BNUMBER:  B-274855
DATE:  January 23, 1997
TITLE:  Advisory Commission on Intergovernmental Relations:  Use and
Final Disposition of State Government Contributions

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Matter of:Advisory Commission on Intergovernmental Relations:  Use and 
          Final Disposition of State Government Contributions

File:     B-274855

Date:January 23, 1997

DIGEST

1.  The United States Advisory Commission on Intergovernmental 
Relations (ACIR) has statutory authority to receive and expend 
contributions for carrying out its purposes.  State contributions to 
generally support ACIR's authorized activities are unrestricted gifts.  
As unrestricted gifts, they are available for all ACIR activities 
authorized by Congress at the time of ACIR's expenditure and are not 
limited to the specific activities authorized by Congress, or 
contemplated by ACIR or the states at the time the contributions were 
made.

2.  Effective October 1, 1996, ACIR's only statutorily authorized 
activity is to perform research under a contract as provided by the 
National Gambling Impact Study Commission Act.  From October 1, 1996, 
until such time as ACIR receives the research contract,  ACIR may use 
the unconditional state government contributions for the limited 
purpose of supporting activities preparatory to receiving the 
contract.  

3.  When unrestricted gifts are made to an agency of the United 
States, such gifts are in the final analysis for the benefit of the 
United States.  After ACIR completes its activities under the National 
Gambling Impact Study Commission Act, it will terminate under current 
law.  When ACIR terminates, it must deposit unexpended state 
contributions into the Treasury as miscellaneous receipts.

DECISION

The United States Advisory Commission on Intergovernmental Relations 
(ACIR) requests an advance decision on the use and final disposition 
of the unexpended balance of state government contributions.  
Specifically, ACIR asks whether it may use the unexpended state 
government contributions from October 1, 1996, when its authority to 
carry out the purposes stated in its authorizing legislation ceased, 
until it begins performing new duties under the National Gambling 
Impact Study Commission Act.  ACIR furthers asks what the proper 
disposition is of any unexpended state government contributions 
remaining when it terminates.  For the reasons explained below, state 
contributions to ACIR are unconditional gifts that became the property 
of the federal government when received, and are available for any 
authorized purpose of the ACIR.  As of October 1, 1996, ACIR's only 
authorized purpose is to do research under a contract to be awarded to 
it under the National Gambling Impact Study Commission Act.  
Accordingly, from October 1, 1996, until ACIR is awarded the contract, 
ACIR may use the unconditional state government contributions for the 
limited purpose of supporting activities preparatory to receiving the 
contract.  Upon ACIR's final termination, it must deposit its 
remaining assets into the Treasury as miscellaneous receipts.                    

BACKGROUND

Congress created the ACIR as a 26-member bipartisan federal commission 
to give continuing attention to intergovernmental problems.  Pub. L. 
No. 86-380, 73 Stat. 703 (1959)(codified at 42 U.S.C.  sec.  4271, 4272 
(1994)).  As originally created, Congress authorized to be 
appropriated such sums as may be necessary to carry out the provisions 
of the Act.  42 U.S.C.  sec.  4278 (1994).  Subsequently, Congress 
authorized ACIR to receive funds through grants, contracts, and 
contributions from, among others, state governments, and to expend 
such funds only for authorized purposes.  Pub. L. No. 89-733, 80 Stat. 
1162 (1966)(codified at 42 U.S.C.  sec.  4279 (1994)).  ACIR advises that 
it has maintained its appropriated funds separately from contributions 
received from state governments.

The Treasury, Postal Service, and General Government Appropriations 
Act, 1996, Pub. L. No. 104-52, 109 Stat. 468, 480 (1995), terminated 
ACIR effective September 30, 1996.  The appropriations act provided 
"for the necessary expenses of the ACIR, $784,000, of which $334,000 
is to carry out the provisions of Public Law 104-4[1], and of which 
$450,000 shall be available only for the purposes of the prompt and 
orderly termination of the ACIR."

About 2 months before ACIR was to terminate, Congress gave ACIR a new 
responsibility.  Section 7(a) of the National Gambling Impact Study 
Commission (Gambling Commission) Act, Pub. L. No. 104-169, 110 Stat. 
1482, 1487 (1996), required the Gambling Commission to contract with 
ACIR to research and report its findings no later than 15 months after 
the date upon which the Gambling Commission first meets.  However, 
Public Law 104-169 did not address ACIR's scheduled termination on 
September 30, 1996.  Congress subsequently authorized ACIR to 
"continue in existence solely for the purpose of performing any 
contract entered into under section 7(a) of the National Gambling 
Impact Study Commission Act (Public Law 104-169; 110 Stat. 1487).  The 
[ACIR] shall terminate on the date of the completion of such 
contract."  Pub. L. No. 104-328, 110 Stat. 4004 (1996).

In the past, ACIR received funding from two distinct sources:  federal 
appropriations and private contributions.[2]  ACIR's fiscal year 1996 
appropriation provided some funds for studies and reports on federal 
mandates and some for ACIR's prompt and orderly termination.  ACIR did 
not receive any appropriations for fiscal year 1997.  While Public Law 
104-328 continued ACIR's existence beyond fiscal year 1996 for the 
limited purpose of providing research for the Gambling Commission, 
Congress appropriated no funds and, in fact, provided in Public Law 
104-328 that ACIR shall make any required contribution for employee 
insurance, health, and retirement programs from funds received through 
its contracts with the Gambling Commission.  As of January 8, 1997, 
ACIR does not have a contract with the Gambling Commission.

Because ACIR did not receive an appropriation for fiscal year 1997, 
ACIR asks whether it may use unexpended state contributions to 
maintain staff and otherwise continue its existence until the Gambling 
Commission awards ACIR a contract.  ACIR also asks whether it must 
deposit the unexpended balance of the state contributions in the 
Treasury when it terminates or whether it may return unexpended 
amounts to its contributors (or their designees).

ANALYSIS

Use of State Contributions During ACIR's Existence

ACIR is authorized to receive and expend contributions from state 
governments only for carrying out the purposes of ACIR.  42 U.S.C.  sec.  
4279 (1994).  ACIR's purpose is to give continuing attention to 
intergovernmental problems.  42 U.S.C.  sec.  4272 (1994).  The legislative 
history on the 1966 amendment authorizing ACIR to receive and expend 
contributions states that the purpose of the amendment was "to 
increase the participation of certain non-Federal agencies by allowing 
them to contribute to the support of the Commission's work."  S. Rep. 
No. 1747, 89th Cong., 2d Sess. 4 (1966).  Based on the materials and 
information provided by ACIR, ACIR solicited and received 
contributions from state governments to support its general purposes, 
namely, carrying out intergovernmental assistance and information 
services.  We have not been advised that the state contributors have 
tied their contributions to a particular activity to the exclusion of 
all others.  In addition, the contributions were voluntary for which 
no specific benefit was exchanged.  In this regard, the contributions 
had all the characteristics of an unrestricted gift in support of the 
general activities and operation of ACIR.  Nothing in the materials 
ACIR provided supports a conclusion that the contributors explicitly 
retained a reversionary interest in their contributions, that ACIR 
held the contributions in trust for the contributors, or that the 
contributions were anything other than a donation to be used for the 
statutorily authorized purposes of ACIR.

Essentially, gifts or donations are gratuitous conveyances or 
transfers of ownership in property without any consideration.  
B-195492, March 18, 1980.  The essential elements of a gift are 
donative intent, delivery and acceptance.  In order to make a gift to 
a federal entity, all that is required is a simple letter to the 
appropriate agency head transmitting the funds for the stated purpose.  
B-157469, July 24, 1974.   
Appropriated funds are not limited to those appropriated to agencies 
from the general fund of the Treasury.  Rather, funds available to 
agencies are considered appropriated, regardless of their source, if 
they are made available for collection and expenditure pursuant to 
specific statutory authority.  See B-215042, April 12, 1985.  This 
means that although donated funds may not be subject to all the 
restrictions applicale to direct appropriations, they are still public 
funds.   See B-197565, May 13, 1980.  

Donations are accounted for as trust funds and must be deposited in 
the Treasury as such under 31 U.S.C.  sec.  1323(c), to be disbursed in 
accordance with the terms of the trust and the scope of the agency's 
statutory authority.  Although contributions to ACIR have been 
maintained separately from direct appropriations and held in a "trust 
fund account" to carry out authorized purposes, they are not "held in 
trust" as those words are commonly used to describe a fiduciary 
relationship to keep money for the benefit of another.  There is a 
clearly defined and well recognized difference between a gift and a 
trust.  To make a gift, the donor must part with possession and 
control, and delivery is essential, while in a trust, the legal title 
is retained by the donor, and only the equitable title vests in the 
trustee.  38A C.J.S. Gifts  sec.  9.  An absolute gift cannot be cut down 
by implication into a trust by events transpiring after it is made.  
Vickers v. Vickers, 65 S.E. 885, 133 Ga. 383.  

The scope of ACIR's statutory authority to accept and expend these 
contributions is limited to the purposes of the Commission.  42 U.S.C.  sec.  
4279.  The contributions were made to support ACIR's work.  As 
suggested above, these contributions represent unconditional gifts.  
These state contributions were absolutely and irrevocably delivered 
to, and accepted by, ACIR without any explicit or specfic limitations.  
Upon acceptance of these contributions, the legal title passed to the 
United States for ACIR's use for the purposes authorized by Congress.  
Since ACIR is an agency of the United States subject to the sovereign 
power of the Congress to modify or adjust its activities, the fact 
that Congress significantly limited the scope of ACIR's activities is 
not relevant.  In the final analyis, the contributions to ACIR inure 
to the benefit of the United States and become the property of the 
United States.

With the enactment of Public Laws 104-169 and 104-328, ACIR's purpose 
is still related to intergovernmental problems, albeit now of a much 
more limited scope.  The state contributions were given for the 
general purposes of ACIR.  The fact that Congress narrowed ACIR's 
scope by legislation subsequent to when the contributions were donated 
does not divest ACIR of the authority to use the contributions.  
Further, these contributions are the only funds available to ACIR to 
support staff and pay other expenses incurred in discussing and 
negotiating the research contract with the Gambling Commission.  
Accordingly, from October 1, 1996, until such time as the Gambling 
Commission awards ACIR the contract, ACIR may use the unexpended 
balances of the unconditional state government contributions to 
support activities preparatory to receiving the gambling research 
contract.  Our conclusion is not inconsistent with the purposes of the 
National Gambling Impact Study Commission Act[3] and will help ACIR, 
in the words of Public Law 104-328, "continue in existence" for 
purposes of performing the gambling research contract.

Use of State Contributions After ACIR's Termination

The same analysis that prompts us to conclude that ACIR may use 
unexpended state government contributions for activities preparatory 
to receiving the contract from the Gambling Commission also leads us 
to conclude that when ACIR terminates, it must transfer any remaining 
funds to the United States Treasury as miscellaneous receipts.

As discussed above, we view the state contributions as unconditional 
gifts.  The fact that they are held in a trust fund account for 
budgetary and accounting purposes does not constitute or otherwise 
create a trust where one did not otherwise exist.  The state 
contributors parted with both possession and control of the funds when 
they gave the money to ACIR to be used for the general purposes of the 
Commission.  The State's have not retained any title or reversionary 
interest in the monies, nor have they tied their contributions to a 
particular activity to the exclusion of all others. 

When Congress authorized ACIR, as an instrumentality of the United 
States, to accept contributions to help finance ACIR's statutory 
purposes, the contributed monies became the property of the United 
States no different than the funds Congress appropriated to ACIR.  
Just like ACIR's appropriated funds, the state contributions may be 
used only for purposes Congress has authorized.  As of October 1, 
1996, ACIR is only authorized to conduct gambling research under a 
contract with the Gambling Commission.  Under current law, when ACIR 
completes that contract, it will have no authorized purposes and must 
terminate.

We have not objected to a federal commission transferring before its 
termination donated funds to a private organization to complete 
activities the commission had begun and was authorized to conduct at 
the time of the transfer even though the private organization would 
not expend the funds before the commission's termination.  36 Comp. 
Gen. 771 (1957).  However, the situation before us is not analogous to 
that in 36 Comp. Gen. 771.  The intended effect of ACIR's proposal to 
transfer unexpended state contributions to an entity designated by the 
contributors is to enable the transferee entity to use those 
contributions for activities that ACIR is no longer authorized by 
Congress to conduct.  This would be an improper use of ACIR funds.  
The only remaining disposition of unexpended state contributions when 
ACIR terminates is to deposit them in the United States Treasury as 
miscellaneous receipts.

Comptroller General
of the United States

1. Title III of Public Law 104-4, the Unfunded Mandates Reform Act of 
1995, required ACIR to complete during fiscal year 1996 studies and 
reports on issues relating to the effect of federal mandates on State, 
local, and tribal governments.

2. Because ACIR informally advised us that the only unexpended private 
contributions it has are contributions from state governments, for 
ease of reference, we will refer to the private contributions as state 
contributions.

3. The purpose of requiring a gambling study by ACIR was "to use the 
expertise of the ACIR . . . so as to avoid duplicating work already 
done by the Government, reduce the cost of the [Gambling] Commission, 
and ensure that the States are not left out of the process."  142 
Cong. Rec. S7974 (daily ed. July 17, 1996) (statement of Sen. 
Stevens).