TITLE:  Architect of the Capitol--Payment of Fringe Benefits to
        Temporary Employees, B-303961, December 6, 2004
BNUMBER:  B-303961
DATE:  December 6, 2004
**********************************************************************
   Decision

   Matter of:   Architect of the Capitol--Payment of Fringe Benefits to
Temporary Employees

   File:            B-303961

   Date:           December 6, 2004

   DIGEST

   Participation by the Architect of the Capitol (AOC) in a multiemployer
defined benefit plan would constitute a violation of the Antideficiency
Act because of the possibility of indeterminate withdrawal liability under
the Employee Retirement Income Security Act.  Language instructing AOC to
take all steps which may be required to pay fringe benefits to its
temporary employees "notwithstanding any other provision of law" does not
suffice to waive the Antideficiency Act.  Nothing in the statute or its
legislative history suggests that Congress intended a waiver of the
Antideficiency Act, and AOC can give effect to both this language and the
Antideficiency Act.

   DECISION

   The Architect of the Capitol (AOC) has requested our decision regarding
whether participation in a multiemployer defined benefit plan could lead
to a violation of the Antideficiency Act because of the possibility of
withdrawal liability under the Employee Retirement Income Security Act
(ERISA).  Letter from Alan M. Hantman, Architect of the Capitol, to David
M. Walker, Comptroller General, July 15, 2004.  As we explain below, the
Antideficiency Act prohibits AOC from participation in such a plan because
the potential for withdrawal liability could subject the government to an
indeterminate and costly liability that extends into future years, for
which appropriated funds may not be available.  Although Congress directed
AOC to take all steps required to pay fringe benefits to its temporary
employees "notwithstanding any other provision of law," this language does
not waive the Antideficiency Act.

   BACKGROUND

   The Architect of the Capitol has followed the practice of hiring, on a
temporary basis, tradesman employees who are members of unions.[1]  In
2001, concerns arose over AOC's long-term use of these temporary employees
and the fact that these employees did not enjoy the same eligibility for
health, retirement, and insurance benefits as other federal employees. 
H.R. Rep. No. 107-169, at 16 (2001).  Congress, therefore, included a
provision in AOC's fiscal year 2002 appropriation that directed AOC to
ensure that its temporary employees were eligible for fringe benefits,
including life insurance, health insurance, and retirement.[2] 
Legislative Branch Appropriations Act, Fiscal Year 2002, Pub. L. No.
107-68, S 133(a), 115 Stat. 560, 581-2 (Nov. 12, 2001).

   In response to this mandate, AOC converted 101 temporary employees, at
their request, to federal wage grade positions, which enjoy the same
eligibility for benefits as other federal employees.[3]  Currently, 57
percent of AOC's tradesman employees receive federal benefits.  However,
there are approximately 85 employees who have elected to remain in
temporary appointments and thus are ineligible for federal benefits.  For
these employees, AOC sought to implement section 133(a) by making payments
directly to their unions' benefit trust funds, but was concerned that a
1977 decision by the Comptroller General would prohibit such
transfers.[4]  However, in a December 2001 decision, we concluded that
section 133(a) provided AOC with the appropriate authority to transfer
fringe benefit payments directly to union employee benefit trust funds. 
B-289496, Dec. 21, 2001. 

   In 2003, Congress amended section 133(a) by adding a new paragraph (4)
that explicitly directs AOC to make such contributions for benefits to
"any third party designated to receive such contributions on behalf of the
employees under a collective bargaining agreement, participation
agreement, or other arrangement entered into by the Architect." 
Legislative Branch Appropriations Act, 2004, Pub. L. No. 108-83, S
1101(a)(2), 117 Stat. 1007, 1027 (Sept. 30, 2003) (amending S 133(a) of
Pub. L. No. 107-68).  Congress also directed AOC to "take all steps which
may be required" to implement section 133(a), "notwithstanding any other
provision of law."  Pub. L. No. 108-83, S 1101(d).

   According to AOC, in order to give effect to the law, it began lengthy and
extensive negotiations with the five unions that represent its 85
temporary employees in order to agree upon the means to pay the fringe
benefits.  Each union has separate benefit plans for its members,
different participation rules, and varying methods of accepting employer
contributions.  The unions advised AOC that they would only accept AOC's
contributions if AOC entered into a participation agreement and became a
member of their multiemployer defined benefit plans.[5]  Memorandum from
Charles K. Tyler, General Counsel, AOC, to Alan M. Hantman, Architect of
the Capitol, July 12, 2004 (Tyler Memo), at 2. 

   These multiemployer defined benefit plans are governed by the Employee
Retirement Income Security Act (ERISA).  29 U.S.C. SS 1001-1461.  Employee
pension or welfare plans established or maintained by the federal
government, a state, or locality are exempt from ERISA.  29 U.S.C. SS
1002(32), 1003(b)(1).  Here, private trade unions, in conjunction with
private employers, rather than AOC, established and maintain the plans in
which AOC has been asked to participate, and the provisions of Title IV of
ERISA are likely to apply to AOC's participation in such plans.   AOC
received a legal opinion from outside counsel that confirmed this
conclusion.  Letter from Kenneth R. Hoffman, Partner, Venable LLP, to
Margaret Cox, Associate General Counsel, AOC, April 20, 2004. 

   AOC feared that participation as a sponsoring employer in a multiemployer
defined benefit plan could lead to what is termed "withdrawal liability"
under Title IV of ERISA.  Withdrawal liability is the amount that an
employer who withdraws from a multiemployer plan under Title IV of ERISA
is required to pay to continue funding their proportionate share of the
plan's unfunded vested benefits.  29 U.S.C. SS 1381, 1391.  In other
words, an employer's liability to a plan continues even after its
withdrawal from the plan.  In order to protect employees' benefits in
multiemployer defined benefit plans, ERISA requires participating
employers, even after they withdraw from a plan, to continue funding the
benefits owed to their employees that have not yet been paid.  Upon
withdrawal, this liability could arise in two ways: AOC would face an
immediate withdrawal liability if it withdrew from a plan with unfunded
vested benefits.  Yet, even with a fully funded plan, AOC would face the
potential of costly future liability if the plan became underfunded in
subsequent years.  See GAO-04-423, at 23.  Therefore, the government's
liability as a participating employer in a multiemployer plan is difficult
to predict at the time that AOC enters into a participation agreement
because it is dependent on the financial health of other employers in the
plan and the return on investments made by the plan's trustees.  See id. 

   In order to avoid the possibility of such a liability, AOC attempted to
negotiate with its unions to hold the federal government harmless from
withdrawal liability or, alternatively, to allow AOC to simply transfer
funds to the plans, without signing a participation agreement.  Tyler
Memo, at 3.  However, only one union was amenable to such an
arrangement,[6] and AOC became concerned that signing a participation
agreement to join a multiemployer defined benefit plan could lead to
future liabilities over which AOC had no control and for which funds might
not be appropriated.  Id.  Therefore, AOC sought our decision as to
whether participating in a multiemployer defined benefit plan would
violate the Antideficiency Act and whether the "notwithstanding any other
provision of law" language of section 1101 of the Legislative Branch
Appropriations Act of 2004 waives the Antideficiency
Act.                  

   DISCUSSION

   The Antideficiency Act prohibits federal officials from involving the
government "in a contract or obligation for the payment of money before an
appropriation is made unless authorized by law."  31 U.S.C. S
1341(a)(1)(B).  In 1909, in one of the first interpretations of the
Antideficiency Act, the Comptroller of the Treasury, the predecessor to
the Comptroller General, stated that: "[N]o officer of the Government has
a right to make a contract on its behalf involving the payment of an
indefinite and uncertain sum that may exceed the appropriation, and which
is not capable of definite ascertainment by the terms of the contract, but
is wholly dependent upon the happening of some contingency the consequence
of which can not be defined by the contract."  15 Comp. Dec. 405, 407
(1909). 

   Over the years, the Comptroller General has restated and applied this
principle in numerous decisions.  For example, in 1976, we pointed out
that the Antideficiency Act would prohibit an agency from signing a
contract in which termination costs were indeterminate or dependent on
events or actions outside of the agency's control.  56 Comp. Gen. 142,
156-7 (1976).  More recently, we again observed that an agency may not,
without statutory authority, accept a legal duty that could mature into a
legal liability by virtue of actions beyond the control of the agency. 
B-300480, April 9, 2003.  Indeed, this principle drives a long line of our
decisions holding that open-ended indemnification agreements run afoul of
the Antideficiency Act.  See, e.g., 62 Comp. Gen. 361 (1983).  See also
Hercules, Inc. v. United States, 516 U.S. 417, 427 (1996) (open-ended
indemnification agreements barred by the Antideficiency Act).

   Similarly, AOC could not, without violating the Antideficiency Act, sign a
participation agreement that could subject the government to the
possibility of withdrawal liability.  Annually, AOC can budget for its
contributions to a plan, because participation in a plan and the payments
due are negotiated on a yearly basis, depending on the health of the
plan.  However, because ERISA governs these plans, if AOC decided to
withdraw from a participation agreement at a future date, AOC would still
be liable for its share of benefits not covered by plan assets upon
withdrawal.  29 U.S.C. SS 1381, 1391.  This liability could extend into
future years, and the amount of AOC's liability would depend on factors
outside of its control, such as the financial health of other employers
participating in the plan and the return on investments made by the plan's
trustees.  GAO-04-423, at 23.  Since AOC has no assurance that
appropriations will be available to cover this liability, the
Antideficiency Act would prohibit entering into a participation agreement
that could subject the government to an indefinite withdrawal liability. 
31 U.S.C.

   S 1341(a)(1)(B). 

   The Legislative Branch Appropriations Act of 2004 directs AOC to take all
steps required to implement section 133(a), "notwithstanding any other
provision of law."   Pub. L. No. 108-83, S 1101(d).  While we have never
had occasion to address whether such language includes the Antideficiency
Act, we have noted the importance of legislative history in determining
whether an agency is authorized to sign contracts and make obligations in
advance of appropriations.  67 Comp. Gen. 190 (1988).  In such cases, we
look for "language indicating a clear intent to make an exception" to the
Antideficiency Act.[7]  Id.  For example, conference report language in
the Farms for the Future Act of 1990 stating that funding for a mandatory
pilot program constituted direct spending authority indicated that
Congress intended a waiver of the Antideficiency Act.[8]  B-244093, July
19, 1991. 

   In this case, the language and legislative history of section 133(a) do
not suggest that Congress intended a waiver of the Antideficiency Act. 
There is no mention in the House Appropriations Committee report of any
Antideficiency Act implications of AOC's payment of fringe benefits.[9] 
See H.R. Rep. No. 108-186, at 15 (2003).  Given the fact that
government-sponsored employee benefit plans are generally exempt from
ERISA,[10] it is unlikely that it would have occurred to Congress that AOC
would be required to enter into a participation agreement with open-ended
liability.  It is more likely that Congress analogized to the federal
life, health, and retirement plans, which are available to the vast
majority of federal employees and are obligated on a
pay-period-by-pay-period basis.  See 5 U.S.C. S 5504 and 24 Comp. Gen.
676, 678 (1945).      

   Although the scant legislative history does not suggest which provisions
of law Congress intended to waive, we would read the "notwithstanding"
language to ensure that the restrictions on disbursing officers did not
prevent AOC from making direct payments to employee benefit trust
funds.[11]  At the time the "notwithstanding" language was enacted by
Congress, the restrictions on disbursing officers was the major obstacle
that AOC had identified in implementing section 133(a).[12]  See H.R. Rep.
No. 108-186, at 15 (2003).  This view of the interplay of the two statutes
honors a longstanding principle of statutory construction that if
possible, statutes should be construed harmoniously, so as to give effect
to both.  See, e.g., Posadas v. National City Bank, 296 U.S. 497, 503
(1936); Negonsott v. Samuels, 933 F.2d 818, 819 (10th Cir. 1991).

   The federal courts have followed this principle in interpreting other
"notwithstanding" provisions.[13]  In such cases, the "notwithstanding"
clause "is not necessarily preemptive" of all laws.  E.P. Paup Co. v.
Director, Office of Workers Compensation Programs, 999 F.2d 1341, 1348
(9th Cir. 1993).  The courts have only preempted laws that are in
"irreconcilable conflict" with the latter statute.[14]   In re Glacier
Bay, 944 F.2d 577, 583 (9th Cir. 1991).  The Supreme Court has similarly
stated, "[T]he use of such a `notwithstanding' clause clearly signals the
drafter's intention that the provisions of the `notwithstanding' section
override conflicting provisions of any other section."  Cisneros v. Alpine
Ridge Group, 508 U.S. 10, 18 (1993) (emphasis added).  In that decision,
the Supreme Court had to reconcile two provisions in a housing subsidy
contract: one that guaranteed a landlord automatic annual payment
adjustments and another that stated that "notwithstanding any other
provisions of this Contract," annual adjustments shall not result in
material differences between subsidized and market rates.  Id. at 13-14. 
The Court held that the two provisions clearly conflicted if annual
adjustments exceeded market rates, and in such a case, the
"notwithstanding" provision trumped the annual adjustment provisions.  Id.
at 18-19.

   Similarly, the Court of Appeals for the Federal Circuit considered the
effect of an appropriations provision that stated "notwithstanding any
other provision of law," the statute of limitations on tribal trust fund
claims shall not commence to run until the tribe is furnished with an
accounting.  Shoshone Indian Tribe of the Wind River Reservation v. United
States, 364 F.3d 1339, 1344 (Fed. Cir. 2004).  The Court of Appeals held
that a clear conflict existed between the appropriations provision and the
statute of limitations, and that the "notwithstanding" phrase "connotes a
legislative intent to displace any other provision of law that is
contrary" to the appropriations provision.  Id. at 1346.     

   In the present case, the provisions of section 133(a) and the
Antideficiency Act are not in irreconcilable conflict.  Section 133(a)
requires AOC to "take all steps which may be required to carry out" its
provisions.  In fact, AOC has done just that.  AOC converted the majority
of its temporary employees to federal wage grade positions, and then began
negotiations with its five unions and requested the ability either to make
contributions without signing a participation agreement or to simply
transfer funds equal to the fringe benefit portion of their employees'
pay.  Tyler Memo, at 3.  Such an arrangement would constitute a defined
contribution plan, which does not subject an employer to withdrawal
liability.  29 U.S.C. S 1321(b)(1). 

   AOC could also, without violating the Antideficiency Act, negotiate and
sign a participation agreement that exempts or indemnifies AOC for any
withdrawal liability or provides for AOC's participation only to the
extent of available appropriations.  In fact, the committee report
emphasizes that section 133(a) "gives the Architect flexibility to provide
eligibility for benefits from a variety of appropriate sources."  H.R.
Rep. No. 108-186, at 15 (2003).  If the unions that represent its
temporary employees are not amenable to such arrangements, AOC could
refrain from hiring temporary employees and meet its construction needs
through its federal wage grade employees, whose salaries and benefits are
paid and obligated on a pay period basis. 

   In our past decisions, we have been unwilling to read general language,
such as the "notwithstanding" clause in the Legislative Branch
Appropriations Act of 2004, as a waiver of the Antideficiency Act.  See,
e.g., 67 Comp. Gen. 190 (1988).[15]  The Antideficiency Act is one of the
fundamental statutes by which Congress exercises its constitutional
control of the public purse.  B-262069, Aug. 1, 1995.  The Act represents
Congress's strongest means to enforce the constitutional command that
"[n]o Money shall be drawn from the Treasury but in Consequence of
Appropriations made by Law."  U.S. Const. Art. I, S 9, cl. 7.  Therefore,
we will not interpret general language, such as the "notwithstanding"
clause, to imply a waiver of the Antideficiency Act without some
legislative history to indicate that Congress intended to give the agency
authority to obligate in advance or in excess of an appropriation.  Cf.
B-288142, Sept. 6, 2001 (absent "clear legislative expressions of
congressional intent," we were unwilling to infer exceptions to time
restrictions placed on appropriations "given the significance of time
restrictions in preserving congressional power of the purse").  See also
31 U.S.C. S 1301(d) ("A law may be construed . . . to authorize making a
contract for the payment of money in excess of an appropriation only if
the law specifically states . . . that such a contract may be made.").  

   Indeed, there are numerous occasions of the "notwithstanding" clause in
statute, and reading these as waivers of the Antideficiency Act could have
profound implications for federal fiscal control.[16]  For example, the
Consolidated Appropriations Act of 2004 authorized the Secretary of
Agriculture to "[n]otwithstanding any other provision of law . . . make
funding and other assistance available . . . to repair and prevent damage
to non-Federal land in watersheds that have been impaired by fires
initiated by the Federal Government."  Pub. L. No. 108-199, Div. A, tit.
VII, S 781, 118 Stat. 3, 44 (Jan. 23, 2004).  We do not believe that
Congress intended the Secretary to provide such assistance in excess of
available appropriations.  Similarly, section 2291(a)(4) of Title 22 of
the United States Code states, "Notwithstanding any other provision of
law, the President is authorized to furnish assistance to any country or
international organization, on such terms and conditions as he may
determine, for the control of narcotic and psychotropic drugs and other
controlled substances, or for other anticrime purposes."  Provisions such
as these do not authorize the provision of assistance in advance of or in
excess of appropriations.  Effect can be given to these statutes, by
making funding and assistance available, without violating the
Antideficiency Act. 

   Therefore, given the lack of any legislative history indicating that
Congress intended to waive the Antideficiency Act and the fact that AOC
can give effect to both section 133(a) and the Antideficiency Act, we
cannot say that the Legislative Branch Appropriations Act of 2004 provides
the clarity necessary to find a waiver of the Antideficiency Act.  Section
133(a) prohibits AOC from hiring temporary employees that are ineligible
for fringe benefits.  It does not require AOC to violate the
Antideficiency Act.

   While AOC cannot, without violating the Antideficiency Act, contribute to
a multiemployer defined benefit plan that subjects the government to the
potential for indeterminate withdrawal liability, it can attempt to
negotiate an agreement with the unions that represent its temporary
employees to participate in such a plan while holding the federal
government harmless for any withdrawal liability.  If the unions are
unwilling to agree to such an arrangement, AOC should fully inform
Congress of the situation.  

   CONCLUSION

   The Antideficiency Act precludes AOC from signing a participation
agreement to contribute to a multiemployer defined benefit plan that
subjects the government to the potential for withdrawal liability, an
indeterminate liability dependent on events and actions outside of AOC's
control.  Although Congress directed AOC to take all steps which may be
required to implement section 133(a) "notwithstanding any other provision
of law," this language does not waive the Antideficiency Act.  Nothing in
the statute or legislative history evinces a clear intent by Congress to
waive the Antideficiency Act. 

   Anthony H. Gamboa

   General Counsel

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

   [1] These employees include plumbers, electricians, masons, ironworkers,
and carpenters. 

   [2] Section 133(a)(1) states

   "Except as provided in paragraph (2), none of the funds provided by this
Act or any other Act may be used by the Architect of the Capitol . . . to
employ   any individual as a temporary employee within a category of
temporary employment which does not provide employees with the same
eligibility for life insurance, health insurance, retirement, and other
benefits which is provided to temporary employees who are hired for a
period exceeding 1 year in length." 

   Subsection (a)(2) lists several exceptions to this requirement, including
summer employees, individuals hired for less than 120 days during any
5-year period, and temporary employees who opt to remain under their
current pay system.  Subsection (a)(3) states "nothing in this subsection
may be construed to require the Architect of the Capitol to provide
duplicative benefits." 

   [3] Wage grade employees are federal employees whose pay is set pursuant
to 5 U.S.C. SS 5341-5349. 

   [4] The opinion held that disbursing officers could only draw public money
as authorized for payments made pursuant to law and to persons to whom
payment is made.  Therefore, the Architect could only make payments
directly to its employees, and not to union trust funds.  B-189553, Oct.
13, 1977.  This restriction on disbursing officers is currently codified
at 31 U.S.C. S 3322. 

   [5] A defined benefit plan promises a definite benefit that is generally
based on an employee's years of service and either a flat dollar amount or
the employee's salary.  A defined contribution plan bases benefits on the
contributions to and investment returns on a participant's individual
account.  In a defined benefit plan, the employer bears the investment
risk; in a defined contribution plan, the employee bears the risk.  GAO,
Private Pensions: Multiemployer Plans Face Short- and Long-Term
Challenges, GAO-04-423, at 4 (March 26, 2004).  According to AOC, the
unions require that AOC make a lump sum contribution for each of its
temporary employees, which the unions would then distribute to employee
health care, life insurance, and pension plans.   

   [6] This union represents approximately 25 of the Architect's temporary
employees. 

   [7] We have similarly looked for "clear legislative expressions of
congressional intent" in interpreting exceptions to the time restrictions
placed on appropriated funds "[g]iven the significance of time
restrictions in preserving congressional power of the purse."  B-288142,
Sept. 6, 2001. 

   [8] Direct spending authority is mandatory spending that is not controlled
through appropriations.  A Glossary of Terms Used in the Federal Budget
Process (Exposure Draft), GAO/AFMD-2.1.1, at 41, Jan. 1993.  Congressional
intent to waive the Antideficiency Act was also evident in the structure
of the Farms for the Future Act.  The Act distinguished between federal
loan guarantees for the state of Vermont and other states by limiting the
eligibility of other states to "the option of the Secretary of Agriculture
and subject to appropriations."  B-244093, July 19, 1991.

   [9] The House Appropriations Committee originated the amendments to
section 133(a).

   [10] Plans established or maintained by the federal government, a state,
or locality are exempt from ERISA.  29 U.S.C. SS 1002(32), 1003(b)(1). 
However, since AOC neither established nor will maintain any of the plans
in which it is being asked to participate, the provisions of ERISA are
likely to apply.    

   [11] For example, 31 U.S.C. S 3322(a)(2) limits a disbursing officer's
ability to transfer public money only as authorized for payments made
pursuant to law and to persons to whom payment is made. 

   [12] In addition, prior to the passage of the amendments to section
133(a), AOC sought the opinion of the Internal Revenue Service (IRS) as to
whether it had the legal authority to make fringe benefit payments on a
pre-tax basis.  Letter from Alan M. Hantman, Architect of the Capitol, to
Charles O. Rossotti, Commissioner, IRS, Feb. 7, 2002.   

   [13] No court has ever addressed whether the phrase "notwithstanding any
other provision of law," alone, would be sufficient to waive the
Antideficiency Act.

   [14] Similarly, in a 2002 bid protest decision, we considered whether a
provision directing the Department of Energy to award certain contracts
"notwithstanding any other provision of law" waived the Competition in
Contracting Act (CICA).                B-290125.2, B-290125.3, Dec. 18,
2002.  In that case, we stated that that while such language does not give
an agency "unfettered discretion," it does exempt it from laws that
ordinarily would prevent the agency from taking the action that Congress
has directed it to undertake.  Id.  Since CICA did not present a direct
obstacle to the awarding of the contracts, we concluded that its
provisions still applied.  Id.

   [15] See also 5 Op. Off. Legal Counsel 1, 4 (Jan. 16, 1981) (authority to
incur obligations in advance of appropriations "may not ordinarily be
inferred . . . from the kind of broad, categorical authority, standing
alone, that often appears, for example, in the organic statutes of
government agencies.")  

   [16] Since 1988, Congress has enacted over 700 public laws with provisions
containing the phrase "notwithstanding any other provision of law."  LEXIS
search, Public Laws database, October 15, 2004.
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