TITLE:  Effect of Recent Amendments to the District of Columbia Victims of Violent
Crime Compensation Act, Public Law Nos. 106-554 and 107-96
BNUMBER: B-288173 
DATE:  June 13, 2002
**********************************************************************
Effect of Recent Amendments to the District of Columbia Victims of Violent
Crime Compensation Act, Public Law Nos. 106-554 and 107-96, B-288173, June
13, 2002

Decision


Matter of:   Effect of Recent Amendments to the District of Columbia Victims
of Violent Crime Compensation Act, Public Law Nos. 106-554 and 107-96

File:            B-288173

Date:           June 13, 2002


DIGEST

1.  The District of Columbia Victims of Violent Crime Compensation Act
requires that "any unobligated balances existing in the [Crime Victims
Compensation] Fund as of the end of each fiscal year" be used in accordance
with specified percentages for compensation payments and outreach to
victims.  The District of Columbia Courts should apply the percentage
formulas relating to the use of unobligated balances
to the total annual unobligated balance after the end of each fiscal year's
activities.  To exclude unobligated balances of prior fiscal year allocation
from the calculation would not be consistent with the plain language of the
Act.

2.  The District of Columbia Courts method of calculating "unobligated
balance" is consistent with the Compensation Act.

3.  The Courts may implement District of Columbia Council changes to the
Crime Victims Compensation Program as long as the changes do not alter or
exceed the conditions of applicable federal appropriation and authorization
acts.


DECISION

The District of Columbia Courts (Courts) request an advance decision
interpreting recent congressional amendments to the District of Columbia's
Victims of Violent Crime Compensation Act (Compensation Act) and on other
implementation issues related to the Compensation Act.  Specifically, the
Courts ask whether: (1) the statutory percentage formulas relating to the
use of unobligated balances in the Crime Victims Compensation Fund should be
applied to the Fund's end-of-year accumulated balance or its annual balance
of amounts remaining after each fiscal year's activities;[1] (2) the Courts
method of calculating "unobligated balance" is consistent with the
Compensation Act; and (3) the Courts may implement changes made in the Crime
Victims Compensation Program by the District of Columbia Council (Council)
without further congressional action.

As explained below, we conclude that the Compensation Act requires that (1)
the percentage formulas relating to the use of unobligated balances should
be applied to the total annual unobligated balance after the end of each
fiscal year's activities; (2) the Courts method of calculating "unobligated
balance" is consistent with the Compensation Act; and  (3) the Courts may
implement Council changes to the Compensation Act as long as the Council
changes do not alter or exceed the conditions of applicable federal
appropriation and authorization acts.

BACKGROUND

The District of Columbia enacted the Victims of Violent Crime Compensation
Act (Compensation Act) to provide compensation to victims of violent crime
in the District.  D.C. Code Ann. ï¿½ï¿½ 4-501 through 4-518 (2001).[2]  The
Compensation Act established a Crime Victims Compensation Fund (Fund),
consisting of appropriated funds, federal grant funds, and costs, fees and
other assessments collected by the District entities identified in the
statute, and any monies received from other public or private sources for
the purpose of the fund.  D.C. Code Ann. ï¿½ 4-515.  The Compensation Act, as
amended, provides that the Courts may make compensation payments totaling up
to $25,000 from the Fund to crime victims for economic loss.  Payments can
also be made for shelter, burial costs, or medical expenses.

In 1997, the Congress enacted the National Capital Revitalization and
Self-Government Improvement Act of 1997 (Revitalization Act) that provided
that all money received by the District of Columbia Courts be deposited in
the Treasury of the United States or the Crime Victims Fund.  Pub. L. No.
105-33, Title XI, ï¿½11243,
111 Stat. 251, 753 (1997).  Consequently, in fiscal year 1998, the Courts
began depositing their fines, fees, and all other funds the Courts received
into the Fund.  Letter from Anne B. Wicks, Executive Officer, District of
Columbia Courts (June 5, 2001).  The Courts also made Compensation Act
payments and administrative cost payments for administering the Compensation
Act in fiscal year 1998.

In September 1999, we issued a report reviewing the Courts financial
operations for fiscal year 1998.  The report concluded that the $1.8 million
in Compensation Act payments and administrative cost payments that the
Courts made from the Fund in
fiscal year 1998 were made without proper authority.  D.C. Courts, Planning
and Budgeting Difficulties During Fiscal Year 1998, GAO/AIMD/OGC-99-226, at
18 (September 16, 1999).   Our report advised that Section 446 of the
District of Columbia Self-Government and Governmental Reorganization Act,
Pub. L. No. 93-198, 87 Stat. 774 (1973) (Home Rule Act), as amended, states
that no officer or employee of the District of Columbia government may
obligate or spend an amount unless it is approved by an act of the Congress
and then only according to that act.  GAO/AIMD/OGC-99-226, at 18.  Although
the Revitalization Act authorized the Courts to deposit into the Fund the
fines, fees, and other money to the Fund, the Revitalization Act made no
mention of obligating or expending amounts from the Fund.  Id.  Furthermore,
no other federal law authorized payments from the Fund.  Consequently, the
Courts did not have the legislative authority to make payments from the
Fund.   Id.  We recommended that the Courts seek legislation authorizing the
Courts to use the Fund to pay eligible claims under the Compensation Act.
Id. at 25.

In 1999, Congress enacted the District of Columbia Appropriations Act for
fiscal year 2000, providing the Courts with the requisite authority our
Office had found lacking, and amended the Fund in several other ways.  Pub.
L. No. 106-113, 113 Stat. 1501 (1999).  First, the Appropriations Act
amended section 16(a) of the Victims of Violent Crime Compensation Act of
1996 to require that the Fund be maintained as a separate fund in the
Treasury of the United States and provided that "all amounts deposited to
the credit of the Fund are appropriated without fiscal year limitation" to
make payments as authorized under the Compensation Act.   Pub. L. No.
106-113,
ï¿½ 160(b), 113 Stat. 1528 (1999), codified at D.C. Code Ann. ï¿½ 4-515(a).  The
Appropriations Act also ratified any payments made from or deposits made to
the Fund on or after April 9, 1997.  Id. ï¿½ 160(e).  Lastly, Congress struck
the authority to pay administrative costs from the Fund and added language
prohibiting the use of the Fund for "any other purpose."  Id.  ï¿½160(a)(1),
(2).  Thus, in 1999, the Fund was available only for payments for the
compensation of victims.

In the Omnibus Consolidated Appropriations Act, 2001, Congress again amended
the Fund's language to provide that:

Any unobligated balance existing in the Fund in excess of $250,000 as of the
end of each fiscal year (beginning with fiscal year 2000) may be used only
in accordance with a plan developed by the District of Columbia and approved
by the Committees on Appropriations of the Senate and House of
Representatives, the Committee on Government Reform of the House of
Representatives, and the Committee on Governmental Affairs of the Senate,
and not less than 80 percent of such balance shall be used for direct
compensation payments to crime victims through the Fund under this section
and in accordance with this Act.

Pub. L. No. 106-554, Appendix D, Div. A., Ch. 4, ï¿½ 403, 114 Stat. 2763A-188
(2000).

The most recent congressional enactment relating to the Fund occurred in the
District of Columbia Appropriations Act for fiscal year 2002, which further
amended the Compensation Act to provide that any "unobligated balance as of
the end of each fiscal year" (the Appropriation Act struck the "in excess of
$250,000" language) could be used only in accordance with the plan submitted
to Congress.  In addition, the Appropriations Act changed the percentage
allocation for the unobligated balance as follows:

Any unobligated balance existing in the Fund as of the end of each fiscal
year (beginning with fiscal year 2000) may be used only in accordance with a
plan developed by the District of Columbia and approved by the Committees on
Appropriations of the Senate and House of Representatives, the Committee on
Government Reform of the House of Representatives, and the Committee on
Governmental Affairs of the Senate, except that under such plan --

(1) 50 percent of such balance shall be used for direct compensation
payments to crime victims through the Fund under this section and in
accordance with this Act; and

(2) 50 percent of such balance shall be used for outreach activities
designed to increase the number of crime victims who apply for such direct
compensation payments.

Pub. L. No. 107-96, 115 Stat. 923, 928 (2001).  Lastly, the Congress amended
the Compensation Act to provide that not more than 5 percent of the total
amount of monies in the Fund may be used to pay administrative costs
necessary to carry out the Act.  Id.

In 2000, after the Congress enacted the amendments to the Compensation Act
in the fiscal year 2000 District of Columbia Appropriations Act, the Council
enacted legislation of its own amending the Compensation Act.  The District
of Columbia legislation expanded the definition of a victim, increased
compensation for crime victims, provided that compensation paid to a victim
should not affect the victim's
eligibility for other public benefits, and permitted the Courts to pay
administrative expenses from the Fund.  Fiscal Year 2001 Budget Support Act
of 2000, D.C. Law 13-172 (2000).[3]

The Courts have three questions related to the effect of these various
legislative changes to the Fund.   First, the Courts ask whether the
statutory percentage formulas relating to the use of unobligated balances in
the Fund should be applied to the Fund's accumulated balance or to the
annual balance of amounts remaining after each fiscal year's activities (we
define these terms in our analysis which follows).  Second, the Courts seek
guidance on whether their interpretation of "unobligated balance" is
acceptable.  Lastly, the Courts note that, in 2000, the Council made changes
to the Compensation Act after Congress provided the Courts with the
requisite authority to make payments out of the Funds.  The Courts ask
whether they may implement changes made in the Compensation Program without
further congressional approval.   Our answers to these questions are set out
below.

ANALYSIS

1.  Statutory Percentage Formula for Use Of Unobligated Balances

The Courts ask whether the statutory percentage formulas relating to the use
of unobligated balances in the Fund should be applied to the Fund's
accumulated balance or to the annual balance of amounts remaining after each
fiscal year's activities.  The best way to understand the Courts' first
question is by using an illustrative example.  Assume there is a $1 million
unobligated balance in the Fund at the end of fiscal year one (FY 1).  The
Compensation Act requires that this $1 million unobligated balance be split
evenly and used for two purposes: $500,000 for direct compensation payments
to crime victims and the other $500,000 for outreach activities.

At the end of FY 2, assume that no victim compensation payments were made so
that the $500,000 unobligated balance for compensation payments at the end
of the FY 1 remains unobligated at the end of FY 2.  Also assume that all of
the prior fiscal year unobligated balance dedicated to outreach was
obligated and expended (unobligated balance for outreach reduced to zero).
If, in FY 2, another $1,000,000 in unobligated balances were accumulated
there would be $500,000 in "old" unobligated balances dedicated, at the end
of the prior fiscal year, to compensation payments, and a "new" FY 2
unobligated balance of $1,000,000.   The Courts posit two ways to calculate
how much of this $1.5 million is available for each purpose; each
calculation has very different results and a significant impact on the
funding for each of the purposes described above.

Annual Balance Calculation Method

Under the scenario outlined above, if we add the "old" $500,000 unobligated
carryover balance to the $1,000,000 in "new" unobligated balances that were
built up in the Fund during FY 2 there would be $1.5 million in total
unobligated balances.  Under the annual balance calculation method, the
Courts would apply the 50-50 split to the total unobligated balance at the
end of FY 2 ($1.5 million), making $750,000 available for direct
compensation payments to crime victims and $750,000 available for outreach
activities.[4]  Thus, in this calculation, what was previously otherwise
available only for direct compensation payments in the form of unobligated
balances ($500,000 from FY 1) loses its character and is subsumed into the
end of the FY 2 unobligated balance and split 50-50.


                 Table 1: Illustration of Annual Balance Calculation Method

















                                                     "Accumulated" Balance
                                                     Calculation Method

                                                     Again using the same
                                                     scenario, at the end
                                                     of FY 1 the $500,000
                                                     was available for
                                                     direct compensation
                                                     payments to crime
                                                     victims.  Under the
                                                     accumulated balance
method of calculation, this "old" unobligated balance is not added to the
$1,000,000 in "new" unobligated balances that were built up during FY 2;
instead it is considered to have been dedicated for direct compensation at
the end of FY 1 and remains dedicated for that purpose even though none of
this $500,000 was used in FY 2.  In this scenario we have only $1 million in
new unobligated balances, not $1.5 million.  If you apply the Compensation
Act's 50-50 split to the total "new" unobligated balance at the end of FY 2,
there would be $500,000 of "new" unobligated balances available for direct
compensation payments to crime victims and $500,000 of "new" unobligated
balances available for outreach activities.   When added to the "old"
unobligated carryover balance, there would be  $1,000,000 for direct
compensation payments to crime victims ($500,000 "new" plus $500,000 "old" =
$1,000,000), as opposed to $750,000 available under the annual balance
calculation.


Table 2:  Illustration of Accumulated Balance Calculation Method
















                                                 Discussion

                                                 To choose between the
                                                 annual balance approach and
                                                 the accumulated balance
                                                 approach, we must ascertain
                                                 congressional intent.  The
                                                 best way of determining
                                                 legislative intent is the
                                                 language of the statute
                                                 itself.  Mallard v. United
States District Court, 490 U.S. 296, 300 (1989).   As the Supreme Court has
explained: "There is, of course, no more persuasive evidence of the purpose
of a statute than the words by which the legislature undertook to give
expression to its wishes."  United States v. American Trucking Associations,
Inc., 310 U.S. 534, 543 (1940).  This is the so-called "plain meaning"
rule.  Mallard v. United States District Court, 490 U.S. at 300; United
States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989).

The Compensation Act clearly states that "[a]ny unobligated balance existing
in the Fund as of the end of each fiscal year."  Pub. L. No. 107-96, 115
Stat. 923, 928 (2001) (emphasis added).   The Compensation Act also states
that 50 percent "of such balance" must be used for compensation payments,
and the other 50 percent "of such balance" must be used for outreach.  Id.
The Compensation Act does not address or distinguish between unobligated
balances built up in prior fiscal years and balances built up during
subsequent fiscal years for either purpose.  Although in the illustration we
posed above $500,000 was dedicated at the end of FY 1 for direct
compensation payments, that amount, in our illustration was, in fact, never
obligated during FY 2, and so remained unobligated at the end of FY 2.   The
Compensation Act plainly states that as of one point in time, that is,  "the
end of each fiscal year," any unobligated balance existing is to be equally
divided among two authorized purposes: crime victim payments and outreach
activities.   Thus, under the plain meaning of the statute, the 50-50 split
of unobligated balances should be applied using the annual balance
calculation, i.e., the total annual unobligated balance after the end of
each fiscal year's activities.

2.  Courts Method of Calculating Unobligated Balance

The Compensation Act defines the term "unobligated balances" as not
including the amount of claims pending at the end of a fiscal year which
have been filed but for which awards have not been made, based on an
estimated average cost of each award.  D.C. Code Ann. ï¿½ 4-515(d-1)(4).  The
Compensation Act requires, in other words, that the Courts consider claims
pending at the end of the year to be obligated, even though not yet paid,
and prescribes that for pending claims the Courts obligate an amount equal
to pending claims based on the estimated average cost of each award.   The
Courts calculate the estimated average cost of each award in a multi-step
process and have asked whether their approach is consistent with the
Compensation Act.

In the first step of the calculation, at the end of the fiscal year, the
Courts divide the total amount paid from the Fund during the fiscal year by
the number of paid claims.  Then the Courts, based on their data of what has
occurred with claims in the current and prior years, estimate the number of
pending claims that are not likely to be paid at all (not valid/ineligible
claims) and those claims that will result in no cost to the Fund because
expenses are paid by another source (no cost eligible/no payment claims).
The Courts deduct these latter claims from the total number of pending
claims.   The Courts multiply the remaining number of pending claims by the
average cost per claim calculated initially.   By using this multi-step
approach, the Courts believe they can more accurately estimate the average
cost of each award at the end of the fiscal year, as required by the
Compensation Act, and not obligate more than is necessary to meet actual
estimated claims.

The Courts' approach is a reasonable application of the Compensation Act,
and we do not object to it.  The Compensation Act requires the Courts, at
the end of the fiscal year, to obligate an amount equal to pending claims
based on the average cost of award.  The Courts multi-step approach is
focused on obtaining the most accurate estimated "average cost of each
award."  The Courts first obtain the average cost of awards actually paid.
Then, in order to arrive at an accurate estimate for pending unpaid claims,
the Courts, using historical data, subtract all the claims that are not
likely to be paid.  Thus, at the end of the year, the Courts obligate funds
based on the estimated average cost of awards that are likely to be paid.
This method of calculation of "unobligated balances" (made at the end of the
fiscal year using historical data to adjust for likely unpaid and no cost
claims) is consistent with the Compensation Act.

3.  Implementing Council Changes to the Compensation Program

After the Congress amended the Compensation Act in 1999 making monies in the
Fund available for obligation and expenditure, Pub. L. 106-113, 113 Stat.
1501 (1999), the Council enacted legislation that, among other things,
expanded the definition of a victim, increased compensation for crime
victims, permitted the payment of administrative expenses and provided that
a victim's receipt of compensation will not affect eligibility for public
benefits.  Fiscal Year 2001 Budget Support Act, D.C. Law 13-172/13-376
(2000).

The Courts ask whether they may implement these changes in the Compensation
Program without further congressional approval.   The Courts' uncertainty is
due to the GAO report noted in the background section above:   D.C. Courts,
Planning and Budgeting Difficulties During Fiscal Year 1998,
GAO/AIMD/OGC-99-226, at 18 (September 16, 1999).   Our report noted that
although the Revitalization Act supported the authority of the Courts to
deposit the fines, fees, and other money identified in Compensation Act to
the Fund, the Revitalization Act did not authorize obligating or expending
the amounts deposited into the Fund.   Thus, because appropriated funds may
only be spent in accordance with an Act of Congress under the Home Rule Act,
the Courts did not have the authority to make payments from the Fund.

Our report does not stand for the proposition that the Council cannot enact
substantive legislation, but that, as a matter of appropriations law,
legislation involving fiscal matters must be approved by an act of the
Congress.  The necessity for congressional approval of the District of
Columbia budget and fiscal matters is longstanding.  Congress rejected a
proposed delegation of full fiscal authority to the District of Columbia
when enacting the Home Rule Act.  Cannon v. United States, 645 F.2d 1128
(1981).   By that Act, Congress granted District of Columbia citizens the
right to elect a Council authorized to enact local legislation, subject to
Congress' ultimate authority.  Congress retained its budgetary control,
however, and prohibited the District of Columbia from obligating or
expending revenues without obtaining the prior approval of Congress.
In our opinion, as long as the District's substantive legislation does not
conflict with or exceed the fiscal prerogatives of the Congress, then the
Courts may implement those changes.  In other words, as long as the
Council's legislation bears a reasonable relationship to the purposes for
which Congress has allowed the Fund to
be used and does not otherwise violate the conditions of the applicable
appropriations and authorization acts, the Courts may implement the Council
legislation.

For example, in 1999, Congress struck the authority to pay administrative
costs from the Fund and added language prohibiting the use of the Fund for
"any other purpose."  Id.  Pub. L. No. 106-113, ï¿½ 160(a)(1), (2), 113 Stat.
1528 (1999), codified at D.C. Code Ann. ï¿½ 4-515(a).  Thus, in 1999, the Fund
was available only for payments for the compensation of victims.  In 2000,
however, the Council amended the Compensation Act to permit the Courts to
pay administrative expenses from the Fund.  See discussion above; Fiscal
Year 2001 Budget Support Act of 2000, D.C. Law 13-172 (2000).   We
understand that the Courts did not use the Fund to pay any administrative
expenses even though the Council had amended the Compensation Act to permit
such payments.  In our opinion, the Courts acted properly in not
implementing the District law because any payments for administrative
expenses would have violated the conditions of the applicable appropriation,
namely, the prohibition included in section 160 of Public Law No. 106-113.

Of course, current law permits the payment of administrative expenses.  The
District of Columbia Appropriations Act for fiscal year 2002 amended the
Compensation Act to permit use of "no more than 5 percent" of the Fund for
administrative costs.  Pub. L. No. 107-96, 115 Stat. 923, 928 (2001).
However, were the Council to enact legislation authorizing use of up to 15
percent of monies in the Fund for administrative costs, clearly there would
be a conflict, as there was when the Council enacted D.C. Law 13-172, with
the congressionally imposed budgetary/fiscal cap.  However, as long as
payments for administrative costs remain below the congressionally imposed
limitation, District of Columbia changes to the Compensation Act's allowance
for administrative expenses would not violate the condition imposed by
Congress.

We reviewed, also, some other changes Council enacted in D.C. Law 13-172,
namely, the expanded definition of a victim, increased compensation for
crime victims, and providing that a victim's compensation will not affect
eligibility for public benefits.  We do not find these changes to conflict
with or exceed the conditions that Congress enacted for the use of the Fund
in either Public Law 106-113 or Public Law 107-96.  Consequently, the Courts
may implement these changes.



CONCLUSIONS


For the reasons explained above, the Compensation Act requires that (1) the
percentage formulas relating to the use of unobligated balances should be
applied to the total annual unobligated balance after the end of each fiscal
year's activities;
(2) the Courts method of calculating "unobligated balance" is consistent
with the Compensation Act; and  (3) the Courts may implement Council changes
to the Compensation Act as long as the Council changes do not alter or
exceed the conditions of applicable federal appropriation and authorization
acts.




Anthony H.  Gamboa
General Counsel

                          -------------------------

[1] We define the Courts' use of the terms "accumulated balance" and "annual
balance" in the analysis section of this opinion.
[2] The original Victims of Violent Crime Compensation Act was enacted in
1981, and was codified in D.C. Code Ann. ï¿½ï¿½ 3-401 through 3-415 (1994).  The
program was first administered by the Department of Employment Services and
then by the Department of Human Services.  The Victims of Violent Crime
Compensation Act of 1996 transferred operational responsibility to the
Superior Court of the District of Columbia.  D.C. Law 11-243, 44 DCR 1142
(April 9, 1997).   The 1996 Compensation Act permanently repealed sections
3-401 through 3-415 and created a new system for compensating crime victims,
codified at D.C. Code Ann. ï¿½ï¿½ 4?501 through 4-518 (2001).  Unless otherwise
noted, all references to codified sections of the Fund are post 1996
codifications.

[3] District of Columbia Law 172, the "Fiscal Year 2001 Budget Support Act
of 2000," was introduced in the Council and assigned bill number 13-179,
which was referred to the Committee of the Whole.  The Bill was adopted on
first and second readings on May 18, 2000, and June 6, 2000, respectively.
Signed by the Mayor on June 26, 2000, it was assigned Act Number 13-375 and
transmitted to both Houses of Congress for its review.  District of Columbia
Law 172 became effective on October 19, 2000.
[4] This hypothetical does not include the impact of the administrative
expense allowance found in D.C. Code Ann. ï¿½ 4-515(e)("Not more than 5
percent of the total amount of monies in the Fund may be used to pay
administrative costs necessary to carry out this Act.")