer to HUD was consistent with the re\xc2\xad\nquirements of surplus property sales. GSA notified HUD of the approval and that\nthe congressional committees would have to review HUD\xe2\x80\x99s disposal plan. Letter\nfor Office of Real Property, HUD, from Richard W. Austin, Assistant Commis\xc2\xad\nsioner, Office of Real Property, GSA (Aug. 7, 1972).\nIn a letter to the Chairpersons of the United States House and Senate Commit\xc2\xad\ntees on Government Operations, the GSA Administrator advised Congress of the\nproposed transfer to HUD and subsequent sale to the Commonwealth of Puerto\n95\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nRico of 51.887 acres of San Patricio property.2 Letters for Honorable Chet\nHolifield and Sam J. Ervin, Jr., Chairmen, House and Senate Committees on Gov\xc2\xad\nernment Operations, from Arthur F. Sampson, Acting Administrator, GSA (Aug.\n25, 1972) (\xe2\x80\x9c Holifield & Ervin Aug. 25, 1972 Letters\xe2\x80\x9d ). The letters, which were\nidentical, disclosed virtually the same information that the Jackson June 29, 1972\nLetter had provided to GSA. As for the reversionary provision, however, GSA\nsimply stated that \xe2\x80\x9c [c]onveyances under Section 414 of the Housing and Urban\nDevelopment Act of 1969, as amended, do not require reversionary provisions\nin the deed when disposal is to a public body.\xe2\x80\x9d Id. at 2. GSA did not notify\nCongress that HUD nevertheless planned to convey the land conditionally.\nIn a letter dated October 17, 1972, GSA assigned to HUD 51.887 acres of the\nland with improvements (\xe2\x80\x9c the San Patricio property\xe2\x80\x9d ) for sale to the Common\xc2\xad\nwealth of Puerto Rico as HUD had previously requested. Letter for Samuel Jack\xc2\xad\nson, Assistant Secretary for Community Planning and Management, HUD, from\nAlbert Wilson, Director, Real Property Division, GSA (Oct. 17, 1972). Although\nGSA demanded in the letter that the sale to Puerto Rico be made subject to certain\nconditions, no mention was made of a need for a reversionary provision in the\ndeed or that the land be conveyed conditionally as to its use. GSA did request\nthat it be furnished with copies of the deed of conveyance.\nIn a deed dated September 27, 1974, HUD sold the San Patricio property to\nCRUV for $1,655,000, to be paid over an eight year period with the unpaid bal\xc2\xad\nance bearing an interest per annum of eight and one fourth percent. See Deed\nat 8-9. As set forth in the deed, the conveyance of the San Patricio property\nwas premised upon certain conditions that were binding on CRUV and its succes\xc2\xad\nsors. Some of the conditions relevant to the issues addressed here are set forth\nas part of the deed\xe2\x80\x99s paragraph entitled \xe2\x80\x9c Seventh\xe2\x80\x9d under the category \xe2\x80\x9c TERMS\nAND CONDITIONS.\xe2\x80\x9d Five types of \xe2\x80\x9c Terms and Conditions\xe2\x80\x9d are listed in para\xc2\xad\ngraphs lettered from \xe2\x80\x9c A \xe2\x80\x9d to \xe2\x80\x9c E .\xe2\x80\x9d Some of the terms and conditions in category\n\xe2\x80\x9c E \xe2\x80\x9d are pertinent and read as follows:\nE. [CRUV] proposes to provide housing under the terms of the\nUnited States Housing Act of Nineteen Thirty Seven as amended,\n. . . so as to enable families of low and moderate income and the\nelderly or handicapped, to live in decent homes now beyond their\nmeans.\n2 The letter states that the property to be transferred consist o f 51.887 acres of land with improvements. Almost\nan acre (i.e. .973 ) o f the 52.86 acres initially requested by HUD was transferred to the Federal Aviation Administra\xc2\xad\ntion ( \xe2\x80\x9c FAA**) instead o f HUD. Accordingly, H U D received 51.887 acres o f the San Patricio property for sale to\nCRU V . See Letter for Samuel Jackson, Assistant Secretary for Community Planning and Management, HUD, from\nA lbert W ilson, Chief, Real Property Division, GSA (July 21, 1972); Segregation, Sale, Conveyance and Mortgage\nDeed at 6 -7 (Sept. 27, 1974) (\xe2\x80\x9c D eed\xe2\x80\x9d ) (attached as Exhibit A).\nA fter the sale to CRUV, a discrepancy betw een the deed and Registry o f Property in Puerto Rico was discovered\nas to the acreage o f the property conveyed. In a qualifying deed, dated February 25, 1975, the parties agreed to\nadopt the acreage figures appearing in the R egistry (54.06 total acreage, 2.193 acreage given to the FAA, leaving\na total acreage o f 51.867 conveyed to CRUV). See Aclaratory D eed (Feb. 25, 1975).\n\n96\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nTO HAVE AND TO HOLD the [San Patricio] property provided,\nhowever, that this Deed is made and accepted upon the following\nconditions subsequent, which shall be binding upon and enforceable\nagainst [CRUV], its successors or assigns, as follows:\nOne.\xe2\x80\x94 That for a period of forty (40) years from date of this deed,\nthe [San Patricio] property herein conveyed shall be utilized for\nthe development and rental of low-rent housing to be occupied by\nfamilies or individuals of low or moderate income and for such\nother purposes as may be defined from time to time by the United\nStates Department of Housing and Urban Development.\nTwo.\xe2\x80\x94 That during the aforementioned period of forty (40) years\n[CRUV] will resell, lease, mortgage or encumber, or otherwise dis\xc2\xad\npose of the [San Patricio] property or any part thereof or interest\ntherein only as the United State [sic] Department of Housing and\nUrban Development or its successors, in accordance with the thenexisting regulations, may authorize in writing.\n\nFive.\xe2\x80\x94 In the event of a breach of any of the conditions set forth\nabove, whether caused by the legal or other inability of [CRUV],\nits successors or assigns, to perform any of the obligations herein\nset forth, all right, title, and interest in and to the [San Patricio]\nproperty shall, at the option of the United States of America, revert\nto and become the property of the United States of America; unless\nthe [Secretary] and the Administrator of General Services, after the\nexpiration of the first twenty (20) years of such period, approve\nthe use of the property for such other purpose[s]; and the United\nStates of America shall have an immediate right of entry thereon,\nand [CRUV], its successors or assigns, shall forfeit all right, title,\nand interest in and to the [San Patricio] property and in any and\nall of the tenements, hereditaments, and appurtenances thereunto\nbelonging . . . .\nDeed at 10-12.\nThereafter, in the deed\xe2\x80\x99s paragraph entitled \xe2\x80\x9c Ninth,\xe2\x80\x9d CRUV made an additional\nrepresentation concerning the construction of the low and moderate income hous\xc2\xad\ning on the San Patricio property:\n97\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\n[CRUV] agrees that it will start construction of the proposed facility\nwithin three years following the execution of this Deed and will\nkeep such developer activity within a reasonable period of time\nthereafter, now estimated to be ten years. Construction of initial\nand subsequent phases of the development of the property will pro\xc2\xad\nceed only upon prior approval of the United States Department of\nHousing and Urban Development.\nId. at 14.\n\nAfter purchasing the San Patricio property, CRUV never developed the land\nas originally planned. Documents supplied to us by HUD and GSA contain ref\xc2\xad\nerences to a variety of problems faced by CRUV in its efforts to develop the\nproperty. For example, in a HUD memorandum dated February 10, 1987, the first\n10 years of problems are summarized.\nNo real acceptable solution has been reached in 10 years. Over this\ntime, the circumstances have changed as the Section 8 New Con\xc2\xad\nstruction Program was terminated. Alternate sources of funds for\nconstruction needed to be developed.\n\nAfter 10 years, nothing had been built because of a variety of rea\xc2\xad\nsons: lack of development money, utilities problems, neighborhood\nopposition, bureaucratic inertia, and changes in administration.\nMemorandum for Thomas T. Demery, Assistant Secretary for Housing-Federal\nHousing Commissioner, HUD, from R. Hunter Cushing, Deputy Assistant Sec\xc2\xad\nretary for Multifamily Housing Programs, HUD (Feb. 1987)3 (\xe2\x80\x9c Cushing Memo\xc2\xad\nrandum\xe2\x80\x9d ).\nThe documents reveal that a number of alternative development proposals were\nsubmitted by CRUV to HUD. Some proposals were accepted and some were re\xc2\xad\njected by HU D .4 The documents also show that some proposals were prompted\nby threats of instituting a reversionary proceeding. The Cushing Memorandum\nstates:\n3 The handw ritten date o f \xe2\x80\x9c Feb. 5, 1986\xe2\x80\x9d o n the memorandum appears to not reference the date o f the memo\xc2\xad\nrandum. The receipt stam p on the bottom o f the memorandum appears to indicate a date of \xe2\x80\x9c February 10, 1987.\xe2\x80\x9d\nIn addition, the m emorandum references events occurring subsequent to February 5, 1986.\n4 Apparently, efforts to develop the property were unsuccessful in part because o f the amount o f HUD subsidy\nthat would have been required to support the low and moderate income housing proposals. See Letter for Karen\nPopp, A ttom ey-A dvisor, O ffice o f Legal Counsel, from Nelson A. Diaz, General Counsel, HUD at 3 (July 27, 1995)\n( \xe2\x80\x9c Diaz July 27, 1995 Letter\xe2\x80\x9d ).\n\n98\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nThe sale documents and deed required development activities to\nbegin in 3 years and be completed in 10 years, or the property\nwas subject to a right of reversion in the United States. As the\n10-year period approached without any development, Common\xc2\xad\nwealth and HUD officials met on numerous occasions to try to de\xc2\xad\nvelop a plan for the site in order to avoid reversion.\nWhen Puerto Rican officials understood we were serious about\nstarting the reversion process [after 10 years], they negotiated a new\nplan to develop half of the site with [Low and Moderate Income\nHousing] and the other half with Coast Guard family housing for\nsome of its enlisted personnel. Half of the proceeds of the Coast\nGuard sale were earmarked to assist the [Low and Moderate Income\nHousing] part of the site. Puerto Rico developed a plan for the [Low\nand Moderate Income Housing] half and selected developers for\nthe development. The Coast Guard secured funding for its half,\nsigned a contract to buy it, and put down a $50,000 deposit.\nHowever, the plan never went forward. There was a change in ad\xc2\xad\nministrations in Puerto Rico, and the new officials decided to re\xc2\xad\nzone the site to park and recreational use to block development\nof any type.\nIn December 1985, Puerto Rico, at our request, submitted another\nproposed plan for the site but it was unacceptable to HUD.\nId. at 1, 4.\n\nThe Cushing memorandum also made reference to a GSA letter dated March\n7, 1986, which requested that HUD either facilitate the development of the prop\xc2\xad\nerty or exercise its reversionary rights under the deed. Letter for Angelo Sciosia,\nDirector, Office of Surplus Land, HUD, from James J. Buckley, Acting Assistant\nCommissioner, Office of Real Property, GSA (Mar. 7, 1986). As set forth in that\nletter, GSA inspected a portion of the property in January 1985 and found that\nthe property had not been developed.5\nIn addressing a then-current CRUV development proposal, the Cushing Memo\xc2\xad\nrandum discussed the alternative of pursuing the reversionary proceeding and the\npossible consequences.\n5 HUD advised CRUV in a letter dated June 26, 1986, that a request had been made of the H U D General Counsel\nto commence the reversion process. Letter for Jose Ariel Nazario, Secretary, Housing Department, Commonwealth\no f Puerto Rico, from R. Hunter Cushing, Deputy Assistant Secretary, Multifamily Housing Programs, HUD (June\n26, 1986).\n\n99\n\n\x0cOpinions o f the O ffice o f Legal Counsel in Volume 20\n\nThis proposal will develop 450 new units at San Patricio, and 300\nnew units in Rio Bayamon \xe2\x80\x94 a noteworthy achievement.\nOur alternative is to refuse to modify our last position and continue\nwith reversion which will entail protracted litigation during which\nno new units will be built. Furthermore, because of numerous legal\ninterpretaters, our success in litigation is not assured. However, the\nCommonwealth seems to be willing to expend a lot of political\ncurrency to keep us at the negotiating table.\n\nSince we have never before done a section 414 reversion, we expect\nit will take several years.\nId. at 2.\n\nIn the end, HUD chose to pursue negotiating alternative proposals for the devel\xc2\xad\nopment of the property instead o f seeking a reversion of the property. In a letter\ndated March 17, 1987, HUD approved the 1986 plan to develop 450 units on\nthe San Patricio property and to sell other property to the United States Coast\nGuard. HUD advised CRUV that \xe2\x80\x9c [w]e will suspend the reversionary process\nbegun earlier.\xe2\x80\x9d Letter for Jose Ariel Nazario Alvarez, Secretary, Housing Depart\xc2\xad\nment, Commonwealth of Puerto Rico, from Thomas T. Demery, Assistant Sec\xc2\xad\nretary for Housing-Federal Housing Commissioner, HUD at 2 (Mar. 17, 1987).\nThe 1986 plan approved by HUD involved the sale of the San Patricio property\nto a developer in Puerto Rico, the RECA Development Corporation (\xe2\x80\x9c RECA\xe2\x80\x9d ).\nProblems arose in completing the plan as it related to the Coast Guard property\nand because of the substantial increase in fair market value enjoyed by the San\nPatricio property.6 The delay from these problems extended into the early 1990\xe2\x80\x99s.\nIn 1991, CRUV was dissolved and the Office for the Liquidation of Assets\n(\xe2\x80\x9c OLA\xe2\x80\x9d ) in Puerto Rico acquired CRUV\xe2\x80\x99s debts and assets, including the San\nPatricio property.7 See Proposal at 6. OLA\xe2\x80\x99s Special Trustee was tasked with\nthe duty of liquidating CRUV\xe2\x80\x99s obligations in an effort to meet its debts. The\nPuerto Rico Department of Housing (\xe2\x80\x9c Vivienda\xe2\x80\x9d ) assumed CRUV\xe2\x80\x99s govern\xc2\xad\n6 In 1987, the San Patricio property was valued at $6.2 million for use in providing the required housing. A\n1994 appraisal found the value for use at $10 million and without the restrictions at $20 million. See Puerto Rico\nDept, o f Housing, Proposal for the Disposition o f Finca San Patricio for the Creation of a \xe2\x80\x9c Jibaro Housing Thist\nF und\xe2\x80\x9d at 18\xe2\x80\x9419 (A ug. 17, 1994) ( \xe2\x80\x9c Proposal\xe2\x80\x9d ). The increase in value has been attributed to the location of the\nproperty and inflation. The San Patricio property is on a bluff within walking distance o f many existing urban\nfacilities, services and employment opportunities and the most expensive housing development in Puerto Rico (single\nfam ily hom es in the $2 million plus range). Id. at 18.\n7 C RU V had m ade full payment of the purchase price plus interest for the San Patricio property by March,\n1983. In the end, CRUV paid a total sum o f $1,954,253.45 fo r the property. See Memorandum for Angelo M.\nSciosia, Director, O ffice o f Surplus Land & H ousing, HUD, from Rafael Pieras-Lombardero, Area Counsel, HUD,\nRe: Status Report San Patricio N aval Reservation Project No. N -PR 451B (Apr. 20, 1983).\n\n100\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment A ct o f 1969\n\nmental responsibility in the area of developing affordable housing in Puerto Rico.\nId. at 6-10.\n\nOLA and Vivienda assumed the responsibility of facilitating the development\nof the San Patricio property. Negotiations with RECA continued. In 1992, an\n\xe2\x80\x9c Agreement to Sell and Purchase San Patricio Property\xe2\x80\x9d (the \xe2\x80\x9c Agreement\xe2\x80\x9d ) was\ndrafted and allegedly agreed to by representatives of RECA, Vivienda, and HUD.\nThe 1992 transaction contemplated a sale of the San Patricio property free of\nthe restrictive use in providing low and moderate income housing with the pro\xc2\xad\nceeds being used by Vivienda to build the housing elsewhere.\nThe proposed transaction was never completed. HUD and Puerto Rico have\ntaken the position that the Agreement is not valid. HUD\xe2\x80\x99s position is premised\nupon the assertion that GSA\xe2\x80\x99s approval for the sale is required under the deed.\nPuerto Rico has asserted that OLA\xe2\x80\x99s approval is also required. See Letter for\nMarcia Hale, Co-Chair, Interagency Working Group on Puerto Rico, Department\nof Commerce, from Nelson Diaz, General Counsel, HUD at 2 (Feb. 9, 1995)\n(\xe2\x80\x9c Diaz Feb. 9, 1995 Letter\xe2\x80\x9d ). RECA filed an action on September 26, 1994 in\nthe Superior Court of Puerto Rico seeking injunctive and declaratory relief. Id.\nThe litigation is pending.8\nAs the dispute with RECA continued in Puerto Rico, Vivienda submitted a pro\xc2\xad\nposal to HUD for the sale of the San Patricio property. The proposal envisions\na two step sale. In the first step, Vivienda and OLA would enter into a binding\nagreement for Vivienda to acquire the San Patricio property with its current deed\nrestriction and to pay OLA for the current value of such use. Vivienda and OLA\nwould forward a copy of the agreement to HUD. After obtaining GSA approval,\nHUD would authorize the removal of the deed restrictions on the use of the prop\xc2\xad\nerty. Upon removal of the deed restrictions, Vivienda would issue a Request for\nProposals for the development of the site and sell the property at its fair market\nvalue.9 The proceeds of this sale would be used by Vivienda, in part, to provide\nlow and moderate income housing in other parts of Puerto Rico. Part of the money\nwould be used to pay the expenses of Vivienda and OLA. The two-step approach\nin this transaction is required because OLA\xe2\x80\x99s authority is limited to liquidating\nCRUV\xe2\x80\x99s assets. See Diaz July 27, 1995 Letter at 1 n.l; Letter for Teresa Wynn\nRoseborough and Karen Popp, Office of Legal Counsel, Department of Justice,\nfrom Emily C. Hewitt, General Counsel, GSA at 2 n.3 (June 20, 1995) (\xe2\x80\x9c Hewitt\nJune 20, 1995 Letter\xe2\x80\x9d ); Vivienda Proposal at 35-52.\nAfter consideration of Vivienda\xe2\x80\x99s proposed transaction, HUD and GSA arrived\nat differing views as to whether the United States could legally approve the trans\xc2\xad\naction. As set forth below, we outline those differing views and address the legal\nissues under section 414 raised by the proposed transaction.\n6 This Opinion does not address the questions presented in the 1992 litigation.\n\xe2\x80\x99 Earlier this year, HUD learned from Puerto Rico that RECA has indicated a willingness to purchase the San\nPatricio property. See Diaz Feb. 9, 1995 Letter. This result could resolve the pending litigation Id.\n\n101\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nC . The P osition s o f H U D and G SA\n\nHUD takes the position that the proposed transaction is lawful under section\n414 of the Housing and Urban Development Act of 1969, 40 U.S.C. \xc2\xa7484b. GSA\nclaims that the proposed transaction is not authorized by section 414.\nConceding that section 414 requires that the San Patricio property be \xe2\x80\x9c used\xe2\x80\x9d\nto provide low and moderate income housing, HUD first argues that the proposed\ntransaction satisfies the \xe2\x80\x9c use\xe2\x80\x9d requirement. Specifically, HUD claims that selling\nthe property at its fair market value and using the proceeds to build housing else\xc2\xad\nwhere is a proper \xe2\x80\x9c use\xe2\x80\x9d of the property in providing the required housing. Rely\xc2\xad\ning on this expansive view of the statutory term \xe2\x80\x9c use,\xe2\x80\x9d HUD concludes that the\nproposal would not change the \xe2\x80\x9c use\xe2\x80\x9d of the property, only the method by which\nthe property is used. See San Patricio, Summary of HUD Legal Position, Attach\xc2\xad\nment to Letter for Honorable Walter Dellinger, Assistant Attorney General, Office\nof Legal Counsel, from Emily C. Hewitt, General Counsel, GSA (Apr. 11, 1995).\nGSA rejects the notion that the proposed sale is not a change in use of the\nproperty. GSA views the statutory term of \xe2\x80\x9c use\xe2\x80\x9d as requiring that the property\nbe physically used by developing the required housing on the actual premises.\nHUD next asserts that even if the proposed transaction constitutes a change\nin the property\xe2\x80\x99s use, HUD and GSA are authorized to approve such change under\nthe terms of the deed, which are not inconsistent with section 414. As outlined\nabove, the deed specifies in Condition Five of paragraph Seven that, after twenty\nyears, HUD and GSA could approve a change in the use of the property. The\nsame provision of the deed allows for reversion of the property at the United\nStates\xe2\x80\x99 option in the event housing is not provided for the first forty years after\nconveyance to CRUV. Section 414, however, does not explicitly state that in a\nconveyance to a public body the United States can authorize a change in the use\nof the property. Subsection (b) o f the statute does specify that in a sale to a non\xc2\xad\npublic body the property shall revert back to the United States if the property\nis not used in providing the required housing, unless after twenty years a change\nin use has been approved by GSA and HUD.\nHUD construes the statute as leaving the government with the option to insert\na reversionary requirement and a provision allowing for a change in use when\nthe sale is to a public body. HUD contends that the existence of section 414(b)\nsimply makes the reversionary requirement mandatory for all sales to non-public\nbodies.\nGSA views the explicitness of section 414(b) somewhat differently and finds\n\xe2\x80\x9c some\xe2\x80\x9d merit in the claim that \xe2\x80\x9c Congress\xe2\x80\x99s omission from subsection (b) of pub\xc2\xad\nlic bodies signifies a specific and purposeful limitation of the authority to approve\nchanges in use.\xe2\x80\x9d Letter for Teresa Wynn Roseborough and Karen Popp, Office\nof Legal Counsel, from Emily C. Hewitt, General Counsel, GSA at 1 n.l (Aug.\n9, 1995) (\xe2\x80\x9c Hewitt Aug. 9, 1995 letter\xe2\x80\x9d ). GSA concedes, however, that the statute\nis ambiguous and that the legislative history does not lend support to this interpre\xc2\xad\n102\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\ntation. Citing Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., 467\nU.S. 837, 843 n.9 (1984), GSA joins HUD in concluding that considerable weight\nshould be accorded to GSA\xe2\x80\x99s interpretation of the statute through its regulations.\nGSA asserts that the current regulation, 41 C.F.R. \xc2\xa7101-47.308-6(1) (1994),\nwhich was adopted in 1982, is controlling because approval of the proposed trans\xc2\xad\naction must comply with Condition Two of paragraph Seven of the deed. As set\nforth above, that condition requires HUD\xe2\x80\x99s approval \xe2\x80\x9c in accordance with the thenexisting regulations,\xe2\x80\x9d for a resell of the property. The current regulation at issue\naddresses the authority to change the use of the property in sales to non-public\nbodies. The regulations do not specify that the authority exists in sales to public\nbodies. GSA argues that the regulation establishes that GSA has interpreted section\n414(b) as limiting the authority to approve changes in use to properties transferred\nto non-public bodies.\nHUD disagrees. The previous version of the regulation at issue, which was\nadopted in 1971, did not limit the power to change the use to properties transferred\nto non-public bodies. On its face, the regulation appeared to recognize the author\xc2\xad\nity to change the use of the property in any type of sale under section 414 and\nto require a reversionary right in all deeds of conveyance. HUD contends that\nthis earlier regulation is evidence that GSA interpreted section 414 as HUD now\ndoes\xe2\x80\x94 the statute leaves the government with the option to insert a reversionary\nrequirement and a provision allowing for a change in use when the sale is only\nto a public body. HUD also cites to the letters GSA wrote to Congress and HUD\nin approving the San Patricio transfer as further support of this interpretation.\nSee letters supra . 10\nFinally, the parties addressed GSA\xe2\x80\x99s claim that even if the deed\xe2\x80\x99s provision\nfor change of use authority is lawful under section 414, such approval authority\nis conditioned upon compliance by CRUV with the use requirements during the\ntwenty year period. Stated differently, GSA argues that GSA and HUD may ap\xc2\xad\nprove a change in the use of the property only if CRUV has been in compliance\nwith the deed\xe2\x80\x99s conditions. GSA relies on the language in section 414, analogous\nreal property disposal regulations and policy considerations in support of its argu\xc2\xad\nment.\nIn rejecting GSA\xe2\x80\x99s argument, HUD relies on the plain language of the statute,\nregulations and deed. HUD also argues that, in any event, CRUV\xe2\x80\x99s noncompliance\nwas caused by exceptional circumstances and should not be a basis for denying\na change in use. According to HUD, CRUV and its successor were unable to\ndevelop the property as required by the deed of conveyance despite its best efforts.\nThese failures were caused in part by the lack of HUD funding required for the\ndevelopment.\n10 As for the 1982 change lo the regulations, HUD rejects G SA \xe2\x80\x99s assertion that the change demonstrates a different\nGSA interpretation o f section 414. HUD claims that the amended regulation sim ply adopted a rule more consistent\nwith the statute: in a conveyance to a non-public body, the reversionary requirement is mandatory.\n\n103\n\n\x0cOpinions o f the O ffice o f Legal Counsel in Volume 20\n\nII. Legal Analysis\nA. Whether the Proposed Transaction Constitutes A Change In Use of the San\nPatricio Property\nThe initial question presented is whether the proposed transaction constitutes\na change in use of the property under section 414 and the deed. Section 414\nauthorized GSA to transfer surplus property to HUD \xe2\x80\x9c for sale or lease by him\nat its fair value for use in the provision of housing to be occupied by families\nor individuals of low or moderate incomes. . . . Any such sale or lease of surplus\nland shall be made only to (1) a public body which will use the land in connection\nwith the development of a low-rent housing project.\xe2\x80\x9d 11 In the sale of the property\nto CRUV, the deed required that the property be \xe2\x80\x9c utilized for the development\nand rental of low-rent housing to be occupied by families or individuals of low\nor moderate income.\xe2\x80\x9d Deed at 10-11. HUD claims that the proposed transaction\nis not a change in the use of the property because the property will be \xe2\x80\x9c used\xe2\x80\x9d\nas an asset to sell at fair market value in order to raise money to build the housing\non different property in Puerto Rico. We do not believe that HUD is correct.\nThe plain meaning of the phrase \xe2\x80\x9c for use in the provision of hous\xc2\xad\ning\xe2\x80\x9d convinces us that Congress was referring to the physical use\nof the property \xe2\x80\x94 that is, that Congress intended as an initial matter\nthat the property be used as the premises upon which the required\nhousing must be built. Indeed, the legislation authorized HUD to\nsell the property below fair market value because of the use to\nwhich the property would be put. The discounted value was deter\xc2\xad\nmined by the \xe2\x80\x9c use\xe2\x80\x9d of the property as the premises upon which\nthe low and moderate housing would be built. Adopting HUD\xe2\x80\x99s\nconstruction that use in the provision of housing includes use as\nan asset to finance the construction of housing would belie the ra\xc2\xad\ntionale of the statute\xe2\x80\x99s provision.\nThe primary guide to statutory interpretation is the plain meaning of the text.\nAs stated by the Supreme Court in United States v. Ron Pair Enters., Inc., 489\nU.S. 235, 242 (1989):\nThe plain meaning of legislation should be conclusive, except in\nthe \xe2\x80\x9c rare cases [in which] the literal application of a statute will\nproduce a result demonstrably at odds with the intention of its draft\xc2\xad\ners.\xe2\x80\x9d Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571\n11 Section 414(a) was am ended by deleting the latter part o f this phrase and currently reads in relevant part:\n\xe2\x80\x9c for sale o r lease by either Secretary at its fair value for use in the provision o f housing to be occupied predominantly\nby fam ilies o r individuals o f low- o r moderate-income.\xe2\x80\x9d\n\n104\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment A ct o f 1969\n\n(1982). In such cases, the intention of the drafters, rather than the\nstrict language, controls.\nThis is not the \xe2\x80\x9c rare case[]\xe2\x80\x9d where the result that follows from the statute\xe2\x80\x99s\ntext is \xe2\x80\x9c demonstrably at odds\xe2\x80\x9d with its underlying congressional purpose. See\nGriffin, 458 U.S. at 571. To the contrary, adopting the plain meaning of the lan\xc2\xad\nguage furthers the congressional intent of selling property at a discount because\nof its restricted usage. The legislative history supports the conclusion we have\nreached from a plain reading of the statute.\nThe House Committee on Banking, Housing, and Urban Affairs explained that\nthe rationale for selling the property at a discounted value was to attract developers\nwho could build housing on the property.\nThe advantage to a developer in obtaining land through section 414\nlies in the statute\xe2\x80\x99s authorization for the price of the land to be\nset by the Secretary at \xe2\x80\x9c fair value for use\xe2\x80\x9d rather than \xe2\x80\x9c fair market\nvalue.\xe2\x80\x9d\nH.R. Rep. No. 95-871, at 47 (1978).\nIn justifying the sale at a discount, the Senate Committee on Banking and Cur\xc2\xad\nrency exhibited an expectation that the property itself would be developed:\nExisting law governing the disposal of surplus Federal land permits\nthe Administrator of General Services to assign surplus real prop\xc2\xad\nerty to the Secretary of the Interior or the Secretary of Health, Edu\xc2\xad\ncation, and Welfare for subsequent sale or lease at less than market\nvalue to nonprofit organizations, the States or their subdivisions.\nSuch property must be used for recreational, public health, or edu\xc2\xad\ncational purposes. This section would allow a similar sale or lease\nof surplus land at reduced prices where the land is to be used for\nthe development of low- and moderate-income housing. The price\nto be paid for all property (or the lease thereof) being so utilized\nshall be equal to the fair value (or fair rental value if it is to be\nleased) of such plot as determined by standard appraisal techniques,\nconsidering the use to which the property is to be put by the party\nacquiring the same. . . .\nAuthority to provide sites as [sic] a reduced price for low- and mod\xc2\xad\nerate-income housing would not necessarily have an adverse budg\xc2\xad\netary impact since the amount of subsequent Federal subsidy re\xc2\xad\nquired for this housing would be lessened due to lower initial land\ncosts to the developer.\n105\n\n\x0cOpinions o f the O ffice o f Legal Counsel in Volume 20\n\nS. Rep. No. 91-392, at 35-36.\nSubsequent materials also refer to the physical use of the property in explaining\nsection 414. For example, in addressing the 1970 amendment to section 414, the\nHouse Committee on Banking, Finance, and Urban Affairs explained that section\n414 authorized GSA to dispose of surplus \xe2\x80\x9c land\xe2\x80\x9d to HUD \xe2\x80\x9c for the construction\nof low- and moderate-income\xe2\x80\x9d housing. House Comm, on Banking, Finance, and\nUrban Affairs, 95th Cong., Basic Laws an d Authorities on Housing and Commu\xc2\xad\nnity D evelopm ent 23 n.l (Comm. Print 1978).\nIn a joint explanatory statement of the House and Senate managers of the Com\xc2\xad\nmittee of Conference, section 414 was described as providing property \xe2\x80\x9c at its\nfair value for use as housing . . . . [T]he disposition of federal surplus property\nis for the purpose of making land available for low and moderate income hous\xc2\xad\ning.\xe2\x80\x9d House Subcomm. on Housing and Community Development, 95th Cong.,\nCom pilation o f the Housing and Community D evelopm ent Amendments o f 1978,\nJoint E xplanatory Statement o f the M anagers o f the Committee o f Conference\n110 (Comm. Print 1978) (\xe2\x80\x9c Explanatory Statement of Managers\xe2\x80\x9d ); see also H.R.\n\nConf. Rep. No. 95-1792, at 81 (1978).\nThe legislative history plainly shows that in adopting section 414 Congress in\xc2\xad\ntended for the surplus property to be developed with the required low and mod\xc2\xad\nerate income housing. This history and the plain meaning of the statute belie any\nclaim that the phrase \xe2\x80\x9c use in the provision of housing\xe2\x80\x9d includes a developer\xe2\x80\x99s\nsale of the property at a fair market value.\nIn addition, if \xe2\x80\x9c use in the provision of housing\xe2\x80\x9d included a sale at fair market\nvalue by the developer, the program established by section 414 would accomplish\nnothing more than what GSA could have done alone. If authorized, GSA would\ncertainly have the ability to negotiate the sale of federal property at fair market\nvalue and to earmark the proceeds for housing without HUD and the developer\nas intermediaries to the sale. Such intermediaries would create inefficiencies and\nunnecessary expense. Indeed, in the end, the statute was repealed and the program\nabolished due, in part, to the recognition that GSA could sell surplus property\ndirectly to a developer for the construction of housing.\nSince its inception, this program has been infrequently used. Four\xc2\xad\nteen properties have been transferred since 1970. Nine additional\nproperties are in the pipeline. This limited activity over such a long\nperiod does not justify the costs involved\xe2\x80\x94 staff, travel, etc. \xe2\x80\x94 in\nmaintaining the program. Moreover, the program is administratively\ninefficient, since it interjects HUD and FmHA between GSA and\nthe ultimate purchaser/lessee of the property involved.\nS. Rep. No. 98-142, at 23 (1983)\n106\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nOur conclusion is also supported by the plain meaning of section 414(b). As\nquoted above, section 414(b) requires that HUD assure that the property be\n\xe2\x80\x9c used\xe2\x80\x9d in providing housing to be occupied for a period of forty years (thirty\nas amended) by families of low and moderate income and that a reversion occur\nif the property is not so used. Certainly the property would have to be physically\nused during this period; disposing of the property could not satisfy the forty/thirty\nyear requirement. Nor could the property be reverted back to the United States\nif it had been \xe2\x80\x9c used\xe2\x80\x9d in a sale at fair market value.\nEven if the statute were ambiguous on this issue, GSA, the agency charged\nwith administering the statute, has interpreted \xe2\x80\x9c use in the provision of housing\xe2\x80\x9d\nto require that the land be developed with the necessary housing. Regulations\nadopted by GSA mandate that when HUD submits a request to GSA for the trans\xc2\xad\nfer of surplus property for sale to another entity, HUD must specify:\n(5) [h]ow the property is to be used (i.e., single or multifamily\nhousing units, the number of housing units proposed, types of facili\xc2\xad\nties, and the estimated cost of construction); (6) [a]n estimate as\nto the dates construction will be started and completed; and (7)\n[w]hat reversionary provision will be included in the deed . . . .\n41 C.F.R. \xc2\xa7 101-47.308-6(f) (1994). HUD complied with these regulations in the\nconveyance at issue here. Likewise, the deed\xe2\x80\x99s requirement that the property be\n\xe2\x80\x9c utilized for the development and rental of low-rent housing,\xe2\x80\x9d appears to con\xc2\xad\ntemplate the physical use of the property.12 Because the proposed transaction in\xc2\xad\nvolves the sale of the property to raise cash with which housing would be built\nelsewhere, we believe such use constitutes a change under the terms of section\n414 and the deed.\n12 Indeed, in a different context, HUD has taken the same position we have reached: permitting a developer to\nsell the property at fair market value and using the proceeds to provide the required housing elsewhere is a change\nin use o f the property under the deed. In 1992, an Agreement to sell the San Patricio property was allegedly agreed\nto by representatives o f RECA, Vivienda, and HUD. The proposed sale, like the one at issue here, involved selling\nthe property at fair market value with the proceeds going toward the building o f low and moderate housing elsewhere\nin Puerto Rico. HUD took the position that the Agreement was not valid.\nHUD\xe2\x80\x99s assertion was premised upon Condition Five o f paragraph Seven o f the deed, which requires the approval\no f GSA and HUD where, after twenty years, CRUV or its successor seeks to use the property for a purpose other\nthan the provision o f low or moderate income housing. See Deed at 10, <|7(E)(One) and p. 11-12, 17(E)(Five).\nIn relying on this condition of the deed, the crux o f H UD\'s position is that the proposed transaction is a change\nin use o f the property \xe2\x80\x94 that is, the property is not being used to provide the required housing. Otherwise, only\nCondition Two, Seventh paragraph, would apply to the transaction. Condition Two requires only HUD\xe2\x80\x99s approval\nif the property is resold for the purpose o f providing the required housing. Id. at 10-11, ^7(E)(Tw o); see also\nLetter for Karen Popp, Attomey-Advisor, Office o f Legal Counsel, from Nelson A. Diaz, General Counsel, HUD\nat 4 n .l (June 19, 1995) ( \xe2\x80\x9c Diaz June 19, 1995 Letter\xe2\x80\x9d ) (\xe2\x80\x9c Paragraph No. 2 in the deed . . . only requires HUD\napproval of a sale o f San Patricio by CRUV because a sale o f the property, by itself, does not constitute a change\nin use as long as housing continues to be planned for the property.*\xe2\x80\x99)\nIndeed, HUD also concedes in the June 19, 1995, letter that the proposed transaction at issue here constitutes\na change in the use o f the property, requiring GSA and HUD approval. Diaz June 19, 1995 Letter at 4 ( \xe2\x80\x9c All\nHUD proposes to do at this time is to implement [Condition Five] o f the deed so that a sale and change in use\nof the San Patricio property can be approved by GSA and HUD.\xe2\x80\x9d ).\n\n107\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nB. W heth er th e U nited States M ay A pprove A Change In Use o f the San Patricio\nP roperty\nHaving concluded that the proposed transaction constitutes a change in use of\nthe property, we now turn to the remaining issue in dispute: whether section 414\npermits a change in use of the property where the conveyance was to a public\nbody.\nHUD and GSA agree that the conveyance to CRUV was a sale to a public\nbody and, consequently, that section 414(b) does not apply to the San Patricio\nconveyance. We also agree with these conclusions.13 By its plain meaning, section\n414(b) is limited to a conveyance made to a private entity.14 Indeed, the repealing\nstatute recognizes that section 414(b) applies only to qualifying conveyances. Pub.\nL. No. 98-181, 97 Stat. 1153, 1175 (1983); see discussion supra p. 4.\nThe explicitness of section 414(b)\xe2\x80\x99s limitations as to private entity conveyances\nand the corresponding silence in the statute as to dispositions to public bodies\ncreate an issue of interpretation. Is a subsequent change of use statutorily prohib\xc2\xad\nited when a public body purchased the property at fair market value for use in\nthe provision of low and moderate income housing?\nHere, the principle of expressio unius est exclusio alterius is not helpful in deter\xc2\xad\nmining legislative intent. Under this maxim, the expression of one thing is the\nexclusion of another. See, e.g., U nited States v. Wells Fargo Bank, 485 U.S. 351,\n357 (1988). Applying this principle, one must conclude that reversion is required\nas to the private entity and optional as to the public body, and that the right\nto change the use of the property is permitted for a private entity and excluded\nas to the public body. These two conclusions, however, are mutually exclusive.\nIf a change of use is not permissible as to public body conveyances, the conditions\nwould run in perpetuity and a right of reverter would be required in the deed\nto enforce the perpetuity provision. Stated differently, a reversionary provision\nwould be mandated in every deed of conveyance to a public entity, a concept\nthat would be inconsistent with the application of the expressio unius maxim.\nGSA concedes that the legislative history does not \xe2\x80\x9c lend specific support to\n[the] interpretation of the statute\xe2\x80\x9d reached by application of the expressio unius\nprinciple. We agree that the legislative history of section 414 is scant and certainly\nnot illuminating as to this question. What little legislative history does exist is\n13 By its plain m eaning, the last sentence o f the original and first amended versions o f section 414(b), which\nrequired notice to the congressional committees, applied to all surplus property sales. O ur discussion o f section\n414(b) here is limited to the first two sentences o f these earlier versions, which after the 1978 amendment, constituted\nthe whole section.\n14 The legislative history does not detract in any way from the plain meaning o f section 414(b). See S. Rep.\nNo. 98-1 4 2 , at 23 ( \xe2\x80\x9c Section 414 presently provides that land conveyed to a private entity will revert to the United\nStates if it is used for other purposes within thirty years (twenty years w ith Federal approval) after its transfer\nfor use as low-and m oderate-incom e housing.\xe2\x80\x99*); H.R. Rep. No. 95-871, at 95 (414(b) applies \xe2\x80\x9c in the case o f disposi\xc2\xad\ntion o f surplus property to an entity other than a public body\xe2\x80\x99*); Explanatory Statement o f Managers at 225 (\xc2\xa7 4 1 4<b)\nm akes specific requirem ents w ith respect to a conveyance \xe2\x80\x9c to an entity other than a public body\xe2\x80\x9d ).\n\n108\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nambiguous. For example, an earlier version of section 414(b), as it appeared in\nS. 2864, 91st Cong. (1969), provided:\nAs a condition to any sale or lease of excess land under this section\nto a purchaser or lessee other than a public body, the Secretary\nshall obtain such undertakings as he may consider appropriate to\nassure that the property will be used in the provision of rental or\ncooperative housing to be occupied by families or individuals of\nlow or moderate income for a period of not less than twenty years.\nThe Secretary shall notify the Committees on Banking and Cur\xc2\xad\nrency of the Senate and House of Representatives whenever any\nexcess land is sold or leased by him pursuant to the authority of\nthis section.\n115 Cong. Rec. 26,728-29 (1969) (emphasis added).\nIn explaining the provision in S. 2864, the Senate Committee on Banking and\nCurrency stated:\nAlso, any purchaser under [section 414] must commit the property\nfor use in low- and moderate-income rental or cooperative housing\nfor at least 20 years. Notification of all sales or leases under this\nsection shall be given to the Committees on Banking and Currency\nof the Senate and House of Representatives.\nS. Rep. No. 91-392, at 36 (emphasis added). The Committee also stated:\nSubsection (b) would require, as a condition to any sale or lease\nof excess land, that the Secretary obtain such undertakings as he\nmay consider appropriate to assure that the property will be used\nin the provision of rental or cooperative housing to be occupied\nby families or individuals of low or moderate income for a period\nof not less than 20 years. The Secretary must notify the Senate\nand House Committees on Banking and Currency whenever any\nexcess land is sold or leased pursuant to this section.\nId. at 53 (emphasis added); 115 Cong. Rec. 26,707 (1969).\n\nThe Senate Committee report also contained a section on the views of Senator\nJohn Tower, which stated in relevant part:\nSection [414] presents yet another problem. Pursuant to that section,\ngovernmental lands may be sold to individuals at a cost below fair\nmarket value for use in low-cost housing. This conveyance is in\nfee and there is no reversion if the land is not used for low-cost\n109\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nhousing after the initial 20 years. In reality, the purchaser is getting\na windfall; the price which he pays the Federal Government could\nin many instances be much below the actual value of the land and\nafter 20 years he can use it for any purpose he so desires. The\nFederal Government must pay fair market value when it acquires\nland, and it should receive the same when it sells lands.\nId. at 55 (emphasis added).\n\nThereafter, the proposed legislation was amended to require a forty year usage\nof the property with a mandatory reversion for noncompliance, but to permit a\nchange in use after twenty years. This version of section 414(b) was eventually\napproved by Congress. H.R. Conf. Rep. No. 91-740, at 23. The report explained:\nThe conference substitute retains the Senate provisions with amend\xc2\xad\nments . . . (2) authorizing the Secretary of HUD to assure that the\nproperty will be used for low- and moderate-income housing for\nnot less than 40 years, but permitting a changed use after the initial\n20 years upon approval of the Secretary.\nId. at 35.\n\nIn a section by section summary of the adopted legislation, the House Com\xc2\xad\nmittee on Banking and Currency described section 414(a) and then stated: \xe2\x80\x98\xe2\x80\x98Sub\xc2\xad\nsection (b) requires that, as a condition to any such sale or lease of surplus real\nproperty, the Secretary must obtain\xe2\x80\x99\xe2\x80\x99 certain undertakings. House Comm, on Bank\xc2\xad\ning and Currency, 91st Cong., Housing and Urban Developm ent Act o f 1969, Pub\xc2\xad\nlic L aw No. 91\xe2\x80\x94152 and Section-By-Section Summary 39 (Comm. Print 1969) (em\xc2\xad\nphasis added). It is unclear what is meant by \xe2\x80\x9c any such sale.\xe2\x80\x9d The phrase could\nreference the whole discussion relating to a section 414(a) conveyance or the pre\xc2\xad\nceding sentence, which addresses only sales to private entities. The previous sen\xc2\xad\ntence states:\nPrior to any sale or lease to a purchaser other than a public body\nthe Secretary must notify the governing body of the locality where\nthe property is located and no sale or lease may be made if, within\n90 days, the local governing body formally notifies the Secretary\nthat it objects to the proposed sale or lease.\nId.\n\nIt is clear that the congressional statements highlighted above \xe2\x80\x9c were obviously\nnot made with [our] narrow issue in mind and they cannot be said to demonstrate\na Congressional desire.\xe2\x80\x9d Jewell R idge C oal Corp. v. Local No. 6167, United Mine\nW orkers, 325 U.S. 161, 168-69 (1945). At times, some of the statements appear\nto suggest that section 414(b) applies to all sales under section 414. These state\xc2\xad\n110\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nments, however, are difficult to reconcile with the plain meaning of section 414(b)\nand the other legislative history. In addition, one of the concerns addressed by\nsection 414(b)\xe2\x80\x99s reversionary requirement and corresponding change in use provi\xc2\xad\nsion, as explained by Senator Tower, was that \xe2\x80\x9c individuals\xe2\x80\x9d not receive an unnec\xc2\xad\nessary windfall. One could construe this as an indication that Congress was not\nconcerned with a windfall bestowed upon a public body.\nWithout clearer direction from Congress, we agree with HUD and GSA that\nthe statute and its legislative history are sufficiently ambiguous to make it appro\xc2\xad\npriate to consider what, if any, interpretation has been provided by the agency\ncharged with administering the statute.\nThe power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of\npolicy and the making of rules to fill any gap left, implicitly or\nexplicitly, by Congress.\nChevron U.S.A. Inc., 467 U.S. at 842-43 (footnotes omitted) (quoting M orton v.\nRuiz, 415 U.S. 199, 231 (1974)). The permissibility of an agency\xe2\x80\x99s interpretation\ndepends upon whether the interpretation is \xe2\x80\x9c reasonable.\xe2\x80\x9d Id. at 845.\n\nOn April 29, 1971, the Administrator of GSA issued regulations implementing\nthe program established under section 414. In relevant part, the regulations stated:\nIf the property conveyed under section 414(a) of the 1969 Housing\nAct, as amended, is used for any purpose other than the purpose\nfor which it was sold or leased within a period of not less than\n40 years of the conveyance, it shall revert to the United States (or,\nin the case of leased property, the lease shall terminate) unless the\nSecretary and the Administrator of General Services, after the expi\xc2\xad\nration of the first 20 years of such period, approve the use of the\nproperty for such other purpose.\n41 C.F.R. \xc2\xa7101-47.308-6(1) (1974). The regulations also required that in any\nHUD request to GSA for the transfer of surplus property, HUD had to specify\n\xe2\x80\x9c what reversionary provisions [would] be included in the deed.\xe2\x80\x9d Id. \xc2\xa7 101\xe2\x80\x94\n47.308-6(f)(7).\nWe believe it is clear from the language of these regulations that GSA construed\nsection 414 to permit the government the option of inserting a reversionary re\xc2\xad\nquirement and a provision allowing for a change in use in a deed conveying prop\xc2\xad\nerty to a public body. Indeed, the Administrator confirmed this interpretation in\nletters to Congress regarding the conveyance at issue here. He advised the House\nand Senate Committees that \xe2\x80\x9c [conveyances under Section 414 of the Housing\nand Urban Development Act of 1969, as amended, do not require reversionary\nprovisions in the deed when disposal is to a public body.\xe2\x80\x9d Holifield & Ervin\n111\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nAug. 25, 1972 Letters at 5. It does not appear that GSA informed Congress that\nHUD intended, nevertheless, to convey the land conditionally.\nIn addition, copies of the San Patricio property deed, which contained the rever\xc2\xad\nsionary requirement and corresponding change in use provision after a twenty year\nlapse, were given to GSA within a week of its execution. GSA never objected\nto the terms of the deed or claimed they were contrary to section 414 requirements.\nWe believe that GSA\xe2\x80\x99s interpretation of section 414 was correct. As previously\ndiscussed, the legislative history supports the view that section 414(b) was adopted\nto mandate a reversionary provision in conveyances to private entities as a means\nto preclude windfalls to individuals. Accordingly, it is reasonable to conclude that\nthe silence as to public bodies creates an option as opposed to a requirement.\n\xe2\x80\x9c Windfalls\xe2\x80\x9d to governmental entities are of less concern than windfalls to private\nparties. It is also reasonable to conclude that the duration and nature of use restric\xc2\xad\ntions in conveyances to public entities were options to be negotiated on a case\nby case basis with the affected public entity. The contrary construction, that con\xc2\xad\nveyances to public entities were required to be burdened in perpetuity while pri\xc2\xad\nvate conveyances were not, seems an unlikely congressional intent.15\nThe modifications made to the regulations in 1982 do not change our conclu\xc2\xad\nsion. The regulations were amended, in relevant part, to provide:\n(1) If any property conveyed under section 414(a) of the 1969 HUD\nAct, as amended, to an entity other than a public body is used\nfor any purpose other than the purpose for which it was sold or\nleased within a period of 30 years of the conveyance, it shall revert\nto the United States (or, in the case of leased property, the lease\nshall terminate) unless the appropriate Secretary and the Adminis\xc2\xad\ntrator of General Services, after the expiration of the first 20 years\nof such period, approve the use of the property for such other pur\xc2\xad\npose.\n41 C.F.R. \xc2\xa7 101-47.308-6(1) (1993) (emphasis added). The other reference in the\nregulation as to reversionary provisions remained the same; it continued to require\nHUD to specify \xe2\x80\x9c [w]hat reversionary provisions [would] be included in the\ndeed.\xe2\x80\x9d Id. \xc2\xa7 101\xe2\x80\x9447.308\xe2\x80\x946(f)(7).\nGSA contends that the addition of the language, \xe2\x80\x9c \xe2\x80\x98to an entity other than a\npublic body,\xe2\x80\x99 \xe2\x80\x9d to paragraph (1) of the regulation represents a purposeful effort\n15 A nother indication o f the reasonableness o f G SA \xe2\x80\x99s interpretation is the silence by Congress after being advised\nby the A dm inistrator o f G S A \xe2\x80\x99s interpretation. The regulations also informed Congress of G S A \'s interpretation. Al\xc2\xad\nthough C ongress am ended the statute after being aware o f the interpretation, the language relevant here was never\nmodified. \xe2\x80\x9c W here an agency\xe2\x80\x99s statutory construction has been fully brought to the attention o f the public and the\nCongress,\xe2\x80\x98and the latter has not sought to alter that interpretation although it has amended the statute in other respects,\nthen presum ably the legislative intent has been correctly discerned.\xe2\x80\x99 \xe2\x80\x9d North Haven Bd. o f Educ. v. Bell, 456 U.S.\n512, 535 (1982) (quoting United States v. Rutherford, 442 U.S. 544, 554 n.10 (1979)); see also FEA v. Algonquin\nSNG, Inc., 426 U.S. 548, 56 7 -6 8 , 570-71 (1976).\n\n112\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nto clarify the \xe2\x80\x9c 1971 regulation by unambiguously limiting the authority to approve\nchanges in use to properties transferred to non-public bodies.\xe2\x80\x9d Hewitt Aug. 9,\n1995 Letter at 3. The language of the regulation, however, fails to achieve this\n\xe2\x80\x9c clarification.\xe2\x80\x9d 16 Like section 414 itself, the 1982 regulation fails unambiguously\nto assert any limitations on conveyances to public bodies or any limitations on\nGSA and HUD\xe2\x80\x99s ability to permit changes in the use of such property. Given\nthe clarity of the 1971 regulation, which was the regulation in force at the time\nof the original conveyance, and the ambiguity of the 1982 regulation, we do not\nbelieve that GSA is precluded by statute or regulation from approving a change\nin the use of the San Patricio property because it was conveyed to a public enti\xc2\xad\nty. 17 In the absence of a statutory or regulatory bar, we believe the terms of\nthe deed are controlling. Under the deed, GSA and HUD may approve a change\nin use after September 27, 1994. Deed at 11, <J[7(E)(Five).18\nWe now turn to GSA\xe2\x80\x99s final claim that even if approval for a change of use\nis permissible, as a matter of law, the approval mechanism cannot be exercised\nin this case because of the noncompliance to date.19 In support of this position,\nGSA refers to the language of section 414 and the compliance requirements of\nanalogous real property disposal authorities.\nWe do not agree with GSA. The analogous regulations upon which GSA relies\nexplicitly require compliance before a change in use is permitted. The statute,\n16 In addition, the 1982 changes appear to have been prompted by the passage o f statutory amendments that were\naimed at increasing sales o f surplus property. In the notice o f proposed rulemaking announcing the 1982 changes,\nGSA stated that the regulations were being changed to implement the 1978 and 1980 amendments to the statute,\nwhich expanded the scope of the program and reduced the restrictions. 41 C.F.R. pt. 101-47. Although the statutory\namendments did not involve the language at issue here, the legislative history reveals that the statutory modifications\nwere prompted by congressional intent to enhance utilization o f the program.\nIn 1978, the House Committee on Banking, Finance and Urban Affairs stated that certain amendments w ere being\nmade to section 414 \xe2\x80\x9c in order to facilitate the use o f such property for housing. Activity under this program has\nbeen at a very low level and the committee hopes that these changes will result in greater utilization o f surplus\nfederal land and property for housing." Explanatory Statement o f Managers at 181.\nIn a Senate report, the need for the 1978 amendments was explained as follows:\nUnfortunately, program activity has operated at a very low level-only five or six transfers of land have\nbeen made under section 414 since 1970. White part o f the problem has been the low priority given in\nthe past to using surplus land for housing, another major constraint has been the restrictive nature o f the\nstatutory provision under which the program must operate.\nS. Rep. No. 95-871, at 47 (1978).\n17 Moreover, GSA has never revised the requirement that HUD specify in any transfer request \xe2\x80\x9c what reversionary\nprovisions [would] be included in the deed.\xe2\x80\x9d 41 C.F.R. \xc2\xa7101-47.308-6(0(7) (1974). The continuation o f this provi\xc2\xad\nsion without modification further supports the inference that, after the 1982 regulatory changes, reversionary provi\xc2\xad\nsions in deeds were optional for public body conveyances.\n18 Citing Condition T w o o f paragraph Seven, GSA contends that the proposed transaction is prohibited because\nthe 1982 regulations specifically limit the right to change usage to private entities. GSA cites the 1982 regulations\nas relevant because Condition Two o f the deed requires HUD approval, \xe2\x80\x9c in accordance with the then-existing regula\xc2\xad\ntions,\xe2\x80\x9d for a resell o f the property.\nArguably, because the proposal constitutes a change in use o f the property, only Condition Five o f the deed\napplies. See discussion supra (Condition Two applies to a resell when the property is not to be used for a different\npurpose.). Condition Five requires that both GSA and HUD approve the change o f use. Condition Five does not\nhave language limiting the authority to \xe2\x80\x9c then-existing regulations.\xe2\x80\x9d Nevertheless, even if Condition Tw o o f the\ndeed were invoked by the proposed transaction at issue here, the current regulations are not a bar to the transfer.\n19 GSA also argues that, as a matter o f policy, the changes o f use should not be approved. W e decline to comment\non the policy implications raised by the proposed transaction at issue here.\n\n113\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nregulations, and deed at issue here do not contain such an explicit condition. Nor\nis there language in these authorities or legislative history to support a prior com\xc2\xad\npliance requirement. Indeed, the explicitness of the analogous regulations and the\nsilence in the authorities at issue here support the absence of such a requirement\nin section 414 conveyances. The analogous authorities confirm that when prior\ncompliance is intended, GSA uses explicit language to that effect. Cf. Custis v.\nU nited States, 511 U.S. 485, 491-92 (1994) (where Congress includes explicit\nlanguage in certain statutes and omits similar language in a related statute, it is\npresumed that Congress acted intentionally in the disparate inclusion or exclusion).\nEven if prior compliance were required, GSA concedes that compliance would\nnot be a condition to a change in use where the noncompliance was caused by\nextenuating circumstances. HUD argues that the noncompliance in this matter was\ncaused by extenuating circumstances. HUD refers to the 20 years of effort by\nCRUV and its successor to develop the property, the lack of HUD funding and\nthe location of the property to support its claim that the noncompliance was not\nthe result of any deliberate negligence by CRUV. We do not disagree that the\nfailure to develop the property was caused by extraordinary circumstances. As\noutlined above, CRUV and its successor appear to have tried continuously to de\xc2\xad\nvelop the property and often failed from faults other than their own. The proposed\nconstruction project was massive and was estimated in 1972 to cost $72 million.\nIndeed, GSA and HUD were aware from the beginning that the proposal to de\xc2\xad\nvelop the property would require years of construction to complete. GSA even\nadvised Congress that a completion date for all construction could not be estimated\nbecause of the size of the project.\nThe record also reveals CRUV\xe2\x80\x99s ongoing communication and cooperation with\nHUD in attempts to comply with the deed and section 414 as problems occurred.\nHUD and GSA were aware of the noncompliance and HUD continued to work\nwith CRUV to provide the required housing. GSA requested that HUD either insti\xc2\xad\ntute a reversionary action or facilitate compliance. HUD threatened to commence\nreversionary proceedings against CRUV. These threats apparently resulted in pro\xc2\xad\nposals that were acceptable to the United States. In the end, a conscious decision\nwas made to drop the reversion action. Again, however, CRUV and HUD encoun\xc2\xad\ntered problems in implementing the proposal. Thereafter, CRUV\xe2\x80\x99s successor made\nthe proposal that is at issue here.\nm . Conclusion\nIn sum, the proposed transaction would constitute a change in use of the San\nPatricio property under section 414. Because a change in use is not barred by\n\n114\n\n\x0cLegal Authority to Approve Changes in Use o f Property Under Section 414 o f the Housing and Urban\nDevelopment Act o f 1969\n\nstatute or regulation, the deed of conveyance is controlling. Under the deed, GSA\nand HUD may approve the proposed change at issue here.\nH.\n\nJEFFERSON POWELL\n\nD eputy Assistant Attorney General\nOffice o f Legal Counsel\n\n115\n\n\x0c'