State Justice Institute--Newsletter Advertising Charges
Highlights
Congress established the the State Justice Institute (Institute) as a private, nonprofit corporation. 42 U.S.C. sect. 10702(a). Although the Institute has many aspects of a federal agency, its authorizing statute states that "[e]xcept as otherwise specifically provided...the Institute shall not be considered a department, agency, or instrumentality of the Federal Government." 42 U.S.C. sect. 10704(c)(1). Nothing in the Institute's authorizing legislation explicitly or implicitly requires application of the miscellaneous receipts statute, which states that all money received "for the government" must be deposited in the Treasury. 31 U.S.C. sect. 3302(b). Thus, the Institute is not subject to the miscellaneous receipts statute. Certain legal and policy considerations may inform the Institute's choices regarding advertising it carries in its newsletter.
B-307317, State Justice Institute--Newsletter Advertising Charges, September 13, 2006
Decision
Matter of: State Justice Institute—Newsletter Advertising Charges
DIGEST
The State Justice Institute (Institute) may retain a fee for the use of advertising space in its semiannual newsletter. Congress established the Institute as a private, nonprofit corporation. 42 U.S.C. sect. 10702(a). Although the Institute has many aspects of a federal agency, its authorizing statute states that [e]xcept as otherwise specifically provided . . . the Institute shall not be considered a department, agency, or instrumentality of the Federal Government. 42 U.S.C. sect. 10704(c)(1). Nothing in the Institute's authorizing legislation explicitly or implicitly requires application of the miscellaneous receipts statute, which states that all money received for the government must be deposited in the Treasury. 31 U.S.C. sect. 3302(b). Thus, the Institute is not subject to the miscellaneous receipts statute. Certain legal and policy considerations may inform the Institute's choices regarding advertising it carries in its newsletter.
DECISION
The Executive Director of the State Justice Institute (Institute) has requested an advance decision under 31 U.S.C. sect. 3529 regarding whether the Institute may retain a fee for the use of advertising space in its semiannual newsletter. Letter from Kevin Linskey, Executive Director, Institute, to David M. Walker, Comptroller General,
BACKGROUND
Congress provided for the establishment of the Institute in 1984. State Justice Institute Act of 1984, Pub. L. No. 98-620, title II, 98 Stat. 3335, 3336 (
The Institute receives an annual appropriation from Congress. E.g., Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2006, Pub. L. No. 109-108, title V, 119 Stat. 2290, 2333 (
ANALYSIS
Whether the Institute may retain a fee for the use of advertising space in its newsletter depends upon whether it is subject to the miscellaneous receipts statute, 31 U.S.C. sect. 3302(b).[1] This statute provides that in the absence of contrary authority an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury . . . without deduction for any charge or claim. Thus, without statutory authority to retain for its own use funds it receives, an agency must deposit such funds in the Treasury. See B-300826,
To be subject to the miscellaneous receipts statute, the Institute must have an official or agent of the Government receiving money for the Government. The Institute has some aspects of a federal agency. It receives an annual appropriation, its Board of Directors is appointed by the President and confirmed by the Senate, its employees are eligible to receive certain federal employment benefits, and it may purchase items from the General Services Administration. However, the Institute's authorizing statute makes it clear that except as otherwise explicitly provided, the Institute shall not be considered a department, agency, or instrumentality of the federal government. 42 U.S.C. sect. 10704(c)(1). We find nothing explicitly or implicitly in the Institute's authorizing statute that would otherwise suggest or require application of the miscellaneous receipts statute to the Institute. Congress also made clear that, except for specific exceptions not applicable here, the officers and employees of the Institute shall not be considered officers or employees of the
As a private corporation, the Institute is generally not subject to the same restrictions and controls on its expenditures as are government agencies and establishments even though it receives appropriations directly from the Congress. B-131935,
While the Institute may retain a fee for the use of advertising space in its newsletter, its authorizing statute constrains the content of advertising the Institute chooses to carry. First, the Institute may not attempt to influence either the passage or the defeat of legislation pending in Congress or any state or local legislative body. 42 U.S.C. sect. 10707(a)(3). The Institute also may not identify itself with any political party or association, or any candidate for public or party office. 42 U.S.C. sect. 10707(c).
Federal policy considerations may also influence the content of advertising the Institute carries. Although there is no governmentwide legal restriction, federal policy is generally opposed to commercial advertising in federal publications. Joint Committee on Printing, United States Congress, Government Printing and Binding Regulations, sect. 13 (reprinted 1990). This policy is based on concerns that such advertising might create an unfair advantage for particular private entities by creating the impression of government endorsement.
Although the Institute is not a government agency, this policy may still inform the Institute's choice of advertising. In addition to possessing some of the traditional indicia of a federal agency as discussed above, the Institute's public role also appears in many ways to be governmental. For example, the Institute awards grants and contracts primarily to state and local courts and nonprofits operating in conjunction with state judicial branches. 42 U.S.C. sect. 10705(b). These grants and contracts are intended to enhance the performance of state and local court systems. 42 U.S.C. sect. 10705(c). In addition, the Institute must follow notice and comment procedures before it issues rules and regulations and must publish new rules and regulations in the Federal Register. 42 U.S.C. sect. 10702(f). Thus, while the Institute is a private, nonprofit corporation, the principles supporting the federal policy against commercial advertising should inform the Institute's judgment in its choice of the nature and scope of advertising it will publish in its newsletter. We recommend that the Institute consult with the appropriate committees of Congress before adopting a policy concerning advertising.
CONCLUSION
Congress established the Institute as a private, nonprofit corporation. Under its authorizing statute, it is not considered a department, agency, or instrumentality of the federal government, nor are its officers and employees considered officers and employees of the
Gary L. Kepplinger
General Counsel
[1] We accept, for purposes of our analysis, that the Institute may charge a fee for advertising space, since the Institute may exercise all the powers conferred upon it by the Virginia Nonstock Corporation Act, under which it is incorporated, 42 U.S.C. sect. 10702, and that Act authorizes the Institute to exercise all powers necessary or convenient to effect any or all of the purposes for which [it] is organized.
[2] While the Institute is not constrained by the miscellaneous receipts statute by virtue of its status as a private, nonprofit corporation, the Institute should also consider the application of other law to its proposed fund-raising activity. For example, where the government creates a corporation by special law, for the furtherance of governmental objectives, and retains for itself permanent authority to appoint a majority of the directors of that corporation, the corporation is part of the Government for purposes of the First Amendment. Lebron v. National Railroad Passenger Corp., 513