Administrative Record, Oakley et al. v. DeVos, No. 4:20-cv-03215 (N.D. Cal.), Doc. 52-3 (September 23, 2020)
Summary
Administrative record filed September 23, 2020 as Document 52-3 in Oakley et al. v. DeVos, Case 4:20-cv-03215-YGR. It opens with H. R. 748, Public Law 116-136, dated March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), and the Act's table of contents, which lists Division A, Title I (Keeping American Workers Paid and Employed Act), Title II (Assistance for American Workers, Families, and Businesses) and Title III (Supporting America's Health Care System in the Fight Against the Coronavirus). The final page closes with a news article about unemployment benefits and false claims in Washington State, quoting Ms. LeVine and U.S. Attorney Brian T. Moran in Seattle.
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Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 1 of 305
H. R. 748 Public Law 116-136
March 27, 2020
134 Stat. 281
One Hundred Sixteenth Congress
of the
United States of America
AT T H E S E C O N D S E S S I O N
Begun and held at the City of Washington on Friday,
the third day of January, two thousand and twenty
An Act
To amend the Internal Revenue Code of 1986 to repeal the excise tax on high
cost employer-sponsored health coverage.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Coronavirus Aid, Relief, and
Economic Security Act’’ or the ‘‘CARES Act’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
DIVISION A—KEEPING WORKERS PAID AND EMPLOYED, HEALTH CARE
SYSTEM ENHANCEMENTS, AND ECONOMIC STABILIZATION
TITLE I—KEEPING AMERICAN WORKERS PAID AND EMPLOYED ACT
Sec. 1101. Definitions.
Sec. 1102. Paycheck protection program.
Sec. 1103. Entrepreneurial development.
Sec. 1104. State trade expansion program.
Sec. 1105. Waiver of matching funds requirement under the women’s business cen-
ter program.
Sec. 1106. Loan forgiveness.
Sec. 1107. Direct appropriations.
Sec. 1108. Minority business development agency.
Sec. 1109. United States Treasury Program Management Authority.
Sec. 1110. Emergency EIDL grants.
Sec. 1111. Resources and services in languages other than English.
Sec. 1112. Subsidy for certain loan payments.
Sec. 1113. Bankruptcy.
Sec. 1114. Emergency rulemaking authority.
TITLE II—ASSISTANCE FOR AMERICAN WORKERS, FAMILIES, AND
BUSINESSES
Subtitle A—Unemployment Insurance Provisions
Sec. 2101. Short title.
Sec. 2102. Pandemic Unemployment Assistance.
Sec. 2103. Emergency unemployment relief for governmental entities and nonprofit
organizations.
Sec. 2104. Emergency increase in unemployment compensation benefits.
Sec. 2105. Temporary full Federal funding of the first week of compensable regular
unemployment for States with no waiting week.
Sec. 2106. Emergency State staffing flexibility.
Sec. 2107. Pandemic emergency unemployment compensation.
Sec. 2108. Temporary financing of short-time compensation payments in States
with programs in law.
Sec. 2109. Temporary financing of short-time compensation agreements.
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134 Stat. 382
H. R. 748—2
Sec. 2110. Grants for short-time compensation programs.
Sec. 2111. Assistance and guidance in implementing programs.
Sec. 2112. Waiver of the 7-day waiting period for benefits under the Railroad Un-
employment Insurance Act.
Sec. 2113. Enhanced benefits under the Railroad Unemployment Insurance Act.
Sec. 2114. Extended unemployment benefits under the Railroad Unemployment In-
surance Act.
Sec. 2115. Funding for the DOL Office of Inspector General for oversight of unem-
ployment provisions.
Sec. 2116. Implementation.
Subtitle B—Rebates and Other Individual Provisions
Sec. 2201. 2020 recovery rebates for individuals.
Sec. 2202. Special rules for use of retirement funds.
Sec. 2203. Temporary waiver of required minimum distribution rules for certain re-
tirement plans and accounts.
Sec. 2204. Allowance of partial above the line deduction for charitable contribu-
tions.
Sec. 2205. Modification of limitations on charitable contributions during 2020.
Sec. 2206. Exclusion for certain employer payments of student loans.
Subtitle C—Business Provisions
Sec. 2301. Employee retention credit for employers subject to closure due to
COVID–19.
Sec. 2302. Delay of payment of employer payroll taxes.
Sec. 2303. Modifications for net operating losses.
Sec. 2304. Modification of limitation on losses for taxpayers other than corpora-
tions.
Sec. 2305. Modification of credit for prior year minimum tax liability of corpora-
tions.
Sec. 2306. Modifications of limitation on business interest.
Sec. 2307. Technical amendments regarding qualified improvement property.
Sec. 2308. Temporary exception from excise tax for alcohol used to produce hand
sanitizer.
TITLE III—SUPPORTING AMERICA’S HEALTH CARE SYSTEM IN THE FIGHT
AGAINST THE CORONAVIRUS
Subtitle A—Health Provisions
Sec. 3001. Short title.
PART I—ADDRESSING SUPPLY SHORTAGES
SUBPART A—MEDICAL PRODUCT SUPPLIES
Sec. 3101. National Academies report on America’s medical product supply chain
security.
Sec. 3102. Requiring the strategic national stockpile to include certain types of
medical supplies.
Sec. 3103. Treatment of respiratory protective devices as covered countermeasures.
SUBPART B—MITIGATING EMERGENCY DRUG SHORTAGES
Sec. 3111. Prioritize reviews of drug applications; incentives.
Sec. 3112. Additional manufacturer reporting requirements in response to drug
shortages.
SUBPART C—PREVENTING MEDICAL DEVICE SHORTAGES
Sec. 3121. Discontinuance or interruption in the production of medical devices.
PART II—ACCESS TO HEALTH CARE FOR COVID–19 PATIENTS
SUBPART A—COVERAGE OF TESTING AND PREVENTIVE SERVICES
Sec. 3201. Coverage of diagnostic testing for COVID–19.
Sec. 3202. Pricing of diagnostic testing.
Sec. 3203. Rapid coverage of preventive services and vaccines for coronavirus.
SUBPART B—SUPPORT FOR HEALTH CARE PROVIDERS
Sec. 3211. Supplemental awards for health centers.
Sec. 3212. Telehealth network and telehealth resource centers grant programs.
Sec. 3213. Rural health care services outreach, rural health network development,
and small health care provider quality improvement grant programs.
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134 Stat. 283
H. R. 748—3
Sec. 3214. United States Public Health Service Modernization.
Sec. 3215. Limitation on liability for volunteer health care professionals during
COVID–19 emergency response.
Sec. 3216. Flexibility for members of National Health Service Corps during emer-
gency period.
SUBPART C—MISCELLANEOUS PROVISIONS
Sec. 3221. Confidentiality and disclosure of records relating to substance use dis-
order.
Sec. 3222. Nutrition services.
Sec. 3223. Continuity of service and opportunities for participants in community
service activities under title V of the Older Americans Act of 1965.
Sec. 3224. Guidance on protected health information.
Sec. 3225. Reauthorization of healthy start program.
Sec. 3226. Importance of the blood supply.
PART III—INNOVATION
Sec. 3301. Removing the cap on OTA during public health emergencies.
Sec. 3302. Priority zoonotic animal drugs.
PART IV—HEALTH CARE WORKFORCE
Sec. 3401. Reauthorization of health professions workforce programs.
Sec. 3402. Health workforce coordination.
Sec. 3403. Education and training relating to geriatrics.
Sec. 3404. Nursing workforce development.
Subtitle B—Education Provisions
Sec. 3501. Short title.
Sec. 3502. Definitions.
Sec. 3503. Campus-based aid waivers.
Sec. 3504. Use of supplemental educational opportunity grants for emergency aid.
Sec. 3505. Federal work-study during a qualifying emergency.
Sec. 3506. Adjustment of subsidized loan usage limits.
Sec. 3507. Exclusion from Federal Pell Grant duration limit.
Sec. 3508. Institutional refunds and Federal student loan flexibility.
Sec. 3509. Satisfactory academic progress.
Sec. 3510. Continuing education at affected foreign institutions.
Sec. 3511. National emergency educational waivers.
Sec. 3512. HBCU Capital financing.
Sec. 3513. Temporary relief for federal student loan borrowers.
Sec. 3514. Provisions related to the Corporation for National and Community Serv-
ice.
Sec. 3515. Workforce response activities.
Sec. 3516. Technical amendments.
Sec. 3517. Waiver authority and reporting requirement for institutional aid.
Sec. 3518. Authorized uses and other modifications for grants.
Sec. 3519. Service obligations for teachers.
Subtitle C—Labor Provisions
Sec. 3601. Limitation on paid leave.
Sec. 3602. Emergency Paid Sick Leave Act Limitation.
Sec. 3603. Unemployment insurance.
Sec. 3604. OMB Waiver of Paid Family and Paid Sick Leave.
Sec. 3605. Paid leave for rehired employees.
Sec. 3606. Advance refunding of credits.
Sec. 3607. Expansion of DOL Authority to postpone certain deadlines.
Sec. 3608. Single-employer plan funding rules.
Sec. 3609. Application of cooperative and small employer charity pension plan rules
to certain charitable employers whose primary exempt purpose is pro-
viding services with respect to mothers and children.
Sec. 3610. Federal contractor authority.
Sec. 3611. Technical corrections.
Subtitle D—Finance Committee
Sec. 3701. Exemption for telehealth services.
Sec. 3702. Inclusion of certain over-the-counter medical products as qualified med-
ical expenses.
Sec. 3703. Increasing Medicare telehealth flexibilities during emergency period.
Sec. 3704. Enhancing Medicare telehealth services for Federally qualified health
centers and rural health clinics during emergency period.
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134 Stat. 284
H. R. 748—4
Sec. 3705. Temporary waiver of requirement for face-to-face visits between home
dialysis patients and physicians.
Sec. 3706. Use of telehealth to conduct face-to-face encounter prior to recertification
of eligibility for hospice care during emergency period.
Sec. 3707. Encouraging use of telecommunications systems for home health serv-
ices furnished during emergency period.
Sec. 3708. Improving care planning for Medicare home health services.
Sec. 3709. Adjustment of sequestration.
Sec. 3710. Medicare hospital inpatient prospective payment system add-on pay-
ment for COVID–19 patients during emergency period.
Sec. 3711. Increasing access to post-acute care during emergency period.
Sec. 3712. Revising payment rates for durable medical equipment under the Medi-
care program through duration of emergency period.
Sec. 3713. Coverage of the COVID–19 vaccine under part B of the Medicare pro-
gram without any cost-sharing.
Sec. 3714. Requiring Medicare prescription drug plans and MA–PD plans to allow
during the COVID–19 emergency period for fills and refills of covered
part D drugs for up to a 3-month supply.
Sec. 3715. Providing home and community-based services in acute care hospitals.
Sec. 3716. Clarification regarding uninsured individuals.
Sec. 3717. Clarification regarding coverage of COVID–19 testing products.
Sec. 3718. Amendments relating to reporting requirements with respect to clinical
diagnostic laboratory tests.
Sec. 3719. Expansion of the Medicare hospital accelerated payment program during
the COVID–19 public health emergency.
Sec. 3720. Delaying requirements for enhanced FMAP to enable State legislation
necessary for compliance.
Subtitle E—Health and Human Services Extenders
PART I—MEDICARE PROVISIONS
Sec. 3801. Extension of the work geographic index floor under the Medicare pro-
gram.
Sec. 3802. Extension of funding for quality measure endorsement, input, and selec-
tion.
Sec. 3803. Extension of funding outreach and assistance for low-income programs.
PART II—MEDICAID PROVISIONS
Sec. 3811. Extension of the Money Follows the Person rebalancing demonstration
program.
Sec. 3812. Extension of spousal impoverishment protections.
Sec. 3813. Delay of DSH reductions.
Sec. 3814. Extension and expansion of Community Mental Health Services dem-
onstration program.
PART III—HUMAN SERVICES AND OTHER HEALTH PROGRAMS
Sec. 3821. Extension of sexual risk avoidance education program.
Sec. 3822. Extension of personal responsibility education program.
Sec. 3823. Extension of demonstration projects to address health professions work-
force needs.
Sec. 3824. Extension of the temporary assistance for needy families program and
related programs.
PART IV—PUBLIC HEALTH PROVISIONS
Sec. 3831. Extension for community health centers, the National Health Service
Corps, and teaching health centers that operate GME programs.
Sec. 3832. Diabetes programs.
PART V—MISCELLANEOUS PROVISIONS
Sec. 3841. Prevention of duplicate appropriations for fiscal year 2020.
Subtitle F—Over-the-Counter Drugs
PART I—OTC DRUG REVIEW
Sec. 3851. Regulation of certain nonprescription drugs that are marketed without
an approved drug application.
Sec. 3852. Misbranding.
Sec. 3853. Drugs excluded from the over-the-counter drug review.
Sec. 3854. Treatment of Sunscreen Innovation Act.
Sec. 3855. Annual update to Congress on appropriate pediatric indication for cer-
tain OTC cough and cold drugs.
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134 Stat. 285
H. R. 748—5
Sec. 3856. Technical corrections.
PART II—USER FEES
Sec. 3861. Finding.
Sec. 3862. Fees relating to over-the-counter drugs.
TITLE IV—ECONOMIC STABILIZATION AND ASSISTANCE TO SEVERELY
DISTRESSED SECTORS OF THE UNITED STATES ECONOMY
Subtitle A—Coronavirus Economic Stabilization Act of 2020
Sec. 4001. Short title.
Sec. 4002. Definitions.
Sec. 4003. Emergency relief and taxpayer protections.
Sec. 4004. Limitation on certain employee compensation.
Sec. 4005. Continuation of certain air service.
Sec. 4006. Coordination with Secretary of Transportation.
Sec. 4007. Suspension of certain aviation excise taxes.
Sec. 4008. Debt guarantee authority.
Sec. 4009. Temporary Government in the Sunshine Act relief.
Sec. 4010. Temporary hiring flexibility.
Sec. 4011. Temporary lending limit waiver.
Sec. 4012. Temporary relief for community banks.
Sec. 4013. Temporary relief from troubled debt restructurings.
Sec. 4014. Optional temporary relief from current expected credit losses.
Sec. 4015. Non-applicability of restrictions on ESF during national emergency.
Sec. 4016. Temporary credit union provisions.
Sec. 4017. Increasing access to materials necessary for national security and pan-
demic recovery.
Sec. 4018. Special Inspector General for Pandemic Recovery.
Sec. 4019. Conflicts of interest.
Sec. 4020. Congressional Oversight Commission.
Sec. 4021. Credit protection during COVID–19.
Sec. 4022. Foreclosure moratorium and consumer right to request forbearance.
Sec. 4023. Forbearance of residential mortgage loan payments for multifamily prop-
erties with federally backed loans.
Sec. 4024. Temporary moratorium on eviction filings.
Sec. 4025. Protection of collective bargaining agreement.
Sec. 4026. Reports.
Sec. 4027. Direct appropriation.
Sec. 4028. Rule of construction.
Sec. 4029. Termination of authority.
Subtitle B—Air Carrier Worker Support
Sec. 4111. Definitions.
Sec. 4112. Pandemic relief for aviation workers.
Sec. 4113. Procedures for providing payroll support.
Sec. 4114. Required assurances.
Sec. 4115. Protection of collective bargaining agreement.
Sec. 4116. Limitation on certain employee compensation.
Sec. 4117. Tax payer protection.
Sec. 4118. Reports.
Sec. 4119. Coordination.
Sec. 4120. Direct appropriation.
TITLE V—CORONAVIRUS RELIEF FUNDS
Sec. 5001. Coronavirus Relief Fund.
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 6001. COVID–19 borrowing authority for the United States Postal Service.
Sec. 6002. Emergency designation.
DIVISION B—EMERGENCY APPROPRIATIONS FOR CORONAVIRUS HEALTH
RESPONSE AND AGENCY OPERATIONS
SEC. 3. REFERENCES.
Except as expressly provided otherwise, any reference to ‘‘this
Act’’ contained in any division of this Act shall be treated as
referring only to the provisions of that division.
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134 Stat. 286
H. R. 748—6
DIVISION A—KEEPING WORKERS PAID
AND EMPLOYED, HEALTH CARE SYS-
TEM ENHANCEMENTS, AND ECO-
NOMIC STABILIZATION
TITLE I—KEEPING AMERICAN
WORKERS PAID AND EMPLOYED ACT
SEC. 1101. DEFINITIONS.
In this title—
(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ mean
the Small Business Administration and the Administrator
thereof, respectively; and
(2) the term ‘‘small business concern’’ has the meaning
given the term in section 3 of the Small Business Act (15
U.S.C. 636).
SEC. 1102. PAYCHECK PROTECTION PROGRAM.
(a) IN GENERAL.—Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A), in the matter preceding clause
(i), by striking ‘‘and (E)’’ and inserting ‘‘(E), and (F)’’; and
(B) by adding at the end the following:
‘‘(F) PARTICIPATION IN THE PAYCHECK PROTECTION PRO-
GRAM.—In an agreement to participate in a loan on a
deferred basis under paragraph (36), the participation by
the Administration shall be 100 percent.’’; and
(2) by adding at the end the following:
‘‘(36) PAYCHECK PROTECTION PROGRAM.—
‘‘(A) DEFINITIONS.—In this paragraph—
‘‘(i) the terms ‘appropriate Federal banking agency’
and ‘insured depository institution’ have the meanings
given those terms in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813);
‘‘(ii) the term ‘covered loan’ means a loan made
under this paragraph during the covered period;
‘‘(iii) the term ‘covered period’ means the period
beginning on February 15, 2020 and ending on June
30, 2020;
‘‘(iv) the term ‘eligible recipient’ means an indi-
vidual or entity that is eligible to receive a covered
loan;
‘‘(v) the term ‘eligible self-employed individual’ has
the meaning given the term in section 7002(b) of the
Families First Coronavirus Response Act (Public Law
116–127);
‘‘(vi) the term ‘insured credit union’ has the
meaning given the term in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752);
‘‘(vii) the term ‘nonprofit organization’ means an
organization that is described in section 501(c)(3) of
the Internal Revenue Code of 1986 and that is exempt
from taxation under section 501(a) of such Code;
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134 Stat. 313
H. R. 748—33
TITLE II—ASSISTANCE FOR AMERICAN
WORKERS, FAMILIES, AND BUSINESSES
Subtitle A—Unemployment Insurance
Provisions
SEC. 2101. SHORT TITLE.
This subtitle may be cited as the ‘‘Relief for Workers Affected
by Coronavirus Act’’.
SEC. 2102. PANDEMIC UNEMPLOYMENT ASSISTANCE.
(a) DEFINITIONS.—In this section:
(1) COVID–19.—The term ‘‘COVID–19’’ means the 2019
Novel Coronavirus or 2019-nCoV.
(2) COVID–19 PUBLIC HEALTH EMERGENCY.—The term
‘‘COVID–19 public health emergency’’ means the public health
emergency declared by the Secretary of Health and Human
Services on January 27, 2020, with respect to the 2019 Novel
Coronavirus.
(3) COVERED INDIVIDUAL.—The term ‘‘covered individual’’—
(A) means an individual who—
(i) is not eligible for regular compensation or
extended benefits under State or Federal law or pan-
demic emergency unemployment compensation under
section 2107, including an individual who has
exhausted all rights to regular unemployment or
extended benefits under State or Federal law or pan-
demic emergency unemployment compensation under
section 2107; and
(ii) provides self-certification that the individual—
(I) is otherwise able to work and available
for work within the meaning of applicable State
law, except the individual is unemployed, partially
unemployed, or unable or unavailable to work
because—
(aa) the individual has been diagnosed
with COVID–19 or is experiencing symptoms
of COVID–19 and seeking a medical diagnosis;
(bb) a member of the individual’s house-
hold has been diagnosed with COVID–19;
(cc) the individual is providing care for
a family member or a member of the individ-
ual’s household who has been diagnosed with
COVID–19;
(dd) a child or other person in the house-
hold for which the individual has primary
caregiving responsibility is unable to attend
school or another facility that is closed as a
direct result of the COVID–19 public health
emergency and such school or facility care is
required for the individual to work;
(ee) the individual is unable to reach the
place of employment because of a quarantine
imposed as a direct result of the COVID–19
public health emergency;
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134 Stat. 335
H. R. 748—55
General Act of 1978 (5 U.S.C. App.) that are related to the provi-
sions of, and amendments made by, this subtitle, to remain avail-
able without fiscal year limitation.
SEC. 2116. IMPLEMENTATION.
(a) NON-APPLICATION OF THE PAPERWORK REDUCTION ACT.—
Chapter 35 of title 44, United States Code (commonly referred
to as the ‘‘Paperwork Reduction Act of 1995’’), shall not apply
to the provisions of, and the amendments made by, this subtitle.
(b) OPERATING INSTRUCTIONS OR OTHER GUIDANCE.—Notwith-
standing any other provision of law, the Secretary of Labor may
issue any operating instructions or other guidance necessary to
carry out the provisions of, or the amendments made by, this
subtitle.
Subtitle B—Rebates and Other Individual
Provisions
SEC. 2201. 2020 RECOVERY REBATES FOR INDIVIDUALS.
(a) IN GENERAL.—Subchapter B of chapter 65 of subtitle F
of the Internal Revenue Code of 1986 is amended by inserting
after section 6427 the following new section:
‘‘SEC. 6428. 2020 RECOVERY REBATES FOR INDIVIDUALS.
‘‘(a) IN GENERAL.—In the case of an eligible individual, there
shall be allowed as a credit against the tax imposed by subtitle
A for the first taxable year beginning in 2020 an amount equal
to the sum of—
‘‘(1) $1,200 ($2,400 in the case of eligible individuals filing
a joint return), plus
‘‘(2) an amount equal to the product of $500 multiplied
by the number of qualifying children (within the meaning of
section 24(c)) of the taxpayer.
‘‘(b) TREATMENT OF CREDIT.—The credit allowed by subsection
(a) shall be treated as allowed by subpart C of part IV of subchapter
A of chapter 1.
‘‘(c) LIMITATION BASED ON ADJUSTED GROSS INCOME.—The
amount of the credit allowed by subsection (a) (determined without
regard to this subsection and subsection (e)) shall be reduced (but
not below zero) by 5 percent of so much of the taxpayer’s adjusted
gross income as exceeds—
‘‘(1) $150,000 in the case of a joint return,
‘‘(2) $112,500 in the case of a head of household, and
‘‘(3) $75,000 in the case of a taxpayer not described in
paragraph (1) or (2).
‘‘(d) ELIGIBLE INDIVIDUAL.—For purposes of this section, the
term ‘eligible individual’ means any individual other than—
‘‘(1) any nonresident alien individual,
‘‘(2) any individual with respect to whom a deduction under
section 151 is allowable to another taxpayer for a taxable
year beginning in the calendar year in which the individual’s
taxable year begins, and
‘‘(3) an estate or trust.
‘‘(e) COORDINATION WITH ADVANCE REFUNDS OF CREDIT.—
‘‘(1) IN GENERAL.—The amount of credit which would (but
for this paragraph) be allowable under this section shall be
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H. R. 748—66
(ii) CARRYOVER.—If the aggregate amount of quali-
fied contributions made in the contribution year
(within the meaning of section 170(d)(1) of such Code)
exceeds the limitation of clause (i), such excess shall
be added to the excess described in section
170(b)(1)(G)(ii).
(B) CORPORATIONS.—In the case of a corporation—
(i) LIMITATION.—Any qualified contribution shall
be allowed as a deduction only to the extent that
the aggregate of such contributions does not exceed
the excess of 25 percent of the taxpayer’s taxable
income (as determined under paragraph (2) of section
170(b) of such Code) over the amount of all other
charitable contributions allowed under such paragraph.
(ii) CARRYOVER.—If the aggregate amount of quali-
fied contributions made in the contribution year
(within the meaning of section 170(d)(2) of such Code)
exceeds the limitation of clause (i), such excess shall
be appropriately taken into account under section
170(d)(2) subject to the limitations thereof.
(3) QUALIFIED CONTRIBUTIONS.—
(A) IN GENERAL.—For purposes of this subsection, the
term ‘‘qualified contribution’’ means any charitable con-
tribution (as defined in section 170(c) of the Internal Rev-
enue Code of 1986) if—
(i) such contribution is paid in cash during cal-
endar year 2020 to an organization described in section
170(b)(1)(A) of such Code, and
(ii) the taxpayer has elected the application of
this section with respect to such contribution.
(B) EXCEPTION.—Such term shall not include a con-
tribution by a donor if the contribution is—
(i) to an organization described in section 509(a)(3)
of the Internal Revenue Code of 1986, or
(ii) for the establishment of a new, or maintenance
of an existing, donor advised fund (as defined in section
4966(d)(2) of such Code).
(C) APPLICATION OF ELECTION TO PARTNERSHIPS AND
S CORPORATIONS.—In the case of a partnership or S corpora-
tion, the election under subparagraph (A)(ii) shall be made
separately by each partner or shareholder.
(b) INCREASE IN LIMITS ON CONTRIBUTIONS OF FOOD INVEN-
TORY.—In the case of any charitable contribution of food during
2020 to which section 170(e)(3)(C) of the Internal Revenue Code
of 1986 applies, subclauses (I) and (II) of clause (ii) thereof shall
each be applied by substituting ‘‘25 percent’’ for ‘‘15 percent.’’
(c) EFFECTIVE DATE.—This section shall apply to taxable years
ending after December 31, 2019.
SEC. 2206. EXCLUSION FOR CERTAIN EMPLOYER PAYMENTS OF STU-
DENT LOANS.
(a) IN GENERAL.—Paragraph (1) of section 127(c) of the Internal
Revenue Code of 1986 is amended by striking ‘‘and’’ at the end
of subparagraph (A), by redesignating subparagraph (B) as subpara-
graph (C), and by inserting after subparagraph (A) the following
new subparagraph:
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134 Stat. 347
H. R. 748—67
‘‘(B) in the case of payments made before January
1, 2021, the payment by an employer, whether paid to
the employee or to a lender, of principal or interest on
any qualified education loan (as defined in section
221(d)(1)) incurred by the employee for education of the
employee, and’’.
(b) CONFORMING AMENDMENT; DENIAL OF DOUBLE BENEFIT.—
The first sentence of paragraph (1) of section 221(e) of the Internal
Revenue Code of 1986 is amended by inserting before the period
the following: ‘‘, or for which an exclusion is allowable under section
127 to the taxpayer by reason of the payment by the taxpayer’s
employer of any indebtedness on a qualified education loan of
the taxpayer’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to payments made after the date of the enactment
of this Act.
Subtitle C—Business Provisions
SEC. 2301. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS SUBJECT
TO CLOSURE DUE TO COVID–19.
(a) IN GENERAL.—In the case of an eligible employer, there
shall be allowed as a credit against applicable employment taxes
for each calendar quarter an amount equal to 50 percent of the
qualified wages with respect to each employee of such employer
for such calendar quarter.
(b) LIMITATIONS AND REFUNDABILITY.—
(1) WAGES TAKEN INTO ACCOUNT.—The amount of qualified
wages with respect to any employee which may be taken into
account under subsection (a) by the eligible employer for all
calendar quarters shall not exceed $10,000.
(2) CREDIT LIMITED TO EMPLOYMENT TAXES.—The credit
allowed by subsection (a) with respect to any calendar quarter
shall not exceed the applicable employment taxes (reduced by
any credits allowed under subsections (e) and (f) of section
3111 of the Internal Revenue Code of 1986 and sections 7001
and 7003 of the Families First Coronavirus Response Act) on
the wages paid with respect to the employment of all the
employees of the eligible employer for such calendar quarter.
(3) REFUNDABILITY OF EXCESS CREDIT.—
(A) IN GENERAL.—If the amount of the credit under
subsection (a) exceeds the limitation of paragraph (2) for
any calendar quarter, such excess shall be treated as an
overpayment that shall be refunded under sections 6402(a)
and 6413(b) of the Internal Revenue Code of 1986.
(B) TREATMENT OF PAYMENTS.—For purposes of section
1324 of title 31, United States Code, any amounts due
to the employer under this paragraph shall be treated
in the same manner as a refund due from a credit provision
referred to in subsection (b)(2) of such section.
(c) DEFINITIONS.—For purposes of this section—
(1) APPLICABLE EMPLOYMENT TAXES.—The term ‘‘applicable
employment taxes’’ means the following:
(A) The taxes imposed under section 3111(a) of the
Internal Revenue Code of 1986.
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TITLE III—SUPPORTING AMERICA’S
HEALTH CARE SYSTEM IN THE FIGHT
AGAINST THE CORONAVIRUS
Subtitle A—Health Provisions
SEC. 3001. SHORT TITLE.
This subtitle may be cited as the ‘‘Coronavirus Aid, Relief,
and Economic Security Act’’.
PART I—ADDRESSING SUPPLY SHORTAGES
Subpart A—Medical Product Supplies
SEC. 3101. NATIONAL ACADEMIES REPORT ON AMERICA’S MEDICAL
PRODUCT SUPPLY CHAIN SECURITY.
(a) IN GENERAL.—Not later than 60 days after the date of
enactment of this Act, the Secretary of Health and Human Services
shall enter into an agreement with the National Academies of
Sciences, Engineering, and Medicine (referred to in this section
as the ‘‘National Academies’’) to examine, and, in a manner that
does not compromise national security, report on, the security of
the United States medical product supply chain.
(b) PURPOSES.—The report developed under this section shall—
(1) assess and evaluate the dependence of the United
States, including the private commercial sector, States, and
the Federal Government, on critical drugs and devices that
are sourced or manufactured outside of the United States,
which may include an analysis of—
(A) the supply chain of critical drugs and devices of
greatest priority to providing health care;
(B) any potential public health security or national
security risks associated with reliance on critical drugs
and devices sourced or manufactured outside of the United
States, which may include responses to previous or existing
shortages or public health emergencies, such as infectious
disease outbreaks, bioterror attacks, and other public
health threats;
(C) any existing supply chain information gaps, as
applicable; and
(D) potential economic impact of increased domestic
manufacturing; and
(2) provide recommendations, which may include a plan
to improve the resiliency of the supply chain for critical drugs
and devices as described in paragraph (1), and to address
any supply vulnerabilities or potential disruptions of such prod-
ucts that would significantly affect or pose a threat to public
health security or national security, as appropriate, which may
include strategies to—
(A) promote supply chain redundancy and contingency
planning;
(B) encourage domestic manufacturing, including
consideration of economic impacts, if any;
(C) improve supply chain information gaps;
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(B) by striking ‘‘$338,000,000 for fiscal year 2010, and
such sums as may be necessary for each of the fiscal
years 2011 through 2016’’ and inserting ‘‘$137,837,000 for
each of fiscal years 2021 through 2025’’; and
(C) by adding at the end the following:
‘‘(b) PART E.—For the purpose of carrying out part E, there
are authorized to be appropriated $117,135,000 for each of the
fiscal years 2021 through 2025.’’.
(b) EVALUATION AND REPORT ON NURSE LOAN REPAYMENT PRO-
GRAMS.—
(1) EVALUATION.—The Comptroller General shall conduct
an evaluation of the nurse loan repayment programs adminis-
tered by the Health Resources and Services Administration.
Such evaluation shall include—
(A) the manner in which payments are made under
such programs;
(B) the existing oversight functions necessary to ensure
the proper use of such programs, including payments made
as part of such programs;
(C) the identification of gaps, if any, in oversight func-
tions; and
(D) information on the number of nurses assigned to
facilities pursuant to such programs, including the type
of facility to which nurses are assigned and the impact
of modifying the eligibility requirements for programs
under section 846 of the Public Health Service Act (42
U.S.C. 297n), such as the impact on entities to which
nurses had previously been assigned prior to fiscal year
2019 (such as federally qualified health centers and facili-
ties affiliated with the Indian Health Service).
(2) REPORT.—Not later than 18 months after the enactment
of this Act, the Comptroller General shall submit to the Com-
mittee on Health, Education, Labor, and Pensions of the Senate
and the Committee on Energy and Commerce of the House
of Representatives, a report on the evaluation under paragraph
(1), which may include recommendations to improve relevant
nursing workforce loan repayment programs.
Subtitle B—Education Provisions
SEC. 3501. SHORT TITLE.
This subtitle may be cited as the ‘‘COVID–19 Pandemic Edu-
cation Relief Act of 2020’’.
SEC. 3502. DEFINITIONS.
(a) DEFINITIONS.—In this subtitle:
(1) CORONAVIRUS.—The term ‘‘coronavirus’’ has the
meaning given the term in section 506 of the Coronavirus
Preparedness and Response Supplemental Appropriations Act,
2020 (Public Law 116–123).
(2) FOREIGN INSTITUTION.—The term ‘‘foreign institution’’
means an institution of higher education located outside the
United States that is described in paragraphs (1)(C) and (2)
of section 102(a) of the Higher Education Act of 1965 (20
U.S.C. 1002(a)).
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(3) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institu-
tion of higher education’’ has the meaning of the term under
section 102 of the Higher Education Act of 1965 (20 U.S.C.
1002).
(4) QUALIFYING EMERGENCY.—The term ‘‘qualifying emer-
gency’’ means—
(A) a public health emergency related to the
coronavirus declared by the Secretary of Health and
Human Services pursuant to section 319 of the Public
Health Service Act (42 U.S.C. 247d);
(B) an event related to the coronavirus for which the
President declared a major disaster or an emergency under
section 401 or 501, respectively, of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5170 and 5191); or
(C) a national emergency related to the coronavirus
declared by the President under section 201 of the National
Emergencies Act (50 U.S.C. 1601 et seq.).
(5) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Education.
SEC. 3503. CAMPUS-BASED AID WAIVERS.
(a) WAIVER OF NON-FEDERAL SHARE REQUIREMENT.—Notwith-
standing sections 413C(a)(2) and 443(b)(5) of the Higher Education
Act of 1965 (20 U.S.C. 1070b–2(a)(2) and 1087–53(b)(5)), with
respect to funds made available for award years 2019–2020 and
2020–2021, the Secretary shall waive the requirement that a partici-
pating institution of higher education provide a non-Federal share
to match Federal funds provided to the institution for the programs
authorized pursuant to subpart 3 of part A and part C of title
IV of the Higher Education Act of 1965 (20 U.S.C. 1070b et seq.
and 1087–51 et seq.) for all awards made under such programs
during such award years, except nothing in this subsection shall
affect the non-Federal share requirement under section 443(c)(3)
that applies to private for-profit organizations.
(b) AUTHORITY TO REALLOCATE.—Notwithstanding sections
413D, 442, and 488 of the Higher Education Act of 1965 (20 U.S.C.
1070b–3, 1087–52, and 1095), during a period of a qualifying emer-
gency, an institution may transfer up to 100 percent of the institu-
tion’s unexpended allotment under section 442 of such Act to the
institution’s allotment under section 413D of such Act, but may
not transfer any funds from the institution’s unexpended allotment
under section 413D of such Act to the institution’s allotment under
section 442 of such Act.
SEC. 3504. USE OF SUPPLEMENTAL EDUCATIONAL OPPORTUNITY
GRANTS FOR EMERGENCY AID.
(a) IN GENERAL.—Notwithstanding section 413B of the Higher
Education Act of 1965 (20 U.S.C. 1070b–1), an institution of higher
education may reserve any amount of an institution’s allocation
under subpart 3 of part A of title IV of the Higher Education
Act of 1965 (20 U.S.C. 1070b et seq.) for a fiscal year to award,
in such fiscal year, emergency financial aid grants to assist under-
graduate or graduate students for unexpected expenses and unmet
financial need as the result of a qualifying emergency.
(b) DETERMINATIONS.—In determining eligibility for and
awarding emergency financial aid grants under this section, an
institution of higher education may—
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(1) waive the amount of need calculation under section
471 of the Higher Education Act of 1965 (20 U.S.C. 1087kk);
(2) allow for a student affected by a qualifying emergency
to receive funds in an amount that is not more than the
maximum Federal Pell Grant for the applicable award year;
and
(3) utilize a contract with a scholarship-granting organiza-
tion designated for the sole purpose of accepting applications
from or disbursing funds to students enrolled in the institution
of higher education, if such scholarship-granting organization
disburses the full allocated amount provided to the institution
of higher education to the recipients.
(c) SPECIAL RULE.—Any emergency financial aid grants to stu-
dents under this section shall not be treated as other financial
assistance for the purposes of section 471 of the Higher Education
Act of 1965 (20 U.S.C. 1087kk).
SEC. 3505. FEDERAL WORK-STUDY DURING A QUALIFYING EMER-
GENCY.
(a) IN GENERAL.—In the event of a qualifying emergency, an
institution of higher education participating in the program under
part C of title IV of the Higher Education Act of 1965 (20 U.S.C.
1087–51 et seq.) may make payments under such part to affected
work-study students, for the period of time (not to exceed one
academic year) in which affected students were unable to fulfill
the students’ work-study obligation for all or part of such academic
year due to such qualifying emergency, as follows:
(1) Payments may be made under such part to affected
work-study students in an amount equal to or less than the
amount of wages such students would have been paid under
such part had the students been able to complete the work
obligation necessary to receive work study funds, as a one
time grant or as multiple payments.
(2) Payments shall not be made to any student who was
not eligible for work study or was not completing the work
obligation necessary to receive work study funds under such
part prior to the occurrence of the qualifying emergency.
(3) Any payments made to affected work-study students
under this subsection shall meet the matching requirements
of section 443 of the Higher Education Act of 1965 (20 U.S.C.
1087–53), unless such matching requirements are waived by
the Secretary.
(b) DEFINITION OF AFFECTED WORK-STUDY STUDENT.—In this
section, the term ‘‘affected work-study student’’ means a student
enrolled at an eligible institution participating in the program under
part C of title IV of the Higher Education Act of 1965 (20 U.S.C.
1087–51 et seq.) who—
(1) received a work-study award under section 443 of the
Higher Education Act of 1965 (20 U.S.C. 1087–53) for the
academic year during which a qualifying emergency occurred;
(2) earned Federal work-study wages from such eligible
institution for such academic year; and
(3) was prevented from fulfilling the student’s work-study
obligation for all or part of such academic year due to such
qualifying emergency.
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SEC. 3506. ADJUSTMENT OF SUBSIDIZED LOAN USAGE LIMITS.
Notwithstanding section 455(q)(3) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(q)(3)), the Secretary shall exclude from
a student’s period of enrollment for purposes of loans made under
part D of title IV of the Higher Education Act of 1965 (20 U.S.C.
1087a et seq.) any semester (or the equivalent) that the student
does not complete due to a qualifying emergency, if the Secretary
is able to administer such policy in a manner that limits complexity
and the burden on the student.
SEC. 3507. EXCLUSION FROM FEDERAL PELL GRANT DURATION LIMIT.
The Secretary shall exclude from a student’s Federal Pell Grant
duration limit under section 401(c)(5) of the Higher Education Act
of 1965 (2 U.S.C. 1070a(c)(5)) any semester (or the equivalent)
that the student does not complete due to a qualifying emergency
if the Secretary is able to administer such policy in a manner
that limits complexity and the burden on the student.
SEC. 3508. INSTITUTIONAL REFUNDS AND FEDERAL STUDENT LOAN
FLEXIBILITY.
(a) INSTITUTIONAL WAIVER.—
(1) IN GENERAL.—The Secretary shall waive the institu-
tional requirement under section 484B of the Higher Education
Act of 1965 (20 U.S.C. 1091b) with respect to the amount
of grant or loan assistance (other than assistance received
under part C of title IV of such Act) to be returned under
such section if a recipient of assistance under title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) with-
draws from the institution of higher education during the pay-
ment period or period of enrollment as a result of a qualifying
emergency.
(2) WAIVERS.—The Secretary shall require each institution
using a waiver relating to the withdrawal of recipients under
this subsection to report the number of such recipients, the
amount of grant or loan assistance (other than assistance
received under part C of title IV of such Act) associated with
each such recipient, and the total amount of grant or loan
assistance (other than assistance received under part C of
title IV of such Act) for which each institution has not returned
assistance under title IV to the Secretary.
(b) STUDENT WAIVER.—The Secretary shall waive the amounts
that students are required to return under section 484B of the
Higher Education Act of 1965 (20 U.S.C. 1091b) with respect to
Federal Pell Grants or other grant assistance if the withdrawals
on which the returns are based, are withdrawals by students who
withdrew from the institution of higher education as a result of
a qualifying emergency.
(c) CANCELING LOAN OBLIGATION.—Notwithstanding any other
provision of the Higher Education Act of 1965 (20 U.S.C. 1001
et seq.), the Secretary shall cancel the borrower’s obligation to
repay the entire portion of a loan made under part D of title
IV of such Act (20 U.S.C. 1087a et seq.) associated with a payment
period for a recipient of such loan who withdraws from the institu-
tion of higher education during the payment period as a result
of a qualifying emergency.
(d) APPROVED LEAVE OF ABSENCE.—Notwithstanding any other
provision of the Higher Education Act of 1965 (20 U.S.C. 1001
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et seq.), for purposes of receiving assistance under title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), an institution
of higher education may, as a result of a qualifying emergency,
provide a student with an approved leave of absence that does
not require the student to return at the same point in the academic
program that the student began the leave of absence if the student
returns within the same semester (or the equivalent).
SEC. 3509. SATISFACTORY ACADEMIC PROGRESS.
Notwithstanding section 484 of the Higher Education Act of
1965 (20 U.S.C. 1091), in determining whether a student is
maintaining satisfactory academic progress for purposes of title
IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.),
an institution of higher education may, as a result of a qualifying
emergency, exclude from the quantitative component of the calcula-
tion any attempted credits that were not completed by such student
without requiring an appeal by such student.
SEC. 3510. CONTINUING EDUCATION AT AFFECTED FOREIGN INSTITU-
TIONS.
(a) IN GENERAL.—Notwithstanding section 481(b) of the Higher
Education Act of 1965 (20 U.S.C. 1088(b)), with respect to a foreign
institution, in the case of a public health emergency, major disaster
or emergency, or national emergency declared by the applicable
government authorities in the country in which the foreign institu-
tion is located, the Secretary may permit any part of an otherwise
eligible program to be offered via distance education for the duration
of such emergency or disaster and the following payment period
for purposes of title IV of the Higher Education Act of 1965 (20
U.S.C. 1070 et seq.).
(b) ELIGIBILITY.—An otherwise eligible program that is offered
in whole or in part through distance education by a foreign institu-
tion between March 1, 2020, and the date of enactment of this
Act shall be deemed eligible for the purposes of part D of title
IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.)
for the duration of the qualifying emergency and the following
payment period for purposes of title IV of the Higher Education
Act of 1965 (20 U.S.C. 1070 et seq.). An institution of higher
education that uses the authority provided in the previous sentence
shall report such use to the Secretary—
(1) for the 2019–2020 award year, not later than June
30, 2020; and
(2) for an award year subsequent to the 2019–2020 award
year, not later than 30 days after such use.
(c) REPORT.—Not later than 180 days after the date of enact-
ment of this Act, and every 180 days thereafter for the duration
of the qualifying emergency and the following payment period,
the Secretary shall submit to the authorizing committees (as defined
in section 103 of the Higher Education Act of 1965 (20 U.S.C.
1003)) a report that identifies each foreign institution that carried
out a distance education program authorized under this section.
(d) WRITTEN ARRANGEMENTS.—
(1) IN GENERAL.—Notwithstanding section 102 of the
Higher Education Act of 1965 (20 U.S.C. 1002), for the duration
of a qualifying emergency and the following payment period,
the Secretary may allow a foreign institution to enter into
a written arrangement with an institution of higher education
located in the United States that participates in the Federal
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Direct Loan Program under part D of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087a et seq.) for the purpose
of allowing a student of the foreign institution who is a borrower
of a loan made under such part to take courses from the
institution of higher education located in the United States.
(2) FORM OF ARRANGEMENTS.—
(A) PUBLIC OR OTHER NONPROFIT INSTITUTIONS.—A for-
eign institution that is a public or other nonprofit institu-
tion may enter into a written arrangement under sub-
section (a) only with an institution of higher education
described in section 101 of such Act (20 U.S.C. 1001).
(B) OTHER INSTITUTIONS.—A foreign institution that
is a graduate medical school, nursing school, or a veterinary
school and that is not a public or other nonprofit institution
may enter into a written arrangement under subsection
(a) with an institution of higher education described in
section 101 or section 102 of such Act (20 U.S.C. 1001
and 1002).
(3) REPORT ON USE.—An institution of higher education
that uses the authority described in paragraph (2) shall report
such use to the Secretary—
(A) for the 2019–2020 award year, not later than June
30, 2020; and
(B) for an award year subsequent to the 2019–2020
award year, not later than 30 days after such use.
(4) REPORT FROM THE SECRETARY.—Not later than 180 days
after the date of enactment of this Act, and every 180 days
thereafter for the duration of the qualifying emergency and
the following payment period, the Secretary shall submit to
the authorizing committees (as defined in section 103 of the
Higher Education Act of 1965 (20 U.S.C. 1003)) a report that
identifies each foreign institution that entered into a written
arrangement authorized under subsection (a).
SEC. 3511. NATIONAL EMERGENCY EDUCATIONAL WAIVERS.
(a) IN GENERAL.—Notwithstanding any other provision of law,
the Secretary may, upon the request of a State educational agency
or Indian tribe, waive any statutory or regulatory provision
described under paragraphs (1) and (2) of subsection (b), and upon
the request of a local educational agency, waive any statutory
or regulatory provision described under paragraph (2) of subsection
(b), if the Secretary determines that such a waiver is necessary
and appropriate due to the emergency involving Federal primary
responsibility determined to exist by the President under the section
501(b) of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5191(b)) with respect to the Coronavirus
Disease 2019 (COVID–19).
(b) APPLICABLE PROVISIONS OF LAW.—
(1) STREAMLINED WAIVERS.—The Secretary shall create an
expedited application process to request a waiver and the Sec-
retary may waive any statutory or regulatory requirements
for a State educational agency (related to assessments, account-
ability, and reporting requirements related to assessments and
accountability), if the Secretary determines that such a waiver
is necessary and appropriate as described in subsection (a),
under the following provisions of law:
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(A) The following provisions under section 1111 of the
Elementary and Secondary Education Act of 1965 (20
U.S.C. 6311):
(i) Paragraphs (2) and (3) of subsection (b).
(ii) Subsection (c)(4).
(iii) Subparagraphs (C) and (D) of subsection (d)(2).
(iv) The following provisions under subsection (h)
of such section 1111:
(I) Clauses (i), (ii), (iii)(I), (iv), (v), (vi), (vii),
and (xi) of paragraph (1)(C).
(II) Paragraph (2)(C) with respect to the
waived requirements under subclause (I).
(III) Clauses (i) and (ii) of paragraph (2)(C).
(B) Section 421(b) of the General Education Provisions
Act (20 U.S.C. 1225(b)).
(2) STATE AND LOCALLY-REQUESTED WAIVERS.—For a State
educational agency, local educational agency, or Indian tribe
that receives funds under a program authorized under the
Elementary and Secondary Education Act of 1965 (20 U.S.C.
6301 et seq.) that requests a waiver under subsection (c), the
Secretary may waive statutory and regulatory requirements
under any of the following provisions of such Act:
(A) Section 1114(a)(1).
(B) Section 1118(a) and section 8521.
(C) Section 1127.
(D) Section 4106(d).
(E) Subparagraphs (C), (D), and (E) of section
4106(e)(2).
(F) Section 4109(b).
(G) The definition under section 8101(42) for purposes
of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6301 et seq.).
(3) APPLICABILITY TO CHARTER SCHOOLS.—Any waivers
issued by the Secretary under this section shall be imple-
mented, as applicable—
(A) for all public schools, including public charter
schools within the boundaries of the recipient of the waiver;
(B) in accordance with State charter school law; and
(C) pursuant to section 1111(c)(5) of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6311(c)(5)).
(4) LIMITATION.—Nothing in this section shall be construed
to allow the Secretary to waive any statutory or regulatory
requirements under applicable civil rights laws.
(5) ACCOUNTABILITY AND IMPROVEMENT.—Any school
located in a State that receives a waiver under paragraph
(1) and that is identified for comprehensive support and
improvement, targeted support and improvement, or additional
targeted support in the 2019–2020 school year under section
1111(c)(4)(D) or section 1111(d)(2) of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 6311(c)(4)(D) or (d)(2))
shall maintain that identification status in the 2020–2021
school year and continue to receive supports and interventions
consistent with the school’s support and improvement plan
in the 2020–2021 school year.
(c) STATE AND LOCAL REQUESTS FOR WAIVERS.—
(1) IN GENERAL.—A State educational agency, local edu-
cational agency, or Indian tribe that desires a waiver from
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any statutory or regulatory provision described under sub-
section (b)(2), may submit a waiver request to the Secretary
in accordance with this subsection.
(2) REQUESTS SUBMITTED.—A request for a waiver under
this subsection shall—
(A) identify the Federal programs affected by the
requested waiver;
(B) describe which Federal statutory or regulatory
requirements are to be waived;
(C) describe how the emergency involving Federal pri-
mary responsibility determined to exist by the President
under the section 501(b) of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5191(b))
with respect to the Coronavirus Disease 2019 (COVID–
19) prevents or otherwise restricts the ability of the State,
State educational agency, local educational agency, Indian
tribe, or school to comply with such statutory or regulatory
requirements; and
(D) provide an assurance that the State educational
agency, local educational agency, or Indian tribe will work
to mitigate any negative effects, if any, that may occur
as a result of the requested waiver.
(3) SECRETARY APPROVAL.—
(A) IN GENERAL.—Except as provided under subpara-
graph (B), the Secretary shall approve or disapprove a
waiver request submitted under paragraph (1) not more
than 30 days after the date on which such request is
submitted.
(B) EXCEPTIONS.—The Secretary may disapprove a
waiver request submitted under paragraph (1), only if the
Secretary determines that—
(i) the waiver request does not meet the require-
ments of this section;
(ii) the waiver is not permitted pursuant to sub-
section (b)(2); or
(iii) the description required under paragraph
(2)(C) provides insufficient information to demonstrate
that the waiving of such requirements is necessary
or appropriate consistent with subsection (a).
(4) DURATION.—A waiver approved by the Secretary under
this section may be for a period not to exceed the 2019–2020
academic year, except to carry out full implementation of any
maintenance of effort waivers granted during the 2019–2020
academic year.
(d) REPORTING AND PUBLICATION.—
(1) PUBLIC NOTICE.—A State educational agency, Indian
Tribe, or local educational agency requesting a waiver under
subsection (b)(2) shall provide the public and all local edu-
cational agencies in the State with notice of, and the oppor-
tunity to comment on, the request by posting information
regarding the waiver request and the process for commenting
on the State website.
(2) NOTIFYING CONGRESS.—Not later than 7 days after
granting a waiver under this section, the Secretary shall notify
the Committee on Health, Education, Labor, and Pensions of
the Senate, the Committee on Appropriations of the Senate,
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the Committee on Education and Labor of the House of Rep-
resentatives, and the Committee on Appropriations of the House
of Representatives of such waiver.
(3) PUBLICATION.—Not later than 30 days after granting
a waiver under this section, the Secretary shall publish a
notice of the Secretary’s decision (including which waiver was
granted and the reason for granting the waiver) in the Federal
Register and on the website of the Department of Education.
(4) REPORT.—Not later than 30 days after the date of
enactment of this Act, the Secretary shall prepare and submit
a report to the Committee on Health, Education, Labor, and
Pensions and the Committee on Appropriations of the Senate,
and the Committee on Education and Labor and the Committee
on Appropriations of the House of Representatives, with rec-
ommendations on any additional waivers under the Individuals
with Disabilities Education Act (20 U.S.C. 1401 et seq.), the
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), the
Elementary and Secondary Education Act of 1965 (20 U.S.C.
6301 et seq.), and the Carl D. Perkins Career and Technical
Education Act of 2006 (20 U.S.C. 2301 et seq.) the Secretary
believes are necessary to be enacted into law to provide limited
flexibility to States and local educational agencies to meet
the needs of students during the emergency involving Federal
primary responsibility determined to exist by the President
under section 501(b) of the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5191(b)) with respect
to the Coronavirus Disease 2019 (COVID–19).
(e) TERMS.—In this section, the term ‘‘State educational agency’’
includes the Bureau of Indian Education, and the term ‘‘local edu-
cational agency’’ includes Bureau of Indian Education funded
schools operated pursuant to a grant under the Tribally Controlled
Schools Act of 1988 (25 U.S.C. 2501 et seq.), or a contract under
the Indian Self-Determination and Education Assistance Act (25
U.S.C. 5301 et seq.).
SEC. 3512. HBCU CAPITAL FINANCING.
(a) DEFERMENT PERIOD.—
(1) IN GENERAL.—Notwithstanding any provision of title
III of the Higher Education Act of 1965 (20 U.S.C. 1051 et
seq.), or any regulation promulgated under such title, the Sec-
retary may grant a deferment, for the duration of a qualifying
emergency, to an institution that has received a loan under
part D of title III of such Act (20 U.S.C. 1066 et seq.).
(2) TERMS.—During the deferment period granted under
this subsection—
(A) the institution shall not be required to pay any
periodic installment of principal or interest required under
the loan agreement for such loan; and
(B) the Secretary shall make principal and interest
payments otherwise due under the loan agreement.
(3) CLOSING.—At the closing of a loan deferred under this
subsection, terms shall be set under which the institution shall
be required to repay the Secretary for the payments of principal
and interest made by the Secretary during the deferment, on
a schedule that begins upon repayment to the lender in full
on the loan agreement, except in no case shall repayment
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be required to begin before the date that is 1 full fiscal year
after the date that is the end of the qualifying emergency.
(b) TERMINATION DATE.—
(1) IN GENERAL.—The authority provided under this section
to grant a loan deferment under subsection (a) shall terminate
on the date on which the qualifying emergency is no longer
in effect.
(2) DURATION.—Any provision of a loan agreement or insur-
ance agreement modified by the authority under this section
shall remain so modified for the duration of the period covered
by the loan agreement or insurance agreement.
(c) REPORT.—Not later than 180 days after the date of enact-
ment of this Act, and every 180 days thereafter during the period
beginning on the first day of the qualifying emergency and ending
on September 30 of the fiscal year following the end of the qualifying
emergency, the Secretary shall submit to the authorizing commit-
tees (as defined in section 103 of the Higher Education Act of
1965 (20 U.S.C. 1003)) a report that identifies each institution
that received assistance under this section.
(d) FUNDING.—There is hereby appropriated, out of any money
in the Treasury not otherwise appropriated, $62,000,000 to carry
out this section.
SEC. 3513. TEMPORARY RELIEF FOR FEDERAL STUDENT LOAN BOR-
ROWERS.
(a) IN GENERAL.—The Secretary shall suspend all payments
due for loans made under part D and part B (that are held by
the Department of Education) of title IV of the Higher Education
Act of 1965 (20 U.S.C. 1087a et seq.; 1071 et seq.) through Sep-
tember 30, 2020.
(b) NO ACCRUAL OF INTEREST.—Notwithstanding any other
provision of the Higher Education Act of 1965 (20 U.S.C. 1001
et seq.), interest shall not accrue on a loan described under sub-
section (a) for which payment was suspended for the period of
the suspension.
(c) CONSIDERATION OF PAYMENTS.—Notwithstanding any other
provision of the Higher Education Act of 1965 (20 U.S.C. 1001
et seq.), the Secretary shall deem each month for which a loan
payment was suspended under this section as if the borrower of
the loan had made a payment for the purpose of any loan forgive-
ness program or loan rehabilitation program authorized under part
D or B of title IV of the Higher Education Act of 1965 (20 U.S.C.
1087a et seq.; 1071 et seq.) for which the borrower would have
otherwise qualified.
(d) REPORTING TO CONSUMER REPORTING AGENCIES.—During
the period in which the Secretary suspends payments on a loan
under subsection (a), the Secretary shall ensure that, for the pur-
pose of reporting information about the loan to a consumer reporting
agency, any payment that has been suspended is treated as if
it were a regularly scheduled payment made by a borrower.
(e) SUSPENDING INVOLUNTARY COLLECTION.—During the period
in which the Secretary suspends payments on a loan under sub-
section (a), the Secretary shall suspend all involuntary collection
related to the loan, including—
(1) a wage garnishment authorized under section 488A
of the Higher Education Act of 1965 (20 U.S.C. 1095a) or
section 3720D of title 31, United States Code;
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(2) a reduction of tax refund by amount of debt authorized
under section 3720A of title 31, United States Code, or section
6402(d) of the Internal Revenue Code of 1986;
(3) a reduction of any other Federal benefit payment by
administrative offset authorized under section 3716 of title
31, United States Code (including a benefit payment due to
an individual under the Social Security Act or any other provi-
sion described in subsection (c)(3)(A)(i) of such section); and
(4) any other involuntary collection activity by the Sec-
retary.
(f) WAIVERS.—In carrying out this section, the Secretary may
waive the application of—
(1) subchapter I of chapter 35 of title 44, United States
Code (commonly known as the ‘‘Paperwork Reduction Act’’);
(2) the master calendar requirements under section 482
of the Higher Education Act of 1965 (20 U.S.C. 1089);
(3) negotiated rulemaking under section 492 of the Higher
Education Act of 1965 (20 U.S.C. 1098a); and
(4) the requirement to publish the notices related to the
system of records of the agency before implementation required
under paragraphs (4) and (11) of section 552a(e) of title 5,
United States Code (commonly known as the ‘‘Privacy Act of
1974’’), except that the notices shall be published not later
than 180 days after the date of enactment of this Act.
(g) NOTICE TO BORROWERS AND TRANSITION PERIOD.—To inform
borrowers of the actions taken in accordance with this section
and ensure an effective transition, the Secretary shall—
(1) not later than 15 days after the date of enactment
of this Act, notify borrowers—
(A) of the actions taken in accordance with subsections
(a) and (b) for whom payments have been suspended and
interest waived;
(B) of the actions taken in accordance with subsection
(e) for whom collections have been suspended;
(C) of the option to continue making payments toward
principal; and
(D) that the program under this section is a temporary
program.
(2) beginning on August 1, 2020, carry out a program
to provide not less than 6 notices by postal mail, telephone,
or electronic communication to borrowers indicating—
(A) when the borrower’s normal payment obligations
will resume; and
(B) that the borrower has the option to enroll in
income-driven repayment, including a brief description of
such options.
SEC. 3514. PROVISIONS RELATED TO THE CORPORATION FOR
NATIONAL AND COMMUNITY SERVICE.
(a) ACCRUAL OF SERVICE HOURS.—
(1) ACCRUAL THROUGH OTHER SERVICE HOURS.—
(A) IN GENERAL.—Notwithstanding any other provision
of the Domestic Volunteer Service Act of 1973 (42 U.S.C.
4950 et seq.) or the National and Community Service Act
of 1990 (42 U.S.C. 12501 et seq.), the Corporation for
National and Community Service shall allow an individual
described in subparagraph (B) to accrue other service hours
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that will count toward the number of hours needed for
the individual’s education award.
(B) AFFECTED INDIVIDUALS.—Subparagraph (A) shall
apply to any individual serving in a position eligible for
an educational award under subtitle D of title I of the
National and Community Service Act of 1990 (42 U.S.C.
12601 et seq.)—
(i) who is performing limited service due to
COVID–19; or
(ii) whose position has been suspended or placed
on hold due to COVID–19.
(2) PROVISIONS IN CASE OF EARLY EXIT.—In any case where
an individual serving in a position eligible for an educational
award under subtitle D of title I of the National and Community
Service Act of 1990 (42 U.S.C. 12601 et seq.) was required
to exit the position early at the direction of the Corporation
for National and Community Service, the Chief Executive
Officer of the Corporation for National and Community Service
may—
(A) deem such individual as having met the require-
ments of the position; and
(B) award the individual the full value of the edu-
cational award under such subtitle for which the individual
would otherwise have been eligible.
(b) AVAILABILITY OF FUNDS.—Notwithstanding any other provi-
sion of law, all funds made available to the Corporation for National
and Community Service under any Act, including the amounts
appropriated to the Corporation under the headings ‘‘OPERATING
EXPENSES’’, ‘‘SALARIES AND EXPENSES’’, and ‘‘OFFICE OF THE
INSPECTOR GENERAL’’ under the heading ‘‘CORPORATION FOR
NATIONAL AND COMMUNITY SERVICE’’ under title IV of Division
A of the Further Consolidated Appropriations Act, 2020 (Public
Law 116–94), shall remain available for the fiscal year ending
September 30, 2021.
(c) NO REQUIRED RETURN OF GRANT FUNDS.—Notwithstanding
section 129(l)(3)(A)(i) of the National and Community Service Act
of 1990 (42 U.S.C. 12581(l)(3)(A)(i)), the Chief Executive Officer
of the Corporation for National and Community Service may permit
fixed-amount grant recipients under such section 129(l) to maintain
a pro rata amount of grant funds, at the discretion of the Corpora-
tion for National and Community Service, for participants who
exited, were suspended, or are serving in a limited capacity due
to COVID–19, to enable the grant recipients to maintain operations
and to accept participants.
(d) EXTENSION OF TERMS AND AGE LIMITS.—Notwithstanding
any other provision of law, the Corporation for National and
Community Service may extend the term of service (for a period
not to exceed the 1-year period immediately following the end
of the national emergency) or waive any upper age limit (except
in no case shall the maximum age exceed 26 years of age) for
national service programs carried out by the National Civilian
Community Corps under subtitle E of title I of the National and
Community Service Act of 1990 (42 U.S.C. 12611 et seq.), and
the participants in such programs, for the purposes of—
(1) addressing disruptions due to COVID–19; and
(2) minimizing the difficulty in returning to full operation
due to COVID–19 on such programs and participants.
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SEC. 3515. WORKFORCE RESPONSE ACTIVITIES.
(a) ADMINISTRATIVE COSTS.—Notwithstanding section 128(b)(4)
of the Workforce Innovation Opportunity Act (29 U.S.C. 3163(b)(4)),
of the total amount allocated to a local area (including the total
amount allotted to a single State local area) under subtitle B
of title I of such Act (29 U.S.C. 3151 et seq.) for program year
2019, not more than 20 percent of the total amount may be used
for the administrative costs of carrying out local workforce invest-
ment activities under chapter 2 or chapter 3 of subtitle B of title
I of such Act, if the portion of the total amount that exceeds
10 percent of the total amount is used to respond to a qualifying
emergency.
(b) RAPID RESPONSE ACTIVITIES.—
(1) STATEWIDE RAPID RESPONSE.—Of the funds reserved
by a Governor for program year 2019 for statewide activities
under section 128(a) of the Workforce Innovation and Oppor-
tunity Act (29 U.S.C. 3163(a)) that remain unobligated, such
funds may be used for statewide rapid response activities as
described in section 134(a)(2)(A) of such Act (29 U.S.C.
3174(a)(2)(A)) for responding to a qualifying emergency.
(2) LOCAL BOARDS.—Of the funds reserved by a Governor
for program year 2019 under section 133(a)(2) of such Act
(29 U.S.C. 3173(a)(2)) that remain unobligated, such funds may
be released within 30 days after the date of enactment of
this Act to the local boards most impacted by the coronavirus
at the determination of the Governor for rapid response activi-
ties related to responding to a qualifying emergency.
(c) DEFINITIONS.—Except as otherwise provided, the terms in
this section have the meanings given the terms in section 3 of
the Workforce Innovation and Opportunity Act (29 U.S.C. 3102).
SEC. 3516. TECHNICAL AMENDMENTS.
(a) IN GENERAL.—
(1) Section 6103(a)(3) of the Internal Revenue Code of
1986, as amended by the FUTURE Act (Public Law 116–91),
is further amended by striking ‘‘(13), (16)’’ and inserting
‘‘(13)(A), (13)(B), (13)(C), (13)(D)(i), (16)’’.
(2) Section 6103(p)(3)(A) of such Code, as so amended,
is further amended by striking ‘‘(12),’’ and inserting ‘‘(12),
(13)(A), (13)(B), (13)(C), (13)(D)(i)’’.
(3) Section 6103(p)(4) of such Code, as so amended, is
further amended by striking ‘‘(13) or (16)’’ each place it appears
and inserting ‘‘(13), or (16)’’.
(4) Section 6103(p)(4) of such Code, as so amended and
as amended by paragraph (3), is further amended by striking
‘‘(13)’’ each place it appears and inserting ‘‘(13)(A), (13)(B),
(13)(C), (13)(D)(i)’’.
(5) Section 6103(l)(13)(C)(ii) of such Code, as added by
the FUTURE Act (Public Law 116–91), is amended by striking
‘‘section 236A(e)(4)’’ and inserting ‘‘section 263A(e)(4)’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply as if included in the enactment of the FUTURE Act
(Public Law 116–91).
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SEC. 3517. WAIVER AUTHORITY AND REPORTING REQUIREMENT FOR
INSTITUTIONAL AID.
(a) WAIVER AUTHORITY.—Notwithstanding any other provision
of the Higher Education Act of 1965 (U.S.C. 1001 et seq.), unless
enacted with specific reference to this section, for any institution
of higher education that was receiving assistance under title III,
title V, or subpart 4 of part A of title VII of such Act (20 U.S.C.
1051 et seq.; 1101 et seq.; 1136a et seq.) at the time of a qualifying
emergency, the Secretary may, for the period beginning on the
first day of the qualifying emergency and ending on September
30 of the fiscal year following the end of the qualifying emergency—
(1) waive—
(A) the eligibility data requirements set forth in section
391(d) and 521(e) of the Higher Education Act of 1965
(20 U.S.C. 1068(d); 1103(e));
(B) the wait-out period set forth in section 313(d) of
the Higher Education Act of 1965 (20 U.S.C. 1059(d));
(C) the allotment requirements under paragraphs (2)
and (3) of subsection 318(e) of the Higher Education Act
of 1965 (20 U.S.C. 1059e(e)), and the reference to ‘‘the
academic year preceding the beginning of that fiscal year’’
under such section 318(e)(1);
(D) the allotment requirements under subsections (b),
(c), and (g) of section 324 of the Higher Education Act
of 1965 (20 U.S.C. 1063), the reference to ‘‘the end of
the school year preceding the beginning of that fiscal year’’
under such section 324(a), and the reference to ‘‘the aca-
demic year preceding such fiscal year’’ under such section
324(h);
(E) subparagraphs (A), (C), (D), and (E) of section
326(f)(3) of the Higher Education Act of 1965 (20 U.S.C.
1063b(f)(3)), and references to ‘‘previous year’’ under such
section 326(f)(3)(B);
(F) subparagraphs (A), (C), (D), and (E) of section
723(f)(3) and subparagraphs (A), (C), (D), and (E) of section
724(f)(3) of the Higher Education Act of 1965 (20 U.S.C.
1136a(f)(3); 1136b(f)(3)), and references to ‘‘previous aca-
demic year’’ under subparagraph (B) of such sections
723(f)(3) and 724(f)(3); and
(G) the allotment restriction set forth in section
318(d)(4) and section 323(c)(2) of the Higher Education
Act of 1965 (20 U.S.C. 1059e(d)(4); 1062(c)(2)); and
(2) waive or modify any statutory or regulatory provision
to ensure that institutions that were receiving assistance under
title III, title V, or subpart 4 of part A of title VII of such
Act (20 U.S.C. 1051 et seq.; 1101 et seq.; 1136a et seq.) at
the time of a qualifying emergency are not adversely affected
by any formula calculation for fiscal year 2020 and for the
period beginning on the first day of the qualifying emergency
and ending on September 30 of the fiscal year following the
end of the qualifying emergency, as necessary.
(b) USE OF UNEXPENDED FUNDS.—Any funds paid to an institu-
tion under title III, title V, or subpart 4 of part A of title VII
of the Higher Education Act of 1965 (20 U.S.C. 1051 et seq.; 1101
et seq.; 1136a et seq.) and not expended or used for the purposes
for which the funds were paid to the institution during the 5-
year period following the date on which the funds were first paid
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to the institution, may be carried over and expended during the
succeeding 5-year period.
(c) REPORT.—Not later than 180 days after the date of enact-
ment of this Act, and every 180 days thereafter for the period
beginning on the first day of the qualifying emergency and ending
on September 30 of the fiscal year following the end of the qualifying
emergency, the Secretary shall submit to the authorizing commit-
tees (as defined in section 103 of the Higher Education Act of
1965 (20 U.S.C. 1003)) a report that identifies each institution
that received a waiver or modification under this section.
SEC. 3518. AUTHORIZED USES AND OTHER MODIFICATIONS FOR
GRANTS.
(a) IN GENERAL.—The Secretary is authorized to modify the
required and allowable uses of funds for grants awarded under
part A or B of title III, chapter I or II of subpart 2 of part
A of title IV, title V, or subpart 4 of part A of title VII of the
Higher Education Act of 1965 (20 U.S.C. 1057 et seq.; 1060 et
seq.; 1070a–11 et seq.; 1070a–21 et seq.; 1101 et seq.; 1136a et
seq.) to an institution of higher education or other grant recipient
(not including individual recipients of Federal student financial
assistance), at the request of an institution of higher education
or other recipient of a grant (not including individual recipients
of Federal student financial assistance) as a result of a qualifying
emergency, for the period beginning on the first day of the qualifying
emergency and ending on September 30 of the fiscal year following
the end of the qualifying emergency.
(b) MATCHING REQUIREMENT MODIFICATIONS.—Notwith-
standing any other provision of the Higher Education Act of 1965
(20 U.S.C. 1001 et seq.), the Secretary is authorized to modify
any Federal share or other financial matching requirement for
a grant awarded on a competitive basis or a grant awarded under
part A or B of title III or subpart 4 of part A of title VII of
the Higher Education Act of 1965 (20 U.S.C. 1057 et seq.; 1060
et seq.; 1136a et seq.) at the request of an institution of higher
education or other grant recipient as a result of a qualifying emer-
gency, for the period beginning on the first day of the qualifying
emergency and ending on September 30 of the fiscal year following
the end of the qualifying emergency.
(c) REPORTS.—Not later than 180 days after the date of enact-
ment of this Act, and every 180 days thereafter for the duration
of the period beginning on the first day of the qualifying emergency
and ending on September 30 of the fiscal year following the end
of the qualifying emergency, the Secretary shall submit to the
authorizing committees (as defined in section 103 of the Higher
Education Act of 1965 (20 U.S.C. 1003)) a report that identifies
each institution of higher education or other grant recipient that
received a modification under this section.
SEC. 3519. SERVICE OBLIGATIONS FOR TEACHERS.
(a) TEACH GRANTS.—For the purpose of section 420N of the
Higher Education Act of 1965 (20 U.S.C. 1070g–2), during a quali-
fying emergency, the Secretary—
(1) may modify the categories of extenuating circumstances
under which a recipient of a grant under subpart 9 of part
A of title IV of the Higher Education Act of 1965 (20 U.S.C.
1070g et seq.) who is unable to fulfill all or part of the recipient’s
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service obligation may be excused from fulfilling that portion
of the service obligation; and
(2) shall consider teaching service that, as a result of a
qualifying emergency, is part-time or temporarily interrupted,
to be full-time service and to fulfill the service obligations
under such section 420N.
(b) TEACHER LOAN FORGIVENESS.—Notwithstanding section
428J or 460 of the Higher Education Act of 1965 (20 U.S.C. 1078–
10; 1087j), the Secretary shall waive the requirements under such
sections that years of teaching service shall be consecutive if—
(1) the teaching service of a borrower is temporarily inter-
rupted due to a qualifying emergency; and
(2) after the temporary interruption due to a qualifying
emergency, the borrower resumes teaching service and com-
pletes a total of 5 years of qualifying teaching service under
such sections, including qualifying teaching service performed
before, during, and after such qualifying emergency.
Subtitle C—Labor Provisions
SEC. 3601. LIMITATION ON PAID LEAVE.
Section 110(b)(2)(B) of the Family and Medical Leave Act of
1993 (as added by the Emergency Family and Medical Leave Expan-
sion Act) is amended by striking clause (ii) and inserting the fol-
lowing:
‘‘(ii) LIMITATION.—An employer shall not be
required to pay more than $200 per day and $10,000
in the aggregate for each employee for paid leave under
this section.’’.
SEC. 3602. EMERGENCY PAID SICK LEAVE ACT LIMITATION.
Section 5102 of the Emergency Paid Sick Leave Act (division
E of the Families First Coronavirus Response Act) is amended
by adding at the end the following:
‘‘(f) LIMITATIONS.—An employer shall not be required to pay
more than either—
‘‘(1) $511 per day and $5,110 in the aggregate for each
employee, when the employee is taking leave for a reason
described in paragraph (1), (2), or (3) of section 5102(a); or
‘‘(2) $200 per day and $2,000 in the aggregate for each
employee, when the employee is taking leave for a reason
described in paragraph (4), (5), or (6) of section 5102(a).’’.
SEC. 3603. UNEMPLOYMENT INSURANCE.
Section 903(h)(2)(B) of the Social Security Act (42 U.S.C.
1103(h)(2)(B)), as added by section 4102 of the Emergency
Unemployment Insurance Stabilization and Access Act of 2020,
is amended to read as follows:
‘‘(B) The State ensures that applications for unemploy-
ment compensation, and assistance with the application
process, are accessible, to the extent practicable in at least
two of the following: in person, by phone, or online.’’.
SEC. 3604. OMB WAIVER OF PAID FAMILY AND PAID SICK LEAVE.
(a) FAMILY AND MEDICAL LEAVE ACT OF 1993.—Section 110(a)
of title I of the Family and Medical Leave Act of 1993 (29 U.S.C.
2611 et seq.) (as added by division C of the Families First
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‘‘(i) described in section 501(c)(3),
‘‘(ii) who has been in existence since at least 1938,
‘‘(iii) who conducts medical research directly or
indirectly through grant making, and
‘‘(iv) whose primary exempt purpose is to provide
services with respect to mothers and children.’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to plan years beginning after December 31, 2018.
SEC. 3610. FEDERAL CONTRACTOR AUTHORITY.
Notwithstanding any other provision of law, and subject to
the availability of appropriations, funds made available to an agency
by this Act or any other Act may be used by such agency to
modify the terms and conditions of a contract, or other agreement,
without consideration, to reimburse at the minimum applicable
contract billing rates not to exceed an average of 40 hours per
week any paid leave, including sick leave, a contractor provides
to keep its employees or subcontractors in a ready state, including
to protect the life and safety of Government and contractor per-
sonnel, but in no event beyond September 30, 2020. Such authority
shall apply only to a contractor whose employees or subcontractors
cannot perform work on a site that has been approved by the
Federal Government, including a federally-owned or leased facility
or site, due to facility closures or other restrictions, and who cannot
telework because their job duties cannot be performed remotely
during the public health emergency declared on January 31, 2020
for COVID–19: Provided, That the maximum reimbursement
authorized by this section shall be reduced by the amount of credit
a contractor is allowed pursuant to division G of Public Law 116–
127 and any applicable credits a contractor is allowed under this
Act.
SEC. 3611. TECHNICAL CORRECTIONS.
(1) Section 110(a)(3) of the Family and Medical Leave Act
of 1993 (as added by the Emergency and Medical Leave Expan-
sion Act) is amended by striking ‘‘553(d)(A)’’ and inserting
‘‘553(d)(3)’’.
(2) Section 5111 of the Emergency Paid Sick Leave Act
(division E of the Families First Coronavirus Response Act)
is amended by striking ‘‘553(d)(A)’’ and inserting ‘‘553(d)(3)’’.
(3) Section 110(c) of the Family and Medical Leave Act
of 1993 (as added by the Emergency and Medical Leave Expan-
sion Act) is amended by striking ‘‘subsection (a)(2)(A)(iii)’’ and
inserting ‘‘subsection (a)(2)(A)’’.
(4) Section 3104 of the Emergency Family and Medical
Leave Expansion Act (division C of the Families First
Coronavirus Response Act) is amended—
(A) by striking ‘‘110(a)(B)’’ and inserting ‘‘section
110(a)(1)(B) of the Family and Medical Leave Act of 1993’’;
and
(B) by striking ‘‘section 107(a) for a violation of section
102(a)(1)(F) if the employer does not meet the definition
of employer set forth in Section 101(4)(A)(i)’’ and inserting
‘‘section 107(a) of such Act for a violation of section
102(a)(1)(F) of such Act if the employer does not meet
the definition of employer set forth in section 101(4)(A)(i)
of such Act’’.
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(5) Section 5110(1) of the Emergency Paid Sick Leave Act
(division E of the Families First Coronavirus Response Act)
is amended—
(A) in the matter preceding subparagraph (A), by
striking ‘‘terms’’ and inserting ‘‘term’’; and
(B) in subparagraph (A)(i), by striking ‘‘paragraph
(5)(A)’’ and inserting ‘‘paragraph (2)(A)’’.
(6) Section 5110(2)(B)(ii) of the Emergency Paid Sick Leave
Act (division E of the Families First Coronavirus Response
Act) is amended by striking ‘‘clause (i)(IV)’’ and inserting ‘‘clause
(i)(III)’’.
(7) Section 110(a)(3) of the Family and Medical Leave Act
of 1993 (as added by the Emergency and Medical Leave Expan-
sion Act) is amended—
(A) by striking ‘‘and’’ after the semicolon at the end
of subparagraph (A);
(B) by striking the period at end of subparagraph (B)
and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(C) as necessary to carry out the purposes of this
Act, including to ensure consistency between this Act and
Division E and Division G of the Families First Coronavirus
Response Act.’’.
(8) Section 5104(1) of the Emergency Paid Sick Leave Act
(division E of the Families First Coronavirus Response Act)
is amended by striking ‘‘and’’ after the semicolon and inserting
‘‘or’’.
(9) Section 5105 of the Emergency Paid Sick Leave Act
(division E of the Families First Coronavirus Response Act)
is amended by adding at the end the following:
‘‘(c) INVESTIGATIONS AND COLLECTION OF DATA.—The Secretary
of Labor or his designee may investigate and gather data to ensure
compliance with this Act in the same manner as authorized by
sections 9 and 11 of the Fair Labor Standards Act of 1938 (29
U.S.C. 209; 211).’’.
Subtitle D—Finance Committee
SEC. 3701. EXEMPTION FOR TELEHEALTH SERVICES.
(a) IN GENERAL.—Paragraph (2) of section 223(c) of the Internal
Revenue Code of 1986 is amended by adding at the end the following
new subparagraph:
‘‘(E) SAFE HARBOR FOR ABSENCE OF DEDUCTIBLE FOR
TELEHEALTH.—In the case of plan years beginning on or
before December 31, 2021, a plan shall not fail to be treated
as a high deductible health plan by reason of failing to
have a deductible for telehealth and other remote care
services.’’.
(b) CERTAIN COVERAGE DISREGARDED.—Clause (ii) of section
223(c)(1)(B) of the Internal Revenue Code of 1986 is amended
by striking ‘‘or long-term care’’ and inserting ‘‘long-term care, or
(in the case of plan years beginning on or before December 31,
2021) telehealth and other remote care’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the date of the enactment of this Act.
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‘‘(ii) Allow not less than 12 months from the date
of the first accelerated payment before requiring that the
outstanding balance be paid in full.
‘‘(3) Nothing in this subsection shall preclude the Secretary
from carrying out the provisions described in clauses (i), (ii), and
(iii) of paragraph (2)(B) and clauses (i) and (ii) of paragraph (2)(C)
under the program under subsection (e)(3) after the period for
which this subsection applies.
‘‘(4) Notwithstanding any other provision of law, the Secretary
may implement the provisions of this subsection by program instruc-
tion or otherwise.’’.
SEC. 3720. DELAYING REQUIREMENTS FOR ENHANCED FMAP TO
ENABLE STATE LEGISLATION NECESSARY FOR COMPLI-
ANCE.
Section 6008 of the Families First Coronavirus Response Act
is amended by adding at the end the following new subsection:
‘‘(d) DELAY IN APPLICATION OF PREMIUM REQUIREMENT.—
During the 30 day period beginning on the date of enactment
of this Act, a State shall not be ineligible for the increase to
the Federal medical assistance percentage of the State described
in subsection (a) on the basis that the State imposes a premium
that violates the requirement of subsection (b)(2) if such premium
was in effect on the date of enactment of this Act.’’.
Subtitle E—Health and Human Services
Extenders
PART I—MEDICARE PROVISIONS
SEC. 3801. EXTENSION OF THE WORK GEOGRAPHIC INDEX FLOOR
UNDER THE MEDICARE PROGRAM.
Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C.
1395w–4(e)(1)(E)) is amended by striking ‘‘May 23, 2020’’ and
inserting ‘‘December 1, 2020’’.
SEC. 3802. EXTENSION OF FUNDING FOR QUALITY MEASURE ENDORSE-
MENT, INPUT, AND SELECTION.
(a) IN GENERAL.—Section 1890(d)(2) of the Social Security Act
(42 U.S.C. 1395aaa(d)(2)) is amended—
(1) in the first sentence, by striking ‘‘and $4,830,000 for
the period beginning on October 1, 2019, and ending on May
22, 2020’’ and inserting ‘‘$20,000,000 for fiscal year 2020, and
for the period beginning on October 1, 2020, and ending on
November 30, 2020, the amount equal to the pro rata portion
of the amount appropriated for such period for fiscal year
2020’’; and
(2) in the third sentence, by striking ‘‘and 2019 and for
the period beginning on October 1, 2019, and ending on May
22, 2020’’ and inserting ‘‘, 2019, and 2020, and for the period
beginning on October 1, 2020, and ending on November 30,
2020,’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall take effect as if included in the enactment of the Further
Consolidated Appropriations Act, 2020 (Public Law 116–94).
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‘‘(G) $310,000,000 for fiscal year 2020; and
‘‘(H) $51,808,219 for the period beginning on October
1, 2020, and ending on November 30, 2020.’’.
(c) TEACHING HEALTH CENTERS THAT OPERATE GRADUATE MED-
ICAL EDUCATION PROGRAMS.—Section 340H(g)(1) of the Public
Health Service Act (42 U.S.C. 256h(g)(1)) is amended by striking
‘‘and 2019, and $81,445,205 for the period beginning on October
1, 2019, and ending on May 22, 2020’’ and inserting ‘‘through
fiscal year 2020, and $21,141,096 for the period beginning on
October 1, 2020, and ending on November 30, 2020’’.
(d) APPLICATION OF PROVISIONS.—Amounts appropriated pursu-
ant to the amendments made by this section for fiscal year 2020
and for the period beginning on October 1, 2020, and ending on
November 30, 2020, shall be subject to the requirements contained
in Public Law 116–94 for funds for programs authorized under
sections 330 through 340 of the Public Health Service Act (42
U.S.C. 254 through 256).
(e) CONFORMING AMENDMENT.—Paragraph (4) of section 3014(h)
of title 18, United States Code, as amended by section 401(e)
of division N of Public Law 116–94, is amended by striking ‘‘section
401(d) of division N of the Further Consolidated Appropriations
Act, 2020’’ and inserting ‘‘section 3831 of the CARES Act’’.
SEC. 3832. DIABETES PROGRAMS.
(a) TYPE I.—Section 330B(b)(2)(D) of the Public Health Service
Act (42 U.S.C. 254c–2(b)(2)(D)) is amended by striking ‘‘and 2019,
and $96,575,342 for the period beginning on October 1, 2019, and
ending on May 22, 2020’’ and inserting ‘‘through 2020, and
$25,068,493 for the period beginning on October 1, 2020, and ending
on November 30, 2020’’.
(b) INDIANS.—Section 330C(c)(2)(D) of the Public Health Service
Act (42 U.S.C. 254c–3(c)(2)(D)) is amended by striking ‘‘and 2019,
and $96,575,342 for the period beginning on October 1, 2019, and
ending on May 22, 2020’’ and inserting ‘‘through 2020, and
$25,068,493 for the period beginning on October 1, 2020, and ending
on November 30, 2020’’.
PART V—MISCELLANEOUS PROVISIONS
SEC. 3841. PREVENTION OF DUPLICATE APPROPRIATIONS FOR FISCAL
YEAR 2020.
Expenditures made under any provision of law amended in
this title pursuant to the amendments made by the Continuing
Appropriations Act, 2020, and Health Extenders Act of 2019 (Public
Law 116–59), the Further Continuing Appropriations Act, 2020,
and Further Health Extenders Act of 2019 (Public Law 116–69),
and the Further Consolidated Appropriations Act, 2020 (Public
Law 116–94) for fiscal year 2020 shall be charged to the applicable
appropriation or authorization provided by the amendments made
by this title to such provision of law for such fiscal year.
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recipients of financial assistance under this subtitle which, in the
sole determination of the Secretary, provide appropriate compensa-
tion to the Federal Government for the provision of the financial
assistance.
SEC. 4118. REPORTS.
(a) REPORT.—Not later than November 1, 2020, the Secretary
shall submit to the Committee on Transportation and Infrastructure
and the Committee on Financial Services of the House of Represent-
atives and the Committee on Commerce, Science, and Transpor-
tation and the Committee on Banking, Housing, and Urban Affairs
of the Senate a report on the financial assistance provided to
air carriers and contractors under this subtitle, including a descrip-
tion of any financial assistance provided.
(b) UPDATE.—Not later than the last day of the 1-year period
following the date of enactment of this Act, the Secretary shall
update and submit to the Committee on Transportation and the
Committee on Financial Services and Infrastructure of the House
of Representatives and the Committee on Commerce, Science, and
Transportation and the Committee on Banking, Housing, and Urban
Affairs of the Senate the report described in subsection (a).
SEC. 4119. COORDINATION.
In implementing this subtitle the Secretary shall coordinate
with the Secretary of Transportation.
SEC. 4120. DIRECT APPROPRIATION.
Notwithstanding any other provision of law, there is appro-
priated, out of amounts in the Treasury not otherwise appropriated,
$32,000,000,000 to carry out this subtitle.
TITLE V—CORONAVIRUS RELIEF FUNDS
SEC. 5001. CORONAVIRUS RELIEF FUND.
(a) IN GENERAL.—The Social Security Act (42 U.S.C. 301 et
seq.) is amended by inserting after title V the following:
‘‘TITLE VI—CORONAVIRUS RELIEF
FUND
‘‘SEC. 601. CORONAVIRUS RELIEF FUND.
‘‘(a) APPROPRIATION.—
‘‘(1) IN GENERAL.—Out of any money in the Treasury of
the United States not otherwise appropriated, there are appro-
priated for making payments to States, Tribal governments,
and units of local government under this section,
$150,000,000,000 for fiscal year 2020.
‘‘(2) RESERVATION OF FUNDS.—Of the amount appropriated
under paragraph (1), the Secretary shall reserve—
‘‘(A) $3,000,000,000 of such amount for making pay-
ments to the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam, the
Commonwealth of the Northern Mariana Islands, and
American Samoa; and
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‘‘(B) $8,000,000,000 of such amount for making pay-
ments to Tribal governments.
‘‘(b) AUTHORITY TO MAKE PAYMENTS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), not later than
30 days after the date of enactment of this section, the Secretary
shall pay each State and Tribal government, and each unit
of local government that meets the condition described in para-
graph (2), the amount determined for the State, Tribal govern-
ment, or unit of local government, for fiscal year 2020 under
subsection (c).
‘‘(2) DIRECT PAYMENTS TO UNITS OF LOCAL GOVERNMENT.—
If a unit of local government of a State submits the certification
required by subsection (e) for purposes of receiving a direct
payment from the Secretary under the authority of this para-
graph, the Secretary shall reduce the amount determined for
that State by the relative unit of local government population
proportion amount described in subsection (c)(5) and pay such
amount directly to such unit of local government.
‘‘(c) PAYMENT AMOUNTS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), the amount
paid under this section for fiscal year 2020 to a State that
is 1 of the 50 States shall be the amount equal to the relative
population proportion amount determined for the State under
paragraph (3) for such fiscal year.
‘‘(2) MINIMUM PAYMENT.—
‘‘(A) IN GENERAL.—No State that is 1 of the 50 States
shall receive a payment under this section for fiscal year
2020 that is less than $1,250,000,000.
‘‘(B) PRO RATA ADJUSTMENTS.—The Secretary shall
adjust on a pro rata basis the amount of the payments
for each of the 50 States determined under this subsection
without regard to this subparagraph to the extent nec-
essary to comply with the requirements of subparagraph
(A).
‘‘(3) RELATIVE POPULATION PROPORTION AMOUNT.—For pur-
poses of paragraph (1), the relative population proportion
amount determined under this paragraph for a State for fiscal
year 2020 is the product of—
‘‘(A) the amount appropriated under paragraph (1) of
subsection (a) for fiscal year 2020 that remains after the
application of paragraph (2) of that subsection; and
‘‘(B) the relative State population proportion (as defined
in paragraph (4)).
‘‘(4) RELATIVE STATE POPULATION PROPORTION DEFINED.—
For purposes of paragraph (3)(B), the term ‘relative State popu-
lation proportion’ means, with respect to a State, the quotient
of—
‘‘(A) the population of the State; and
‘‘(B) the total population of all States (excluding the
District of Columbia and territories specified in subsection
(a)(2)(A)).
‘‘(5) RELATIVE UNIT OF LOCAL GOVERNMENT POPULATION
PROPORTION AMOUNT.—For purposes of subsection (b)(2), the
term ‘relative unit of local government population proportion
amount’ means, with respect to a unit of local government
and a State, the amount equal to the product of—
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‘‘(A) 45 percent of the amount of the payment deter-
mined for the State under this subsection (without regard
to this paragraph); and
‘‘(B) the amount equal to the quotient of—
‘‘(i) the population of the unit of local government;
and
‘‘(ii) the total population of the State in which
the unit of local government is located.
‘‘(6) DISTRICT OF COLUMBIA AND TERRITORIES.—The amount
paid under this section for fiscal year 2020 to a State that
is the District of Columbia or a territory specified in subsection
(a)(2)(A) shall be the amount equal to the product of—
‘‘(A) the amount set aside under subsection (a)(2)(A)
for such fiscal year; and
‘‘(B) each such District’s and territory’s share of the
combined total population of the District of Columbia and
all such territories, as determined by the Secretary.
‘‘(7) TRIBAL GOVERNMENTS.—From the amount set aside
under subsection (a)(2)(B) for fiscal year 2020, the amount
paid under this section for fiscal year 2020 to a Tribal govern-
ment shall be the amount the Secretary shall determine, in
consultation with the Secretary of the Interior and Indian
Tribes, that is based on increased expenditures of each such
Tribal government (or a tribally-owned entity of such Tribal
government) relative to aggregate expenditures in fiscal year
2019 by the Tribal government (or tribally-owned entity) and
determined in such manner as the Secretary determines appro-
priate to ensure that all amounts available under subsection
(a)(2)(B) for fiscal year 2020 are distributed to Tribal govern-
ments.
‘‘(8) DATA.—For purposes of this subsection, the population
of States and units of local governments shall be determined
based on the most recent year for which data are available
from the Bureau of the Census.
‘‘(d) USE OF FUNDS.—A State, Tribal government, and unit
of local government shall use the funds provided under a payment
made under this section to cover only those costs of the State,
Tribal government, or unit of local government that—
‘‘(1) are necessary expenditures incurred due to the public
health emergency with respect to the Coronavirus Disease 2019
(COVID–19);
‘‘(2) were not accounted for in the budget most recently
approved as of the date of enactment of this section for the
State or government; and
‘‘(3) were incurred during the period that begins on March
1, 2020, and ends on December 30, 2020.
‘‘(e) CERTIFICATION.—In order to receive a payment under this
section, a unit of local government shall provide the Secretary
with a certification signed by the Chief Executive for the unit
of local government that the local government’s proposed uses of
the funds are consistent with subsection (d).
‘‘(f) INSPECTOR GENERAL OVERSIGHT; RECOUPMENT.—
‘‘(1) OVERSIGHT AUTHORITY.—The Inspector General of the
Department of the Treasury shall conduct monitoring and over-
sight of the receipt, disbursement, and use of funds made
available under this section.
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‘‘(2) RECOUPMENT.—If the Inspector General of the Depart-
ment of the Treasury determines that a State, Tribal govern-
ment, or unit of local government has failed to comply with
subsection (d), the amount equal to the amount of funds used
in violation of such subsection shall be booked as a debt of
such entity owed to the Federal Government. Amounts recov-
ered under this subsection shall be deposited into the general
fund of the Treasury.
‘‘(3) APPROPRIATION.—Out of any money in the Treasury
of the United States not otherwise appropriated, there are
appropriated to the Office of the Inspector General of the
Department of the Treasury, $35,000,000 to carry out oversight
and recoupment activities under this subsection. Amounts
appropriated under the preceding sentence shall remain avail-
able until expended.
‘‘(4) AUTHORITY OF INSPECTOR GENERAL.—Nothing in this
subsection shall be construed to diminish the authority of any
Inspector General, including such authority as provided in the
Inspector General Act of 1978 (5 U.S.C. App.).
‘‘(g) DEFINITIONS.—In this section:
‘‘(1) INDIAN TRIBE.—The term ‘Indian Tribe’ has the
meaning given that term in section 4(e) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C.
5304(e)).
‘‘(2) LOCAL GOVERNMENT.—The term ‘unit of local govern-
ment’ means a county, municipality, town, township, village,
parish, borough, or other unit of general government below
the State level with a population that exceeds 500,000.
‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary
of the Treasury.
‘‘(4) STATE.—The term ‘State’ means the 50 States, the
District of Columbia, the Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam, the Commonwealth of
the Northern Mariana Islands, and American Samoa.
‘‘(5) TRIBAL GOVERNMENT.—The term ‘Tribal government’
means the recognized governing body of an Indian Tribe.’’.
(b) APPLICATION OF PROVISIONS.—Amounts appropriated for
fiscal year 2020 under section 601(a)(1) of the Social Security Act
(as added by subsection (a)) shall be subject to the requirements
contained in Public Law 116–94 for funds for programs authorized
under sections 330 through 340 of the Public Health Service Act
(42 U.S.C. 254 through 256).
TITLE VI—MISCELLANEOUS
PROVISIONS
SEC. 6001. COVID–19 BORROWING AUTHORITY FOR THE UNITED
STATES POSTAL SERVICE.
(a) DEFINITIONS.—In this section—
(1) the term ‘‘COVID–19 emergency’’ means the emergency
involving Federal primary responsibility determined to exist
by the President under section 501(b) of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5191(b)) with respect to the Coronavirus Disease 2019 (COVID–
19); and
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(2) the term ‘‘Postal Service’’ means the United States
Postal Service.
(b) ADDITIONAL BORROWING AUTHORITY.—Notwithstanding sec-
tion 2005 of title 39, United States Code, or any other provision
of law, if the Postal Service determines that, due to the COVID–
19 emergency, the Postal Service will not be able to fund operating
expenses without borrowing money—
(1) the Postal Service may borrow money from the Treasury
in an amount not to exceed $10,000,000,000—
(A) to be used for such operating expenses; and
(B) which may not be used to pay any outstanding
debt of the Postal Service; and
(2) the Secretary of the Treasury may lend up to the
amount described in paragraph (1) at the request of the Postal
Service, upon terms and conditions mutually agreed upon by
the Secretary and the Postal Service.
(c) PRIORITIZATION OF DELIVERY FOR MEDICAL PURPOSES
DURING COVID–19 EMERGENCY.—Notwithstanding any other provi-
sion of law, during the COVID–19 emergency, the Postal Service—
(1) shall prioritize delivery of postal products for medical
purposes; and
(2) may establish temporary delivery points, in such form
and manner as the Postal Service determines necessary, to
protect employees of the Postal Service and individuals
receiving deliveries from the Postal Service.
SEC. 6002. EMERGENCY DESIGNATION.
(a) IN GENERAL.—The amounts provided under this division
are designated as an emergency requirement pursuant to section
4(g) of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 933(g)).
(b) DESIGNATION IN SENATE.—In the Senate, this division is
designated as an emergency requirement pursuant to section
4112(a) of H. Con. Res. 71 (115th Congress), the concurrent resolu-
tion on the budget for fiscal year 2018.
DIVISION B—EMERGENCY APPROPRIA-
TIONS FOR CORONAVIRUS HEALTH
RESPONSE AND AGENCY OPERATIONS
The following sums are hereby are appropriated, out of any
money in the Treasury not otherwise appropriated, for the fiscal
year ending September 30, 2020, and for other purposes, namely:
TITLE I
AGRICULTURAL PROGRAMS
OFFICE OF THE SECRETARY
For an additional amount for the ‘‘Office of the Secretary’’,
$9,500,000,000, to remain available until expended, to prevent,
prepare for, and respond to coronavirus by providing support for
agricultural producers impacted by coronavirus, including producers
of specialty crops, producers that supply local food systems,
including farmers markets, restaurants, and schools, and livestock
producers, including dairy producers: Provided, That such amount
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SEC. 14002. (a) Section 404 of the Bipartisan Budget Act of
2015 (42 U.S.C. 6239 note) is amended—
(1) in subsection (e), by striking ‘‘2020’’ and inserting
‘‘2022’’; and
(2) in subsection (g), by striking ‘‘2020’’ and inserting
‘‘2022’’.
(b) Title III of division C of the Further Consolidated Appropria-
tions Act, 2020 (Public Law 116–94) is amended in the matter
under the heading ‘‘Department of Energy—Energy Programs—
Strategic Petroleum Reserve’’ by striking the three provisos before
the final period and inserting the following:
‘‘ Provided, That, as authorized by section 404 of the Bipartisan
Budget Act of 2015 (Public Law 114–74; 42 U.S.C. 6239 note),
the Secretary of Energy shall draw down and sell not to exceed
a total of $450,000,000 of crude oil from the Strategic Petroleum
Reserve in fiscal year 2020, fiscal year 2021, or fiscal year 2022:
Provided further, That the proceeds from such drawdown and sale
shall be deposited into the ‘Energy Security and Infrastructure
Modernization Fund’ during the fiscal year in which the sale occurs
and shall be made available in such fiscal year, to remain available
until expended, for necessary expenses to carry out the Life Exten-
sion II project for the Strategic Petroleum Reserve’’.
(c) The amount provided by this section is designated by the
Congress as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
SEC. 14003. Any discretionary appropriation for the Corps of
Engineers derived from the Harbor Maintenance Trust Fund (not
to exceed the total amount deposited in the Harbor Maintenance
Trust Fund in the prior fiscal year) shall be subtracted from the
estimate of discretionary budget authority and outlays for any
estimate of an appropriations Act under the Congressional Budget
and Impoundment Control Act of 1974 or the Balanced Budget
and Emergency Deficit Control Act of 1985: Provided, That the
modifications described in this section shall not take effect until
the earlier of January 1, 2021 or the date of enactment of legislation
authorizing the development of water resources and shall remain
in effect thereafter.
SEC. 14004. Section 14321(a)(2)(B)(ii) of title 40, United States
Code, is amended by inserting ‘‘, except that a discretionary grant
to respond to economic distress directly related to the impacts
of the Coronavirus Disease 2019 (COVID–19) shall not be included
in such aggregate amount’’ before the period at the end.
TITLE V
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
ADMINISTRATIVE PROVISION—INTERNAL REVENUE SERVICE
(INCLUDING TRANSFER OF FUNDS)
SEC. 15001. In addition to the amounts otherwise available
to the Internal Revenue Service in fiscal year 2020, $250,000,000,
to remain available until September 30, 2021, shall be available
to prevent, prepare for, and respond to coronavirus, domestically
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such amount is designated by the Congress as being for an emer-
gency requirement pursuant to section 251(b)(2)(A)(i) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985.
OFFICE OF PERSONNEL MANAGEMENT
SALARIES AND EXPENSES
For an additional amount for ‘‘Salaries and Expenses’’,
$12,100,000, to remain available until September 30, 2021, to pre-
vent, prepare for, and respond to coronavirus, domestically or inter-
nationally, including technologies for digital case management,
short-term methods to allow electronic submissions of retirement
application packages in support of paper-based business operations,
and increased telecommunications: Provided, That such amount
is designated by the Congress as being for an emergency require-
ment pursuant to section 251(b)(2)(A)(i) of the Balanced Budget
and Emergency Deficit Control Act of 1985.
PANDEMIC RESPONSE ACCOUNTABILITY COMMITTEE
For an additional amount for ‘‘Pandemic Response Account-
ability Committee’’, $80,000,000, to remain available until
expended, to promote transparency and support oversight of funds
provided in this Act to prevent, prepare for, and respond to
coronavirus, domestically or internationally: Provided, That such
amount is designated by the Congress as being for an emergency
requirement pursuant to section 251(b)(2)(A)(i) of the Balanced
Budget and Emergency Deficit Control Act of 1985.
SMALL BUSINESS ADMINISTRATION
DISASTER LOANS PROGRAM ACCOUNT
(INCLUDING TRANSFERS OF FUNDS)
For an additional amount for the ‘‘Disaster Loans Program
Account’’, $562,000,000, to remain available until expended, to pre-
vent, prepare for, and respond to coronavirus, domestically or inter-
nationally, for the cost of direct loans authorized by section 7(b)
of the Small Business Act and for administrative expenses to carry
out the disaster loan program authorized by section 7(b) of the
Small Business Act: Provided, That the amounts provided under
this heading in this Act may be transferred to, and merged with,
‘‘Small Business Administration—Salaries and Expenses’’ to pre-
vent, prepare for, and respond to coronavirus, domestically or inter-
nationally: Provided further, That such amount is designated by
the Congress as being for an emergency requirement pursuant
to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985.
GENERAL PROVISIONS—THIS TITLE
PANDEMIC RESPONSE ACCOUNTABILITY COMMITTEE
SEC. 15010. (a) In this section—
(1) the term ‘‘agency’’ has the meaning given the term
in section 551 of title 5, United States Code;
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(2) the term ‘‘appropriate congressional committees’’
means—
(A) the Committees on Appropriations of the Senate
and the House of Representatives;
(B) the Committee on Homeland Security and Govern-
mental Affairs of the Senate;
(C) the Committee on Oversight and Reform of the
House of Representatives; and
(D) any other relevant congressional committee of juris-
diction;
(3) the term ‘‘Chairperson’’ means the Chairperson of the
Committee;
(4) the term ‘‘Council’’ means the Council of the Inspectors
General on Integrity and Efficiency established under section
11 of the Inspector General Act of 1978 (5 U.S.C. App);
(5) the term ‘‘Committee’’ means the Pandemic Response
Accountability Committee established under subsection (b);
(6) the term ‘‘covered funds’’ means any funds, including
loans, that are made available in any form to any non-Federal
entity, not including an individual, under—
(A) this Act;
(B) the Coronavirus Preparedness and Response
Supplemental Appropriations Act, 2020 (Public Law 116–
123);
(C) the Families First Coronavirus Response Act
(Public Law 116–127); or
(D) any other Act primarily making appropriations
for the Coronavirus response and related activities; and
(7) the term ‘‘Coronavirus response’’ means the Federal
Government’s response to the nationwide public health emer-
gency declared by the Secretary of Health and Human Services,
retroactive to January 27, 2020, pursuant to section 319 of
the Public Health Service Act (42 U.S.C. 247d), as a result
of confirmed cases of the novel coronavirus (COVID–19) in
the United States.
(b) There is established within the Council the Pandemic
Response Accountability Committee to promote transparency and
conduct and support oversight of covered funds and the Coronavirus
response to—
(1) prevent and detect fraud, waste, abuse, and mismanage-
ment; and
(2) mitigate major risks that cut across program and agency
boundaries.
(c)(1) The Chairperson of the Committee shall be selected by
the Chairperson of the Council from among Inspectors General
described in subparagraphs (B), (C), and (D) of paragraph (2) with
experience managing oversight of large organizations and expendi-
tures.
(2) The members of the Committee shall include—
(A) the Chairperson;
(B) the Inspectors General of the Departments of Defense,
Education, Health and Human Services, Homeland Security,
Justice, Labor, and the Treasury;
(C) the Inspector General of the Small Business Adminis-
tration;
(D) the Treasury Inspector General for Tax Administration;
and
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(E) any other Inspector General, as designated by the
Chairperson from any agency that expends or obligates covered
funds or is involved in the Coronavirus response.
(3)(A) There shall be an Executive Director and a Deputy
Executive Director of the Committee.
(B)(i)(I) Not later than 30 days after the date of enactment
of this Act, the Executive Director of the Committee shall be
appointed by the Chairperson of the Council, in consultation with
the majority leader of the Senate, the Speaker of the House of
Representatives, the minority leader of the Senate, and the minority
leader of the House of Representatives.
(II) Not later than 90 days after the date of enactment of
this Act, the Deputy Executive Director of the Committee shall
be appointed by the Chairperson of the Council, in consultation
with the majority leader of the Senate, the Speaker of the House
of Representatives, the minority leader of the Senate, the minority
leader of the House of Representatives, and the Executive Director
of the Committee.
(ii) The Executive Director and the Deputy Executive Director
of the Committee shall—
(I) have demonstrated ability in accounting, auditing, and
financial analysis;
(II) have experience managing oversight of large organiza-
tions and expenditures; and
(III) be full-time employees of the Committee.
(C) The Executive Director of the Committee shall—
(i) report directly to the Chairperson;
(ii) appoint staff of the Committee, subject to the approval
of the Chairperson, consistent with subsection (f);
(iii) supervise and coordinate Committee functions and
staff; and
(iv) perform any other duties assigned to the Executive
Director by the Committee.
(4)(A) Members of the Committee may not receive additional
compensation for services performed.
(B) The Executive Director and Deputy Executive Director of
the Committee shall be compensated at the rate of basic pay pre-
scribed for level IV of the Executive Schedule under section 5315
of title 5, United States Code.
(d)(1)(A) The Committee shall conduct and coordinate oversight
of covered funds and the Coronavirus response and support Inspec-
tors General in the oversight of covered funds and the Coronavirus
response in order to—
(i) detect and prevent fraud, waste, abuse, and mismanage-
ment; and
(ii) identify major risks that cut across programs and
agency boundaries.
(B) The functions of the Committee shall include—
(i) developing a strategic plan to ensure coordinated, effi-
cient, and effective comprehensive oversight by the Committee
and Inspectors General over all aspects of covered funds and
the Coronavirus response;
(ii) auditing or reviewing covered funds, including a com-
prehensive audit and review of charges made to Federal con-
tracts pursuant to authorities provided in the Coronavirus Aid,
Relief, and Economic Security Act, to determine whether waste-
ful spending, poor contract or grant management, or other
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abuses are occurring and referring matters the Committee con-
siders appropriate for investigation to the Inspector General
for the agency that disbursed the covered funds, including
conducting randomized audits to identify fraud;
(iii) reviewing whether the reporting of contracts and grants
using covered funds meets applicable standards and specifies
the purpose of the contract or grant and measures of perform-
ance;
(iv) reviewing the economy, efficiency, and effectiveness
in the administration of, and the detection of fraud, waste,
abuse, and mismanagement in, Coronavirus response programs
and operations;
(v) reviewing whether competition requirements applicable
to contracts and grants using covered funds have been satisfied;
(vi) serving as a liaison to the Director of the Office of
Management and Budget, the Secretary of the Treasury, and
other officials responsible for implementing the Coronavirus
response;
(vii) reviewing whether there are sufficient qualified
acquisition, grant, and other applicable personnel overseeing
covered funds and the Coronavirus response;
(viii) reviewing whether personnel whose duties involve
the Coronavirus response or acquisitions or grants made with
covered funds or are otherwise related to the Coronavirus
response receive adequate training, technology support, and
other resources;
(ix) reviewing whether there are appropriate mechanisms
for interagency collaboration relating to the oversight of covered
funds and the Coronavirus response, including coordinating
and collaborating to the extent practicable with State and local
government entities;
(x) expeditiously reporting to the Attorney General any
instance in which the Committee has reasonable grounds to
believe there has been a violation of Federal criminal law;
and
(xi) coordinating and supporting Inspectors General on mat-
ters related to oversight of covered funds and the Coronavirus
response.
(2)(A)(i) The Committee shall submit to the President and
Congress, including the appropriate congressional committees,
management alerts on potential management, risk, and funding
problems that require immediate attention.
(ii) The Committee shall submit to Congress such other reports
or provide such periodic updates on the work of the Committee
as the Committee considers appropriate on the use of covered
funds and the Coronavirus response.
(B) The Committee shall submit biannual reports to the Presi-
dent and Congress, including the appropriate congressional commit-
tees, and may submit additional reports as appropriate—
(i) summarizing the findings of the Committee; and
(ii) identifying and quantifying the impact of any tax
expenditures or credits authorized under this Act to the extent
practicable.
(C)(i) All reports submitted under this paragraph shall be made
publicly available and posted on the website established under
subsection (g).
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(ii) Any portion of a report submitted under this paragraph
may be redacted when made publicly available, if that portion
would disclose information that is not subject to disclosure under
sections 552 and 552a of title 5, United States Code, or is otherwise
prohibited from disclosure by law.
(3)(A) The Committee shall make recommendations to agencies
on measures to prevent or address fraud, waste, abuse and mis-
management, and to mitigate risks that cut across programs and
agency boundaries, relating to covered funds and the Coronavirus
response.
(B) Not later than 30 days after receipt of a recommendation
under subparagraph (A), an agency shall submit a report to the
President and the appropriate congressional committees on—
(i) whether the agency agrees or disagrees with the rec-
ommendations; and
(ii) any actions the agency will take to implement the
recommendations, which shall also be included in the report
required under section 2(b) of the GAO–IG Act (31 U.S.C.
1105 note).
(e)(1) The Committee shall conduct audits and reviews of pro-
grams, operations, and expenditures relating to covered funds and
the Coronavirus response and coordinate on such activities with
the Inspector General of the relevant agency to avoid unnecessary
duplication and overlap of work.
(2) The Committee may—
(A) conduct its own independent investigations, audits, and
reviews relating to covered funds or the Coronavirus response;
(B) collaborate on audits and reviews relating to covered
funds with any Inspector General of an agency; and
(C) provide support to relevant agency Inspectors General
in conducting investigations, audits, and reviews relating to
the covered funds and Coronavirus response.
(3)(A) In conducting and supporting investigations, audits, and
reviews under this subsection, the Committee—
(i) shall have the authorities provided under section 6
of the Inspector General Act of 1978 (5 U.S.C. App.);
(ii) may issue subpoenas to compel the testimony of persons
who are not Federal officers or employees; and
(iii) may enforce such subpoenas in the event of a refusal
to obey by order of any appropriate United States district
court as provided for under section 6 of the Inspector General
Act of 1978 (5 U.S.C. App).
(B) The Committee shall carry out the powers under paragraphs
(1) and (2) in accordance with section 4(b)(1) of the Inspector Gen-
eral Act of 1978 (5 U.S.C. App.).
(C) Whenever information or assistance requested by the Com-
mittee or an Inspector General is unreasonably refused or not
provided, the Committee shall immediately report the circumstances
to the appropriate congressional committees.
(D) The Committee shall leverage existing information tech-
nology resources within the Council, such as oversight.gov, to carry
out the duties of the Committee.
(4)(A) The Committee may hold public hearings and Committee
personnel may conduct necessary inquiries.
(B) The head of each agency shall make all officers and
employees of that agency available to provide testimony to the
Committee and Committee personnel.
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(C) The Committee may issue subpoenas to compel the testi-
mony of persons who are not Federal officers or employees at
such public hearings, which may be enforced in the same manner
as provided for subpoenas under section 6 of the Inspector General
Act of 1978 (5 U.S.C. App.).
(5) The Committee may enter into contracts to enable the
Committee to discharge its duties, including contracts and other
arrangements for audits, studies, analyses, and other services with
public agencies and with private persons, and make such payments
as may be necessary to carry out the duties of the Committee.
(6) The Committee may establish subcommittees to facilitate
the ability of the Committee to discharge its duties.
(7) The Committee may transfer funds appropriated to the
Committee for expenses to support administrative support services
and audits, reviews, or other activities related to oversight by
the Committee of covered funds or the Coronavirus response to
any Office of the Inspector General or the General Services Adminis-
tration.
(f)(1)(A)(i) Subject to subparagraph (B), the Committee may
exercise the authorities of subsections (b) through (i) of section
3161 of title 5, United States Code (without regard to subsection
(a) of that section) to carry out the functions of the Committee
under this section.
(ii) For purposes of exercising the authorities described under
clause (i), the term ‘‘Chairperson’’ shall be substituted for the term
‘‘head of a temporary organization’’.
(iii) In exercising the authorities described in clause (i), the
Chairperson shall consult with members of the Committee.
(iv) In addition to the authority provided by section 3161(c)
of title 5, United States Code, upon the request of an Inspector
General, the Committee may detail, on a nonreimbursable basis,
any personnel of the Council to that Inspector General to assist
in carrying out any audit, review, or investigation pertaining to
the oversight of covered funds or the Coronavirus response.
(B) In exercising the employment authorities under section
3161(b) of title 5, United States Code, as provided under subpara-
graph (A) of this paragraph—
(i) section 3161(b)(2) of that title (relating to periods of
appointments) shall not apply; and
(ii) no period of appointment may exceed the date on which
the Committee terminates.
(C)(i) A person employed by the Committee shall acquire
competitive status for appointment to any position in the competi-
tive service for which the employee possesses the required qualifica-
tions upon the completion of 2 years of continuous service as an
employee under this subsection.
(ii) No person who is first employed as described in clause
(i) more than 2 years after the date of enactment of this Act
may acquire competitive status under clause (i).
(2)(A) The Committee may employ annuitants covered by sec-
tion 9902(g) of title 5, United States Code, for purposes of the
oversight of covered funds or the Coronavirus response.
(B) The employment of annuitants under this paragraph shall
be subject to the provisions of section 9902(g) of title 5, United
States Code, as if the Committee was the Department of Defense.
(3) Upon request of the Committee for information or assistance
from any agency or other entity of the Federal Government, the
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head of such entity shall, insofar as is practicable and not in
contravention of any existing law, and consistent with section 6
of the Inspector General Act of 1978 (5 U.S.C. App.), furnish such
information or assistance to the Committee, or an authorized des-
ignee, including an Inspector General designated by the Chair-
person.
(4) Any Inspector General responsible for conducting oversight
related to covered funds or the Coronavirus response may, con-
sistent with the duties, responsibilities, policies, and procedures
of the Inspector General, provide information requested by the
Committee or an Inspector General on the Committee relating
to the responsibilities of the Committee.
(g)(1)(A) Not later than 30 days after the date of enactment
of this Act, the Committee shall establish and maintain a user-
friendly, public-facing website to foster greater accountability and
transparency in the use of covered funds and the Coronavirus
response, which shall have a uniform resource locator that is
descriptive and memorable.
(B) The Committee shall leverage existing information tech-
nology and resources, such as oversight.gov, to the greatest extent
practicable to meet the requirements under this section.
(2) The website established and maintained under paragraph
(1) shall be a portal or gateway to key information relating to
the oversight of covered funds and the Coronavirus response and
provide connections to other Government websites with related
information.
(3) In establishing and maintaining the website under para-
graph (1), the Committee shall ensure the following:
(A) The website shall provide materials and information
explaining the Coronavirus response and how covered funds
are being used. The materials shall be easy to understand
and regularly updated.
(i) The website shall provide accountability information,
including findings from Inspectors General, including any
progress reports, audits, inspections, or other reports, including
reports from or links to reports on the website of the Govern-
ment Accountability Office.
(ii) The website shall provide data on relevant operational,
economic, financial, grant, subgrant, contract, and subcontract
information in user-friendly visual presentations to enhance
public awareness of the use of covered funds and the
Coronavirus response.
(iii) The website shall provide detailed data on any Federal
Government awards that expend covered funds, including a
unique trackable identification number for each project,
information about the process that was used to award the
covered funds, and for any covered funds over $150,000, a
detailed explanation of any associated agreement, where
applicable.
(iv) The website shall include downloadable, machine-read-
able, open format reports on covered funds obligated by month
to each State and congressional district, where applicable.
(v) The website shall provide a means for the public to
give feedback on the performance of any covered funds and
of the Coronavirus response, including confidential feedback.
(vi) The website shall include detailed information on Fed-
eral Government awards that expend covered funds, including
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data elements required under the Federal Funding Account-
ability and Transparency Act of 2006 (31 U.S.C. 6101 note),
allowing aggregate reporting on awards below $50,000, as pre-
scribed by the Director of the Office of Management and Budget.
(vii) The website shall provide a link to estimates of the
jobs sustained or created by this Act to the extent practicable.
(viii) The website shall include appropriate links to other
government websites with information concerning covered funds
and the Coronavirus response, including Federal agency and
State websites.
(ix) The website shall include a plan from each Federal
agency for using covered funds.
(x) The website shall provide information on Federal alloca-
tions of mandatory and other entitlement programs by State,
county, or other geographical unit related to covered funds
or the Coronavirus response.
(xi) The website shall present the data such that funds
subawarded by recipients are not double counted in search
results, data visualizations, or other reports.
(xii) The website shall include all recommendations made
to agencies relating to covered funds and the Coronavirus
response, as well as the status of each recommendation.
(xiii) The website shall be enhanced and updated as nec-
essary to carry out the purposes of this section.
(4) The Committee may exclude posting contractual or other
information on the website on a case-by-case basis when necessary
to protect national security or to protect information that is not
subject to disclosure under sections 552 and 552a of title 5, United
States Code.
(h)(1) Nothing in this section shall affect the independent
authority of an Inspector General to determine whether to conduct
an audit or investigation of covered funds or the Coronavirus
response.
(2) If the Committee requests that an Inspector General of
an agency conduct or refrain from conducting an audit or investiga-
tion and the Inspector General rejects the request in whole or
in part, the Inspector General shall, not later than 30 days after
rejecting the request, submit a report to the Committee, the head
of the applicable agency, and the appropriate congressional commit-
tees, that states the reasons that the Inspector General has rejected
the request in whole or in part.
(i) The Committee shall coordinate its oversight activities with
the Comptroller General of the United States and State auditors.
(j) For the purposes of carrying out the mission of the Com-
mittee under this section, there are authorized to be appropriated
such sums as may be necessary to carry out the duties and functions
of the Committee.
(k) The Committee shall terminate on September 30, 2025.
REPORTING ON USE OF FUNDS
SEC. 15011. (a) In this section—
(1) the terms ‘‘agency’’, ‘‘appropriate congressional commit-
tees’’, ‘‘Committee’’, ‘‘covered funds’’, and ‘‘Coronavirus
response’’ have the meanings given those terms in section
15010;
(2) the term ‘‘covered recipient’’—
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(A) means any entity that receives large covered funds;
and
(B) includes any State, the District of Columbia, and
any territory or possession of the United States; and
(3) the term ‘‘large covered funds’’ means covered funds
that amount to more than $150,000.
(b)(1)(A) On a monthly basis until September 30, 2021, each
agency shall report to the Director of the Office of Management
and Budget, the Bureau of Fiscal Service in the Department of
the Treasury, the Committee, and the appropriate congressional
committees on any obligation or expenditure of large covered funds,
including loans and awards.
(B) Not later than 90 days after the date of enactment of
this Act, each agency shall submit to the Committee a plan
describing how the agency will use covered funds.
(2) Not later than 10 days after the end of each calendar
quarter, each covered recipient shall submit to the agency and
the Committee a report that contains—
(A) the total amount of large covered funds received from
the agency;
(B) the amount of large covered funds received that were
expended or obligated for each project or activity;
(C) a detailed list of all projects or activities for which
large covered funds were expended or obligated, including—
(i) the name of the project or activity;
(ii) a description of the project or activity; and
(iii) the estimated number of jobs created or retained
by the project or activity, where applicable; and
(D) detailed information on any level of subcontracts or
subgrants awarded by the covered recipient or its subcontrac-
tors or subgrantees, to include the data elements required
to comply with the Federal Funding Accountability and Trans-
parency Act of 2006 (31 U.S.C. 6101 note) allowing aggregate
reporting on awards below $50,000 or to individuals, as pre-
scribed by the Director of the Office of Management and Budget.
(3) Not later than 30 days after the end of each calendar
quarter, the Committee, in consultation with the agency that made
large covered funds available to any covered recipient shall make
the information in reports submitted under paragraph (2) publicly
available by posting the information on the website established
under section 15010(g).
(4)(A) Each agency, in coordination with the Committee and
the Director of the Office of Management and Budget shall provide
user-friendly means for covered recipients to meet requirements
of this subsection.
(B) Federal agencies may use existing mechanisms to ensure
that information under this subsection is reported accurately.
(c)(1) The Director of the Office of Management and Budget,
in consultation with the Secretary of the Treasury, the Adminis-
trator of the Small Business Administration, and the Chairperson
of the Council of Economic Advisors, shall submit to the appropriate
congressional committees and publicly release on the website estab-
lished under section 15010(g) quarterly reports that detail the
impact of programs funded through large covered funds on employ-
ment, estimated economic growth, and other key economic indica-
tors, including information about impacted industries.
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(2)(A) The first report submitted under paragraph (1) shall
be submitted not later than 45 days after the end of the first
full quarter following the date of enactment of this Act.
(B) The last report required to be submitted under paragraph
(1) shall apply to the quarter in which the Committee terminates.
TITLE VI
DEPARTMENT OF HOMELAND SECURITY
MANAGEMENT DIRECTORATE
OPERATIONS AND SUPPORT
For an additional amount for ‘‘Operations and Support’’,
$178,300,000, to remain available until September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally, which shall be for the purchase of personal protec-
tive equipment and sanitization materials: Provided, That funds
provided under this heading in this Act may be transferred by
the Secretary of Homeland Security between appropriations in the
Department only for the purchase of personal protective equipment
and sanitization materials to prevent, prepare for, and respond
to coronavirus, domestically or internationally: Provided further,
That none of the funds made available under this heading may
be transferred pursuant to the authority in section 503 of the
Department of Homeland Security Appropriations Act, 2020: Pro-
vided further, That the Department shall provide notice of any
transfer to the Committees on Appropriations of the Senate and
the House of Representatives not later than 5 days after executing
such transfer: Provided further, That such amount is designated
by the Congress as being for an emergency requirement pursuant
to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985.
TRANSPORTATION SECURITY ADMINISTRATION
OPERATIONS AND SUPPORT
For an additional amount for ‘‘Operations and Support’’,
$100,000,000, to remain available until September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally, which shall be for cleaning and sanitization at
checkpoints and other airport common areas; overtime and travel
costs; and explosive detection materials: Provided, That such
amount is designated by the Congress as being for an emergency
requirement pursuant to section 251(b)(2)(A)(i) of the Balanced
Budget and Emergency Deficit Control Act of 1985.
UNITED STATES COAST GUARD
OPERATIONS AND SUPPORT
For an additional amount for ‘‘Operations and Support’’,
$140,800,000, to remain available until September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally, which shall be for mobilization of reservists and
increasing the capability and capacity of Coast Guard information
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technology systems and infrastructure: Provided, That such amount
is designated by the Congress as being for an emergency require-
ment pursuant to section 251(b)(2)(A)(i) of the Balanced Budget
and Emergency Deficit Control Act of 1985.
CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY
OPERATIONS AND SUPPORT
For an additional amount for ‘‘Operations and Support’’,
$9,100,000, to remain available until September 30, 2021, to pre-
vent, prepare for, and respond to coronavirus, domestically or inter-
nationally, which shall be for support of interagency critical infra-
structure coordination and related activities: Provided, That such
amount is designated by the Congress as being for an emergency
requirement pursuant to section 251(b)(2)(A)(i) of the Balanced
Budget and Emergency Deficit Control Act of 1985.
FEDERAL EMERGENCY MANAGEMENT AGENCY
OPERATIONS AND SUPPORT
For an additional amount for ‘‘Operations and Support’’,
$44,987,000, to remain available until September 30, 2021, to pre-
vent, prepare for, and respond to coronavirus, domestically or inter-
nationally, which shall be for enhancements to information tech-
nology and for facilities support: Provided, That such amount is
designated by the Congress as being for an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
DISASTER RELIEF FUND
For an additional amount for ‘‘Disaster Relief Fund’’,
$45,000,000,000, to remain available until expended: Provided, That
of the amount provided under this heading in this Act,
$25,000,000,000 shall be for major disasters declared pursuant to
the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5121 et seq.): Provided further, That of the amount
provided under this heading in this Act, $15,000,000,000 may be
used for all purposes authorized under such Act and may be used
in addition to amounts designated by the Congress as being for
disaster relief pursuant to section 251(b)(2)(D) of the Balanced
Budget and Emergency Deficit Control Act of 1985: Provided fur-
ther, That every 30 days the Administrator shall provide the
Committees on Appropriations of the Senate and the House of
Representatives both projected and actual costs for funds provided
under this heading for major disasters and any other expenses:
Provided further, That of the amounts provided under this heading,
$3,000,000 shall be transferred to ‘‘Office of Inspector General’’
and shall remain available until expended for oversight of activities
supported by funds provided under this heading: Provided further,
That such amount is designated by the Congress as being for
an emergency requirement pursuant to section 251(b)(2)(A)(i) of
the Balanced Budget and Emergency Deficit Control Act of 1985.
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FEDERAL ASSISTANCE
For an additional amount for ‘‘Federal Assistance’’,
$400,000,000, to remain available until September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally: Provided, That of the amount provided under this
heading in this Act, $100,000,000 shall be for Assistance to Fire-
fighter Grants for the purchase of personal protective equipment
and related supplies, including reimbursements; $100,000,000 shall
be for Emergency Management Performance Grants; and
$200,000,000 shall be for the Emergency Food and Shelter Program:
Provided further, That such amount is designated by the Congress
as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
GENERAL PROVISIONS—THIS TITLE
SEC. 16001. Notwithstanding any other provision of law, funds
made available under each heading in this title, except for ‘‘Federal
Emergency Management Agency—Disaster Relief Fund’’, shall only
be used for the purposes specifically described under that heading.
SEC. 16002. Notwithstanding any other provision of law, any
amounts appropriated for ‘‘Federal Emergency Management
Agency—Disaster Relief Fund’’ in this Act are available only for
the purposes for which they were appropriated.
SEC. 16003. (a) PREMIUM PAY AUTHORITY.—If services per-
formed during fiscal year 2020 are determined by the head of
the agency to be primarily related to preparation, prevention, or
response to coronavirus, any premium pay that is funded, either
directly or through reimbursement, by the Federal Emergency
Management Agency shall be exempted from the aggregate of basic
pay and premium pay calculated under section 5547(a) of title
5, United States Code, and any other provision of law limiting
the aggregate amount of premium pay payable on a biweekly or
calendar year basis.
(b) OVERTIME AUTHORITY.—Any overtime that is funded for
such services described in subsection (a), either directly or through
reimbursement, by the Federal Emergency Management Agency
shall be exempted from any annual limit on the amount of overtime
payable in a calendar or fiscal year.
(c) APPLICABILITY OF AGGREGATE LIMITATION ON PAY.—In deter-
mining whether an employee’s pay exceeds the applicable annual
rate of basic pay payable under section 5307 of title 5, United
States Code, the head of an Executive agency shall not include
pay exempted under this section.
(d) LIMITATION OF PAY AUTHORITY.—Pay exempted from other-
wise applicable limits under subsection (a) shall not cause the
aggregate pay earned for the calendar year in which the exempted
pay is earned to exceed the rate of basic pay payable for a position
at level II of the Executive Schedule under section 5313 of title
5, United States Code.
(e) EFFECTIVE DATE.—This section shall take effect as if enacted
on January 1, 2020.
SEC. 16004. (a) Amounts provided for ‘‘Coast Guard—Oper-
ations and Support’’ in the Consolidated Appropriations Act, 2020
(Public Law 116–93) may be available for pay and benefits of
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and identification card issuance requirements under section
202(a)(1) of such Act until not earlier than September 30, 2021.
SEC. 16007. Section 5 of the Protecting and Securing Chemical
Facilities from Terrorist Attacks Act of 2014 (Public Law 113–
254; 6 U.S.C. 621 note) is amended by striking ‘‘the date that
is 5 years and 3 months after the effective date of this Act’’ and
inserting ‘‘July 23, 2020’’: Provided, That the amount provided
by this section is designated by the Congress as being for an
emergency requirement pursuant to section 251(b)(2)(A)(i) of the
Balanced Budget and Emergency Deficit Control Act of 1985.
TITLE VII
DEPARTMENT OF THE INTERIOR
INDIAN AFFAIRS
BUREAU OF INDIAN AFFAIRS
OPERATION OF INDIAN PROGRAMS
(INCLUDING TRANSFERS OF FUNDS)
For an additional amount for ‘‘Operation of Indian Programs’’,
$453,000,000, to remain available until September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally, including, but not limited to, funds for public safety
and justice programs, executive direction to carry out deep cleaning
of facilities, purchase of personal protective equipment, purchase
of information technology to improve teleworking capability, welfare
assistance and social services programs (including assistance to
individuals), and assistance to tribal governments, including tribal
governments who participate in the ‘‘Small and Needy’’ program:
Provided, That amounts received from funds provided under this
heading in this Act for welfare assistance programs shall not be
included in the statutory maximum for welfare assistance funds
included in Public Law 116–94, the Further Consolidated Appro-
priations Act, 2020: Provided further, That assistance received from
funds provided under this heading in this Act shall not be included
in the calculation of funds received by those tribal governments
who participate in the ‘‘Small and Needy’’ program: Provided fur-
ther, That of the amounts provided under this heading in this
Act, not less than $400,000,000 shall be made available to meet
the direct needs of tribes: Provided further, That amounts provided
under this heading in this Act may be made available for distribu-
tion through tribal priority allocations for tribal response and
capacity building activities: Provided further, That funds provided
under this heading in this Act, if transferred to tribes and tribal
organizations under the Indian Self-Determination and Education
Assistance Act, will be transferred on a one-time basis and that
these non-recurring funds are not part of the amount required
by 25 U.S.C. § 5325: Provided further, That such amount is des-
ignated by the Congress as being for an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
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BUREAU OF INDIAN EDUCATION
OPERATION OF INDIAN EDUCATION PROGRAMS
For an additional amount for ‘‘Operation of Indian Education
Programs’’, $69,000,000, to remain available until September 30,
2021, to prevent, prepare for, and respond to coronavirus, domesti-
cally or internationally, including, but not limited to, funding for
tribal colleges and universities, salaries, transportation, and
information technology: Provided, That of the amounts provided
in this paragraph, not less than $20,000,000 shall be for tribal
colleges and universities: Provided further, That such amount is
designated by the Congress as being for an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
DEPARTMENTAL OFFICES
OFFICE OF THE SECRETARY
DEPARTMENTAL OPERATIONS
(INCLUDING TRANSFERS OF FUNDS)
For an additional amount for ‘‘Departmental Operations’’,
$158,400,000, to remain available until September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally, including, but not limited to, funds for purchasing
equipment and supplies to disinfect and clean buildings and public
areas, supporting law enforcement and emergency management
operations, biosurveillance of wildlife and environmental persistence
studies, employee overtime and special pay expenses, and other
response, mitigation, or recovery activities: Provided, That funds
appropriated under this heading in this Act shall be used to absorb
increased operational costs necessary to prevent, prepare for, and
respond to coronavirus, domestically or internationally: Provided
further, That the Secretary of the Interior may transfer the funds
provided under this heading in this Act to any other account in
the Department to prevent, prepare for, and respond to coronavirus,
domestically or internationally, and may expend such funds directly
or through cooperative agreements: Provided further, That the Sec-
retary shall provide a monthly report to the Committees on Appro-
priations of the House of Representatives and the Senate detailing
the allocation and obligation of these funds by account, beginning
not later than 90 days after enactment of this Act: Provided further,
That as soon as practicable after the date of enactment of this
Act, the Secretary shall transfer $1,000,000 to the Office of the
Inspector General, ‘‘Salaries and Expenses’’ account for oversight
activities related to the implementation of programs, activities or
projects funded herein: Provided further, That such amount is des-
ignated by the Congress as being for an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
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NATIONAL ENDOWMENT FOR THE HUMANITIES
GRANTS AND ADMINISTRATION
For an additional amount for ‘‘Grants and Administration’’,
$75,000,000, to remain available until September 30, 2021, to pre-
vent, prepare for, and respond to coronavirus, domestically or inter-
nationally, to be distributed in grants: Provided, That such funds
are available under the same terms and conditions as grant funding
appropriated to this heading in Public Law 116–94: Provided fur-
ther, That 40 percent of such funds shall be distributed to state
humanities councils and 60 percent of such funds shall be for
direct grants: Provided further, That notwithstanding any other
provision of law, such funds may also be used by the recipients
of such grants for purposes of the general operations of such recipi-
ents: Provided further, That the matching requirements under sub-
section (h)(2)(A) of section 7 of the National Foundation on the
Arts and Humanities Act of 1965 may be waived with respect
to such grants: Provided further, That such amount is designated
by the Congress as being for an emergency requirement pursuant
to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985.
TITLE VIII
DEPARTMENT OF LABOR
EMPLOYMENT AND TRAINING ADMINISTRATION
TRAINING AND EMPLOYMENT SERVICES
For an additional amount for ‘‘Training and Employment Serv-
ices’’, $345,000,000, to remain available through September 30,
2022, to prevent, prepare for, and respond to coronavirus, domesti-
cally or internationally, for necessary expenses for the dislocated
workers assistance national reserve: Provided, That the funds pro-
vided under this heading in this Act may be used to replace grant
funds previously obligated to the impacted areas: Provided further,
That such amount is designated by the Congress as being for
an emergency requirement pursuant to section 251(b)(2)(A)(i) of
the Balanced Budget and Emergency Deficit Control Act of 1985.
DEPARTMENTAL MANAGEMENT
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
For an additional amount for ‘‘Departmental Management’’,
$15,000,000, to remain available through September 30, 2022, to
prevent, prepare for, and respond to coronavirus, including to
enforce worker protection laws and regulations, and to oversee
and coordinate activities related to division C, division D, division
E, and division F of Public Law 116–127: Provided, That the Sec-
retary of Labor may transfer the amounts provided under this
heading in this Act as necessary to ‘‘Employee Benefits Security
Administration’’, ‘‘Wage and Hour Division’’, ‘‘Occupational Safety
and Health Administration’’, and ‘‘Employment and Training
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to the Committees on Appropriations of the House of Representa-
tives and the Senate on obligation of funds, including obligations
to such eligible health care providers summarized by State of the
payment receipt: Provided further, That such reports shall be
updated and submitted to such Committees every 60 days until
funds are expended: Provided further, That such amount is des-
ignated by the Congress as being for an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
DEPARTMENT OF EDUCATION
EDUCATION STABILIZATION FUND
For an additional amount for ‘‘Education Stabilization Fund’’,
$30,750,000,000, to remain available through September 30, 2021,
to prevent, prepare for, and respond to coronavirus, domestically
or internationally: Provided, That such amount is designated by
the Congress as being for an emergency requirement pursuant
to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985.
GENERAL PROVISIONS
EDUCATION STABILIZATION FUND
SEC. 18001. (a) ALLOCATIONS.—From the amount made avail-
able under this heading in this Act to carry out the Education
Stabilization Fund, the Secretary shall first allocate—
(1) not more than 1/2 of 1 percent to the outlying areas
on the basis of their respective needs, as determined by the
Secretary, in consultation with the Secretary of the Interior;
(2) one-half of 1 percent for the Secretary of Interior, in
consultation with the Secretary of Education, for programs
operated or funded by the Bureau of Indian Education; and
(3) 1 percent for grants to States with the highest
coronavirus burden to support activities under this heading
in this Act, for which the Secretary shall issue a notice inviting
applications not later than 30 days of enactment of this Act
and approve or deny applications not later than 30 days after
receipt.
(b) RESERVATIONS.—After carrying out subsection (a), the Sec-
retary shall reserve the remaining funds made available as follows:
(1) 9.8 percent to carry out section 18002 of this title.
(2) 43.9 percent to carry out section 18003 of this title.
(3) 46.3 percent to carry out section 18004 of this title.
GOVERNOR’S EMERGENCY EDUCATION RELIEF FUND
SEC. 18002. (a) GRANTS.—From funds reserved under section
18001(b)(1) of this title, the Secretary shall make Emergency Edu-
cation Relief grants to the Governor of each State with an approved
application. The Secretary shall issue a notice inviting applications
not later than 30 days of enactment of this Act and shall approve
or deny applications not later than 30 days after receipt.
(b) ALLOCATIONS.—The amount of each grant under subsection
(a) shall be allocated by the Secretary to each State as follows:
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(1) 60 percent on the basis of their relative population
of individuals aged 5 through 24.
(2) 40 percent on the basis of their relative number of
children counted under section 1124(c) of the Elementary and
Secondary Education Act of 1965 (referred to under this heading
as ‘‘ESEA’’).
(c) USES OF FUNDS.—Grant funds awarded under subsection
(b) may be used to—
(1) provide emergency support through grants to local edu-
cational agencies that the State educational agency deems have
been most significantly impacted by coronavirus to support
the ability of such local educational agencies to continue to
provide educational services to their students and to support
the on-going functionality of the local educational agency;
(2) provide emergency support through grants to institu-
tions of higher education serving students within the State
that the Governor determines have been most significantly
impacted by coronavirus to support the ability of such institu-
tions to continue to provide educational services and support
the on-going functionality of the institution; and
(3) provide support to any other institution of higher edu-
cation, local educational agency, or education related entity
within the State that the Governor deems essential for carrying
out emergency educational services to students for authorized
activities described in section 18003(d)(1) of this title or the
Higher Education Act, the provision of child care and early
childhood education, social and emotional support, and the
protection of education-related jobs.
(d) REALLOCATION.—Each Governor shall return to the Sec-
retary any funds received under this section that the Governor
does not award within one year of receiving such funds and the
Secretary shall reallocate such funds to the remaining States in
accordance with subsection (b).
ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND
SEC. 18003. (a) GRANTS.—From funds reserved under section
18001(b)(2) of this title, the Secretary shall make elementary and
secondary school emergency relief grants to each State educational
agency with an approved application. The Secretary shall issue
a notice inviting applications not later than 30 days of enactment
of this Act and approve or deny applications not later than 30
days after receipt.
(b) ALLOCATIONS TO STATES.—The amount of each grant under
subsection (a) shall be allocated by the Secretary to each State
in the same proportion as each State received under part A of
title I of the ESEA of 1965 in the most recent fiscal year.
(c) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES.—Each State
shall allocate not less than 90 percent of the grant funds awarded
to the State under this section as subgrants to local educational
agencies (including charter schools that are local educational agen-
cies) in the State in proportion to the amount of funds such local
educational agencies and charter schools that are local educational
agencies received under part A of title I of the ESEA of 1965
in the most recent fiscal year.
(d) USES OF FUNDS.—A local educational agency that receives
funds under this title may use the funds for any of the following:
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(1) Any activity authorized by the ESEA of 1965, including
the Native Hawaiian Education Act and the Alaska Native
Educational Equity, Support, and Assistance Act (20 U.S.C.
6301 et seq.), the Individuals with Disabilities Education Act
(20 U.S.C. 1400 et seq.) (‘‘IDEA’’), the Adult Education and
Family Literacy Act (20 U.S.C. 1400 et seq.), the Carl D.
Perkins Career and Technical Education Act of 2006 (20 U.S.C.
2301 et seq.) (‘‘the Perkins Act’’), or subtitle B of title VII
of the McKinney-Vento Homeless Assistance Act (42 U.S.C.
11431 et seq.).
(2) Coordination of preparedness and response efforts of
local educational agencies with State, local, Tribal, and terri-
torial public health departments, and other relevant agencies,
to improve coordinated responses among such entities to pre-
vent, prepare for, and respond to coronavirus.
(3) Providing principals and others school leaders with
the resources necessary to address the needs of their individual
schools.
(4) Activities to address the unique needs of low-income
children or students, children with disabilities, English
learners, racial and ethnic minorities, students experiencing
homelessness, and foster care youth, including how outreach
and service delivery will meet the needs of each population.
(5) Developing and implementing procedures and systems
to improve the preparedness and response efforts of local edu-
cational agencies.
(6) Training and professional development for staff of the
local educational agency on sanitation and minimizing the
spread of infectious diseases.
(7) Purchasing supplies to sanitize and clean the facilities
of a local educational agency, including buildings operated by
such agency.
(8) Planning for and coordinating during long-term clo-
sures, including for how to provide meals to eligible students,
how to provide technology for online learning to all students,
how to provide guidance for carrying out requirements under
the Individuals with Disabilities Education Act (20 U.S.C. 1401
et seq.) and how to ensure other educational services can con-
tinue to be provided consistent with all Federal, State, and
local requirements.
(9) Purchasing educational technology (including hardware,
software, and connectivity) for students who are served by
the local educational agency that aids in regular and sub-
stantive educational interaction between students and their
classroom instructors, including low-income students and stu-
dents with disabilities, which may include assistive technology
or adaptive equipment.
(10) Providing mental health services and supports.
(11) Planning and implementing activities related to
summer learning and supplemental afterschool programs,
including providing classroom instruction or online learning
during the summer months and addressing the needs of low-
income students, students with disabilities, English learners,
migrant students, students experiencing homelessness, and
children in foster care.
(12) Other activities that are necessary to maintain the
operation of and continuity of services in local educational
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agencies and continuing to employ existing staff of the local
educational agency.
(e) STATE FUNDING.—With funds not otherwise allocated under
subsection (c), a State may reserve not more than 1/2 of 1 percent
for administrative costs and the remainder for emergency needs
as determined by the state educational agency to address issues
responding to coronavirus, which may be addressed through the
use of grants or contracts.
(f) REALLOCATION.—A State shall return to the Secretary any
funds received under this section that the State does not award
within 1 year of receiving such funds and the Secretary shall
reallocate such funds to the remaining States in accordance with
subsection (b).
HIGHER EDUCATION EMERGENCY RELIEF FUND
SEC. 18004. (a) IN GENERAL.—The Secretary shall allocate
funding under this section as follows:
(1) 90 percent to each institution of higher education to
prevent, prepare for, and respond to coronavirus, by appor-
tioning it—
(A) 75 percent according to the relative share of full-
time equivalent enrollment of Federal Pell Grant recipients
who are not exclusively enrolled in distance education
courses prior to the coronavirus emergency; and
(B) 25 percent according to the relative share of full-
time equivalent enrollment of students who were not Fed-
eral Pell Grant recipients who are not exclusively enrolled
in distance education courses prior to the coronavirus emer-
gency.
(2) 7.5 percent for additional awards under parts A and
B of title III, parts A and B of title V, and subpart 4 of
part A of title VII of the Higher Education Act to address
needs directly related to coronavirus, that shall be in addition
to awards made in section 18004(a)(1) of this title, and allocated
by the Secretary proportionally to such programs based on
the relative share of funding appropriated to such programs
in the Further Consolidated Appropriations Act, 2020 (Public
Law 116–94) and which may be used to defray expenses
(including lost revenue, reimbursement for expenses already
incurred, technology costs associated with a transition to dis-
tance education, faculty and staff trainings, payroll) incurred
by institutions of higher education and for grants to students
for any component of the student’s cost of attendance (as defined
under section 472 of the Higher Education Act), including food,
housing, course materials, technology, health care, and child
care.
(3) 2.5 percent for part B of title VII of the Higher Edu-
cation Act for institutions of higher education that the Secretary
determines have the greatest unmet needs related to
coronavirus, which may be used to defray expenses (including
lost revenue, reimbursement for expenses already incurred,
technology costs associated with a transition to distance edu-
cation, faculty and staff trainings, payroll) incurred by institu-
tions of higher education and for grants to students for any
component of the student’s cost of attendance (as defined under
section 472 of the Higher Education Act), including food,
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housing, course materials, technology, health care, and child
care.
(b) DISTRIBUTION.—The funds made available to each institu-
tion under subsection (a)(1) shall be distributed by the Secretary
using the same systems as the Secretary otherwise distributes
funding to each institution under title IV of the Higher Education
Act of 1965 (20 U.S.C. 1001 et seq.).
(c) USES OF FUNDS.—Except as otherwise specified in subsection
(a), an institution of higher education receiving funds under this
section may use the funds received to cover any costs associated
with significant changes to the delivery of instruction due to the
coronavirus, so long as such costs do not include payment to contrac-
tors for the provision of pre-enrollment recruitment activities;
endowments; or capital outlays associated with facilities related
to athletics, sectarian instruction, or religious worship. Institutions
of higher education shall use no less than 50 percent of such
funds to provide emergency financial aid grants to students for
expenses related to the disruption of campus operations due to
coronavirus (including eligible expenses under a student’s cost of
attendance, such as food, housing, course materials, technology,
health care, and child care).
(d) SPECIAL PROVISIONS.—(1) In awarding grants under section
18004(a)(3) of this title, the Secretary shall give priority to any
institution of higher education that is not otherwise eligible for
funding under paragraphs (1) and (2) of section 18004(a) of this
title of at least $500,000 and demonstrates significant unmet needs
related to expenses associated with coronavirus.
(2) A Historically Black College and University or a Minority
Serving Institution may use prior awards provided under titles
III, V, and VII of the Higher Education Act to prevent, prepare
for, and respond to coronavirus.
(e) REPORT.—An institution receiving funds under this section
shall submit a report to the Secretary, at such time and in such
manner as the Secretary may require, that describes the use of
funds provided under this section.
ASSISTANCE TO NON-PUBLIC SCHOOLS
SEC. 18005. (a) IN GENERAL.—A local educational agency
receiving funds under sections 18002 or 18003 of this title shall
provide equitable services in the same manner as provided under
section 1117 of the ESEA of 1965 to students and teachers in
non-public schools, as determined in consultation with representa-
tives of non-public schools.
(b) PUBLIC CONTROL OF FUNDS.—The control of funds for the
services and assistance provided to a non-public school under sub-
section (a), and title to materials, equipment, and property pur-
chased with such funds, shall be in a public agency, and a public
agency shall administer such funds, materials, equipment, and prop-
erty and shall provide such services (or may contract for the provi-
sion of such services with a public or private entity).
CONTINUED PAYMENT TO EMPLOYEES
SEC. 18006. A local educational agency, State, institution of
higher education, or other entity that receives funds under ‘‘Edu-
cation Stabilization Fund’’, shall to the greatest extent practicable,
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continue to pay its employees and contractors during the period
of any disruptions or closures related to coronavirus.
DEFINITIONS
SEC. 18007. Except as otherwise provided in sections 18001–
18006 of this title, as used in such sections—
(1) the terms ‘‘elementary education’’ and ‘‘secondary edu-
cation’’ have the meaning given such terms under State law;
(2) the term ‘‘institution of higher education’’ has the
meaning given such term in title I of the Higher Education
Act of 1965 (20 U.S.C. 1001 et seq.);
(3) the term ‘‘Secretary’’ means the Secretary of Education;
(4) the term ‘‘State’’ means each of the 50 States, the
District of Columbia, and the Commonwealth of Puerto Rico;
(5) the term ‘‘cost of attendance’’ has the meaning given
such term in section 472 of the Higher Education Act of 1965.
(6) the term ‘‘Non-public school’’ means a non-public
elementary and secondary school that (A) is accredited, licensed,
or otherwise operates in accordance with State law; and (B)
was in existence prior to the date of the qualifying emergency
for which grants are awarded under this section;
(7) the term ‘‘public school’’ means a public elementary
or secondary school; and
(8) any other term used that is defined in section 8101
of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7801) shall have the meaning given the term in such
section.
MAINTENANCE OF EFFORT
SEC. 18008. (a) A State’s application for funds to carry out
sections 18002 or 18003 of this title shall include assurances that
the State will maintain support for elementary and secondary edu-
cation, and State support for higher education (which shall include
State funding to institutions of higher education and state need-
based financial aid, and shall not include support for capital projects
or for research and development or tuition and fees paid by stu-
dents) in fiscal years 2020 and 2021 at least at the levels of
such support that is the average of such State’s support for
elementary and secondary education and for higher education pro-
vided in the 3 fiscal years preceding the date of enactment of
this Act.
(b) The secretary may waive the requirement in subsection
(a) for the purpose of relieving fiscal burdens on States that have
experienced a precipitous decline in financial resources.
SAFE SCHOOLS AND CITIZENSHIP EDUCATION
For an additional amount for ‘‘Safe Schools and Citizenship
Education’’, $100,000,000, to remain available through September
30, 2021, to prevent, prepare for, and respond to coronavirus, domes-
tically or internationally, to supplement funds otherwise available
for ‘‘Project SERV’’, including to help elementary, secondary and
postsecondary schools clean and disinfect affected schools, and assist
in counseling and distance learning and associated costs: Provided,
That such amount is designated by the Congress as being for
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an emergency requirement pursuant to section 251(b)(2)(A)(i) of
the Balanced Budget and Emergency Deficit Control Act of 1985.
GALLAUDET UNIVERSITY
For an additional amount for ‘‘Gallaudet University’’,
$7,000,000, to remain available through September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally, including to help defray the expenses directly
caused by coronavirus and to enable grants to students for expenses
directly related to coronavirus and the disruption of university
operations: Provided, That such amount is designated by the Con-
gress as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
STUDENT AID ADMINISTRATION
For an additional amount for ‘‘Student Aid Administration’’,
$40,000,000, to remain available through September 30, 2021, to
prevent, prepare for, and respond to coronavirus, domestically or
internationally, for carrying out part D of title I, and subparts
1, 3, 9 and 10 of part A, and parts B, C, D, and E of title
IV of the HEA, and subpart 1 of part A of title VII of the Public
Health Service Act: Provided, That such amount is designated by
the Congress as being for an emergency requirement pursuant
to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985.
HOWARD UNIVERSITY
For an additional amount for ‘‘Howard University’’, $13,000,000,
to remain available through September 30, 2021, to prevent, prepare
for, and respond to coronavirus, domestically or internationally,
including to help defray the expenses directly caused by coronavirus
and to enable grants to students for expenses directly related to
coronavirus and the disruption of university operations: Provided,
That such amount is designated by the Congress as being for
an emergency requirement pursuant to section 251(b)(2)(A)(i) of
the Balanced Budget and Emergency Deficit Control Act of 1985.
DEPARTMENTAL MANAGEMENT
PROGRAM ADMINISTRATION
For an additional amount for ‘‘Program Administration’’,
$8,000,000, to remain available through September 30, 2021 to
prevent, prepare for, and respond to coronavirus, domestically or
internationally: Provided, That such amount is designated by the
Congress as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
OFFICE OF THE INSPECTOR GENERAL
For an additional amount for ‘‘Office of the Inspector General’’,
$7,000,000, to remain available through September 30, 2022, to
prevent, prepare for, and respond to coronavirus, domestically or
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internationally, including for salaries and expenses necessary for
oversight and audit of programs, grants, and projects funded in
this Act to respond to coronavirus: Provided, That such amount
is designated by the Congress as being for an emergency require-
ment pursuant to section 251(b)(2)(A)(i) of the Balanced Budget
and Emergency Deficit Control Act of 1985.
CORPORATION FOR PUBLIC BROADCASTING
For an additional amount for ‘‘Corporation for Public Broad-
casting’’, $75,000,000, to remain available through September 30,
2021, to prevent, prepare for, and respond to coronavirus, including
for fiscal stabilization grants to public telecommunications entities,
as defined by 47 U.S.C. 397(12), with no deduction for administra-
tive or other costs of the Corporation, to maintain programming
and services and preserve small and rural stations threatened by
declines in non-Federal revenues: Provided, That such amount is
designated by the Congress as being for an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
INSTITUTE OF MUSEUM AND LIBRARY SERVICES
OFFICE OF MUSEUM AND LIBRARY SERVICES: GRANTS AND
ADMINISTRATION
For an additional amount for ‘‘Institute of Museum and Library
Services’’, $50,000,000, to remain available until September 30,
2021, to prevent, prepare for, and respond to coronavirus, including
grants to States, territories and tribes to expand digital network
access, purchase internet accessible devices, and provide technical
support services: Provided, That any matching funds requirements
for States, tribes, libraries, and museums are waived for grants
provided with funds made available under this heading in this
Act: Provided further, That such amount is designated by the Con-
gress as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
RAILROAD RETIREMENT BOARD
LIMITATION ON ADMINISTRATION
For an additional amount for the ‘‘Railroad Retirement Board’’,
$5,000,000, to remain available until September 30, 2021, to pre-
vent, prepare for, and respond to coronavirus, including the pur-
chase of information technology equipment to improve the mobility
of the workforce and provide for additional hiring or overtime
hours as needed to administer the Railroad Unemployment Insur-
ance Act: Provided, That such amount is designated by the Congress
as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
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SOCIAL SECURITY ADMINISTRATION
LIMITATION ON ADMINISTRATIVE EXPENSES
For an additional amount for ‘‘Limitation on Administrative
Expenses’’, $300,000,000, to remain available through September
30, 2021 to prevent, prepare for, and respond to coronavirus, domes-
tically or internationally, including paying the salaries and benefits
of all employees affected as a result of office closures, telework,
phone and communication services for employees, overtime costs,
and supplies, and for resources necessary for processing disability
and retirement workloads and backlogs: Provided, That such
amount is designated by the Congress as being for an emergency
requirement pursuant to section 251(b)(2)(A)(i) of the Balanced
Budget and Emergency Deficit Control Act of 1985.
GENERAL PROVISIONS—THIS TITLE
(INCLUDING TRANSFER OF FUNDS)
SEC. 18108. Funds appropriated by this title may be used
by the Secretary of the Department of Health and Human Services
to appoint, without regard to the provisions of sections 3309 through
3319 of title 5 of the United States Code, candidates needed for
positions to perform critical work relating to coronavirus for which—
(1) public notice has been given; and
(2) the Secretary of Health and Human Services has deter-
mined that such a public health threat exists.
SEC. 18109. Funds made available by this title may be used
to enter into contracts with individuals for the provision of personal
services (as described in section 104 of part 37 of title 48, Code
of Federal Regulations (48 CFR 37.104)) to support the prevention
of, preparation for, or response to coronavirus, domestically and
internationally, subject to prior notification to the Committees on
Appropriations of the House of Representatives and the Senate:
Provided, That such individuals may not be deemed employees
of the United States for the purpose of any law administered
by the Office of Personnel Management: Provided further, That
the authority made available pursuant to this section shall expire
on September 30, 2024.
SEC. 18110. (a) If services performed by an employee during
fiscal year 2020 are determined by the head of the agency to
be primarily related to preparation, prevention, or response to
coronavirus, any premium pay for such services shall be disregarded
in calculating the aggregate of such employee’s basic pay and pre-
mium pay for purposes of a limitation under section 5547(a) of
title 5, United States Code, or under any other provision of law,
whether such employee’s pay is paid on a biweekly or calendar
year basis.
(b) Any overtime pay for such services shall be disregarded
in calculating any annual limit on the amount of overtime pay
payable in a calendar or fiscal year.
(c) With regard to such services, any pay that is disregarded
under either subsection (a) or (b) shall be disregarded in calculating
such employee’s aggregate pay for purposes of the limitation in
section 5307 of such title 5.
(d)(1) Pay that is disregarded under subsection (a) or (b) shall
not cause the aggregate of the employee’s basic pay and premium
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pay for the applicable calendar year to exceed the rate of basic
pay payable for a position at level II of the Executive Schedule
under section 5313 of title 5, United States Code, as in effect
at the end of such calendar year.
(2) For purposes of applying this subsection to an employee
who would otherwise be subject to the premium pay limits estab-
lished under section 5547 of title 5, United States Code, ‘‘premium
pay’’ means the premium pay paid under the provisions of law
cited in section 5547(a).
(3) For purposes of applying this subsection to an employee
under a premium pay limit established under an authority other
than section 5547 of title 5, United States Code, the agency respon-
sible for administering such limit shall determine what payments
are considered premium pay.
(e) This section shall take effect as if enacted on February
2, 2020.
(f) If application of this section results in the payment of
additional premium pay to a covered employee of a type that is
normally creditable as basic pay for retirement or any other pur-
pose, that additional pay shall not—
(1) be considered to be basic pay of the covered employee
for any purpose; or
(2) be used in computing a lump-sum payment to the
covered employee for accumulated and accrued annual leave
under section 5551 or section 5552 of title 5, United States
Code.
SEC. 18111. Funds appropriated by this title to the heading
‘‘Department of Health and Human Services’’ may be transferred
to, and merged with, other appropriation accounts under the
headings ‘‘Centers for Disease Control and Prevention’’, ‘‘Public
Health and Social Services Emergency Fund’’, ‘‘Administration for
Children and Families’’, ‘‘Administration for Community Living’’,
and ‘‘National Institutes of Health’’ to prevent, prepare for, and
respond to coronavirus following consultation with the Office of
Management and Budget: Provided, That the Committees on Appro-
priations of the House of Representatives and the Senate shall
be notified 10 days in advance of any such transfer: Provided
further, That, upon a determination that all or part of the funds
transferred from an appropriation by this title are not necessary,
such amounts may be transferred back to that appropriation: Pro-
vided further, That none of the funds made available by this title
may be transferred pursuant to the authority in section 205 of
division A of Public Law 116–94 or section 241(a) of the PHS
Act.
SEC. 18112. Not later than 30 days after the date of enactment
of this Act, the Secretary of Health and Human Services shall
provide a detailed spend plan of anticipated uses of funds made
available to the Department of Health and Human Services in
this Act, including estimated personnel and administrative costs,
to the Committees on Appropriations of the House of Representa-
tives and the Senate: Provided, That such plans shall be updated
and submitted to such Committees every 60 days until September
30, 2024: Provided further, That the spend plans shall be accom-
panied by a listing of each contract obligation incurred that exceeds
$5,000,000 which has not previously been reported, including the
amount of each such obligation.
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SEC. 18113. Of the funds appropriated by this title under the
heading ‘‘Public Health and Social Services Emergency Fund’’, up
to $4,000,000 shall be transferred to, and merged with, funds made
available under the heading ‘‘Office of the Secretary, Office of
Inspector General’’, and shall remain available until expended, for
oversight of activities supported with funds appropriated to the
Department of Health and Human Services to prevent, prepare
for, and respond to coronavirus, domestically or internationally:
Provided, That the Inspector General of the Department of Health
and Human Services shall consult with the Committees on Appro-
priations of the House of Representatives and the Senate prior
to obligating such funds: Provided further, That the transfer
authority provided by this section is in addition to any other transfer
authority provided by law.
SEC. 18114. (a) Funds appropriated in title III of the
Coronavirus Preparedness and Response Supplemental Appropria-
tions Act, 2020 (Public Law 116–123) shall be paid to the ‘‘Depart-
ment of Homeland Security—Countering Weapons of Mass Destruc-
tion Office—Federal Assistance’’account for costs incurred, including
to reimburse costs incurred prior to the enactment of this Act,
under other transaction authority and related to screening for
coronavirus, domestically or internationally.
(b) The term coronavirus has the meaning given the term
in section 506 of the Coronavirus Preparedness and Response
Supplemental Appropriations Act, 2020.
(c) The amounts repurposed in this section that were previously
designated by the Congress as an emergency requirement pursuant
to the Balanced Budget and Emergency Deficit Control Act of
1985 are designated by the Congress as an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
SEC. 18115. (a) IN GENERAL.—Every laboratory that performs
or analyzes a test that is intended to detect SARS–CoV–2 or to
diagnose a possible case of COVID–19 shall report the results
from each such test, to the Secretary of Health and Human Services
in such form and manner, and at such timing and frequency,
as the Secretary may prescribe until the end of the Secretary’s
Public Health Emergency declaration with respect to COVID–19
or any extension of such declaration.
(b) LABORATORIES COVERED.—The Secretary may prescribe
which laboratories must submit reports pursuant to this section.
(c) IMPLEMENTATION.—The Secretary may make prescriptions
under this section by regulation, including by interim final rule,
or by guidance, and may issue such regulations or guidance without
regard to the procedures otherwise required by section 553 of title
5, United States Code.
(d) REPEALER.—Section 1702 of division A of the Families First
Coronavirus Response Act is repealed.
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TITLE IX
LEGISLATIVE BRANCH
SENATE
CONTINGENT EXPENSES OF THE SENATE
SERGEANT AT ARMS AND DOORKEEPER OF THE SENATE
For an additional amount for ‘‘Sergeant at Arms and Door-
keeper of the Senate’’, $1,000,000, to remain available until
expended, to prevent, prepare for, and respond to coronavirus,
domestically or internationally: Provided, That such amount is des-
ignated by the Congress as being for an emergency requirement
pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
MISCELLANEOUS ITEMS
For an additional amount for ‘‘Miscellaneous Items’’, $9,000,000,
to remain available until expended, to prevent, prepare for, and
respond to coronavirus, domestically or internationally, subject to
approval by the Committee on Appropriations of the Senate and
the Senate Committee on Rules and Administration: Provided, That
such amount is designated by the Congress as being for an emer-
gency requirement pursuant to section 251(b)(2)(A)(i) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985.
HOUSE OF REPRESENTATIVES
SALARIES AND EXPENSES
For an additional amount for ‘‘Salaries and Expenses’’,
$25,000,000, to remain available until September 30, 2021, except
that $5,000,000 shall remain available until expended, to prevent,
prepare for, and respond to coronavirus, domestically or internation-
ally, to be allocated in accordance with a spend plan submitted
to the Committee on Appropriations of the House of Representatives
by the Chief Administrative Officer and approved by such Com-
mittee: Provided, That such amount is designated by the Congress
as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
JOINT ITEMS
OFFICE OF THE ATTENDING PHYSICIAN
For an additional amount for ‘‘Office of the Attending Physi-
cian’’, $400,000, to remain available until expended, to prevent,
prepare for, and respond to coronavirus, domestically or internation-
ally: Provided, That such amount is designated by the Congress
as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
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GOVERNMENT ACCOUNTABILITY OFFICE
SALARIES AND EXPENSES
For an additional amount for ‘‘Salaries and Expenses’’,
$20,000,000, to remain available until expended, to prevent, prepare
for, and respond to coronavirus, domestically or internationally,
for audits and investigations and for reimbursement of the Tiny
Findings Child Development Center for salaries for employees, as
authorized by this Act: Provided, That not later than 90 days
after the date of enactment of this Act, the Government Account-
ability Office shall submit to the Committees on Appropriations
of the House of Representatives and the Senate a spend plan
specifying funding estimates and a timeline for such audits and
investigations: Provided further, That $600,000 shall be made avail-
able to the Tiny Findings Child Development Center, subject to
approval by the Committees on Appropriations of the Senate and
House of Representatives, the Senate Committee on Rules and
Administration, and the Committee on House Administration: Pro-
vided further, That such amount is designated by the Congress
as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985.
GENERAL PROVISIONS—THIS TITLE
SOURCE OF FUNDS USED FOR PAYMENT OF SALARIES AND EXPENSES
OF SENATE EMPLOYEE CHILD CARE CENTER
SEC. 19001. The Secretary of the Senate shall reimburse the
Senate Employee Child Care Center for personnel costs incurred
starting on April 1, 2020, for employees of such Center who have
been ordered to cease working due to measures taken in the Capitol
complex to combat coronavirus, not to exceed $84,000 per month,
from amounts in the appropriations account ‘‘Miscellaneous Items’’
within the contingent fund of the Senate.
SOURCE OF FUNDS USED FOR PAYMENT OF SALARIES AND EXPENSES
OF HOUSE OF REPRESENTATIVES CHILD CARE CENTER
SEC. 19002. (a) AUTHORIZING USE OF REVOLVING FUND OR
APPROPRIATED FUNDS.—Section 312(d)(3)(A) of the Legislative
Branch Appropriations Act, 1992 (2 U.S.C. 2062(d)(3)(A)) is
amended—
(1) in subparagraph (A), by striking the period at the
end and inserting the following: ‘‘, and, at the option of the
Chief Administrative Officer during an emergency situation,
the payment of the salary of other employees of the Center.’’;
and
(2) by adding at the end the following new subparagraph:
‘‘(C) During an emergency situation, the payment of
such other expenses for activities carried out under this
section as the Chief Administrative Officer determines
appropriate.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply with respect to fiscal year 2020 and each succeeding
fiscal year.
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the case of the Commission, to waive this paragraph in the case
of mailings sent in response to or to address threats to life safety.’’.
(b) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply with respect to mailings sent on or after the
date of the enactment of this Act.
TECHNICAL CORRECTION
SEC. 19007. In the matter preceding the first proviso under
the heading ‘‘Library of Congress—Salaries and Expenses’’ in divi-
sion E of the Further Consolidated Appropriations Act, 2020 (Public
Law 116–94), strike ‘‘ $504,164,000’’ and insert ‘‘ $510,164,000’’.
CONFORMING AMENDMENT
SEC. 19008. Section 110(a)(1)(A) of the Family and Medical
Leave Act of 1993 (as added by section 3102 of the Families First
Coronavirus Response Act (Public Law 116–127)) is amended—
(1) by inserting before ‘‘In lieu of’’ the following:
‘‘(i) IN GENERAL.—’’; and
(2) by adding at the end the following:
‘‘(ii) SPECIAL RULE.—For purposes of applying sec-
tion 102(a)(1)(F) and this section under the Congres-
sional Accountability Act of 1995, in lieu of the defini-
tion in section 202(a)(2)(B) of that Act (2 U.S.C.
1312(a)(2)(B)), the term ‘eligible employee’ means a
covered employee (as defined in section 101 of that
Act (2 U.S.C. 1301)) who has been employed for at
least 30 calendar days by the employing office (as
so defined) with respect to whom leave is requested
under section 102(a)(1)(F).’’.
SOURCE OF FUNDS USED FOR PAYMENT OF SALARIES AND EXPENSES
OF TINY FINDINGS CHILD DEVELOPMENT CENTER
SEC. 19009. The Government Accountability Office may
reimburse the Tiny Findings Child Development Center for salaries
for employees incurred from April 1, 2020, to September 30, 2020,
for employees of such Center who have been ordered to cease
working due to measures taken in the Capitol complex to combat
coronavirus, not to exceed $100,000 per month, from amounts in
the appropriations account ‘‘Government Accountability Office—
Salaries and Expenses’’.
OVERSIGHT AND AUDIT AUTHORITY
SEC. 19010. (a) DEFINITIONS.—In this section—
(1) the term ‘‘appropriate congressional committees’’
means—
(A) the Committee on Appropriations of the Senate;
(B) the Committee on Homeland Security and Govern-
mental Affairs of the Senate;
(C) the Committee on Health, Education, Labor, and
Pensions of the Senate;
(D) the Committee on Appropriations of the House
of Representatives;
(E) the Committee on Homeland Security of the House
of Representatives;
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(F) the Committee on Oversight and Reform of the
House of Representatives; and
(G) the Committee on Energy and Commerce of the
House of Representatives; and
(2) the term ‘‘Comptroller General’’ means the Comptroller
General of the United States.
(b) AUTHORITY.—The Comptroller General shall conduct moni-
toring and oversight of the exercise of authorities, or the receipt,
disbursement, and use of funds made available, under this Act
or any other Act to prepare for, respond to, and recover from
the Coronavirus 2019 pandemic and the effect of the pandemic
on the health, economy, and public and private institutions of
the United States, including public health and homeland security
efforts by the Federal Government and the use of selected funds
under this or any other Act related to the Coronavirus 2019 pan-
demic and a comprehensive audit and review of charges made
to Federal contracts pursuant to authorities provided in the
Coronavirus Aid, Relief, and Economic Security Act.
(c) BRIEFINGS AND REPORTS.—In conducting monitoring and
oversight under subsection (b), the Comptroller General shall—
(1) during the period beginning on the date of enactment
of this Act and ending on the date on which the national
emergency declared by the President under the National Emer-
gencies Act (50 U.S.C. 1601 et seq.) with respect to the
Coronavirus Disease 2019 (COVID–19) expires, offer regular
briefings on not less frequently than a monthly basis to the
appropriate congressional committees regarding Federal public
health and homeland security efforts;
(2) publish reports regarding the ongoing monitoring and
oversight efforts, which, along with any audits and investiga-
tions conducted by the Comptroller General, shall be submitted
to the appropriate congressional committees and posted on
the website of the Government Accountability Office—
(A) not later than 90 days after the date of enactment
of this Act, and every other month thereafter until the
date that is 1 year after the date of enactment of this
Act; and
(B) after the period described in subparagraph (A),
on a periodic basis; and
(3) submit to the appropriate congressional committees
additional reports as warranted by the findings of the moni-
toring and oversight activities of the Comptroller General.
(d) ACCESS TO INFORMATION.—
(1) RIGHT OF ACCESS.—In conducting monitoring and over-
sight activities under this section, the Comptroller General
shall have access to records, upon request, of any Federal,
State, or local agency, contractor, grantee, recipient, or sub-
recipient pertaining to any Federal effort or assistance of any
type related to the Coronavirus 2019 pandemic under this
Act or any other Act, including private entities receiving such
assistance.
(2) COPIES.—The Comptroller General may make and
retain copies of any records accessed under paragraph (1) as
the Comptroller General determines appropriate.
(3) INTERVIEWS.—In addition to such other authorities as
are available, the Comptroller General or a designee of the
Comptroller General may interview Federal, State, or local
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officials, contractor staff, grantee staff, recipients, or subrecipi-
ents pertaining to any Federal effort or assistance of any type
related to the Coronavirus 2019 pandemic under this or any
other Act, including private entities receiving such assistance.
(4) INSPECTION OF FACILITIES.—As determined necessary
by the Comptroller General, the Government Accountability
Office may inspect facilities at which Federal, State, or local
officials, contractor staff, grantee staff, or recipients or sub-
recipients carry out their responsibilities related to the
Coronavirus 2019 pandemic.
(5) ENFORCEMENT.—Access rights under this subsection
shall be subject to enforcement consistent with section 716
of title 31, United States Code.
(e) RELATIONSHIP TO EXISTING AUTHORITY.—Nothing in this
section shall be construed to limit, amend, supersede, or restrict
in any manner any existing authority of the Comptroller General.
NATIONAL EMERGENCY RELIEF AUTHORITY FOR THE REGISTER OF
COPYRIGHTS
SEC. 19011. (a) AMENDMENT.—Chapter 7 of title 17, United
States Code, is amended by adding at the end the following:
‘‘§ 710. Emergency relief authority
‘‘(a) EMERGENCY ACTION.—If, on or before December 31, 2021,
the Register of Copyrights determines that a national emergency
declared by the President under the National Emergencies Act
(50 U.S.C. 1601 et seq.) generally disrupts or suspends the ordinary
functioning of the copyright system under this title, or any compo-
nent thereof, including on a regional basis, the Register may, on
a temporary basis, toll, waive, adjust, or modify any timing provision
(including any deadline or effective period, except as provided in
subsection (c)) or procedural provision contained in this title or
chapters II or III of title 37, Code of Federal Regulations, for
no longer than the Register reasonably determines to be appropriate
to mitigate the impact of the disruption caused by the national
emergency. In taking such action, the Register shall consider the
scope and severity of the particular national emergency, and its
specific effect with respect to the particular provision, and shall
tailor any remedy accordingly.
‘‘(b) NOTICE AND EFFECT.—Any action taken by the Register
in response to a national emergency pursuant to subsection (a)
shall not be subject to section 701(e) or subchapter II of chapter
5 of title 5, United States Code, and chapter 7 of title 5, United
States Code. The provision of general public notice detailing the
action being taken by the Register in response to the national
emergency under subsection (a) is sufficient to effectuate such
action. The Register may make such action effective both prospec-
tively and retroactively in relation to a particular provision as
the Register determines to be appropriate based on the timing,
scope, and nature of the public emergency, but any action by the
Register may only be retroactive with respect to a deadline that
has not already passed before the declaration described in sub-
section (a).
‘‘(c) STATEMENT REQUIRED.—Except as provided in subsection
(d), not later than 20 days after taking any action that results
in a provision being modified for a cumulative total of longer than
120 days, the Register shall submit to Congress a statement
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Regulations (or successor regulations), if the Secretary determines
that—
(1) the Coronavirus Disease 2019 (COVID–19) is having
a substantial impact on—
(A) the ability of States to implement or carry out
any grant, campaign, or program under those provisions;
or
(B) the ability of the Secretary to carry out any respon-
sibility of the Secretary with respect to a grant, campaign,
or program under those provisions; or
(2) the requirements of those provisions are having a
substantial impact on the ability of States or the Secretary
to address the Coronavirus Disease 2019 (COVID–19).
(b) REPORT.—The Secretary shall periodically submit to the
relevant committees of Congress a report describing—
(1) each determination made by the Secretary under sub-
section (a); and
(2) each waiver or postponement of a requirement under
that subsection.
(c) EMERGENCY REQUIREMENT.—The amount provided by this
section is designated by the Congress as being for an emergency
requirement pursuant to section 251(b)(2)(A)(i) of the Balanced
Budget and Emergency Deficit Control Act of 1985.
TITLE XIII
GENERAL PROVISIONS—THIS ACT
SEC. 23001. Each amount appropriated or made available by
this Act is in addition to amounts otherwise appropriated for the
fiscal year involved.
SEC. 23002. No part of any appropriation contained in this
Act shall remain available for obligation beyond the current fiscal
year unless expressly so provided herein.
SEC. 23003. Unless otherwise provided for by this Act, the
additional amounts appropriated by this Act to appropriations
accounts shall be available under the authorities and conditions
applicable to such appropriations accounts for fiscal year 2020.
SEC. 23004. (a) Subject to subsection (b), and notwithstanding
any other provision of law, funds made available in this Act, or
transferred pursuant to authorization granted in this Act, may
only be used to prevent, prepare for, and respond to coronavirus.
(b) Subsection (a) shall not apply to sections 11002, 13002,
and 18114 of this Act, reimbursements made pursuant to authority
in this Act, or to funds made available in this Act for the Emergency
Reserve Fund, established pursuant to section 7058(c)(1) of division
J of Public Law 115–31, or to funds made available in this Act
for the Infectious Diseases Rapid Response Reserve Fund, estab-
lished pursuant to section 231 of division B of Public Law 115–
245.
(c) This section shall not apply to title VI of this Act.
SEC. 23005. In this Act, the term ‘‘coronavirus’’ means SARS–
CoV–2 or another coronavirus with pandemic potential.
SEC. 23006. Each amount designated in this Act by the Con-
gress as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985 shall be available (or rescinded or transferred,
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if applicable) only if the President subsequently so designates all
such amounts and transmits such designations to the Congress.
SEC. 23007. Any amount appropriated by this Act, designated
by the Congress as an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985 and subsequently so designated by the President,
and transferred pursuant to transfer authorities provided by this
Act shall retain such designation.
BUDGETARY EFFECTS
SEC. 23008. (a) STATUTORY PAYGO SCORECARDS.—The budg-
etary effects of this division shall not be entered on either PAYGO
scorecard maintained pursuant to section 4(d) of the Statutory
Pay As-You-Go Act of 2010.
(b) SENATE PAYGO SCORECARDS.—The budgetary effects of this
division shall not be entered on any PAYGO scorecard maintained
for purposes of section 4106 of H. Con. Res. 71 (115th Congress).
(c) CLASSIFICATION OF BUDGETARY EFFECTS.—Notwithstanding
Rule 3 of the Budget Scorekeeping Guidelines set forth in the
joint explanatory statement of the committee of conference accom-
panying Conference Report 105–217 and section 250(c)(7) and (c)(8)
of the Balanced Budget and Emergency Deficit Control Act of 1985,
the budgetary effects of this division shall be estimated for purposes
of section 251 of such Act.
(d) ENSURING NO WITHIN-SESSION SEQUESTRATION.—Solely for
the purpose of calculating a breach within a category for fiscal
year 2020 pursuant to section 251(a)(6) or section 254(g) of the
Balanced Budget and Emergency Deficit Control Act of 1985, and
notwithstanding any other provision of this division, the budgetary
effects from this division shall be counted as amounts designated
as being for an emergency requirement pursuant to section
251(b)(2)(A) of such Act.
This division may be cited as the ‘‘Emergency Appropriations
for Coronavirus Health Response and Agency Operations’’.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
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8 U.S. Code § 1611.Aliens who are not qualified aliens ineligible for Federal public benefits
(a)In general
Notwithstanding any other provision of law and except as provided in subsection (b), an alien
who is not a qualified alien (as defined in section 1641 of this title) is not eligible for any Federal
public benefit (as defined in subsection (c)).
(b)Exceptions
(1)Subsection (a) shall not apply with respect to the following Federal public benefits:
(A)
Medical assistance under title XIX of the Social Security Act [42 U.S.C. 1396 et seq.] (or any
successor program to such title) for care and services that are necessary for the treatment of an
emergency medical condition (as defined in section 1903(v)(3) of such Act [42 U.S.C.
1396b(v)(3)]) of the alien involved and are not related to an organ transplant procedure, if the
alien involved otherwise meets the eligibility requirements for medical assistance under the State
plan approved under such title (other than the requirement of the receipt of aid or assistance
under title IV of such Act [42 U.S.C. 601 et seq.], supplemental security income benefits under
title XVI of such Act [42 U.S.C. 1381 et seq.], or a State supplementary payment).
(B)
Short-term, non-cash, in-kind emergency disaster relief.
(C)
Public health assistance (not including any assistance under title XIX of the Social Security
Act [42 U.S.C. 1396 et seq.]) for immunizations with respect to immunizable diseases and for
testing and treatment of symptoms of communicable diseases whether or not such symptoms are
caused by a communicable disease.
(D)
Programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and
short-term shelter) specified by the Attorney General, in the Attorney General’s sole and
unreviewable discretion after consultation with appropriate Federal agencies and departments,
which (i) deliver in-kind services at the community level, including through public or private
nonprofit agencies; (ii) do not condition the provision of assistance, the amount of assistance
provided, or the cost of assistance provided on the individual recipient’s income or resources;
and (iii) are necessary for the protection of life or safety.
(E)
Programs for housing or community development assistance or financial assistance administered
by the Secretary of Housing and Urban Development, any program under title V of the Housing
Act of 1949 [42 U.S.C. 1471 et seq.], or any assistance under section 1926c of title 7, to the
extent that the alien is receiving such a benefit on August 22, 1996.
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(2)
Subsection (a) shall not apply to any benefit payable under title II of the Social Security Act [42
U.S.C. 401 et seq.] to an alien who is lawfully present in the United States as determined by the
Attorney General, to any benefit if nonpayment of such benefit would contravene an
international agreement described in section 233 of the Social Security Act [42 U.S.C. 433], to
any benefit if nonpayment would be contrary to section 202(t) of the Social Security Act [42
U.S.C. 402(t)], or to any benefit payable under title II of the Social Security Act to which
entitlement is based on an application filed in or before August 1996.
(3)
Subsection (a) shall not apply to any benefit payable under title XVIII of the Social Security
Act [42 U.S.C. 1395 et seq.] (relating to the medicare program) to an alien who is lawfully
present in the United States as determined by the Attorney General and, with respect to benefits
payable under part A of such title [42 U.S.C. 1395c et seq.], who was authorized to be employed
with respect to any wages attributable to employment which are counted for purposes of
eligibility for such benefits.
(4)
Subsection (a) shall not apply to any benefit payable under the Railroad Retirement Act of
1974 [45 U.S.C. 231 et seq.] or the Railroad Unemployment Insurance Act [45 U.S.C. 351 et
seq.] to an alien who is lawfully present in the United States as determined by the Attorney
General or to an alien residing outside the United States.
(5)
Subsection (a) shall not apply to eligibility for benefits for the program defined in section
1612(a)(3)(A) of this title (relating to the supplemental security income program), or to
eligibility for benefits under any other program that is based on eligibility for benefits under the
program so defined, for an alien who was receiving such benefits on August 22, 1996.
(c)“Federal public benefit” defined
(1)Except as provided in paragraph (2), for purposes of this chapter the term “Federal public
benefit” means—
(A)
any grant, contract, loan, professional license, or commercial license provided by an agency of
the United States or by appropriated funds of the United States; and
(B)
any retirement, welfare, health, disability, public or assisted housing, postsecondary education,
food assistance, unemployment benefit, or any other similar benefit for which payments or
assistance are provided to an individual, household, or family eligibility unit by an agency of the
United States or by appropriated funds of the United States.
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(2)Such term shall not apply—
(A)
to any contract, professional license, or commercial license for a nonimmigrant whose visa for
entry is related to such employment in the United States, or to a citizen of a freely associated
state, if section 141 of the applicable compact of free association approved in Public Law 99–
239 or 99–658 (or a successor provision) is in effect;
(B)
with respect to benefits for an alien who as a work authorized nonimmigrant or as an alien
lawfully admitted for permanent residence under the Immigration and Nationality Act [8 U.S.C.
1101 et seq.] qualified for such benefits and for whom the United States under reciprocal treaty
agreements is required to pay benefits, as determined by the Attorney General, after consultation
with the Secretary of State; or
(C)
to the issuance of a professional license to, or the renewal of a professional license by, a foreign
national not physically present in the United States.
(Pub. L. 104–193, title IV, § 401, Aug. 22, 1996, 110 Stat. 2261; Pub. L. 105–33, title V,
§§ 5561, 5565, Aug. 5, 1997, 111 Stat. 638, 639; Pub. L. 105–306, §§ 2, 5(a), Oct. 28, 1998, 112
Stat. 2926, 2927.)
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[Federal Register Volume 85, Number 117 (Wednesday, June 17, 2020)]
[Rules and Regulations]
[Pages 36494-36504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12965]
=======================================================================
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DEPARTMENT OF EDUCATION
34 CFR Part 668
[Docket ID ED-2020-OPE-0078]
RIN 1840-ZA04
Eligibility of Students at Institutions of Higher Education for
Funds Under the Coronavirus Aid, Relief, and Economic Security (CARES)
Act
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Interim final rule.
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SUMMARY: The Department of Education (Department) issues this interim
final rule so that institutions of higher education may appropriately
determine which individuals attending their institution are eligible to
receive emergency financial aid grants to students under the
Coronavirus Aid, Relief, and Economic Security (CARES) Act (March 27,
2020).
DATES: These regulations are effective June 17, 2020. We must receive
your comments on or before July 17, 2020.
ADDRESSES: Submit your comments through the Federal eRulemaking Portal
or via postal mail, commercial delivery, or hand delivery. We will not
accept comments submitted by fax or by email or those submitted after
the comment period. To ensure that we do not receive duplicate copies,
please submit your comments only once. In addition, please include the
Docket ID at the top of your comments.
If you are submitting comments electronically, we strongly
encourage you to submit any comments or attachments in Microsoft Word
format. If you must submit a comment in Adobe Portable Document Format
(PDF), we strongly encourage you to convert the
[[Page 36495]]
PDF to print-to-PDF format or to use some other commonly used
searchable text format. Please do not submit the PDF in a scanned
format. Using a print-to-PDF format allows the Department to
electronically search and copy certain portions of your submissions.
Federal eRulemaking Portal: Go to www.regulations.gov to
submit your comments electronically. Information on using
regulations.gov, including instructions for accessing agency documents,
submitting comments, and viewing the docket, is available on the site
under ``Help.''
Postal Mail, Commercial Delivery, or Hand Delivery: The
Department strongly encourages commenters to submit their comments
electronically. However, if you mail or deliver your comments about the
interim final rule, address them to Gaby Watts, U.S. Department of
Education, 400 Maryland Ave. SW, Room 258-02, Washington, DC 20202.
Privacy Note: The Department's policy is to make comments received
from members of the public available for public viewing on the Federal
eRulemaking Portal at www.regulations.gov. Therefore, commenters should
include in their comments only information that they wish to make
publicly available.
FOR FURTHER INFORMATION CONTACT: For further information contact Gaby
Watts, U.S. Department of Education, 400 Maryland Ave. SW, Room 258-02,
Washington, DC 20202. Telephone: 202-453-7195 . Email:
Gaby.Watts@ed.gov.
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll-free, at
(800) 877-8339 .
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SUPPLEMENTARY INFORMATION:
Invitation to Comment: Although the Department has decided to issue
this final rule without first publishing a proposed rule for public
comment, we are interested in whether you think we should make any
changes to this rule. We invite your comments. We will consider these
comments in determining whether to revise the rule.
We invite you to assist us in complying with the specific
requirements of Executive Orders 12866 and 13563 and their overall
requirement of reducing regulatory burden that might result from this
final rule. Please let us know of any further ways we could reduce
potential costs or increase potential benefits while preserving the
effective and efficient administration of the Department's programs and
activities.
During and after the comment period, you may inspect all public
comments about this interim final rule by accessing Regulations.gov.
Due to the current COVID-19 pandemic, the Department's buildings are
currently not open. However, upon reopening, you may also inspect the
comments in person at 400 Maryland Ave. SW, Washington, DC 20202,
between 8:30 a.m. and 4:00 p.m., Eastern Time, Monday through Friday of
each week except Federal holidays. To schedule a time to inspect
comments, please contact the person listed under FOR FURTHER
INFORMATION CONTACT.
Assistance to Individuals with Disabilities in Reviewing the
Rulemaking Record: On request, we will provide an appropriate
accommodation or auxiliary aid to an individual with a disability who
needs assistance to review the comments or other documents in the
public rulemaking record for this interim final rule. To schedule an
appointment for this type of accommodation or auxiliary aid, please
contact the person listed under FOR FURTHER INFORMATION CONTACT.
Background:
On March 27, 2020, Congress enacted the CARES Act, Public Law 116-
136, to help Americans cope with the economic and health crises created
by the novel coronavirus disease (COVID-19) outbreak. Section 18004 of
the CARES Act establishes the Higher Education Emergency Relief Fund
(HEERF) and instructs the Secretary to allocate funding to eligible
institutions of higher education in connection with the COVID-19
outbreak. Section 18004(c) specifically allows institutions to use
their HEERF allocation under Sec. 18004(a)(1) for ``any costs
associated with significant changes to the delivery of instruction due
to the coronavirus,'' while adding the restriction that funds cannot be
used for ``payment to contractors for the provision of pre-enrollment
recruitment activities; endowments; or capital outlays associated with
facilities related to athletics, sectarian instruction, or religious
worship.'' Section 18004(c) also states that institutions must use at
least 50 percent of their allocations ``to provide emergency financial
aid grants to students for expenses related to the disruption of campus
operations due to coronavirus (including eligible expenses under a
student's cost of attendance, such as food, housing, course materials,
technology, health care, and child care),'' implicitly allowing
institutions to use more than 50 percent of their funds for this
purpose. Thus, the first sentence of section 18004(c) generally allows
an institution to use its allocated HEERF funds under section
18004(a)(1) to cover certain coronavirus-related costs, while the
second sentence requires an institution to give at least half of its
allocated HEERF funds as grants to students. Finally, section 18004(e)
requires institutions to submit reports to the Secretary describing how
the funds were used under the section and authorizes the Secretary to
specify the time and manner of such reporting.
Although the second sentence of section 18004(c) states that the
emergency financial aid grants are to be given to students, the CARES
Act does not define the term ``student'' or the phrases ``grants to
students'' or ``emergency financial aid grants to students.'' In
addition to leaving these terms undefined, Congress also included an
implicit reference to title IV terms immediately after the phrase
``emergency financial aid grants to students,'' 18004(c) (``including
eligible expenses under a student's cost of attendance''), and explicit
references to that same title IV standard following the phrase ``grants
to students'' in two of the preceding subsections, 18004(a)(2) and
(a)(3) (``the student's cost of attendance (as defined under section
472 of the Higher Education Act''). In determining who constitutes a
``student'' for purposes of ``emergency financial aid grants to
students'' in section 18004 of the CARES Act, the Department is mindful
that ``[s]tatutory construction . . . is a holistic endeavor.'' United
Sav. Ass'n of Texas v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S.
365, 371 (1988). In the appropriate circumstances, the Department's
construction of the CARES Act must be informed or even controlled by
other relevant law. (``We assume that Congress is aware of existing law
when it passes legislation,'' Hall v. United States, 566 U.S. 506, 516
(2012) quoting Miles v. Apex Marine Corp., 498 U.S. 19, 32 (1990).) In
context the category of ``student'' recipients eligible for ``emergency
financial aid grants'' is therefore at a minimum ambiguous.
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This is a critical ambiguity, requiring the Department to exercise
its narrow interpretative authority under Chevron U.S.A., Inc. v.
Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984). (`` `The
power of an administrative agency to administer a congressionally
created . . . program necessarily requires the formulation of policy
and the making of rules to fill any gap left, implicitly or explicitly,
by Congress.' quoting Morton v. Ruiz, 415 U.S. 199, 231 (1974). . . .
Sometimes the legislative delegation to an agency on a particular
question is implicit rather than explicit.'') Here the Secretary
[[Page 36496]]
exercises her authority under 20 U.S.C. 1221e-3 and 20 U.S.C. 3474.
Relying on statutory language and context to develop a harmonious
construction faithful to the entire statutory scheme, see Food and Drug
Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132-33 (2000)
(``In determining whether Congress has specifically addressed the
question at issue, a reviewing court should not confine itself to
examining a particular statutory provision in isolation. The meaning--
or ambiguity--of certain words or phrases may only become evident when
placed in context.''), we have concluded that Congress intended the
category of those eligible for ``emergency financial aid grants to
students'' in section 18004 of the CARES Act to be limited to those
individuals eligible for title IV assistance.
The Department considered a number of factors in reaching this
conclusion. For one, an interpretation of the term ``student'' in
``emergency financial aid grants to students'' that was broad enough to
cover anyone engaged in learning, or anyone enrolled in any way at an
institution, or anyone enrolled full-time at an institution in a
program leading to a recognized postsecondary credential, would be
significantly curtailed at the outset by existing law independent of
title IV with regard to certain immigration statuses. 8 U.S.C. 1611(a)
already prohibits certain individuals from receiving any ``Federal
public benefit'' and applies ``[n]otwithstanding any other provision of
law.'' This prohibition clearly applies to the HEERF funds. Section
1611(c) defines ``Federal public benefit'' to include (A) ``any grant .
. . provided by an agency of the United States or by appropriated funds
of the United States,'' as well as (B) ``any . . . postsecondary
education . . . benefit . . . for which payments or assistance are
provided to an individual . . . by an agency of the United States or by
appropriated funds of the United States.'' \1\ To the extent an
institution uses HEERF funds, which qualify as ``appropriated funds of
the United States,'' to provide ``emergency financial aid grants to
students,'' the grants would qualify as a Federal public benefit under
both Section 1611(c)(1)(A) and (B) because they would be ``grant[s] . .
. by appropriated funds,'' as well as ``postsecondary education''
benefits to individuals. To the extent an institution otherwise uses
the funds to make payments to students for purposes of, for example,
``costs associated with significant changes to the delivery of
instruction due to the coronavirus,'' these payments would also qualify
as ``postsecondary education'' benefits to individuals. The Department
has not identified any specific language in Section 18004, or elsewhere
in the CARES Act, that suggests Congress intended to include aliens who
are not ``qualified'' for purposes of Section 1611 among the recipients
of HEERF funds, notwithstanding the preexisting general prohibition in
Section 1611.
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\1\ Because title IV also contains an eligibility requirement
based on immigration status which is similar in most respects to the
requirement in 8 U.S.C. 1611, there is little remaining application
for the prohibition in 8 U.S.C. 1611 once title IV eligibility
requirements have been applied.
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On the other extreme, the Department concludes that a more narrow
interpretation of the term ``student'' in the phrase ``emergency
financial aid grants to students''--for example, to cover only the
group that received Federal Pell Grants as referenced in section
18004(a)(1)(A)--would be overly restrictive and less supportable under
the language of the CARES Act.
Earlier in the CARES Act, in section 3504 entitled ``Use of
Supplemental Educational Opportunity Grants for Emergency Aid,''
Congress expressly authorizes institutions to use money allocated to
them under the Federal Supplemental Educational Opportunity Grant
(FSEOG) program, 20 U.S.C. 1070b et seq., for ``emergency financial aid
grants to students,'' which is the identical phrase Congress used in
section 18004. Although Congress did not expressly state that these
emergency financial aid grants to students must be limited to those
students who are eligible for participation in programs under title IV
of the HEA, the context indicates that Congress intended that
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restriction as a general rule. Not only was the previously planned use
of the funds conditioned upon title IV eligibility (since the FSEOG
program is part of title IV of the HEA) but also because the text of
the CARES Act allows institutions to ``waive the amount of need
calculation under section 471'' of the HEA, which is a calculation that
applies to title IV aid.
Because ``identical words and phrases within the same statute
should normally be given the same meaning,'' Powerex Corp. v. Reliant
Energy Services, Inc., 551 U.S. 224, 232 (2007), the implicit title IV
eligibility requirement associated with ``emergency financial aid
grants to students'' in section 3504 should apply to the distribution
of ``emergency financial aid grants to students'' in section 18004.
Congress did not previously choose to provide emergency financial aid
grants through the HEA, and thus these grants, by definition, do not
constitute Federal financial student aid under the HEA, including title
IV of the HEA. However, even though it is true that all title IV aid is
subject to title IV eligibility requirements, it does not follow that
all non-title IV aid is exempt from title IV eligibility requirements.
Rather, non-title IV aid can be subject to title IV eligibility
requirements. For example, scholarships distributed under the Fund for
the Improvement of Postsecondary Education, a non-title IV program,
require that recipients meet certain title IV eligibility requirements,
as noted below. 20 U.S.C. 1138(d).
In providing emergency financial aid grants through section 18004
of the CARES Act, Congress also used the framework under title IV of
the HEA for the distribution of these emergency financial aid grants to
students, implying that the Department and institutions adhere to the
requirements under title IV, such as using the definition of ``cost of
attendance'' under title IV of the HEA and the same systems for
distributing Federal financial student aid to institutions under title
IV of the HEA.
Indeed, Congress specifically references title IV of the HEA in
various provisions in section 18004 of the CARES Act, including the
following provisions:
Section 18004(a)(1) links a component of the institutional
allocation for HEERF to enrollment of Pell Grant recipients, and a
student must be eligible for Federal financial student aid under
section 484 of title IV of the HEA to receive Pell Grants. 20 U.S.C.
1070a(a) (stating Pell Grants are only for an ``eligible student
(defined in accordance with [S]ection 484 [of the HEA])''); 20 U.S.C.
1091.
Sections 18004(a)(2) and (3) require institutions to use
funds ``for grants to students for any component of the student's cost
of attendance (as defined under Sec. 472 of [title IV of] the Higher
Education Act), including food, housing, course materials, technology,
healthcare, and child care.'' (Emphasis added.)
Section 18004(a)(3) specifically references ``part B of
title VII of the HEA,'' and section 741(d)(1) of part B of title VII of
the HEA expressly requires students to be eligible under section 484(a)
of the HEA to receive grants or scholarships. 20 U.S.C. 1138(d).
Section 18004(b) expressly requires the Secretary to use
the same systems that are used to distribute funding to each
institution under title IV of the HEA in order to distribute funds to
each institution under section 18004(a)(1) of the CARES Act.
[[Page 36497]]
Section 18004(c) again expressly refers to ``a student's
cost of attendance,'' which is a defined term in section 472 of the
HEA. 20 U.S.C. 1087ll.
The most congruent definition of ``student'' for purposes of
``emergency financial aid grants to students'' in section 18004 is a
person who is or would be eligible under section 484 of the HEA for
title IV aid. Indeed, it would be an illogical result for Congress to
require students to be eligible under section 484 of title IV of the
HEA for grants under section 18004(a)(3) of the CARES Act, which
expressly references part B of title VII of the HEA, but not for grants
under sections 18004(a)(1) and (2) of the CARES Act, especially when
Congress in section 18004(d) directs the Secretary to prioritize funds
under section 18004(a)(3) for institutions that did not receive
sufficient funding under section 18004(a)(1) and (2). ``Interpretations
of statute which would produce absurd results are to be avoided.''
Griffin v. Ocean Contractors, Inc., 458 U.S. 564, 576 (1982). To
interpret section 18004 in a holistic manner, it appears that the best
interpretation of ``student'' where section 18004 references
``emergency financial aid grants to students'' is to mean a person who
is eligible under section 484 of the HEA to receive title IV aid.\2\
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\2\ To calculate the HEERF allocation under section
18004(a)(1)(B), the Department ``approximated the factors using the
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best available data'' by multiplying the 2017/2018 full-time
enrollment number by the fall 2018 percentage of undergraduate,
graduate, and professional students not enrolled exclusively in
distance education, as self-reported by institutions and compiled in
the Department's Integrated Postsecondary Education Data System
(IPEDS). See Methodology for Calculating Allocations per Section
18004(a)(1) of the CARES Act,
https://www2.ed.gov/about/offices/list/ope/heerf90percentformulaallocationexplanation.pdf.
Thus, the approach taken in calculating the ``full-time
equivalent enrollment of students'' in section 18004(a)(1)(B)
differs from the approach taken in this rule in interpreting and
applying ``grants to students'' elsewhere in section 18004. The
Department intends to interpret the term ``student'' in the same way
throughout section 18004, but did not have data available on the
number of individuals enrolled at each institution who are or could
be eligible for title IV aid, so the Department had to use a
different measure based on available data. As between the available
options, the Department believed that using a broader number for
part of the baseline in establishing each institution's share under
18004(a)(1) made sense because funds used toward the first allowed
purpose in 18004(c) (to cover any costs associated with significant
changes to the delivery of instruction due to the coronavirus) apply
to the entire institution regardless of the definition of
``student.'' The Department also deemed it more important to move
expeditiously to calculate the HEERF allocation despite the
acknowledged ``limitations of th[e] data,'' rather than stopping the
HEERF process in order to gather additional data solely for purposes
of calculating the HEERF allocation.
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Final Rule:
For purposes of the phrases ``grants to students'' and ``emergency
financial aid grants to students'' in sections 18004(a)(2), (a)(3), and
(c) of the CARES Act, ``student'' is defined as an individual who is,
or could be, eligible under section 484 of the HEA, to participate in
programs under title IV of the HEA. We add this definition to 34 CFR
668.2.
An important policy goal for the Department is to make emergency
financial aid grants available to students in the most efficient,
effective, and expedient way possible and consistent with Congressional
intent. At the same time, the Department has an obligation to taxpayers
to prevent waste, fraud, and abuse. The potential for waste, fraud, and
abuse is significant when institutions of higher education are given
the opportunity to quickly make cash awards to students, particularly
when institutions are rightfully concerned about declining enrollments
and the loss of ancillary revenue as a result of COVID-19. In addition,
there have been reports that the unusual circumstances caused by COVID-
19 have given rise to new efforts to defraud government programs in
other contexts.\3\
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\3\ See, e.g., Mike Baker, Feds Suspect Vast Fraud Network Is
Targeting U.S. Unemployment Systems, New York Times,
www.nytimes.com/2020/05/16/us/coronavirus-unemployment-fraud-secret-service-washington.html (last
visited May 19, 2020).
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The Department has considered these issues in reaching its
interpretation of the category of those eligible for ``emergency
financial aid grants to students'' in section 18004(a)(2), (a)(3), and
(c). The Department has concluded that the best approach to
interpreting ``student'' in ``emergency financial aid grants to
students'' is to mean a person who is eligible under section 484 of the
HEA to receive title IV aid, as suggested by the references to title IV
elsewhere in section 18004. This approach uses a clear, existing
standard that is familiar to the Department and to institutions and
will allow both the Department and institutions to implement the HEERF
provisions in an efficient, effective, and expedient way. The
Department has placed a high priority on getting assistance to
institutions and individuals as quickly and efficiently as possible in
light of the national emergency and the immediate needs resulting
therefrom, and the use of an existing standard here achieves that same
important goal. The title IV eligibility standard has already been
specified in great detail by the Department in its practice and its
communications with institutions with regard to title IV programs over
the years. In contrast, using a generic, broad standard would require
the Department and institutions to wade through a litany of specific
questions about which groups of potential students do or do not qualify
for ``grants to students.'' \4\
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\4\ For example, there would need to be consideration and a
determination made regarding whether to include or exclude
individuals based on whether they are enrolled for credit, enrolled
in an off-campus program, simultaneously finishing a high school
degree, taking remedial courses, taking only zero-credit thesis
courses, enrolled exclusively in courses not applied towards a
recognized credential, enrolled only in English as a Second Language
programs or Continuing Education Units, auditing classes only,
participating residents or interns in a medical doctor practice
program after receiving their degree, studying abroad at a foreign
university, enrolled in a branch campus in a foreign country, or
participating in Experimental Sites.
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For the majority of students, active participation in title IV
programs will clearly demonstrate to the institution and the Department
that they are qualified as a student to receive emergency financial aid
grants. For example, with regard to the title IV eligibility
requirement related to citizenship or appropriate immigration status in
the United States, the majority of students' statuses can be verified
by the fact of their participation in title IV.\5\ And this
verification also ensures that the disbursement of grants to those
individuals occurs in compliance with the independent statutory
restriction found in 8 U.S.C. 1611.
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\5\ For the rest of students, qualification can be confirmed by
the method described in the May 1, 2015 Dear Colleague Letter,
entitled ``Citizenship and Immigration Status Documentation'' (DCL
ID: GEN-15-08), the Federal Student Aid Handbook
(https://ifap.ed.gov/sites/default/files/attachments/2019-08/1920FSAHbkVol1Ch2.pdf), or by
employing the electronic document
submission flexibilities provided in the Department's April 3, 2020,
``UPDATED Guidance for Interruptions of Study Related to COVID-19''
(https://ifap.ed.gov/sites/default/files/attachments/2020-
04/040320UPDATEDGuidanceInterruptStudyRelCOVID19Attach.pdf).
---------------------------------------------------------------------------
The Department also acknowledges the efficiency of leveraging
existing processes and procedures to minimize burden on institutions
implementing this IFR. For example, institutions could encourage
students who currently do not receive title IV aid to submit the Free
Application for Federal Student Aid (FAFSA) in order to determine title
IV eligibility.
In addition, this approach to interpreting ``student'' within the
phrase ``emergency financial aid grants to students'' also allows the
Department to prevent potential waste, fraud, and abuse. For example,
without the title IV eligibility standard, the existence of HEERF
funding could incentivize individuals who are not qualified and cannot
qualify under the title IV
[[Page 36498]]
standard to enroll as students, and it could incentivize institutions
to take advantage of this dynamic to further their bottom lines. If a
broad definition of ``student'' were employed for purposes of emergency
financial aid grants to students, unscrupulous institutions could
create cheap classes and programming that provides little or no
educational value and then use the HEERF grant funding to incentivize
individuals not qualified under title IV to enroll as paying students
in those classes and programs, thereby qualifying for a grant.
Alternatively, institutions could use the HEERF grant funding to
incentivize the re-enrollment of students cannot maintain Satisfactory
Academic Progress (SAP) due to reasons beyond the qualifying emergency,
solely for the purpose of increasing revenues via the tuition such
students would pay. Without restriction, institutions could also use
HEERF funds for students who are enrolled at the institution but do not
intend to receive a degree or certificate, thereby diverting funds from
students who are pursuing a degree or certificate in an eligible
program.
Instead, interpreting ``student'' to track title IV eligibility for
purposes of emergency financial aid grants to students will ensure that
institutions are only providing funds to students who are enrolled in
an eligible program at an institution and are maintaining SAP in their
program, among other requirements. Each of these requirements exists
because it focuses the use of Federal resources on valuable educational
activities and excludes areas that are more open to waste, fraud, and
abuse. This approach will thereby allow the Department to reduce the
likelihood and amount of waste, fraud, and abuse in the administration
of the HEERF allocations under the CARES Act.
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Waiver of Notice and Comment Rulemaking, Negotiated Rulemaking, and
Delayed Effective Date Under the Administrative Procedure Act
The Department believes its interim final rulemaking authority must
be narrowly construed and exercised only when there is a sound basis
for doing so. However, Congress enacted the CARES Act to help Americans
cope with the urgent economic and health crises created by the COVID-19
outbreak and created the HEERF to provide emergency financial aid
grants to students. In light of the urgent economic challenges facing
many students as a result of the crisis, the Department has determined
that there is good cause for interim final rulemaking and that such
action is in the public interest. In the absence of this interim final
rule, the terms defined herein will remain undefined and indefinite,
and the potential for waste, fraud, and abuse described above will not
have been unaddressed in any legally binding manner.\6\
---------------------------------------------------------------------------
\6\ Nor will the Department enforce the title IV eligibility
interpretation announced in this rule against distribution of HEERF
funds that occurred prior to the publication of this rule.
---------------------------------------------------------------------------
Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the
Department generally offers interested parties the opportunity to
comment on proposed rules. However, the APA provides that an agency is
not required to conduct notice and comment rulemaking when the agency,
for good cause, finds that notice and public comment thereon are
impracticable, unnecessary, or contrary to the public interest (5
U.S.C. 553(b)(B)). In light of the current national emergency and the
importance of institutions properly distributing the HEERF allocations
via emergency financial aid grants to students to help with their
expenses related to the disruption of campus operations due to COVID-19
as quickly as possible, the normal rulemaking process would be
impracticable and contrary to the public interest, so good cause exists
for waiving the notice and comment requirements of the APA. Although
the Department has issued guidance to this effect already, that
guidance is not legally binding, the Department understands that
certain institutions have refrained from distributing some or all of
their HEERF funds until a final rule is issued clarifying this point in
a legally binding manner.
The Department is not required to conduct negotiated rulemaking for
this rule. The requirement in HEA section 492 that requires the
Department to obtain public involvement in the development of proposed
regulations for title IV of the HEA does not apply to this final rule,
because it implements the CARES Act, not title IV. Moreover, even if it
did apply, section 492(b)(2) of the HEA provides that negotiated
rulemaking may be waived for good cause when doing so would be
``impracticable, unnecessary, or contrary to the public interest.''
Section 492(b)(2) of the HEA also requires the Secretary to publish the
basis for waiving negotiations in the Federal Register at the same time
as the regulations in question are first published. Even if section 492
applied to this rule, good cause would exist to waive the negotiated
rulemaking requirement, since, as explained above, notice and comment
rulemaking is not practicable or in the public interest in this case.
The master calendar requirement in section 482 of the HEA likewise
does not apply to this rule, because the rule does not relate to the
delivery of student aid funds under title IV.
Additionally, the APA generally requires that regulations be
published at least 30 days before their effective date, except as
otherwise provided by the agency for good cause found and published
with the rule (5 U.S.C. 553(d)(3)). As described above, good cause
exists for this rule to be effective upon publication in light of the
current national emergency and the importance of institutions properly
distributing the HEERF allocations via emergency financial aid grants
to students to help with their expenses related to the disruption of
campus operations due to COVID-19. The CRA requires a major rule may
take effect no sooner than 60 calendar days after an agency submits a
CRA report to Congress or the rule is published in the Federal
Register, whichever is later. 5 U.S.C. 801(a)(3)(A). However, the CRA
creates limited exceptions to this requirement. See id. Sec. 801(c);
Sec. 808. An agency may invoke the ``good cause'' exception under
section 808(2) in the case of rules for which the agency has found
``good cause'' under the APA, section 553(b)(B), to issue the rule
without providing the public with an advance opportunity to comment. As
stated above the Department has found good cause to issue this rule
without notice and comment rulemaking and thus we are not including the
60-day delayed effective date in this rule.
Executive Orders 12866, 13563, and 13771
Regulatory Impact Analysis
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Under Executive Order 12866, it must be determined whether this
regulatory action is ``significant'' and, therefore, subject to the
requirements of the Executive order and subject to review by the Office
of Management and Budget (OMB). Section 3(f) of Executive Order 12866
defines a ``significant regulatory action'' as an action likely to
result in a rule that may--
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
Tribal governments or communities in a material way (also referred to
as an ``economically significant'' rule);
[[Page 36499]]
(2) Create serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles stated in the
Executive order.
OMB has determined that this regulatory action is a significant
regulatory action subject to review by OMB under section 3(f) of
Executive Order 12866.
Under Executive Order 13771, for each new regulation that the
Department proposes for notice and comment or otherwise promulgates
that is a significant regulatory action under Executive Order 12866 and
that imposes total costs greater than zero, it must identify two
deregulatory actions. For FY 2020, any new incremental costs associated
with a new regulation must be fully offset by the elimination of
existing costs through deregulatory actions. This rule's designation
under Executive Order 13771 will be informed by public comment.
We have also reviewed these regulations under Executive Order
13563, which supplements and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
Executive Order 12866. To the extent permitted by law, Executive Order
13563 requires that an agency--
(1) Propose or adopt regulations only upon a reasoned determination
that their benefits justify their costs (recognizing that some benefits
and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society,
consistent with obtaining regulatory objectives and taking into
account--among other things and to the extent practicable--the costs of
cumulative regulations;
(3) In choosing among alternative regulatory approaches, select
those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives rather
than the behavior or manner of compliance a regulated entity must
adopt; and
(5) Identify and assess available alternatives to direct
regulation, including economic incentives--such as user fees or
marketable permits--to encourage the desired behavior, or provide
information that enables the public to make choices.
Executive Order 13563 also requires an agency ``to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible.'' The Office of
Information and Regulatory Affairs of OMB has emphasized that these
techniques may include ``identifying changing future compliance costs
that might result from technological innovation or anticipated
behavioral changes.''
We are issuing this interim final rule only on a reasoned
determination that its benefits would justify its costs. In choosing
among alternative regulatory approaches, we selected those approaches
that would maximize net benefits. Based on the analysis that follows,
the Department believes that these regulations are consistent with the
principles in Executive Order 13563.
We have also determined that this regulatory action would not
unduly interfere with State, local, and Tribal governments in the
exercise of their governmental functions.
Elsewhere in this section under Paperwork Reduction Act of 1995, we
identify and explain burdens specifically associated with the
information collection requirements.
Need for Regulatory Action
The Department is issuing this interim final rule to clarify which
students are eligible for emergency financial aid grants under section
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18004 of the CARES Act. This final rule is meant to balance flexibility
and clarify administration for institutions so the funds can be
provided to eligible students as efficiently as possible with
eligibility requirements consistent with congressional intent and
designed to prevent waste, fraud, and abuse. The emergency financial
aid grants are meant to assist students with expenses related to the
disruption of on-campus activities, so this final rule is meant to
clarify any questions about eligibility so the funds can be disbursed
in a timely manner.
As detailed in the preamble of this IFR, in light of the current
national emergency and the importance of institutions distributing the
HEERF allocations via emergency financial aid grants to students to
help with their expenses related to the disruption of campus operations
due to COVID-19, the normal rulemaking process would be impracticable
and contrary to the public interest. With the definition of ``student''
in ``emergency financial aid grants to students'' uncertain,
institutions may be reluctant to award the full allocation for grants
to students in time to assist with the COVID-19 related expenses the
funds are intended to alleviate.
Costs, Benefits, and Transfers
The emergency financial aid grants under section 18004 of the CARES
Act are intended to assist eligible students with expenses related to
the disruption of campus activities. In accordance with OMB Circular A-
4, we are evaluating the costs and benefits of the IFR compared to a
pre-statutory baseline. This IFR defines which students are eligible
for the grants but does not change the amount available or the
allocation formula for providing the funds to institutions. The amount
of transfers available to eligible students in 2020 is a minimum of
$6.25 billion and up to $12.5 billion, depending on the amount
institutions retain for institutional expenses. We have not discounted
or annualized this amount because it is meant to be disbursed to
students as efficiently as possible in the current year.
As described in this preamble, the eligibility requirements
clarified in this final rule allow students to know if they are
eligible to receive such funds from their institution. Limiting
eligibility to title IV-eligible students who were enrolled and making
P SAP in on-campus programs during the time of coronavirus-related
disruptions to campus operations should allow the grants to be targeted
for the purpose they were established. By aligning requirements with
title-IV eligibility,\7\ those individuals who do not meet one or more
of the title IV eligibility requirements will be unable to receive
HEERF grants.
---------------------------------------------------------------------------
\7\ An exhaustive list of student eligibility requirements can
be found in Section 484 of the Higher Education Act of 1965, as
amended [20 U.S.C. 1091]. They are as follows (1) enroll or be
accepted for enrollment in a program leading to a recognized
credential at an eligible IHE and not enrolled in elementary or
secondary school (2) if presently enrolled, be maintaining
satisfactory academic progress (3) not owe a refund on a Federal
student grant or be in default on any Federal student loan (4)
submit a Statement of Educational Purpose (5) are a U.S. citizen,
National or eligible noncitizen (6) not have been convicted of, or
plead nolo contendere or guilty to, a crime involving fraud in
obtaining federal student aid (7) have a high school diploma or its
equivalent (8) have a valid social security number (9) register with
the Selective Service (if required) (10) not been convicted of any
offense under any Federal or State law involving the possession or
sale of a controlled substance for conduct that occurred during a
period of enrollment for which the student was receiving Federal
student aid. For more information visit: https://uscode.house.gov/view.xhtml?
req=(title:20%20section:1091%20edition:prelim) and here
https://ifap.ed.gov/federal-student-aid-handbook/08-05-2019-2019-2020-federal-student-aid-handbook-
student-eligibility.
---------------------------------------------------------------------------
As institutions will determine how they will distribute funds to
their
[[Page 36500]]
students, the Department does not know the exact distribution of who
will receive the grants. Table 1 shows the estimated pool of potential
recipients as derived from IPEDS data for institutions that received an
allocation. It is not specific to Spring 2020 enrollment but does
provide an indication of the number of students who could receive
funds. The primary eligibility limitations reflected in the table are
the exclusion of non-resident aliens and the use of the percent of
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students whose programs were exclusively through distance education to
estimate eligible on-campus enrollment.
Table 1--Estimated Potential Grant Recipients by Control of Institution
---------------------------------------------------------------------------------------------------
-------------
Public Private Proprietary
Total
---------------------------------------------------------------------------------------------------
-------------
Total Enrollment \8\................ 18,527,813 4,778,403 1,053,455
24,359,671
Undergraduate................... 16,872,158 3,208,336 916,722
20,997,216
Graduate........................ 1,655,655 1,570,067 136,733
3,362,455
Non-Resident Alien.................. 692,123 408,696 25,903
1,126,722
Percent All-Distance \9\............ 11.40 19.20 59.90
Estimated Potentially Eligible On- 15,802,421 3,530,723 412,048
19,745,193
Campus Enrollment..................
---------------------------------------------------------------------------------------------------
-------------
It will be easier for students who have successfully completed a
FAFSA and received a valid student aid report (SAR) or institutional
student information record (ISIR) for the 2019-20 or 2020-21 award
years to receive an emergency financial aid grant because they have
already demonstrated their eligibility under title IV. While some
students may choose not to fill out a FAFSA because they have other
sources of funding for their education, others may lack the necessary
information or familiarity with the financial aid process to have
information in place already. A number of studies have examined the
issue of barriers to FAFSA completion including complexity and lack of
counseling. These barriers are particularly challenging for low-income,
minority, and first-generation students.\10\ Another limitation that
will restrict title IV eligible students' access to the emergency
financial aid grants is their program's participation in title IV aid.
Some programs at title-IV eligible institutions, primarily shorter
training courses such as first responder training certificate programs,
do not participate. Students enrolled in such programs will not be
eligible for the emergency financial aid grants. Students who choose
not to fill out a FAFSA but otherwise meet the title IV eligibility
criteria may verify their eligibility by completing an application
designed by the institution in which the student attests under the
penalty of perjury to meeting the requirements of section 484 of the
HEA.
---------------------------------------------------------------------------
\8\ Analysis of IPEDS 2017-18 12-month enrollment file, effy2018
available at https://nces.ed.gov/ipeds/datacenter/DataFiles.aspx?goToReportId=7.
\9\ National Center for Education Statistics, Digest of
Education Statistics 2019, Table 311.15. Number and percentage of
students enrolled in degree-granting postsecondary institutions, by
distance education participation, location of student, level of
enrollment, and control and level of institution: Fall 2017 and Fall
2018. Fall 2017 share of students taking exclusively distance
education courses. Available at https://nces.ed.gov/programs/digest/d19/tables/dt19_311.15.asp.
\10\ Owen, Laura and Westlund, Erik (2016) ``Increasing College
Opportunity: School Counselors and FAFSA Completion,'' Journal of
College Access: Vol. 2: Iss. 1, Article 3. Available at:
http://scholarworks.wmich.edu/jca/vol2/iss1/3. Literature review discusses
barriers and interventions.
---------------------------------------------------------------------------
In developing this IFR, the Department considered waiving some
title IV eligibility requirements related to drug offenses, fraud
related to title IV funds, or default. Ultimately, it was determined
that eliminating some eligibility criteria and not others would not be
fair across groups of students and would not allow institutions to
maximize the use of their existing eligibility confirmation processes.
It is unclear how institutions will interpret the language of the
CARES Act as they continue distributing emergency financial aid grants
to students in the absence of the clarification contained in this rule.
Some institutions may choose to continue to follow the guidance the
Department has already issued on this subject, while others may adopt
their own broader definition of ``student.'' At a minimum, the
Department has already brought to the attention of institutions that
the restrictions in 8 U.S.C. 1611 apply with regard to the distribution
of grants to non-qualifying aliens as defined therein, so those
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individuals would not qualify for such grants under any interpretation
of ``students.'' On the other hand, within the boundaries established
by the terms of the CARES Act and other applicable statutes,
institutions have discretion in distributing emergency financial aid
grants to students, so even if an institution decided to use a broad
definition of ``students'' in the absence of this rule, the institution
might not exercise its discretion to award grants to everyone who meets
that broader definition. It is therefore difficult to estimate with any
degree of certainty how institutions would use their HEERF allocations
differently for distribution of emergency financial aid grants to
students in the absence of this rule.
Students will benefit from assistance in paying additional expenses
associated with elements included in their cost of attendance, such as
room and board, that changed with the disruption of campus activities.
As confirmed by the Internal Revenue Service, the relief provided under
section 18004 of the CARES Act will not be considered gross income, so
students have no Federal tax consequences to deter them from accepting
this assistance. Students will have to work with their institutions to
access the funds according to whatever process the institution
establishes to award the relief. As described in the Paperwork
Reduction Act section of this preamble, students are expected to take
263,138 hours for a total of $4.71 million at a wage rate of $17.89
\11\ to apply for emergency relief in 2020.
---------------------------------------------------------------------------
\11\ Students' hourly rate estimated using Bureau of Labor
Statistics (BLS) for Sales and Related Workers, All Other, available
at: https://data.bls.gov/cgi-bin/print.pl/oes/current/oes_nat.htm.
Last accessed May 20, 2020.
---------------------------------------------------------------------------
Institutions are also affected by this final rule. They have some
flexibility in determining how they will distribute the funds they were
allocated for this emergency relief. They will incur some costs in
setting criteria or establishing an application process for their
students. We assume the distribution of the funds can largely rely on
existing processes and information involved in the disbursement of
other title IV aid, but there will be some burden in confirming
students' eligibility for the emergency relief, including for students
who do not have an existing valid SAR or ISIR for the 2019-20 or 2020-
21 award years. This could involve developing an application that
includes student attestation under the penalty of
[[Page 36501]]
perjury to meeting the requirements of section 484 of the HEA. For
students who knowingly misrepresent the truth in their attestation, the
school may take disciplinary action against the student or require
repayment of the emergency grant. As described in the Paperwork
Reduction Act section of this preamble, burden on institutions is
estimated to increase by 25,680 hours and $1,177,941 at a wage rate of
$45.87 for postsecondary education administrators \12\ in 2020.
---------------------------------------------------------------------------
\12\ Based on BLS 2019 median hourly wage rate for postsecondary
education administrators in the BLS Occupational Outlook Handbook.
Available at www.bls.gov/ooh/management/postsecondary-education-administrators.htm. Last accessed
May 20, 2020.
---------------------------------------------------------------------------
To the extent that students use their emergency financial aid
grants for expenses related to elements of their cost of attendance
provided by institutions, those institutions will receive some revenue
students may otherwise have been unable to pay at this time. Table 2
summarizes the amounts to be allocated to institutions by sector. The
full breakout of amounts allocated to individual institutions,
including the maximum that can be allocated to institutional costs, is
available in the Allocations for section 18004(a)(1) of the CARES Act
document \13\ on the Department's CARES Act website.\14\ These
allocations were made according to the formula described in the
Methodology for Calculating Allocations document \15\ on the
Department's CARES Act website. The allocation formula emphasizes
institutions' share of Pell Grant recipients with 75 percent of the
allocation based on each IHE's share of full-time equivalent (FTE)
enrollment of Pell Grant recipients who were not enrolled exclusively
in distance education prior to the coronavirus emergency, relative to
the share of such individuals in all institutions. The remaining 25
percent is based on the institution's share of FTE enrollment of
students who were not Pell Grant recipients and who were not enrolled
exclusively in distance education prior to the coronavirus emergency.
This formula helps direct relief to institutions that serve lower
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income students as part of their on-campus operations.
---------------------------------------------------------------------------
\13\ Available at www2.ed.gov/about/offices/list/ope/allocationstableinstitutionalportion.pdf.
\14\ www2.ed.gov/about/offices/list/ope/caresact.html.
\15\ Available at
www2.ed.gov/about/offices/list/ope/heerf90percentformulaallocationexplanation.pdf.
Table 2--Summary of HEERF Allocations
------------------------------------------------------------------------
Sum of minimum
allocation to be
Sum of total awarded for
Row labels allocation emergency financial
aid grants to
students
------------------------------------------------------------------------
Private Non-Profit <2 Yrs... 11,121,217 5,560,619
Private Non-Profit 2-3 Yrs.. 31,469,853 15,734,951
Private Non-Profit 4 Yrs or 2,441,436,384 1,220,718,556
More.......................
Proprietary <2 Yrs.......... 314,169,982 157,085,261
Proprietary 2-3 Yrs......... 415,718,070 207,859,135
Proprietary 4 Yrs or More... 388,802,168 194,401,134
Public <2 Yrs............... 40,318,527 20,159,318
Public 2-3 Yrs.............. 2,655,311,849 1,327,656,148
Public 4 Yrs or More........ 6,208,906,453 3,104,453,411
-------------------------------------------
Grand Total............. 12,507,254,503 6,253,628,533
------------------------------------------------------------------------
Net Budget Impact
We estimate that the definition of student eligibility for the
emergency financial aid grants to students will not have an impact on
the Federal budget. The CARES Act provided a maximum of $12.5 billion,
with a minimum of $6.25 billion required to be spent on emergency
financial aid grants to students and not spent on institutional
expenses. The final rule does not impact the Federal budget because it
clarifies which students are eligible to receive emergency relief
provided by the CARES Act but do not change the amount available for
such grants. As described in the Costs, Benefits, and Transfers section
related to institutions, allocations have been determined and $11.1
billion of the funding has been disbursed to institutions already, with
$50 million held in reserve to account for data limitations in
allocating the initial amounts to eligible institutions. We anticipate
that $12.5 billion will ultimately be disbursed in 2020, and therefore
estimate $12.5 billion in transfers in 2020 relative to a pre-statutory
baseline.
Accounting Statement
As required by OMB Circular A-4 (available at
www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), in the
following table we have prepared an accounting statement showing the
classification of the impacts associated with the provisions of these
final regulations in 2020, using 3% and 7% discount rates. This table
provides our best estimate of the changes in monetized transfers in
2020 as a result of these final regulations. We note that transfers
below flow from the Federal Government to eligible students and are
processed through institutions.
[[Page 36502]]
Table 3--Accounting Statement: Classification of Estimated Impacts in
2020
[In millions]
------------------------------------------------------------------------
------------------------------------------------------------------------
Category Benefits
------------------------------------------------------------------------
Assistance may support students
continuing in their programs........... Not Quantified
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
Paperwork burden on institutions to 7% 3%
administer funds and on students to $5.9 $5.9
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apply..................................
------------------------------------------------------------------------
Category................................ Transfers
------------------------------------------------------------------------
Relief for eligible students and 7% 3%
institutions to help with additional $12,500 $12,500
expenses due to disruption of campus
activities.............................
------------------------------------------------------------------------
Regulatory Flexibility Act Certification
The Regulatory Flexibility Act does not apply to this rulemaking
because there is good cause to waive notice and comment under the
Administrative Procedure Act (5 U.S.C. 553).
The Secretary certifies that this final rule will not have a
significant economic impact on a substantial number of small entities.
The U.S. Small Business Administration Size Standards define ``small
entities'' as for-profit or nonprofit institutions with total annual
revenue below $7,000,000 or, if they are institutions controlled by
small governmental jurisdictions (that are comprised of cities,
counties, towns, townships, villages, school districts, or special
districts), with a population of less than 50,000.
However, as noted in several of the Department's recent
regulations, we believe that an enrollment-based standard for small
entity status is more applicable to institutions of higher education.
The Department recently proposed a size classification based on
enrollment using IPEDS data that established the percentage of
institutions in various sectors considered to be small entities, as
shown in Table 4. We described this size classification in the NPRM
published in the Federal Register on July 31, 2018 for the proposed
borrower defense rule (83 FR 37242, 37302). The Department discussed
the proposed standard with the Chief Counsel for Advocacy of the Small
Business Administration, and while no change has been finalized, the
Department continues to believe this approach better reflects a common
basis for determining size categories that is linked to the provision
of educational services.
Table 4--Small Entities Under Enrollment Based Definition
---------------------------------------------------------------------------------------------------
-------------
Level Type Small Total
Percent
---------------------------------------------------------------------------------------------------
-------------
2-year................................ Public.................. 342 1,240
28
2-year................................ Private................. 219 259
85
2-year................................ Proprietary............. 2,147 2,463
87
4-year................................ Public.................. 64 759
8
4-year................................ Private................. 799 1,672
48
4-year................................ Proprietary............. 425 558
76
------------------------------------------------------------
-------------
Total............................. ........................ 3,996 6,951
57
---------------------------------------------------------------------------------------------------
-------------
This rule will benefit those institutions of higher education that
are small entities by allowing them to use a familiar existing
eligibility framework to determine who should receive emergency
financial aid grants under HEERF. As described in the Regulatory Impact
Analysis, institutions may benefit from applying no more than 50
percent of their allocation of HEERF funds to institutional costs, so
some small entities will benefit from those revenues. They will also
have to establish a process for determining which of their students
should receive and disburse the funds accordingly. We expect that the
2,586 estimated small entities allocated funds for this purpose under
the CARES Act will spend a total of 5,172 hours totaling $237,240 at a
wage rate of $45.87 \11\ for postsecondary administrators to administer
the distribution of the relief.
Table 5 shows the allocations of funds to small entities by sector,
with any institution for which there was no small business indicator
available considered a small entity. As for all institutions, the
allocations of funds to specific small institutions is available on the
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Department's CARES website.\12\
Table 5--Summary of Allocations to Small Entities by Sector
------------------------------------------------------------------------
Sum of minimum
allocation to be
awarded for
Sector Sum of total emergency
allocation financial aid
grants to
students
------------------------------------------------------------------------
Private Non-Profit <2 Yrs......... 8,274,977 4,137,498
Private Non-Profit 2-3 Yrs........ 20,417,294 10,208,669
[[Page 36503]]
Private Non-Profit 4 Yrs or More.. 266,608,121 133,304,213
Proprietary <2 Yrs................ 239,330,457 119,665,488
Proprietary 2-3 Yrs............... 177,306,399 88,653,273
Proprietary 4 Yrs or More......... 84,269,294 42,134,681
Public <2 Yrs..................... 29,196,455 14,598,279
Public 2-3 Yrs.................... 28,278,395 14,139,221
Public 4 Yrs or More.............. 56,909,101 28,454,561
-------------------------------------
Grand Total................... 910,590,493 455,295,883
------------------------------------------------------------------------
As institutions control the distribution of the funds to eligible
students and have flexibility to establish a process suitable to their
circumstances, no alternatives were considered specifically for small
entities.
Paperwork Reduction Act of 1995
As part of its continuing effort to reduce paperwork and respondent
burden, the Department provides the general public and Federal agencies
with an opportunity to comment on proposed and continuing collections
of information, in accordance with the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public
understands the Department's collection instructions, respondents can
provide the requested data in the desired format, reporting burden
(time and financial resources) is minimized, collection instruments are
clearly understood, and the Department can properly assess the impact
of collection requirements on respondents.
In determining eligibility for these funds, IHEs are being directed
to use the Department's interpretation of ``student,'' meaning a person
who is eligible under section 484 of the HEA to receive title IV aid,
as suggested by the references to title IV in the context of section
18004.
We believe that most institutions will expand their current
financial aid appeals process and utilize that framework to receive
requests for COVID-19 assistance from eligible students. We estimate
that each institution that received an allocation would require five
hours to set up any new form for students to complete and establish
review and recordkeeping procedures to be able to comply with the
separate reporting requirements in the Certification and Agreement
between the institutions and the Secretary. The estimated burden for
the 1,651 private institutions is 8,255 hours (1,651 x 5 hours). The
estimated burden for the 1,641 proprietary institutions is 8,205 hours
(1,641 x 5 hours). The estimated burden for the 1,844 public
institutions is 9,220 (1,844 x 5 hours). The total new burden to all
institutions receiving an allocation of funds is 25,680 hours (5,136
institutions x 5 hours).
Using the unique number of title IV aid recipients 10,319,154 (both
Federal grant and Federal student loan) for the Award Year 2019-2020 we
estimate that 15 percent, or 1,547,873, of those recipients will
request additional aid from their institution based on changed
circumstances due to the coronavirus. We estimate approximately 20
minutes per students to complete the request for additional aid for a
total new burden of 510,798 hours (.33 hours x 1,547,873).
This is a new information collection with a total burden assessment
of 536,478 hours for 1,553,009 respondents with a single response. The
Department has requested an emergency clearance to allow for the
immediate collection of this information. The public will be provided
the ability to comment on the proposed burden assessment through the
standard information collection process with notice requesting comment
being published in the Federal Register.
1840-NEW--Eligibility of Students at Institutions of Higher Education for Funds Under the
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CARES Act
---------------------------------------------------------------------------------------------------
-------------
Estimate costs
Number of Number of Hours per
student $17.89
Affected entity respondents responses response Total burden
institutions
$45.87
---------------------------------------------------------------------------------------------------
-------------
Individual Student.............. 1,547,873 1,547,873 .33 510,798
$9,138,176
Private Institution............. 1,651 1,651 5 8,255
378,657
Proprietary Institution......... 1,641 1,641 5 8,205
376,363
Public Institution.............. 1,844 1,844 5 9,220
422,921
------------------------------------------------------------------
-------------
Total....................... 1,553,009 1,553,009 .............. 536,478
10,316,117
---------------------------------------------------------------------------------------------------
-------------
Intergovernmental Review: This program is subject to Executive
Order 12372 and the regulations in 34 CFR part 79. One of the
objectives of the Executive order is to foster an intergovernmental
partnership and a strengthened federalism. The Executive order relies
on processes developed by State and local governments for coordination
and review of proposed Federal financial assistance.
This document provides early notification of our specific plans and
actions for this program.
[[Page 36504]]
Federalism
Executive Order 13132 requires us to ensure meaningful and timely
input by State and local elected officials in the development of
regulatory policies that have federalism implications. ``Federalism
implications'' means substantial direct effects on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government. This interim final regulation may have federalism
implications. We encourage State and local elected officials to review
and provide comments on this interim final regulation.
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the person listed under FOR
FURTHER INFORMATION CONTACT.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at www.govinfo.gov. At this site you can view this
document, as well as all other documents of this Department published
in the Federal Register, in text or portable document format PDF. To
use PDF, you must have Adobe Acrobat Reader, which is available for
free on the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at
www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
List of Subjects in 34 CFR Part 668
Administrative practice and procedure, Aliens, Colleges and
universities, Consumer protection, Grant programs--education, Loan
programs--education, Reporting and recordkeeping requirements,
Selective Service System, Student aid, Vocational education.
Betsy DeVos,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary amends
title 34 of the Code of Federal Regulations as follows:
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
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0
1. The authority citation for part 668 continues to read as follows:
Authority: 20 U.S.C. 1001-1003, 1070a, 1070g, 1085, 1087b,
1087d, 1087e, 1088, 1091, 1092, 1094, 1099c, and 1099c-1, 1221e-3,
and 3474; Pub. L. 111-256, 124 Stat. 2643; unless otherwise noted.
0
2. Section 668.2 is amended by adding the definition ``Student,'' in
alphabetical order to read as follows:
Sec. 668.2 General definitions.
* * * * *
Student, for purposes of the phrases ``grants to students'' and
``emergency financial aid grants to students'' in sections 18004(a)(2),
(a)(3), and (c) of the Coronavirus Aid, Relief, and Economic Security
(CARES) Act, is defined as an individual who is, or could be, eligible
under section 484 of the HEA, to participate in programs under title IV
of the HEA.
(Authority: 20 U.S.C. 1221e-3 3474)
* * * * *
[FR Doc. 2020-12965 Filed 6-15-20; 4:15 pm]
BILLING CODE 4000-01-P
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Update: On Wednesday June 17, 2020, the Department published its Interim Final
Teaching
Rule (IFR) regarding Eligibility of Students at Institutions of Higher Education for
Family and
Funds Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act
Community
here. The IFR constitutes the Department’s binding final rule regarding student
Engagement
eligibility for HEERF assistance, and carries the force of law except as enjoined
Early Learning
pursuant to the following district court decisions:
On Friday June 12, 2020, the United States District Court for the Eastern
District of Washington entered an Order preliminarily enjoining the
Department of Education “from implementing or enforcing the provisions in
the April 21, 2020 guidance and the Interim Final Rule that restricts the
discretion of higher education institutions in the State of Washington to
determine which students will receive CARES Act student emergency
financial assistance grants to only those students who are eligible for federal
financial aid under Title IV.” Washington v. DeVos, No. 2:20-cv-00182-TOR,
Order at 36, ECF No. 31.
In its Order the Court stated that the “preliminary injunction does not lift the
restrictions of 8 U.S.C. § 1611(a).” Order at 21, 36.
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On Wednesday June 17, 2020, the United States District Court for the
Northern District of California entered an Order preliminarily enjoining the
Department of Education “with respect to any community college in California
[from] imposing or enforcing any eligibility requirement for students to receive
HEERF assistance, including those requirements asserted and set forth in”
the April 21 guidance documents, the May 21 updated statement, and the
Interim Final Rule. Oakley v. DeVos, No. 4:20-cv-03215-YGR, Order at 28,
ECF No. 44. Those documents had referenced Title IV’s eligibility criteria
and applicable restrictions under 8 U.S.C. § 1611(a).
The Department will fully comply with the Orders as long as they are in effect with
regard to the entities to which they apply but will enforce the IFR and other
applicable law to the extent not enjoined. The Department is considering its options
in responding to these preliminary injunctions.
Reporting and Data Collection
CARES Act Quarterly Reporting Statement for all grantees (reporting
requirements met under Federal Funding Accountability and Transparency
Act of 2006 (FFATA)) (PDF, July 9, 2020)
HEERF Public Reporting Requirement (Electronic Announcement, May 6,
2020)
Supplemental FAQs for the CARES Act Higher Education
Emergency Relief Fund
Supplemental FAQs PDF (186K)
New COVID-19 FAQ’s for Title III, IV, V, and VII Grantees
COVID-19 FAQ for Grantees PDF (250K)
CARES Act: Higher Education Emergency Relief Fund
Unofficial copy of Interim Final Rule on eligibility PDF (345K)
Updated statement 5/21/2020:The Department has stated on its guidance portal
that “guidance documents lack the force and effect of law.” See U.S. Department of
Education’s Guidance Homepage, https://www2.ed.gov/policy/gen/guid/types-of-
guidance-documents.html (“Guidance documents represent the ED’s current
thinking on a topic. They do not create or confer any rights for or on any person and
do not impose any requirements beyond those required under applicable law and
regulations. Guidance documents lack the force and effect of law.”); compare, e.g.,
OPE Guidance Documents,
https://www2.ed.gov/about/offices/list/ope/guidance.html (“Guidance documents
lack the force and effect of law.”). On February 26, 2020, the Department published
a Federal Register notice stating this principle along with an announcement of the
existence and location of its guidance portal. Notice of Guidance Portal, 85 Fed.
Reg. 11056, https://www.govinfo.gov/content/pkg/FR-2020-02-26/pdf/2020-
03811.pdf. The statement applies to all of the Department’s guidance except as
authorized by law or as incorporated into a contract.
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This includes, for example, the statements in response to question 5 of the Higher
Education Emergency Relief Fund Institutional Frequently Asked Question
document located here and question 9 of the HEERF Student FAQ document
located here explaining that only students who are or could be eligible to participate
in programs under Section 484 in Title IV of the Higher Education Act of 1965, as
amended, may receive emergency financial aid grants. HEERF Institutional FAQs at
2, HEERF Student FAQs at 4. The Department will not initiate any enforcement
action based solely on these statements because they lack the force and effect of
law. In contrast, the underlying statutory terms in the CARES Act are legally
binding, as are any other applicable statutory terms, such as the restriction in 8
U.S.C. § 1611 on eligibility for Federal public benefits including such grants.
In addition, the Department reiterates its guidance that emergency financial aid
grants under Section 18004(c) of the CARES Act may only be given to those who
are or could be eligible to participate in programs under Section 484 in Title IV of
the Higher Education Act of 1965, as amended (HEA), but emphasizes that that
guidance is specific to the distribution of emergency financial aid grants and does
not apply to the use of HEERF institutional allocations to cover any costs associated
with significant changes to the delivery of instruction due to the coronavirus. The
Department continues to consider the issue of eligibility for HEERF emergency
financial aid grants under the CARES Act and intends to take further action shortly.
Please refer to the posted instructions below on navigating the grants.gov website
and uploading Certificates of Agreement, and please refer to the Secretary’s letter
below for guidance regarding distribution and usage of these funds.
| Student Aid | Institutional Portion | Historically Black Colleges and Universities |
| American Indian Tribally Controlled Colleges and Universities | *Minority Serving
Institutions |
|*Strengthening Institutions Program | Fund for the Improvement of Postsecondary
Education |
*Minority Serving Institutions include institutions that would be eligible to participate
in the following programs: Predominantly Black Institutions, Alaska Native and
Native Hawaiian-Serving Institutions, Asian American and Native American Pacific
Islander-Serving Institutions, Native American-Serving Nontribal Institutions,
Developing Hispanic-Serving Institutions Program, and Promoting
Postbaccalaureate Opportunities for Hispanic Americans.
*Strengthening Institutions include institutions that are not participating in the other
MSI programs but have at least 50 percent of their degree students receiving need-
based assistance under Title IV of the Higher Education Act or have a substantial
number of enrolled students receiving Pell Grants, and have low educational and
general expenditures.
Higher Education Emergency Relief Fund -
Student Aid
Information for Students
The CARES Act Higher Education Emergency Relief Fund-IHE/Student Aid
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provides funding to institutions to provide emergency financial aid grants to students
whose lives have been disrupted, many of whom are facing financial challenges and
struggling to make ends meet. Students cannot apply for assistance directly from
the U.S. Department of Education but should contact their institutions for further
information and guidance. Institutions have the responsibility of determining how
grants will be distributed to students, how the amount of each student grant is
calculated, and the development of any instructions or directions that are provided
to students about the grant.
Please note that the Department will soon be announcing a deadline by which
institutions of higher education must apply for the Higher Education Emergency
Relief (HEER) funding under section 18004a(1) of the CARES Act. A formal notice
will be published in the Federal Register in the near future. We will update this
website with the appropriate notices and information when they become available.
The funding opportunity number is ED-GRANTS-041020-003. If you have questions
concerning this program, please submit them via e-mail to HEERF@ed.gov., or by
phone, at 202-377-3711 .
Guidance on How to Apply for Funding-HEERF- Student Aid
Grants.gov Submission Procedures and Tips for Applicants: PDF (169K)
A Guide for how to apply for funding in GRANTS.gov: PDF (170K)
Visual aid: PDF (1.2M)
How to upload a Workspace PDF (101K)
Letter from the Secretary
CARES Act grant funding cover letter: PDF (138K)
A Certificate of Agreement
CARES HEERF Certification and Agreement: PDF (828K)
Formula allocations
Allocations for Section 18004(a)(1) of CARES Act: PDF (1.28M)
Methodology for Calculating Allocations: PDF (138K)
Frequently Asked Questions
Frequently Asked Questions about the Emergency Financial Aid Grants to Students
under Section 18004(a)(1) and 18004(c) of the CARES Act PDF (189K) (and please
see the updated statement referencing this document at the top of this page)
Internal Revenue Service FAQs regarding Grants under the CARES Act
Student Frequently Asked Questions
Frequently Asked Questions about the Emergency Financial Aid Grants to Students
PDF (106K)
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Higher Education Emergency Relief Fund-
Institutional Portion
You must complete and submit the CARES HEERF Certification and Agreement
Student’s Portion before submitting the CARES HEERF Certification and
Agreement for the Institution’s Allocation of HEER Funds.
Please note that the Department will soon be announcing a deadline by which
institutions of higher education must apply for the Higher Education Emergency
Relief (HEER) funding under section 18004a(1) of the CARES Act. A formal notice
will be published in the Federal Register in the near future. We will update this
website with the appropriate notices and information when they become available.
The funding opportunity number is ED-GRANTS-042120-004. If you have questions
concerning this program, please submit them via e-mail to HEERF@ed.gov., or by
phone, at 202-377-3711 .
Guidance on How to Apply for Funding-HEERF-IHEs-
Institutional Portion
Grants.gov Submission Procedures and Tips for Applicants: PDF (169K)
A Guide for how to apply for funding in GRANTS.gov: PDF (158K)
Visual aid: PDF (1.2M)
How to upload a Workspace PDF (101K)
Letter from the Secretary
CARES Act grant funding cover letter: PDF (156K)
A Certificate of Agreement
CARES HEERF Certification and Agreement: PDF (891K)
Formula allocations
Allocations for Section 18004(a)(1) of CARES Act: PDF (2.01M)
Methodology for Calculating Allocations: PDF (138K)
Frequently Asked Questions
Frequently Asked Questions about the Institutional Portion of the HEERF under
Section 18004(a)(1) and 18004(c) of the CARES Act PDF (202K) (and please see
the updated statement referencing this document at the top of this page)
Internal Revenue Service FAQs regarding Grants under the CARES Act
Higher Education Emergency Relief Fund (a)(1)
Reserve
A Certificate of Agreement
Institutional Certification and Agreement: PDF (187K)
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Student Certification and Agreement: PDF (202K)
Request for an Allocation
Application for Reserve under Section 18004(a)(1) of CARES Act: PDF (203K)
Higher Education Emergency Relief Fund-
Historically Black Colleges and Universities
The funding opportunity number is ED-GRANTS-043020-001. If you have questions
concerning this program, please submit them via e-mail to HEERF@ed.gov., or by
phone, at 202-377-3711 .
Guidance on How to Apply for Funding-HEER - Historically
Black Colleges and Universities
Grants.gov Submission Procedures and Tips for Applicants: PDF (169K)
A Guide for how to apply for funding in GRANTS.gov: PDF (175K)
Visual aid: PDF (1.2M)
How to upload a Workspace PDF (101K)
Letter from the Secretary
CARES Act grant funding cover letter: PDF (147K)
A Certificate of Agreement
CARES HEERF Certification and Agreement: PDF (191K)
Formula allocations
Allocations for Section 18004(a)(2) of CARES Act: EXCEL (304K)
Methodology for Calculating Allocations: PDF (167K)
Higher Education Emergency Relief Fund-
Tribally Control Colleges and Universities
The funding opportunity number is ED-GRANTS-043020-002. If you have questions
concerning this program, please submit them via e-mail to HEERF@ed.gov., or by
phone, at 202-377-3711 .
Guidance on How to Apply for Funding-HEERF-Tribally Control
Colleges and Universities
Grants.gov Submission Procedures and Tips for Applicants: PDF (169K)
A Guide for how to apply for funding in GRANTS.gov: PDF (175K)
Visual aid: PDF (1.2M)
How to upload a Workspace PDF (101K)
Letter from the Secretary
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CARES Act grant funding cover letter: PDF (147K)
A Certificate of Agreement
CARES HEERF Certification and Agreement: PDF (191K)
Formula allocations
Allocations for Section 18004(a)(2) of CARES Act: EXCEL (304K)
Methodology for Calculating Allocations: PDF (167K)
Higher Education Emergency Relief Fund-
Minority Serving Institutions
The funding opportunity number is ED-GRANTS-043020-003. If you have questions
concerning this program, please submit them via e-mail to HEERF@ed.gov., or by
phone, at 202-377-3711 .
Guidance on How to Apply for Funding-HEERF-Minority
Serving Institutions
Grants.gov Submission Procedures and Tips for Applicants: PDF (169K)
A Guide for how to apply for funding in GRANTS.gov: PDF (174K)
Visual aid: PDF (1.2M)
How to upload a Workspace PDF (101K)
Letter from the Secretary
CARES Act grant funding cover letter: PDF (147K)
A Certificate of Agreement
CARES HEERF Certification and Agreement: PDF (191K)
Formula allocations
Allocations for Section 18004(a)(2) of CARES Act: EXCEL (304K)
Methodology for Calculating Allocations: PDF (167K)
Higher Education Emergency Relief Fund-
Strengthening Institutions Program
The funding opportunity number is ED-GRANTS-043020-004. If you have questions
concerning this program, please submit them via e-mail to HEERF@ed.gov., or by
phone, at 202-377-3711 .
Guidance on How to Apply for Funding-HEERF-Strengthening
Institutions Program
Grants.gov Submission Procedures and Tips for Applicants: PDF (169K)
A Guide for how to apply for funding in GRANTS.gov: PDF (174K)
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Visual aid: PDF (1.2M)
How to upload a Workspace PDF (101K)
Letter from the Secretary
CARES Act grant funding cover letter: PDF (147K)
A Certificate of Agreement
CARES HEERF Certification and Agreement: PDF (191K)
Formula allocations
Allocations for Section 18004(a)(2) of CARES Act: EXCEL (304K)
Methodology for Calculating Allocations: PDF (167K)
Higher Education Emergency Relief Fund-FIPSE
The funding opportunity number is ED-GRANTS-043020-005. If you have questions
concerning this program, please submit them via e-mail to HEERF@ed.gov., or by
phone, at 202-377-3711 .
Guidance on How to Apply for Funding-HEERF-FIPSE
Grants.gov Submission Procedures and Tips for Applicants: PDF (169K)
A Guide for how to apply for funding in GRANTS.gov: PDF (174K)
Visual aid: PDF (1.2M)
How to upload a Workspace PDF (101K)
A Certificate of Agreement
CARES HEERF Certification and Agreement: PDF (192K)
Formula allocations
Allocations for Section 18004(a)(3) of CARES Act: EXCEL (106K)
Methodology for Calculating Allocations: PDF (114K)
Budget and Expenditure Reporting
Budget and Expenditure Reporting under Section 18004(a)(3) of the CARES Act:
PDF (204K)
Last Modified: 07/23/2020
Student Loans Laws & Guidance About Us
Repaying Loans Every Student Succeeds Act (ESSA) Contact Us
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Apply for Pell Grants Education Statistics Budget, Performance
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Notices FOIA Privacy Policy Accessibility Security Information quality Inspector General Whitehouse.gov USA.gov
Benefits.gov Regulations.gov
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THE SECRETARY OF EDUCATION
WASHINGTON, DC 20202
April 9, 2020
Dear College and University Presidents:
These are unprecedented and challenging times for your students and for you. I know you find
yourselves grappling with issues you never imagined, and I want to assure you we are here to
support you in your missions and to quickly provide the resources and flexibilities you need to
continue educating your students. That’s why we’re focused on implementing the Coronavirus
Aid, Relief, and Economic Security (CARES) Act quickly and faithfully.
I gave my team a charge as soon as the CARES Act was signed into law: get support to those
most in need as quickly as possible. That starts with college students whose lives have been
disrupted, many of whom are facing financial challenges and struggling to make ends meet.
As you know, the CARES Act provides several different methods for distributing roughly $14
billion in funds to institutions of higher education. The most significant portion of that funding
allocation provides that $12.56 billion will be distributed to institutions using a formula based on
student enrollment. Of the amount allocated to each institution under this formula, at least 50
percent must be reserved to provide students with emergency financial aid grants to help cover
expenses related to the disruption of campus operations due to coronavirus. We are prioritizing
this funding stream in order to get money in the hands of students in need as quickly as possible.
The CARES Act provides institutions with significant discretion on how to award this
emergency assistance to students. This means that each institution may develop its own system
and process for determining how to allocate these funds, which may include distributing the
funds to all students or only to students who demonstrate significant need. The only statutory
requirement is that the funds be used to cover expenses related to the disruption of campus
operations due to coronavirus (including eligible expenses under a student’s cost of attendance,
such as food, housing, course materials, technology, health care, and child care). With that said, I
would like to encourage the leadership of each institution to prioritize your students with the
greatest need, but at the same time consider establishing a maximum funding threshold for each
student to ensure that these funds are distributed as widely as possible. As a point of reference,
you might consider using the maximum Federal Pell grant (for the 2019-2020 academic year,
$6,195) as that threshold. In addition, if you determine that your institution’s students do not
have significant financial need at this time, I would ask that you consider giving your allocation
to those institutions within your state or region that might have significant need.
In order to access these funds, all institutions must sign and return the Certificate of Funding and
Agreement via: grants.gov (https://www.grants.gov/web/grants/applicants/registration.html),
acknowledging the terms and conditions of the funding. After the Department has received the
www.ed.gov
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certificate, institutions may draw down their emergency assistance funds using the Department’s
G5 system.
The Department is also working expeditiously to allocate the remaining funding that is reserved
for institutional use, and we will provide details on how institutions may apply for this
institutional funding, as well as for other emergency funding, in the coming days. Thank you for
your continued work on behalf of America’s students.
Sincerely,
Betsy DeVos
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Methodology for Calculating Allocations per Section 18004(a)(1) of the CARES Act
Of the funds available for the Higher Education Emergency Relief Fund, 90% ($12,557,254,500.00) of
the funds will be awarded to IHEs based on two formula factors: (1) 75% of the funds will be awarded to
IHEs based on each IHE’s share of full-time equivalent (FTE) enrollment of Pell Grant recipients who
were not enrolled exclusively in distance education prior to the coronavirus emergency, relative to the
total FTE enrollment of such individuals in all IHEs; and (2) 25% of the funds will be awarded to IHEs
based on each IHE’s share of FTE enrollment of students who were not Pell Grant recipients and who
were not enrolled exclusively in distance education prior to the coronavirus emergency, relative to the
total FTE enrollment of such individuals in all IHEs. The first factor primarily allocates funds based on
undergraduate enrollment since Pell Grant eligibility is limited to undergraduates and students in
postbaccalaureate teacher education programs. The second factor allocates funds based on undergraduate
and graduate enrollment.
Because limitations of available data preclude calculating precise amounts for the factors, the U.S.
Department of Education (the Department) approximated the factors using the best available data from
ED’s Integrated Postsecondary Education Data System (IPEDS) and Pell Grant Volume data provided by
the Office of Federal Student Aid (FSA).
The first factor was approximated as follows. The number of undergraduate students awarded Pell grants
as reported in IPEDS was adjusted based on the institution’s share of total Pell recipients as reported by
FSA for the 2018/19 award year. The FTE enrollment of these Pell recipients was approximated by
looking at the ratio in IPEDS between 2017/18 FTE undergraduate enrollment and 2017/18 undergraduate
headcount enrollment. In order to approximate FTE enrollment of Pell Grant recipients who were not
enrolled exclusively in distance education, the estimated FTE enrollment of Pell Grant recipients was
multiplied by the percentage of fall 2018 undergraduate degree/certificate-seeking students not enrolled
exclusively in distance education as reported in IPEDS.
The second factor was estimated by subtracting the approximated FTE enrollment of Pell Grant recipients
(if any) from the total 2017/18 FTE enrollment of students as reported in IPEDS and then multiplying the
difference by the percentage of fall 2018 undergraduate, graduate, and professional students not enrolled
exclusively in distance education as reported in IPEDS.
The Department acknowledges the limitations of this data, and therefore has reserved $50 million to be
provided in a subsequent award.
Some additional points to note:
• The data used to determine distance education participation are based on a fall unduplicated
enrollment which is different from FTE enrollment and, in the case of the total FTE enrollment,
also different from FTE enrollment for a 12-month period. The unduplicated enrollment is a
simple headcount of students enrolled in classes; whereas the FTE enrollment counts part-time
students in accordance with their enrollment rate.
• Allocation amounts were calculated at the 6-digit OPEID.
• Some OPEID information was adjusted based on information provided by FSA regarding change
of ownership or affiliation.
• For some IHEs, the approximated FTE enrollment of Pell Grant recipients exceeded the total FTE
enrollment. For these IHEs, the total non-Pell FTE enrollment was set to $0, making the IHE
ineligible for the second factor.
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• The ratio of FTE undergraduate enrollment to undergraduate headcount enrollment was capped at
100 percent.
• Schools that are currently ineligible or were not participating in Title IV per the IPEDS data are
excluded.
• There may be some currently participating and eligible schools which may be excluded from this
formula. For this reason, a reserve of $50 million has been set aside in part to address such
institutions.
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Recipient’s Funding Certification and Agreement
Emergency Financial Aid Grants to Students under the Coronavirus Aid, Relief, and
Economic Security (CARES) Act
Section 18004(a)(1) of the CARES Act, Pub. L. No. 116-136 (March 27, 2020), authorizes
the Secretary of Education (“Secretary”) to allocate formula grant funds in the amount of
$_____________________ to __________________________________________(“Recipient”).
Section 18004(c) of the CARES Act requires Recipient to use no less than fifty percent of the
funds received to provide emergency financial aid grants to students for expenses related to the
disruption of campus operations due to coronavirus (including eligible expenses under a student’s
cost of attendance such as food, housing, course materials, technology, health care, and child care).
This Certification and Agreement solely concerns the emergency financial aid grants to students
under Section 18004(c) of the CARES Act.
To address the pressing financial need of students due to the disruption of campus operations
from coronavirus, and pursuant to the authority duly delegated to the Secretary under the CARES Act
and associated with the coronavirus emergency, as stated in Proclamation 9994 of March 13, 2020,
“Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19)
Outbreak,” Federal Register Vol. 85, No. 53 at 15337-38, the Secretary and Recipient agree as
follows:
1. The Secretary will provide Recipient fifty (50) percent of its formula grant funds (the
“advanced funds”) for the sole and exclusive purpose of providing emergency financial aid grants to
students for their expenses related to the disruption of campus operations due to coronavirus, such as
food, housing, course materials, technology, health care, and child-care expenses.
2. Recipient agrees to promptly make available emergency financial aid grants from the
advanced funds directly to students for their expenses related to the disruption of campus operations
due to coronavirus, such as food, housing, course materials, technology, health care, and child-care
expenses. Recipient shall not use the advanced funds to reimburse itself for any costs or expenses,
including but not limited to any costs associated with significant changes to the delivery of instruction
due to the coronavirus and/or any refunds or other benefits that Recipient previously issued to
students.
3. Recipient retains discretion to determine the amount of each individual emergency
financial aid grant consistent with all applicable laws including non-discrimination laws. Recipient
acknowledges that the Secretary recommends the maximum Federal Pell Grant for the applicable
award year as an appropriate maximum amount for a student’s emergency financial aid grant in most
cases, and the Recipient should be mindful of each student’s particular socioeconomic circumstances
in the staging and administration of these grants. The Secretary strongly encourages Recipient’s
financial aid administrator to exercise the use of professional judgment available under Section 479A
of the Higher Education Act of 1965 (HEA), 20 U.S.C § 1087tt, to make adjustments on a case-by-
case basis to exclude individual emergency financial aid grants from the calculation of a student’s
expected family contribution. The Secretary does not consider these individual emergency financial
aid grants to constitute Federal financial aid under Title IV of the HEA.
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4. In consideration for the advanced funds and as conditions for their receipt, Recipient
warrants, acknowledges, and agrees that:
(a) The advanced funds shall not be used for any purpose other than the direct payment of
grants to students for their expenses related to the disruption of campus operations due to coronavirus,
such as food, housing, course materials, technology, health care, and child-care;
(b) Recipient holds those funds in trust for students and acts in the nature of a fiduciary with
respect thereto;
(c) Recipient shall promptly comply with Section 18004(e) of the CARES Act and (i) report
to the Secretary thirty (30) days from the date of this Certification and Agreement and every forty-
five (45) days thereafter in accordance with 2 CFR 200.333 through 2 CFR 200.337, or in such other
additional form as the Secretary may specify, how grants were distributed to students, the amount of
each grant awarded to each student, how the amount of each grant was calculated, and any instructions
or directions given to students about the grants; and (ii) document that Recipient has continued to pay
all of its employees and contractors during the period of any disruptions or closures to the greatest
extent practicable, explaining in detail all specific actions and decisions related thereto, in compliance
with Section 18006 of the CARES Act;
(d) Recipient shall comply with all requirements in Attachment A to this Certification and
Agreement;
(e) Recipient shall promptly and to the greatest extent practicable distribute all the advanced
funds in the form of emergency financial aid grants to students by one year from the date of this
Certification and Agreement, and document its efforts to do so as part of the report specified in
subsection (c) above;
(f) Recipient shall cooperate with any examination of records with respect to the advanced
funds by making records and authorized individuals available when requested, whether by (i) the U.S.
Department of Education and/or its Inspector General; or (ii) any other federal agency, commission,
or department in the lawful exercise of its jurisdiction and authority; and
(g) failure to comply with this Certification and Agreement, its terms and conditions, and/or
all relevant provisions and requirements of the CARES Act or any other applicable law may result in
Recipient’s liability under the False Claims Act, 31 U.S.C. § 3729, et seq.; OMB Guidelines to
Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as
adopted and amended as regulations of the Department in 2 CFR part 3485; 18 USC § 1001, as
appropriate; and all of the laws and regulations referenced in Attachment A, which is incorporated by
reference hereto.
RECIPIENT or Authorized Representative of Recipient ____________________
OPEID Number ____________________
DATE ____________________
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Attachment A to Recipient’s CARES Funding Certification and Agreement
The Recipient assures and certifies the following:
• Recipient will comply with all applicable assurances in OMB Standard Forms 424B and D
(Assurances for Non-Construction and Construction Programs), including the assurances
relating to the legal authority to apply for assistance; access to records; conflict of interest;
nondiscrimination; Hatch Act provisions; labor standards; Single Audit Act; and the general
agreement to comply with all applicable Federal laws, executive orders and regulations.
• With respect to the certification regarding lobbying in Department Form 80-0013, no Federal
appropriated funds have been paid or will be paid to any person for influencing or attempting
to influence an officer or employee of any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in connection with the
making or renewal of Federal grants under this program; Recipient will complete and submit
Standard Form-LLL, “Disclosure Form to Report Lobbying,” when required (34 C.F.R. Part
82, Appendix B); and Recipient will require the full certification, as set forth in 34 C.F.R. Part
82, Appendix A, in the award documents for all subawards at all tiers.
• Recipient will comply with the provisions of all applicable acts, regulations and assurances;
the following provisions of Education Department General Administrative Regulations
(EDGAR) 34 CFR parts 75, 77, 79, 81, 82, 84, 86, 97, 98, and 99; the OMB Guidelines to
Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part
180, as adopted and amended as regulations of the Department in 2 CFR part 3485; and the
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards in 2 CFR part 200, as adopted and amended as regulations of the Department in 2
CFR part 3474.
Paperwork Burden Statement
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection
of information unless such collection displays a valid OMB control number. The valid OMB control
number for this information collection is 1801-0005. The time required to complete this information
collection is estimated to be 2,853 total burden hours. If you have any comments concerning the
accuracy of the time estimate or suggestions for improving this form, please write to: Hilary Malawer,
400 Maryland Avenue, SW. Washington, D.C. 20202.
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Higher Education Emergency Relief Fund
Frequently Asked Questions about the Emergency Financial Aid Grants to Students
under Section 18004 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act
The CARES Act, which establishes and funds the Higher Education Emergency Relief Fund
(HEERF), directs institutions of higher education (“institutions”) to use no less than 50 percent of
funds received under Sections 18004(a)(1) and 18004(c) of the CARES Act to provide emergency
financial aid grants to students for expenses related to the disruption of campus operations due to
coronavirus. These FAQs address only those funds provided by the Secretary to an institution for
emergency financial aid grants to students under Sections 18004(a)(1) and 18004(c) of the CARES
Act.
1) Can institutions that have provided refunds to students for room and board, tuition,
and other fees (such as activities fees) reimburse themselves from the funds for the
emergency financial aid grants to students?
No. The CARES Act requires institutions to use no less than 50 percent of HEERF funds
received under Sections 18004(a)(1) and 18004(c) of the CARES Act to provide
emergency financial aid grants to students. These funds distributed by the Department
represent the 50 percent minimum of each institution’s HEERF funds under Section
18004(a)(1) of the CARES Act for these emergency financial aid grants to students.
Section 2 of the Funding Certification and Agreement for the Emergency Financial Aid
Grants to Students states: “Recipient shall not use [these] funds to reimburse itself for any
costs or expenses, including but not limited to any costs associated with significant changes
to the delivery of instruction due to the coronavirus and/or any refunds or other benefits
that Recipient previously issued to students.”
Institutions will have more flexibility in the use of the portion of the HEERF that is made
available to cover an institution’s costs associated with significant changes to the delivery
of instruction due to the coronavirus. The Department will provide a Frequently Asked
Questions (FAQ) document regarding the allowable uses of funds for an institution’s costs
shortly after making those funds available to institutions.
2) Can institutions that have provided information technology hardware (such as
laptops, hotspot internet devices, etc.) and other related equipment to students
reimburse themselves from the funds for the emergency financial aid grants to
students?
No. The CARES Act requires institutions to provide the emergency financial aid grants to
students. Section 2 of the Funding Certification and Agreement for the Emergency
Financial Aid Grants to Students states: “Recipient shall not use [these] funds to reimburse
itself for any costs or expenses, including but not limited to any costs associated with
significant changes to the delivery of instruction due to the coronavirus and/or any refunds
or other benefits that Recipient previously issued to students.”
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Institutions will have more flexibility in the use of the portion of the HEERF that is made
available to cover an institution’s costs associated with significant changes to the delivery
of instruction due to the coronavirus. The Department will provide a FAQ document
regarding the allowable uses of funds for an institution’s costs shortly after making those
funds available to institutions.
3) Can institutions that have provided institutionally-funded emergency grants to
students as a result of COVID-19 reimburse themselves from the funds for the
emergency financial aid grants to students?
The only institutionally-funded emergency grants to students that are eligible for
reimbursement from the funds for emergency financial aid grants to students under the
CARES Act are grants: 1) for authorized expenses related to the disruption of campus
operations due to coronavirus as set forth in Section 18004(c) of the CARES Act; 2) made
to students eligible to receive emergency financial aid grants under the CARES Act; and
3) made on or after March 27, 2020, the date the CARES Act was enacted. An institution
must use no less than 50 percent of funds provided pursuant to Sections 18004(a)(1) and
18004(c) for emergency financial aid grants to students. An institution must document that
reimbursements for institutionally-funded emergency grants to students are made in
accordance with the CARES Act.
4) Can institutions that have continued to pay student workers from institutional funds
for campus jobs reimburse themselves from the funds for the emergency financial aid
grants to students?
No. The CARES Act requires institutions to provide the emergency financial aid grants to
students, and institutions may not use that portion of the HEERF set aside for emergency
financial aid grants to students for this purpose. The Department notes that Congress has
provided additional flexibility to institutions relating to the Federal Work-Study (FWS)
Program, including that institutions may continue to pay FWS wages to students for the
remainder of the current academic year in instances in which those students’ jobs were
interrupted as a result of the national emergency due to the coronavirus, as long as those
students had started employment prior to this national emergency. The CARES Act also
waives the non-federal wage match requirement for institutional and non-profit employers
of FWS students. Please see the Department’s Guidance for Interruptions of Study Related
to Coronavirus, which provides additional information about the FWS Program.
The Department will provide a FAQ document regarding the allowable uses of funds for
an institution’s costs associated with significant changes to the delivery of instruction due
to the coronavirus shortly after making those funds available to institutions.
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5) Can institutions use the funds for the emergency financial aid grants to students to
pay outstanding or overdue student bills to institutions?
No. The CARES Act requires institutions to provide the emergency financial aid grants to
students. The institution may not use that portion of the HEERF set aside for emergency
financial aid grants to students to satisfy a student’s outstanding account balance. The
Department notes that the student may use his or her emergency financial aid grant for
expenses related to the disruption of campus operations due to coronavirus.
6) What data will the Department require institutions to report after disbursement of
emergency financial aid grants to students?
As explained in the Funding Certification and Agreement for the Emergency Financial Aid
Grants to Students, each institution will report to the Secretary the following: how grants
were distributed to students, how the amount of each grant was calculated, and any
instructions or directions that the institution gave to students about the grant. Institutions
must also comply with the reporting requirements under Section 15011 of the CARES Act.
The Department will publish a notice in the Federal Register to provide instructions to
institutions on these reporting requirements.
7) What obligation does an institution have to continue to pay all its employees after
accepting the funds for the emergency financial aid grants to students?
The CARES Act requires each institution that accepts funds from the HEERF, including
funds used to pay emergency financial aid grants, to continue to pay employees and
contractors to the greatest extent practicable based on the unique financial circumstances
of each institution; however, institutions may not use emergency financial aid grants to
students to pay employees and contractors.
8) Are incarcerated students participating in the Second Chance Pell Experimental Site
Initiative (ESI) eligible for emergency financial aid grants to students?
The CARES Act expressly requires that institutions provide the emergency financial aid
grants to students “for expenses related to the disruption of campus operations due to
coronavirus (including eligible expenses under a student’s cost of attendance, such as food,
housing, course materials, technology, health care, and childcare).” If an incarcerated
individual who is participating in the Second Chance Pell experiment is released from
incarceration as a result of the national emergency due to the coronavirus, remains enrolled
as a student in the program under the Second Chance Pell experiment, and has such
expenses, he or she likely qualifies for an emergency financial aid grant. A person who
remains incarcerated is unlikely to incur these expenses and would thus be ineligible.
Accordingly, for students participating in the Second Chance Pell ESI, institutions will
need to review on a case-by-case basis what, if any, expenses an incarcerated person, or a
formerly incarcerated person released due to the coronavirus, has incurred due to the
disruption of campus operations.
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9) What students are eligible to receive emergency financial aid grants from the
HEERF?
Only students who are or could be eligible to participate in programs under Section 484 in
Title IV of the Higher Education Act of 1965, as amended (HEA), may receive emergency
financial aid grants. If a student has filed a Free Application for Federal Student Aid
(FAFSA), then the student has demonstrated eligibility to participate in programs under
Section 484 the HEA. Students who have not filed a FAFSA but who are eligible to file a
FAFSA also may receive emergency financial aid grants. The criteria to participate in
programs under Section 484 of the HEA include but are not limited to the following: U.S.
citizenship or eligible noncitizen; a valid Social Security number; registration with
Selective Service (if the student is male); and a high school diploma, GED, or completion
of high school in an approved homeschool setting.
10) Will funds provided through the CARES Act be included in an institution’s 90/10
calculation?
Funds paid directly to institutions by the Department through the HEERF will not be
included as revenue for 90/10 purposes.
11) How must institutions pay the emergency financial aid grants to students?
Institutions may provide emergency financial aid grants to students using checks,
electronic transfer payments, debit cards, and payment apps that adhere to the
Department’s requirements for paying credit balances to students. The disbursement of the
emergency financial aid grant to the student must remain unencumbered by the institution;
debts, charges, fees, or other amounts owed to the institution may not be deducted from the
emergency financial aid grant. The emergency financial aid grant may not be made to
students through the use of a credit card that can be used only on campus or in a retail outlet
affiliated with the institution.
12) At institutions that provide both online and ground-based education, are students
who were enrolled exclusively in online programs prior to the national emergency due
to the coronavirus eligible to receive emergency financial aid grants?
At institutions that provide both online and ground-based education, those students who
were enrolled exclusively in an online program on March 13, 2020, the date of the
President’s Proclamation, “Declaring a National Emergency Concerning the Novel
Coronavirus Disease (COVID-19) Outbreak,” Federal Register Vol. 85, No. 53 at 15337-
38, are not eligible for emergency financial aid grants. The formula provided by Congress
for calculating the distribution of funds to institutions excludes students who were
exclusively enrolled in distance education courses. Additionally, the emergency financial
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aid grants to students are for expenses related to the disruption of campus operations due
to coronavirus, and students who were enrolled exclusively in online programs would not
have expenses related to the disruption of campus operations due to coronavirus.
13) Where can institutions locate additional resources and information related to
emergency financial aid grants to students?
CARES Act grant resources and guidance are located on the Office of Postsecondary
Education’s webpage: https://www2.ed.gov/about/offices/list/ope/caresact.html.
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Posted Date: April 03, 2020
Author: Office of Postsecondary Education
Subject: UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19)
The Department appreciates that postsecondary institutions and their students face unique and
urgent circumstances as a result of the novel coronavirus disease (COVID-19) pandemic. This
guidance provides updated information that expands upon the Department’s March 5, 2020,
guidance and provides additional regulatory flexibilities due to the lawful declaration of the
COVID-19 national emergency.
On March 13, 2020, the President of the United States declared that a national emergency
concerning the COVID-19 outbreak began on March 1, 2020, as stated in “Declaring a National
Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,” Proclamation
9994 of March 13, 2020, Federal Register Vol. 85, No. 53 at 15337-38. The Department
considers this declaration to be equivalent to a federally declared major disaster, as defined in
The Robert T. Stafford Disaster Relief and Emergency Assistance Act in 42 U.S.C. § 5122(2)
(Stafford Act) and provides the following information about additional emergency flexibilities
and regulatory relief for institutions of higher education and their students.
In addition, on March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act), Pub. L. No. 116-136, which provides flexibilities beyond
those captured in this document. The Department is reviewing the Act and intends to provide
additional guidance on the Department’s COVID-19 webpage in the near future.
Finally, as with the March 5, 2020, guidance, this guidance document is a general statement of
policy under the Administrative Procedure Act issued to advise the public prospectively of the
manner in which the Department proposes to exercise its discretionary power and enforcement
discretion as a result of, and in response to, the duly declared COVID-19 pandemic national
emergency. The Department does not intend for this policy statement to create a legally binding
standard affirmatively determining any member of the public’s legal rights and obligations for
which noncompliance may form an independent basis for action. As required by the
Administrative Procedure Act, the Department will afford members of the public a fair
opportunity to argue for lawful approaches other than those put forward in this guidance, to
argue for a modification or rescission of its terms, or both. To suggest another lawful approach
or to argue for a modification or rescission of any of the flexibilities or provisions hereof, please
email the Department’s Regulatory Reform Officer at COVID-19@ed.gov and reference in the
subject line “Attn: Regulatory Reform Officer.”
We recommend that institutions document in their records, as contemporaneously as possible,
any actions taken as a result of COVID-19, including those actions described in this document.
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Effective Period of Guidance
Although our March 5, 2020, guidance applied to students who had already begun their current
term, more recent guidance from President Trump and the Centers for Disease Control and
Prevention (CDC) suggests that social distancing may be required for a longer period. We thus
extend those flexibilities to any payment period or term beginning between March 5, 2020, and
June 1, 2020, inclusive.
Unless otherwise specifically stated in this guidance document, the emergency flexibilities set
forth below remain effective until and through June 30, 2020, unless the payment period
crossover extends over award years and is attached to the 2019-2020 award year. In that case the
effective date is through the end of the crossover payment period.
The Department will extend the effective period of its guidance if circumstances warrant an
extension and will inform the public of such an extension at the appropriate time. As we
continue to monitor the COVID-19 emergency and CDC guidance, the Department will adjust
dates as necessary.
Accommodating Students Whose Enrollment is Disrupted by COVID-19
In our March 5, 2020 guidance, we explained that our goal is to work with institutions seeking to
accommodate students and continue their education despite interruptions caused by COVID-19.
This remains unchanged, as we believe institutions know best how to protect their students,
faculty, and staff.
Academic Calendars - Standard vs. Non-standard Terms
We understand that some students may have been recalled from travel abroad programs or
experiential learning opportunities after the semester began. Therefore, institutions may offer
courses to those students on a schedule that would otherwise cause the program to be considered
a non-standard term or a nonterm program, if doing so enables those students to complete the
term. If an institution utilizes this flexibility, it can continue to disburse aid based on its original
academic calendar. These flexibilities will also be provided to institutions or their additional
locations or programs that must temporarily cease academic instruction or extend scheduled
breaks as a result of COVID-19.
Approved Leaves of Absence
For students who wish to take an approved leave of absence due to COVID-19-related concerns
or limitations (such as interruption of a travel-abroad program), the Department will permit them
to take such leave for the purposes of Title IV fund eligibility, even if the student notifies the
institution of his or her request after the date that the leave of absence has begun. In such a case,
the institution may retain the Title IV funds for that student to apply when the student resumes
enrollment.
Normally, institutions are not permitted to put students on a leave of absence during the
suspension of coursework, including clinicals or internships/externships; however, if the
coursework suspension results from of COVID-19, in this limited circumstance the Department
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will permit the institution to put the student on an approved leave of absence until the institution
can resume coursework or can find another placement for the student.
Enrollment Status Changes
We do not have the statutory authority to waive the requirement that institutions award or
disburse Title IV funds based on a student’s actual enrollment status. For example, assuming an
institution defines full-time enrollment as 12 credit hours, when a full-time student enrolled for
12 credit hours drops or withdraws from three credits, that student is now enrolled at three-
quarter time status; however, for Direct Loans, the institution must only confirm at least half-
time enrollment status as of the time of disbursement. It is not necessary to recalculate a
student’s Direct Loan eligibility based on changes in enrollment status that occur after the
institution originates a Direct Loan. For enrollment status changes that occur after an
institution’s established Pell Grant recalculation (census) date, we do not require recalculation.
The student must have begun attendance in all courses comprising the enrollment status on
which the Pell Grant payment was based.
Distance Education
Approval to Offer Distance Education
Because of the COVID-19 national emergency, and as an emergency measure to accommodate
students, the Department provides broad approval to institutions to use distance learning
modalities without going through the standard Department approval process, even if the
institution would normally be required to seek Departmental approval for the use or expansion of
distance learning programs. At this time, this flexibility applies only to payment periods that
overlap with the Department’s March 5, 2020, guidance or that begin on or between March 5 and
June 1, 2020. If an institution chooses to continue offering a new program or using distance
education in a manner requiring the Department’s approval after that point, it may be required to
obtain approval under the Department’s and its accrediting agency’s applicable policies and
procedures.
We also continue to permit accrediting agencies to waive their distance education review
requirements; however, we encourage accreditors promptly to develop new policies and
procedures for providing rapid approval of distance education programs for institutions working
to accommodate students whose enrollment is otherwise interrupted as a result of COVID-19.
Accrediting agencies should document the process by which their decision-making body decided
to waive or provide expedited review of distance education programs. This flexibility is not
available for clock-hour courses that lead to licensure if the licensing body will not accept
distance learning courses or hours or give credit for them toward the number of hours a student
must complete.
For the purpose of Title IV of the Higher Education Act of 1965, as amended (HEA), distance
learning does not require the use of sophisticated learning management systems or online
platforms, although accreditors may have additional standards included in their review of
distance learning programs; however, accreditors may waive those standards for schools
implementing distance learning programs solely for the purpose of allowing currently enrolled
students to complete a term interrupted by COVID-19 closures. To meet the Department’s
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requirements for providing distance education, an institution must communicate to students
through one of several types of technology – including email or by telephone – described under
34 CFR § 600.2, and instructors must initiate substantive communication with students, either
individually or collectively, on a regular basis. In other words, an instructor may use email to
provide instructional materials to students enrolled in the instructor’s class, use chat features to
communicate with students, set up conference calls to facilitate group conversations, engage in
email exchanges, or require students to submit work electronically that the instructor will
evaluate.
The Department asks institutions to review the “FERPA and Virtual Learning Related
Resources” resource list, the March 30, 2020 webinar, and related materials from the
Department’s Student Privacy Policy Office (SPPO). As educators and students move to virtual
learning due to the need for social distancing during the COVID-19 pandemic, SPPO has
identified resources that discuss virtual learning, and the Family Educational Rights and Privacy
Act (FERPA). These resources include toolkits, letters, and Q&As on information security best
practices, the use of the school official exception under FERPA, classroom observations, and the
use of emails, videos, and other virtual learning tools. SPPO has also issued a FERPA and
COVID-19 FAQ on the health or safety emergency exception under FERPA at
https://studentprivacy.ed.gov/resources/ferpa-and-coronavirus-disease-2019-covid-19. For
additional resources on FERPA, please read SPPO’s website at https://studentprivacy.ed.gov.
Institutions may provide distance learning temporarily to accommodate students as a result of a
COVID-19 interruption, including in cases where students began attendance in classes offered in
a brick-and-mortar setting but were transitioned to a distance education format in the middle of
the term. This includes students who are enrolled at a U.S institution but are participating in a
study abroad experience in a foreign country. In such a case, the student may participate in
distance education provided by either their home institution or their foreign host institution. In
these cases, to enable students to complete the current term, we will treat institutions that were
properly accredited and authorized by states as being approved by these agencies to offer
distance education and will accept the accreditation and state authorization of the institution for
the programs in which those students were enrolled prior to the interruption due to COVID-19.
Institutions may also enter into consortium agreements with other Title IV institutions so that
students can complete courses at other institutions but allow their home institution to award
credit. Where accrediting agencies require students to complete a final number or percentage of
credits in residence at the institution, accrediting agencies may also waive that requirement for
students impacted by COVID-19 without objection from the Department.
The Department urges institutions to study the Department’s March 17, 2020, guidance to
accrediting agencies, which permits accreditors to engage in virtual site visits of institutions or
programs currently under review, scheduled for renewal of recognition, or in a show-cause or
probationary status. This guidance also permits accrediting agencies to extend accreditation
terms or provide additional good cause extensions, including if the institution or program has
otherwise exhausted all regularly-provided good cause extensions, to enable institutions and
programs to continue serving students during COVID-19 related interruptions of regular campus
operations.
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Section 504 of the Rehabilitation Act of 1973 and Title II of the Americans with Disabilities
Act
Post-secondary institutions working to move programs to a distance learning format in order to
continue serving students during a COVID-19 interruption may have concerns about their ability
to ensure that instructions and materials meet the requirements of Section 504 of the
Rehabilitation Act of 1973 (Section 504), and, for public institutions, Title II of the Americans
with Disabilities Act. The Department recognizes that in this unique and ever-changing
environment, these exceptional circumstances may affect how education, including needed
accommodations for students with disabilities, is provided. Institutions should not decline to
provide distance instruction, at the expense of most students, to address matters pertaining to
accommodations for students with disabilities. Rather, institutions must make decisions that take
into consideration the health, safety, and well-being of all their students and staff. Additionally,
the Department understands that, during this national emergency, postsecondary institutions may
not be able to provide services in the same manner as they typically would for the rest of the
academic year.
Postsecondary students with disabilities must receive academic adjustments, auxiliary aids and
services, and reasonable modifications to policies, practices, and procedures, where doing so
would not impose an undue burden nor cause a fundamental alteration. Some academic
adjustments, auxiliary aids and services, and reasonable modifications in the postsecondary
context, can be provided online, while some cannot. Whether an institution serves students in a
brick-and-mortar or an online environment, the institution must ensure that students with
disabilities have an equal opportunity to access educational programs, consistent with protecting
the health and safety of the student and those providing that education to the student.
Where possible, instructors should work to accommodate students with disabilities, such as by
using audio technology to read documents to students who are visually impaired. It may be
appropriate to make other academic adjustments and reasonable accommodations through virtual
means, such as online or telephonically.
Postsecondary students with disabilities typically work with their disability services’
coordinators through an interactive process to determine appropriate academic adjustments,
auxiliary aids and services, and modifications.
With respect to issues concerning website accessibility and online education, the Department
urges institutions to consult its Office for Civil Rights (OCR) webinar available here or as a link
on the Department’s coronavirus webpage, https://www.ed.gov/coronavirus. If you have
questions for OCR or want to request additional information or technical assistance, you may
contact OCR’s Outreach, Prevention, Education and Non-discrimination (OPEN) Center at
OPEN@ed.gov.
Foreign Schools
Pursuant to section 3510 of the CARES Act, the Secretary permits any part of an otherwise
eligible program at a foreign institution to be offered via distance education, if the applicable
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government authorities in the country in which the foreign institution is located have declared a
public health emergency, major disaster or emergency, or national emergency related to COVID-
19. Retroactive to March 1, 2020, institutions may use this flexibility for the duration of such
emergency or disaster and the following payment period for purposes of title IV of the HEA.
The term “foreign schools” are those institutions located outside of the United States that
participate in the Title IV Direct Loan program and award their credentials to U.S. students.
This term excludes study-abroad programs in which a foreign institution provides instruction to a
student who remains a degree-seeking student from the student’s domestic U.S. institution.
Students in this category have always been permitted to engage in distance learning.
The Secretary also permits foreign institutions to enter into written arrangements with
institutions located in the United States that participate in the Federal Direct Loan Program for
the purpose of allowing a student of the foreign institution who is a Federal Direct Loan
borrower to take courses from the American institution. For the purpose of this provision,
foreign public or nonprofit institutions may only enter into written arrangements with public or
nonprofit institutions in the United States. Foreign medical, nursing, and veterinary institutions
that are for-profit may enter into written arrangements with U.S. public, nonprofit, or for-profit
institutions.
At a later date, the Department will provide guidance to institutions on how to comply with the
reporting requirements under the CARES Act applicable to institutions under section 3510.
Return of Title IV Funds (R2T4) and Reporting Requirements (34 C.F.R. §
668.22)
Institutional Charges, Refunds, and R2T4 Calculations
The CARES Act makes significant changes to the requirements and flexibilities surrounding
R2T4. The Department is currently reviewing the implications of the Act and will provide
appropriate guidance as soon as possible.
General Provisions (all Title IV Programs)
Academic Year (§ 668.3)
The Department is authorized to approve a reduced academic year if an institution offering
credit-hour programs is unable to offer at least 30 weeks of instruction during its academic year.
If an institution determines it will temporarily cease providing instruction, extend a break, or
otherwise reduce the length of its term in a manner that results in fewer than 30 weeks of
instruction in the academic year as the result of COVID-19 disruptions, it should send an email
to CaseTeams@ed.gov to request a temporary reduction in the length of its academic year. The
request must:
• Identify each educational program or programs for which the institution requests a
reduction and the requested number of weeks of instructional time for those programs
(institutions are permitted to request the waiver for all programs); and
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• Demonstrate good cause for the requested reductions (which would include disruptions
related to COVID-19).
Institutions should include in the subject line of the email the institution’s name, OPEID, and the
state where the main campus is located. The request will be reviewed and forwarded to the
appropriate School Participation Division, which will communicate its final determination to the
institution.
Agreements to Permit Study at Another Institution (§ 668.5)
If an institution is unable to continue to provide a student’s eligible program because of COVID-
19, it may enter into a written agreement with another institution (such as one that has a larger
number of courses or programs available through distance learning than the home school can
provide) to enable the student to continue his or her academic program while receiving Title IV
assistance.
Compliance audits and audited financial statements (§ 668.23)
The Office of Management and Budget (OMB) has extended its due date for submission of the
single audit to the Federal Audit Clearinghouse. The Department will provide additional
guidance on this extension.
Institutional Participation (§ 668.26(a)(1))
The temporary cessation of educational instruction due to the urgent circumstances created by
the COVID-19 pandemic will not result in a loss of institutional eligibility or participation.
Campus Security Reporting and Equity in Athletics Disclosures (§ 668.41)
The Department will provide appropriate guidance as it continues to monitor the COVID-19
national emergency.
Notifications Regarding an Immediate Threat to Health or Safety (§ 668.46)
The Clery Act and its implementing regulations require institutions to notify the campus
community upon the confirmation of a significant emergency or dangerous situation involving an
immediate threat to the health or safety of students or staff occurring on campus. The
Department does not interpret the statutory language as requiring institutions to give regular, on-
going updates on COVID-19 or to proactively identify positive COVID-19 cases within the
campus community. The Department also does not interpret the statutory language to apply to
positive COVID-19 cases among individuals who are not attending classes, working, or residing
on campus or to require notifications to such individuals.
An institution may satisfy the emergency notification requirements of the Clery Act and § 668.46
as follows: (1) provide students and employees a single notification through the regular means of
communicating emergency notifications informing them about COVID-19 and necessary health
and safety precautions, as well as encouraging them to obtain information from health care
providers, state health authorities, and the CDC’s COVID-19 website; or (2) create a banner at
the top of the institution’s homepage containing that same information, including a statement
about the global pandemic and a link to the CDC’s website.
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Cash Management (34 C.F.R. Part 668, Subpart K)
Institutions must comply with the cash management regulations unless unable to do so due to
COVID-19 disruptions. Where an institution is unable to comply, it should document the
reason(s) for instances where it is unable to comply and retain the documentation in its records.
These include, but are not limited to, the following regulatory requirements:
Borrower Requests for Loan Cancellation (§ 668.165(a)(4)(ii))
Excess Cash (§ 668.166)
Notices and Authorizations (§§ 668.165(a)(3) and 668.165(b)(4)(iii))
Need Analysis
Any aid (in the form of grants or low-interest loans) received by victims of an emergency from a
federal or state entity for the purpose of providing financial relief is not counted as income for
calculating a family’s Expected Family Contribution (EFC) under the Federal Methodology or as
estimated financial assistance for packaging purposes.
Professional Judgment
Section 479A of the HEA gives an institution’s financial aid administrator (FAA) the authority to
use professional judgment to make adjustments on a case-by-case basis to the cost of attendance
or to the values of the items used in calculating the EFC to reflect a student’s special
circumstances. The Department encourages FAAs to use professional judgment to reflect more
accurately the financial need of students and families affected by the COVID-19 pandemic. In
making case-by-case determinations, the FAA must obtain and retain in the affected student’s
file documents that supporting and substantiating the reasons for any adjustment.
Institutions must make and document professional judgment determinations on a case-by-case
basis without regard to how broadly an event may affect its student population. The use of
professional judgment in the Federal Methodology need analysis is discussed in the Federal
Student Aid Handbook. Additionally, FAAs must report to the Central Processing System (CPS)
as a “correction” transaction and with the “PJ” indicator any professional judgment decisions
that affect a student’s eligibility for a Federal Pell Grant.
Satisfactory Academic Progress (SAP) (§ 668.34)
The CARES Act provides additional flexibilities to institutions regarding the calculation of SAP.
An institution of higher education may, as a result of a qualifying emergency, exclude from the
quantitative component of the calculation any attempted credits that were not completed by such student
without requiring an appeal by such student. The Department intends to provide additional guidance
regarding how to implement these additional flexibilities.
Verification (Part 668 Subpart E).
Verification Status Code “W” Warning and “Deobligation” Process Postponed
Typically in April, FSA initiates a warning and “deobligation” process for student records
reported with a verification status code of “W” under which schools are warned that Pell Grant
disbursements to students with this code will be regarded as “overawards” and reduced to a zero
dollar amount ($0.00), even though the disbursements were previously accepted in the Common
Origination and Disbursement (COD) System. Approximately two weeks following this
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warning, we systematically reduce the affected disbursements. The warning and “deobligation”
process is also repeated each July and October. Given the occurrence of this April deadline
during the COVID-19 pandemic, we are canceling the April 2020 warning and “deobligation”
process to allow schools additional time to perform internal reviews and to avoid the
“deobligation” of otherwise eligible Pell Grant awards. We will re-evaluate the process
scheduled for July 2020 and October 2020 as we approach those dates.
For those borrowers in verification groups V4 or V5, the flexibilities listed below apply if the
institution is unable to receive the required documents in person or by mail (e.g., qualified staff
are not on campus to complete this task or students are not able to mail documents). These
flexibilities also apply if the applicant or student is unable to provide the required documents in
person or cannot provide notarized documents by mail.
We suspend the in-person submission and notary requirements for V4 and V5 verification. The
institution may allow an applicant or student to submit copies of the required verification
documents electronically to the institution. This may occur by uploading a photo of the
documents (including from a smartphone), PDF, or other similar electronic document through a
secure school portal, by email, etc.
We also recognize that forms of identification (such as a driver’s license) may expire with no
real and reasonable opportunity for renewal due to social distancing requirements. Institutions
may accept a copy of an expired document if it expired after March 1, 2020.
Further, the Department waives the requirements under § 668.57(b) and (c) that a dependent
student submit a statement signed by one of the student’s parents when no responsible parent can
provide the required signature. In such a situation, the institution must note and retain an
explanation of why neither of the student’s parents was available to provide such a statement.
Federal Student Aid Program Information
Federal Pell Grant, Iraq and Afghanistan Service Grant, and Teacher Education Assistance
for College and Higher Education (TEACH) Grant Programs
Deadline for Reporting Initial Disbursement Records (Federal Pell Grant § 690.83 and
TEACH Grant § 686.37)
Generally, an institution must submit to the Department a Federal Pell Grant, Iraq and
Afghanistan Service Grant, or TEACH Grant disbursement record for a student not later than 15
calendar days after the institution makes a disbursement to the student or becomes aware that a
disbursement needs to be adjusted.
For the Federal Pell Grant program, if the institution becomes aware that previously reported
payments or expected payments for a student are no longer accurate, the institution must submit
an accurate disbursement record for that student no later than 15 calendar days after becoming
aware of the need to make the change. The institution should promptly contact its School
Participation Division if it is unable to meet these deadlines.
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Additional deadline details are included in the deadline date notice published annually in the
Federal Register. For the TEACH Grant Program, an institution must submit to the Department
subsequent disbursement records, including adjustments and cancellation records not later than
15 calendar days following the date of the disbursement, adjustment, or cancellation. The
appropriate School Participation Division will address any concerns about the deadlines for
submitting disbursement records (including adjustments and cancellations) for the TEACH Grant
Program on a case-by-case basis.
Final Federal Reporting Deadlines
Upon an institution’s request, the Department will extend the deadline for reporting final Federal
Pell Grant payments if the institution is unable to meet the published deadline. An affected
institution should make the request as soon as possible by submitting a request via the Common
Origination and Disbursement (COD) website (http://www.cod.ed.gov) or by contacting the
COD School Relations Center at 1-800-474-7268.
All Federal Student Loans Held by the Federal Government—Zero Interest and Suspension of
Payments
In response to the COVID-19 national emergency, President Trump announced that zero interest
would accrue on student loans held by federal government agencies for at least 60 days
beginning on March 13, 2020.
The CARES Act extended the interest reprieve and implemented an automatic forbearance until
September 30, 2020, for any borrower with a student loan held by the Department. The
Department published frequently asked questions (FAQs) with responses for borrowers on its
studentaid.gov website.
All Federal Student Loans Not Held by the Federal Government—Zero Interest and
Suspension of Payments
Federal Family Education Loan (FFEL) Program lenders and institutions who hold Perkins loans
may provide the same zero interest and cessation of payments benefits to the loans they hold on a
voluntary basis. Borrowers of these loans should contact their servicer (or the institution if
paying the institution directly) for additional information.
William D. Ford Federal Direct Loan (Direct Loan) Program/FFEL Program
Borrowers in In-School Loan Status (§ 685.207) and In-School Deferment Status (§ 685.204)
The Department will continue to report to the National Student Loan Data System (NSLDS) as
“in-school” for the loan status of each borrower who was in an “in-school” status on the date the
borrower’s attendance at the institution was interrupted due to the COVID-19 national
emergency. The Department will continue the borrower in that loan status until the institution
reports the borrower as withdrawn. (Please also see above section Enrollment Status Changes
for information about required reporting.).
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Submission of Direct Loan Payment Data (§ 685.301(c))
This regulation requires an institution to submit Direct Loan payment data in accordance with
procedures and deadlines established through a notice published in the Federal Register. An
institution that is unable to meet the requirements specified in the Federal Register Notice must
contact its School Participation Division to discuss its concerns.
Collection of Defaulted Loans
The CARES Act requires the Department of ED to cease collection activities on all defaulted
loans, including administrative wage garnishment and the Treasury Offset Program until
September 30, 2020.
Satisfactory Repayment Arrangements (§ 685.102)
The Department will not treat any payment the borrower fails to make as a missed payment in
the stream of six consecutive, on-time voluntary full monthly payments required to re-establish
his or her eligibility for assistance under Title IV of the HEA. If the Department does not extend
the effective period for the temporary relief provided by this guidance, the required sequence of
qualifying payments resumes at the point at which it was discontinued.
The Department will not treat any payment the borrower fails to make as a missed payment in
the stream of three consecutive, on-time voluntary full monthly payments required to establish
eligibility to consolidate a defaulted loan. If the Department does not extend the effective period
for the temporary relief provided by this guidance, the required sequence of qualifying payments
resumes at the point at which it was discontinued.
Payments to Rehabilitate Defaulted Loans (§ 685.211(f))
The Department will not treat any payment the borrower fails to make as a missed payment in
the stream of nine on-time monthly payments within ten months for purposes of rehabilitating
the defaulted loan through September 30, 2020 as directed in the CARES Act.
FFEL Program: Lenders and Guaranty Agencies and Loans held by the Department
Satisfactory Repayment Arrangements (§ 682.200(b))
The FFEL loan holder should not treat any payment the borrower fails to make as a missed
payment in the stream of six consecutive, on-time voluntary full monthly payments required to
re-establish his or her eligibility for assistance under Title IV of the HEA.
A FFEL loan holder should not treat any payment a borrower fails to make as a missed payment
in the stream of three consecutive, on-time voluntary full monthly payments required to establish
eligibility to consolidate a defaulted loan.
Borrowers in In-School Loan Status (§ 682.209(a)) and In-School Deferment Status (§
682.210)
The loan holder should continue to report to NSLDS as “in-school” the loan status of each
borrower who was in an “in-school” status on the date the borrower’s attendance at the
institution was interrupted due to the COVID-19 national emergency. The loan holder should
continue the borrower in that loan status until the institution reports the borrower as withdrawn.
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Collection of Defaulted Loans (§ 682.410)
Guaranty agencies must stop collection activities on defaulted loans until September 30, 2020,
on all federally held loans. Collection activities must resume at the end of the period at the point
at which they were discontinued. The guaranty agency must document in the loan file why it
suspended collection activities on the loan and is not required to obtain evidence of the
borrower’s status while collection activities have been suspended.
Payments to Rehabilitate Defaulted Loans (§ 682.405)
The FFEL loan holder should not treat any payment the borrower fails to make as an interruption
in the nine on-time voluntary full monthly payments within ten months for purposes of
rehabilitating the defaulted loan.
General Campus-Based Program Issues
Allocation Reduction Due to Under-Utilization (§ 673.4(d)(3))
The CARES Act makes changes to provisions relating to the allocation of campus-based
program funding. The Department intends to provide additional guidance on the allocation
reduction due to under-utilization.
Filing Deadline for Fiscal Operations Report and Application to Participate (FISAP)
The Department will issue appropriate guidance as it continues to monitor the COVID-19
national emergency.
Federal Work Study (FWS)
The Department’s March 5, 2020, guidance regarding FWS payments aligns with flexibilities
provided under the Stafford Act, which permits FWS students to receive FWS, even if they are
unable to work their scheduled hours or must perform their work in a different way (such as
online rather than at a facility) as a result of COVID-19 interruptions, provided the institution is
continuing to provide educational services and is paying its faculty and staff. As explained in the
March 5, 2020, guidance, for students enrolled and performing FWS at a campus that must
temporarily cease providing instruction due to COVID-19, for a FWS student who is employed
by an employer that temporarily or permanently closes as a result of COVID-19, or for students
quarantined and unable to travel to campus or their jobsite, the institution may continue paying
the student Federal work-study wages during that cessation.
Payments may be made in an amount equal to or less than the amount of FWS wages those
students would have been paid had they been able to complete the work obligation necessary to
receive FWS funds.
An institution may pay a student enrolled at an eligible institution who:
• Received an FWS award for the award period during which a COVID-19 related interruption
occurred on the campus;
• Earned FWS wages from the institution for that award period; and
• Was prevented from fulfilling his or her FWS obligation for all or part of the award period
due to a COVID-19 related interruption.
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This flexibility applies only to students who have begun their FWS job prior to the declaration of
the national emergency and may not exceed one academic year.
The CARES Act provides additional flexibility for institutions to provide emergency grants from
their remaining Supplemental Educational Opportunity Grant (SEOG) allocations, which include
grants to students who would have otherwise received FWS wages had they started their job
prior to the national emergency. The Department will issue guidance on the use of remaining
SEOG allocations.
The CARES Act also allows the Secretary to waive the non-federal share in certain
circumstances. The Secretary will consider this waiver authority and will issue guidance on this
issue.
Community Service Requirements (§ 675.18(g))
An institution must use at least seven percent of the total amount of its FWS Federal funds
granted for an award year to compensate students employed in community service. In addition,
the institution must ensure that it includes at least one project for tutoring children in reading or
one project for family literacy in providing community service. The HEA provides that a waiver
of one or both community service requirements may be granted if the Secretary determines that
enforcing the requirements would cause hardship for students at the institution. The Department
considers the inability of an institution to expend at least seven percent of its total FWS Federal
allocation for community service and/or to have at least one project for tutoring children in
reading or family literacy due to the COVID-19 national emergency as an appropriate basis for a
waiver. An institution must submit a request for a waiver along with a statement that explains
the reason for its inability to comply with one or both of the community service requirements.
An affected institution should request a waiver as soon as possible by using the annually
published waiver submission guidelines or by contacting the Campus-Based Call Center at 1-
800-848-0978.
Flexibility in Making Certain FWS Payments (§ 675.18(i))
As explained above, the CARES Act provides additional opportunities for institutions to award
grants to students using reallocated SEOG funds. The Department will publish guidance on how
to administer grants made from reallocated SEOG funds.
Federal Perkins Loan Program
Borrowers in Repayment (§ 674.33)
The Department authorizes institutions to grant forbearance, for a period not to exceed three
months, to a Federal Perkins Loan borrower who is in repayment and who is unable to make
payments due to a COVID-19 related interruption.
For an institutionally held Perkins Loan, interest accrues during any period of forbearance. A
borrower may request this forbearance orally or in writing and is not required to submit
documentation to be considered eligible for this forbearance. An institution must document the
forbearance in the borrower’s file. To receive forbearance beyond the three-month period, the
borrower must make a request to the institution and provide supporting documentation. (At the
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expiration of the three-month period, the institution should examine the borrower’s situation to
determine potential eligibility for an economic hardship deferment or unemployment deferment,
as appropriate.) This period of forbearance is counted toward the three-year maximum limit on
the number of years of forbearance that may be granted to a borrower.
Collection of Defaulted Loans (Part 674, Subpart C—Due Diligence)
The institution may stop collection activities through September 30, 2020 upon notification by
the borrower, a member of the borrower’s family, or another reliable source that the borrower
has been affected by the COVID-19 national emergency. Collection activities must resume
when the period ends. The institution must document in the loan file why it suspended collection
activities on the loan and is not required to obtain evidence of the borrower’s status while
collection activities have been suspended.
Satisfactory Repayment Arrangements on Defaulted Loans (§ 674.2)
An institution should not treat any scheduled payment the borrower fails to make as a missed
payment in the stream of six on-time, consecutive, monthly payments required for the borrower
to make satisfactory repayment arrangements on a defaulted Perkins Loan and to re-establish
their eligibility for assistance under Title IV of the HEA. If the Department does not extend the
effective period for the temporary relief provided by this guidance, the required sequence of
qualifying payments resumes at the point at which it was discontinued.
Payments to Rehabilitate Defaulted Loans (§ 674.39)
An institution should not treat any scheduled payment the borrower fails to make as a missed
payment in the stream of nine on-time, consecutive, monthly payments required for the borrower
to rehabilitate the defaulted loan. If the Department does not extend the effective period for the
temporary relief provided by this guidance, the required sequence of qualifying payments
resumes at the point at which it was discontinued.
Conclusion
We encourage school communities to take all appropriate steps to ensure the health and well-
being of students, faculty, and staff. If you have questions about the information provided in this
guidance document or you are encountering a scenario that we have not addressed, please email
the Department at COVID-19@ed.gov. In response to questions from the postsecondary
community, the Department has also established FAQs that we will update periodically.
We established the webpage https://www.ed.gov/coronavirus to provide general information for
school communities, including links to information posted by the CDC and Prevention, and as
the location for the Department’s guidance. We encourage institutions to refer frequently to
these informational resources.
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Secretary DeVos Rapidly Delivers More Than $6 Billion in Emergency Cash Grants for College
Students Impacted by Coronavirus Outbreak
First wave of CARES Act funding will provide aid to students for expenses like course
materials, technology, housing, food, health care, and childcare
APRIL 9, 2020
Contact: Press Office, (202) 401-1576, press@ed.gov
•
WASHINGTON — U.S. Secretary of Education Betsy DeVos announced today more than $6
billion will be distributed immediately to colleges and universities to provide direct emergency
cash grants to college students whose lives and educations have been disrupted by the
coronavirus outbreak. The funding is available through the Higher Education Emergency Relief
Fund authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed
into law by President Donald J. Trump less than two weeks ago.
"What's best for students is at the center of every decision we make," said Secretary DeVos.
"That's why we prioritized getting funding out the door quickly to college students who need it
most. We don't want unmet financial needs due to the coronavirus to derail their learning."
The CARES Act provides nearly $14 billion to support postsecondary education students and
institutions. Colleges and universities are required to utilize the $6.28 billion made available
today to provide cash grants to students for expenses related to disruptions to their educations
due to the COVID-19 outbreak, including things like course materials and technology as well as
food, housing, health care, and childcare. In order to access the funds, the Department must
receive a signed certification from the higher education institution affirming they will distribute
the funds in accordance with applicable law. The college or university will then determine which
students will receive the cash grants.
School allocations are set by formula prescribed in the CARES Act that is weighted significantly
by the number of full-time students who are Pell-eligible but also takes into consideration the
total population of the school and the number of students who were not enrolled full-time online
before the coronavirus outbreak. The Department is utilizing the most recent data available from
the Integrated Postsecondary Education Data System (IPEDS) and Federal Student Aid (FSA)
for this calculation.
Institutions will receive allocations and guidance for the institutional share of the Higher
Education Emergency Relief Fund in the coming weeks. Institutions will be able to use these
funds to cover costs associated with significant changes to the delivery of instruction due to the
coronavirus.
Additional information on institution-level funding for students, including data tables, can be
found here. The Secretary's letter to college and university presidents with additional information
on this funding allocation can be found here.
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The funding allocations announced today are part of the nearly $31 billion Congress allocated to
the Department to distribute to students, K-12 schools, and higher education institutions under
the CARES Act. The Department, at the Secretary's urging, is working to make funds available
as quickly as possible.
Under the Secretary's leadership, the Department has taken quick action to support higher
education students from the start of the coronavirus outbreak. Colleges and universities were
given immediate regulatory flexibility so students' educations could continue online. The
Secretary also provided student loan relief to tens of millions of borrowers by setting all
federally held student loan interest rates to zero percent and allowing borrowers to defer
payments for 60 days without interest. The CARES Act extends those benefits to six months.
The Department also stopped all federal wage garnishments and collections actions for
borrowers with federally held loans in default.
The Department continues to update ed.gov/coronavirus with information for students, parents,
educators and local leaders about how to prevent the spread of COVID-19.
For more information about COVID-19, please visit the following
websites: coronavirus.gov, cdc.gov/coronavirus/2019-ncov/index.html, and usa.gov/coronavirus.
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Glossary CFR DCL
U.S. Citizenship &
Eligible Noncitizens
CHAPTER
2
A student has to be a U.S. citizen, a citizen of the Freely Associated States, or an eligible non-
citizen to be potentially eligible for federal student aid. In this chapter we describe how the
student’s FAFSA information is matched with other agencies to determine citizenship sta-
tus. We also describe the immigration documents that you may need to collect to ensure the
student’s eligibility.
ELIGIBLE CATEGORIES
A student must be one of the following to be eligible to receive federal Citizenship issues
➔ All applications are matched with the
student aid:
Social Security Administration (SSA) on
U.S. citizenship status. The SSA citizen-
• A U.S. citizen or national; ship field on the ISIR shows the match
result.
• A citizen of the Freely Associated States: the Federated States of ➔ Applications containing an Alien
Micronesia and the Republics of Palau and the Marshall Islands.
Registration Number (ARN) are also
(These students can only receive aid from some of the FSA programs
matched against Department of Home-
and do not have an A-number/ARN, see “Citizens of the Freely Asso-
land Security (DHS) records. The DHS
ciated States” section later in this chapter); or
Primary and DHS Secondary match
• A U.S. permanent resident or other eligible noncitizen. fields show the DHS match results. A
failed match will produce a C code.
➔ If the DHS match fails after automat-
The Department of Education (The Department) matches all applica-
ed primary and secondary verification,
tions with the Social Security Administration (SSA) on U.S. citizenship sta-
the school must conduct a third step
tus. If the status cannot be confirmed, the student must provide documents verification (see “Third Step Verification
proving U.S. citizenship, citizenship of the Freely Associated States, or eligible (Formerly Form G-845)” section in this
non-citizen status in order to be potentially Title IV aid-eligible. If the stu- chapter).
dent provides an alien registration number (ARN) on the FAFSA, his record
is also sent to DHS to check noncitizen immigration status. The results of
both matches appear on the Institutional Student Information Report (ISIR),
and a failed match with either agency will produce a “C code” on the stu-
dent’s ISIR. Citizenship
HEA Sec. 484(a)(5),
A student’s U.S. citizenship (or eligible noncitizen) status only needs 34 CFR 668.32(d),
to be checked once for the award year; if the status is eligible at that time, it 34 CFR 668.33,
remains so for the rest of the award year (with the exception of parolees and and Subpart I of Part 668.
VAWA prima facie cases; see the “Third Step Verification (Formerly Form
G-845)” section below).
If a parent wants to take out a PLUS loan for a dependent undergraduate
student, both the parent and the student must be a U.S. citizen or national or
eligible noncitizens.
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Vol. 1—Student Eligibility 2019–20 Glossary CFR DCL
U.S. citizenship U.S. CITIZENSHIP MATCH WITH THE SSA
A person is a U.S. citizen by birth or by All applications are matched with SSA records to verify U.S. citizenship
naturalization or by operation of law. status, name, date of birth, and Social Security number (SSN) (see Chapter 4).
Persons (except for the children of The Central Processing System (CPS) will reject the application for insuffi-
foreign diplomatic staff) born in the 50 cient information if name, date of birth or SSN is not provided. The student’s
states, the District of Columbia, and, in match result is reported in the “SSA Citizenship” field on the SAR, and on
most cases, Puerto Rico, the U.S. Virgin the Match Flags section of the SAR and ISIR. If the student leaves the citizen-
Islands, Guam, and the Northern Mari-
ship question on the FAFSA blank, the CPS will still attempt the citizenship
ana Islands are U.S. citizens, as are most
persons born abroad to parents (or a
match with the SSA. If there is a complete match with the student’s SSN,
parent) who are citizens. All U.S. citizens name, date of birth, and U.S. citizenship, the CPS will report the student to
are considered U.S. nationals, but not all be a U.S. citizen.
nationals are citizens. Persons whose
only connection to the U.S. is through ▼ Successful match. The SAR and ISIR will have a match flag (but no
birth on American Samoa, Swains Is- comment) indicating that the student’s U.S. citizenship status was confirmed.
land, or the U.S. Minor Outlying Islands
are not U.S. citizens but are U.S. nation- ▼ Data doesn’t match. If the student’s SSN, name, or date of birth
als, and therefore may also receive FSA doesn’t match SSA records, his U.S. citizenship status can’t be confirmed and
funds. a C code and a comment will appear on the output document. The student
should correct the SSN, name, or date of birth (see Chapter 4 for more on
SSN match problems) and submit it. The CPS will perform the match again,
Example: citizenship not and you must see if the new ISIR confirms the student’s U.S. citizenship sta-
confirmed tus; if it does, the C code will no longer appear.
Anthony is a U.S. citizen, but SSA
doesn’t confirm his U.S. citizenship sta-
▼ U.S. citizenship not confirmed. The SAR and ISIR will include a
tus. The aid administrator at Epstein Col-
C code and a comment (code 146) explaining that the SSA was unable to
lege asks him to submit documentation
of his status. Anthony first submits a confirm the student is a U.S. citizen and that he/she needs to provide his/
Social Security card, but the administra- her financial aid office with documents proving U.S. citizenship (see below).
tor explains that the card doesn’t docu- If the student provides eligible noncitizen documentation, you or the stu-
ment his status because noncitizens dent must make a correction by entering his/her Alien Registration Number
can have Social Security cards. Anthony (ARN) on the ISIR, changing his/her citizenship status to eligible noncitizen
then brings in his Certificate of Natu- in Question 15, clicking “yes” on the drop-down box in the “Resend Record
ralization. The administrator makes a to Matches” field and submitting it to the CPS, which will attempt a match
copy of the certificate for his file and with DHS records to confirm the student’s immigration status.
tells Anthony his citizenship has been
documented. She also advises Anthony Note that U.S. citizens born abroad might fail the citizenship check, un-
to have the SSA correct its database so
less they have updated their citizenship information with SSA (see “Updating
that he won’t have this problem again.
status for U.S. citizens born abroad” later in this chapter).
U.S. citizenship documentation
If a student must prove their status as a U.S. citizen or national, only cer-
tain types of documents are acceptable. The Department doesn’t specify all of
the acceptable documents, but here are some documents you might choose
Passport cards & passports to use to prove U.S. citizenship:
22 CFR 51.4(b)(2)
A student may apply for a U.S. passport • A Certificate of Naturalization (N-550 or N-570) issued by USCIS
card, which may be considered accept- (or, prior to 1991, a federal or state court), or through administrative
able documentation of U.S. citizenship, naturalization after December 1990 to those who are individually
at the U.S. State Department website: naturalized. You must copy this document for the student’s file and
https://travel.state.gov/content/travel/
tell the student to update their status with DHS, see https://uscis.gov/
en/passports/apply-renew-passport/card.
html
about-us/contact-us.
• A Certificate of Citizenship (N-560 or N-561) is issued by USCIS to
individuals who derive U.S. citizenship through a parent.
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Glossary CFR DCL Chapter 2—U.S. Citizenship & Eligible Noncitizens
• A copy of the student’s birth certificate showing that the student
Mandatory name changes
was born in the U.S., which includes Puerto Rico (on or after Janu-
Whenever a student legally changes
ary 13, 1941), Guam, the U.S. Virgin Islands (on or after January 17, their name because of marriage, di-
1917), American Samoa, Swains Island, or the Northern Mariana vorce, court order or any other reason,
Islands, unless the person was born to foreign diplomats residing in they must tell the Social Security Ad-
the U.S. If a student has a birth certificate from a U.S. jurisdiction ministration so they can get a corrected
showing that the student was born abroad (i.e., not in the U.S. or its card and have correct SSN matches in
territories), that birth certificate is not acceptable documentation. the future. The student must bring the
appropriate documents to prove the
• A U.S. passport, current or expired, (except “limited” passports, change to their local SSA office. See
which are typically issued for short periods such as a year and which https://secure.ssa.gov/ICON/main.jsp.
don’t receive as much scrutiny as a regular passport when applying).
In the case of nationals who are not U.S. citizens, the passport will be
stamped “Noncitizen National.” Five-year-duration U.S. passports Parent signature on certificate
(commonly issued to younger students) are considered acceptable Because documents such as a certificate
documentation, and are not considered “limited”. Passport cards are of citizenship can go to minors, they
also acceptable; however, one-year-duration U.S. passports are NOT may be signed by a parent or guardian
instead of the minor child. This does not
acceptable documentation.
affect the legitimacy of the document.
• A wallet-sized passport card, issued by the State Department, is a
fully valid attestation of the U.S. citizenship and identity of the bear-
er, but can only be used for land and sea travel between the U.S. and
Canada, Mexico, the Caribbean, and Bermuda.
Child Citizenship Act (CCA)
• A copy of Form FS-240 (Consular Report of Birth Abroad), FS- The CCA became effective on February 27,
545 (Certificate of birth issued by a foreign service post), or DS- 2001. As of that date, foreign-born children
1350 (Certification of Report of Birth). These are State Department who are not U.S. citizens at birth become
citizens once these conditions are met:
documents.
• At least one parent (biological or adop
Before you can disburse aid, the student must present documentation tive) is a U.S. citizen;
that verifies he is a U.S. citizen. If the documents indicate that the student • the children live in the legal and physi
is a U.S. citizen or national, you may award and disburse aid to the student cal custody of that parent;
• they are under 18 years of age; and
and the C-code may remain on the student’s ISIR. Keep a copy of the docu-
• they are admitted as immigrants for
mentation in the student’s file. Unlike the case of eligible noncitizens, you lawful permanent residence.
don’t submit the documents to the DHS/USCIS or any other agency for
verification of U.S. citizenship, even though older versions of the Certificate Children newly entering the country who
of Citizenship and of the Certificate of Naturalization instruct the holder not are adopted abroad prior to the issuance of
their IR-3 visa (for orphans) or IH-3 visa (for
to photocopy them. The student can also contact the Social Security Admin-
children from Hague Convention countries)
istration to update the student’s record. This updating is not required to re- become citizens upon arrival. They should
ceive aid, but may prevent issues with SSA matching in the future. receive a Certificate of Citizenship within
45 days instead of receiving a permanent
resident card and then filing Form N-600
to request a certificate. Children who are
adopted after being admitted to the U.S.
with an IR-4 visa (for orphans) or IH-4 visa
(for children from Hague Convention coun-
tries) become citizens once their adoption
is full and final. Parents of these and other
children who do not automatically receive a
certificate of citizenship can get one by filing
Form N-600.
For more information, contact the USCIS,
visit the website at www.uscis.gov, or see the
State Department’s intercountry adoption
website at http://adoption.state.gov/.
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Report of birth abroad Updating status for U.S. citizens born abroad
The F-240 Report of Birth Abroad form Students born abroad to U.S. citizen parents are U.S. citizens if they meet
was redesigned in January 2011, but certain requirements, and their status is usually noted in the SSA’s database
the previous version (DS-1350) remains when they receive an SSN. But occasionally, a student may not have provided
valid for proving U.S. citizenship for Title sufficient proof of U.S. citizenship to SSA in order for the record to be updat-
IV purposes. ed. Therefore, these students will fail the U.S. citizenship match even if they
have an SSN. If this occurs, the student must provide proof of U.S. citizen-
ship as outlined below. The student can contact the SSA to have their record
corrected. This update is not required to receive aid.
The Freely Associated States
The Compact of Free Association (P.L. Such students can document US. citizenship by providing a “Consular
99-239) created three political entities
Report of Birth Abroad” (Form FS-240, which is proof of U.S. citizenship),
from the former Trust Territory of the
a “Certification of Report of Birth” (Form DS-1350, which is evidence of
Pacific Islands. Two of these entities,
the Marshall Islands and the Federated U.S. citizenship and equivalent to a birth certificate), or a Certificate of Citi-
States of Micronesia, voted in 1986 zenship issued by USCIS. If the birth of the student was registered with the
to end political ties with the U.S.. The American consulate or embassy in a foreign country before he turned 18, he
third entity, Palau, voted to ratify the can receive a copy of one of these by sending a written, notarized request to
compact in 1994; its independence was the USCIS.
effective October 1, 1994. These three
entities are the Freely Associated States. For pictures of the U.S. citizen documents listed above, see the end of
34 CFR 600.2 this chapter.
No FSEOG and FWS/Compact Act CITIZENS OF THE FREELY ASSOCIATED STATES
The Compact of Free Association Students who are citizens of the Freely Associated States—the Feder-
Amendments Act of 2003, or the ated States of Micronesia and the Republics of Palau and the Marshall Is-
Compact Act, eliminated eligibility for lands—are eligible for Pell Grants (citizens of Palau are also eligible for FWS
citizens of the Republic of the Marshall and FSEOG; see the margin note) but are not eligible for FSA loans. These
Islands (RMI) and the Federated States students should have a passport from the Freely Associated States or an I-94.
of Micronesia (FSM) for FSEOG and FWS
funds. To mitigate this loss, the Com- The student should indicate on the FAFSA that he/she is an eligible non-
pact Act authorizes Supplemental Edu- citizen and leave the ARN item blank. If the student doesn’t have an SSN, he
cation Grants (SEGs) that are awarded to
enters 666 and ED will give him a number to use, or if he was given a num-
the FSM and RMI. For more information,
students of the FSM and RMI should
ber in the previous year, he must continue to use the same ED-assigned pseu-
contact their local education authority. do-SSN due to Pell Lifetime Eligibility Used (LEU) rules (see the November
Also under the Compact Act and the 20, 2013 Electronic Announcement for more details).
Palau Compact Review Agreement, stu-
dents who are citizens of the Republic Because he isn’t providing an ARN, the student’s application won’t go
of Palau continue to be eligible for FWS through the DHS match. Do not complete a third step verification for these
and FSEOG funds through the 2019-20 students—they will fail the match. Instead, request documentation of his
award year. Freely Associated States citizenship. Once you have received the student’s
document establishing his status, as a citizen of the Freely Associated States,
make a copy of the document and place it in the student’s file. You can reuse
the original document in future years if it hasn’t expired.
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Glossary CFR DCL Chapter 2—U.S. Citizenship & Eligible Noncitizens
ELIGIBLE NONCITIZEN MATCH WITH THE DHS
The DHS assigns to all legal aliens an Alien Registration Number (ARN),
which FSA uses to identify the student records that must be sent to DHS for
immigration status verification. If the applicant indicates on the FAFSA
that he is an eligible noncitizen and provides an ARN, identifying infor-
mation is sent to the DHS for eligible noncitizen matching.
The results of the match are shown by a match flag in the “FAA Informa- Suspect documents
tion” section of the output document, under the heading “DHS” on the ISIR If you are able to discern that a docu-
or “DHS Match Flag” on the SAR. There will also be a comment about the ment is fraudulent, you must deny the
results on the output document. student Title IV aid. If the student sub-
mits conflicting information regarding
Because all applications are matched with the SSA, an application with immigration status on the FAFSA, you
must resolve any discrepancies before
an ARN will be matched with both DHS and SSA records. When results are
disbursing Title IV aid.
received from both matches, a positive SSA match will indicate that the stu-
dent is a U.S. citizen. If the SSA match is negative, the DHS match flag will Report altered or misreported infor-
determine the student’s eligible noncitizen status. mation to the Department’s Office of
Inspector General at 1-800-MIS-USED or
▼ Successful match. (Y Flag) If the match confirms the student’s immi- the OIG’s website at:
gration status as an eligible one, he can receive aid if the other eligibility cri- www2.ed.gov/about/offices/list/oig/in-
teria are also met. Comment code 143 will appear on the SAR and ISIR, and dex.html.
the successful match results are documentation of the student’s eligibility. Of
course, if you have other information about his status that seems to contra-
dict the successful match result, you must resolve the conflict before paying
the student (see “Conflicting Information” in Chapter 1) by going through
the third step verification process.
▼ Record was not sent to DHS due to data entry errors. (Blank flag)
The match won’t be attempted if the student left the citizenship question
blank (code 068), if the student said they were an eligible noncitizen but DHS second step verification
provided either no ARN or an illegible or invalid one (code 142), or if they match flags and comment codes
changed their response to the citizenship question or changed her ARN after Y, 120: The student’s eligibility has
previous verification by the DHS (code 141). Instead, the student will re- been confirmed. You can process his
ceive a C code and a comment explaining the problem and directing them to aid.
provide the school with his/her most recent immigration documentation to
support their eligibility. Compare the student’s immigration document with C ,105: The student’s eligible noncitizen
status has not yet been verified. The
the SAR/ISIR to determine the appropriate resolution action. If you or the
school is required to wait 10 business
student corrects the ARN and resubmits it so that the match can be conduct- days for another ISIR with an updated
ed, and his/her eligibility is confirmed as an eligible noncitizen, the C code match result. If there is no update, the
will not appear on the new ISIR. If the student’s eligibility is not confirmed, school begins the third step verification
(match flag = N), check their DHS secondary Match Flag to determine how process.
to proceed.
N, 046: The student’s immigration
▼ Student’s noncitizen status has not yet been confirmed. (N Flag status was not confirmed. The school
and C code) DHS will continue to check its records in a process called auto- begins third step verification.
mated secondary confirmation. The SAR and ISIR will have comment code
144 and a DHS match flag of “P” (indicating that the procedure is still in X, 109: The DHS did not have enough
process). Within three to five days, the CPS should generate a SAR and ISIR information to determine the student’s
status. The school begins third step
indicating the result in the “DHS Secondary” Flag field. The response table in
verification.
the margin explains each Flag, its translation and how to proceed.
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Vol. 1—Student Eligibility 2019–20 Glossary CFR DCL
A correction to the student’s name, date of birth, or ARN made while
Conditions requiring secondary the DHS is conducting the automated secondary confirmation may start
confirmation the process over, i.e., the correction may be sent through primary confirma-
34 CFR 668.133(a)
tion. Though unlikely, if the new primary confirmation match yields a “Y,”
the transaction can be used to award aid. The new transaction may have a
new DHS verification number assigned. A correction made to a transaction
School policies and procedures that contains secondary confirmation results of “Y” or “C” (or a transaction
on secondary confirmation with a primary confirmation result of “Y”) will not be sent through the DHS
34 CFR 668.134–135 match again. Otherwise the record will be re-sent for matching.
Example of eligible noncitizen ARN corrections and additions to the FAFSA
not confirmed • If the citizenship question is blank but there is an ARN, the CPS
On his original application, Theo will send the record to DHS for matching.
didn’t give his ARN and reported
that he was a citizen. When the SSA • If both the citizenship question and the ARN are blank, the record
didn’t confirm this, Theo told the aid will not be sent to DHS. The output document will explain that SSA
administrator at Fowler University was unable to confirm that the student is a U.S. citizen. The student
that he was a permanent resident. must submit a correction to the citizenship status and ARN if he/she
He added his ARN and changed his is an eligible noncitizen.
citizenship status to eligible noncitizen,
but SAVE didn’t confirm his status as
• If U.S. citizen or national is selected, but the student provides an
an eligible noncitizen. He explained
eligible noncitizen document, correct question 14 on the ISIR to
to the aid administrator that he had
applied for permanent resident status “eligible noncitizen” and enter the ARN in question 15 and click
but didn’t have documentation yet. “yes” on the drop-down box in the “Resend Record to Matches”
The aid administrator told him that field. This correction will tell CPS to send the record to the DHS Pri-
when he received documentation mary match (for the first time). Ignore comment code 146 from SSA
that his application was approved, on the current ISIR. Wait for the DHS Match flags on the student’s
he should bring it to Fowler so next ISIR to determine if the student is an eligible noncitizen or if a
that it could be submitted to the third step verification is necessary.
USCIS for confirmation. The aid
administrator told him to bring any • If the ARN on the ISIR does not match the ARN on the student’s
information supporting his current immigration document, correct the ARN in field 15 and click “yes”
immigration status to Fowler so that
on the drop-down box in the “Resend Record to Matches” field.
it could be submitted to the USCIS
This will send the corrected record (which DHS considers a new
for confirmation. Depending on the
documentation Theo provides, he may record because of the new ARN) to the DHS Primary match. Ignore
be considered an eligible noncitizen in a DHS comment codes 046, 105, and 109 on the current ISIR. Do not
class other than permanent resident. complete third step verification unless the DHS Match flags on the
resulting ISIR indicate that third step verification is necessary. For
more detail on these codes, see the 2019-20 SAR Comment Code and
Text guide on IFAP.
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Glossary CFR DCL Chapter 2—U.S. Citizenship & Eligible Noncitizens
THIRD STEP VERIFICATION (FORMERLY FORM G-845)
If the student didn’t pass secondary verification or if you have conflict-
ing information about his immigration status after receiving a primary or
secondary match result, you must review the record for third step verifica-
tion.
Third step verification preparation
1. Request the student’s most current, unexpired immigration document.
When it is submitted, make a copy of it.
2. Carefully review the student’s immigration documentation against the
status and document descriptions below.
DHS verification number on the
ISIR
3. Determine whether the student’s immigration documentation sup- When a record is processed through the
ports eligibility for Title IV aid. If it does not support an eligible status, CPS match with DHS, a 15-digit verifica-
you can tell the student that he is not eligible now, but may be eligible tion number is assigned to the student
if/when he provides eligible noncitizen documentation. You should and printed in the “FAA Information”
not complete third step verification for this student. section of the SAR and ISIR. This 15
digit number is needed to access the
For more on using the SAVE system to complete third step verification, student’s SAVE record, and to submit a
see the section titled “Using the SAVE System for third step verification” later third step verification request through
in this chapter. SAVE.
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Vol. 1—Student Eligibility 2019–20 Glossary CFR DCL
ELIGIBLE NONCITIZENS AND DOCUMENTATION
Certain non-U.S. citizens may be eligible for Title IV aid. The following
types of “eligible noncitizens” are among the classes of persons who may be
eligible (see bulleted list below).
For classes of eligible noncitizens other than permanent residents, evi-
dence of their status typically is on the I-94, but other documentation may
also be acceptable. Customs and Border Protection (CBP) no longer issues a
I-94 website paper I-94 form, with the exception of asylees and certain parolees. In Sep-
https://i94.cbp.dhs.gov/I94 tember 2015, CBP automated the refugee admission process. Refugees will no
Customs and Border Protection (CBP)
longer receive a paper form I-94, but will have access to an electronic form.
creates admission records electronically.
Students without paper I-94 documentation (see I-94 website sidebar) may
The I-94 website allows travellers (and
schools, if the traveller grants permis-
have their status confirmed by the electronic I-94 printout and/or a CBP
sion) to access admission records online stamp, showing class of admission and date admitted or paroled in their
(the website contains records from April passport to confirm this status.
2011 to present). Legacy paper I-94s are
also still valid. Only when students fail the citizenship match or have conflicting infor-
mation must you perform third-step verification using the SAVE system to
DHS-Customs and Border Patrol began confirm that their documentation supports one of the following noncitizen
issuing I-94s with an alpha character in status categories:
the 10th position of the 11-character
identifier beginning in May, 2019. • Lawful permanent residents (LPRs) are noncitizens who are legally
permitted to live and work in the U.S. permanently. The standard docu-
ment is the Permanent Resident Card (Form I-551 since 1997) or Resi-
dent Alien Card (Form I-551 before 1997). Both forms are referred to
colloquially as “green cards,” though they have changed colors over the
years. Possessors of the older Alien Registration Receipt Card (Form
I-151, issued prior to June 1978) should have replaced it with a newer
card, but for receiving FSA funds it is acceptable as evidence of perma-
nent residence. In general, students whose LPR card has expired may
still be considered lawful permanent residents for FSA eligibility pur-
poses; therefore, if they submit expired documentation, submit it to
SAVE and base eligibility on the response.
Permanent residents may also present an Arrival/Departure Record
(CBP Form I-94) or the Departure Record (Form I-94A, with the
endorsement “Processed for I-551. Temporary Evidence of Law-
ful Admission for Permanent Residence. Valid until ____________.
Employment Authorized.” This is used at land border ports of entry.
If available, an I-551 (also known as a “green card”) is preferable to es-
tablish LPR status. The form will have an ARN annotated on it and is
acceptable if the expiration date has not passed.
Eligible noncitizen name
changes The U.S. Department of State issues a machine readable immigrant
When an eligible noncitizen student
visa (MRIV) in the holder’s passport. The MRIV will have a U.S. CBP
changes his or her name, the student
needs to update it with SSA and DHS.
inspector admission stamp, and the statement “UPON ENDORSE-
To update their name with DHS, stu- MENT SERVES AS TEMPORARY I-551 EVIDENCING PERMA-
dents can call 1-800-375-5283. For the NENT RESIDENCE FOR 1 YEAR” will appear directly above the ma-
SSA update, the student may refer to chine readable section. An MRIV with this statement, contained in an
https://www.ssa.gov/agency/contact or unexpired foreign passport and endorsed with the admission stamp,
visit their local SSA office. constitutes a temporary I-551, valid for one year from the date of en-
dorsement on the stamp.
The USCIS issues the U.S. Travel Document (mint green cover),
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which contains the Reentry Permit (Form I-327) and the Refugee
Travel Document (Form I-571). It is used by lawful permanent resi-
dents, as well as refugees and asylees, and is annotated with “Permit to
Reenter Form I-327 (Rev. 9-2-03).”
If the student has an I-551 with a baby picture, they should update
the I-551 with the USCIS. Permanent residents are expected to get a
new picture and be fingerprinted at the age of 14. But you can submit
the documents to USCIS and pay a student who has an I-551 with a
baby picture as long as you can confirm that it belongs to the student.
You can do this by comparing the I-551 to a current photo ID that has
the student’s name, date of birth, and signature. The current ID must
also be consistent with any identifying information in the student’s
file.
A student who has an approved application for permanent residence
on file with the USCIS and who is waiting for a permanent resident
card should have an I-797 Approval Notice from USCIS indicating
such, as well as an alien number, which will give notice of current
status. Note that an application for permanent resident status alone is
not sufficient for determining eligibility for FSA funds.
If a person is applying to suspend deportation, they must request a
hearing before an immigration law judge who will render an oral or
written decision. If that is favorable, the USCIS will give the applicant
a Form I-551, which will certify lawful permanent resident status.
There is no special category for persons who have been granted sus-
pensions of deportation.
• Conditional resident aliens are eligible for aid if their documentation
has not expired. They may have a valid I-551, I-94, I-94A, or a pass-
port with an MRIV bearing the statement, “Upon endorsement serves
as temporary I-551 evidencing permanent residence for 1 year.”
The Marriage Fraud Amendments established a two-year conditional
permanent resident status for alien spouses of U.S. citizens or legal
immigrants whose marriage took place less than two years before the Photocopying immigration
spouse applied for permanent resident status. This status may also ap- docs
ply to any of the spouse’s children who are aliens. DCL GEN-15-08
In most cases you will examine and
A Form I-551 of a conditional permanent resident alien is the same copy original immigration documents,
and you must keep a copy in the stu-
I-551 that is issued to regular permanent residents, except that the
dent’s file with the results from the third
card for a conditional permanent resident expires in two years, as op-
step verification/SAVE. While generally
posed to 10 years for the regular card. A conditional permanent resi- not permitted, for the purpose of apply-
dent must file a petition for removal of this restriction in the 90 days ing for Title IV aid, students may legally
before the end of the two years. The USCIS will review the petition photocopy, scan, or otherwise image
and, if the result of the review is satisfactory, drop the restriction and immigration documents (such as Forms
issue new documents. I-551 or I-94) to complete the third step
verification process.
• Conditional entrants are refugees who entered the U.S. under the
seventh preference category of P.L. 89-236 or whose status was ad-
justed to lawful permanent resident alien under that category. Students
may have an I-94 with a stamp displaying “Section 203(a)(7)” and
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SAVE Guide to Immigration indicating that the person was admitted to the U.S. as a conditional
Documents entrant. Because DHS stopped using this category after enacting the
The USCIS’s Systematic Alien Verifica- Refugee Act on March 31, 1980, you should not disburse FSA funds
tion for Entitlements (SAVE) Program if the student has an I-94 with conditional entrant status granted
office publishes the SAVE Guide to Im- after that date.
migration Documents. To access the
Guide, go to: https://save.uscis.gov/web/ The stamps mentioned use blue security ink. The stamp contains three
media/resourcesContents/SAVEGuide- codes: the first is a two-digit code to the left of the date that desig-
CommonlyusedImmigrationDocs.pdf
nates the field office with jurisdiction over the port of entry. On most
stamps, this code will be two numbers and no letters. Letters are cur-
rently only used on HQ stamps. The three-letter code located under
the word “ADMITTED” shows the port of entry. The third code, to the
USCIS retires red ink right of the date, is the unique four-digit number. When referring to a
U.S. Citizenship & Immigration Services particular stamp, the port of entry code and the stamp’s unique num-
(USCIS) now uses blue colored ink for its ber should be used.
secure stamps. The old red ink previous-
ly used for such stamps has been retired
The endorsement or stamp can be placed anywhere on the I-94. If the
and will no longer be used (note also
that some stamps still use black ink).
original stamp does not copy well due to the ink color, you should
replicate it by hand on the photocopy. Because CBP offices don’t have
uniform procedures or stamps, you should contact the local office with
questions regarding acceptable immigration documents.
• Refugee status continues unless revoked by DHS. Refugees are re-
quired to apply for Lawful Permanent Residency (LPR) status after
Use of copy of I-94 or I-94A
Note that a refugee or an asylee
one year, and continue to be refugees even after the grant of LPR sta-
may apply for permanent-resident tus. In September 2015, CBP automated the refugee process. A refugee
status. During the period in which will have an electronic I-94 showing “RE” as the class of admission
the application is being reviewed, and “DS” as the admit until date. The refugee travel letter provided
the student may have a copy of the by the Department of State will be annotated with a stamp showing
I-94 that includes the endorsement admission under Section 207 of the Immigration and Nationality Act
“209a (or 209b) pending. Employment (INA). While the form is now automated, a refugee may be in posses-
Authorized.” Students with this form sion of an older paper I-94 or I-94A form or be provided a paper form
of documentation are eligible for upon request. The paper form I-94 or I-94A is annotated with a stamp
FSA funds as long as the I-94 has not showing admission under Section 207 of the Immigration and Nation-
expired. ality Act (INA). They may also have the old Refugee Travel Docu-
ment (Form I-571) or the newer U.S. Travel Document annotated
with “Refugee Travel Document Form I-571 (Rev. 9-2-03).” Refugees
For more sample citizenship documents are employment authorized and may present an employment authori-
which may be used to substantiate vari- zation document.
ous types of citizenship status, see the
end of this chapter. • Persons granted asylum can apply for permanent residence after one
year. Asylee status continues unless revoked by DHS or until perma-
nent resident status is granted. Asylees will have an I-94 or I-94A
with a stamp showing admission under Section 208 of the INA. They
may also have the same travel documents described for refugees. Per-
Asylees abroad and eligibility sons granted asylum in the U.S. are authorized for indefinite employ-
Asylees who leave the U.S. for an ex- ment.
tended amount of time without USCIS
approval forfeit their current immigra-
• Persons paroled into the U.S. for at least one year must provide
tion status, so it may thus be difficult for
them to be considered an eligible non-
documentation of their parole status (such as an I-94) and it must
citizen for FSA purposes. have a stamp indicating that the student has been paroled into the U.S.
for at least one year, with a date that has not expired (federal student
aid cannot be disbursed after the document has expired). They also
must provide evidence (such as having filed an Application to Register
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Permanent Residence or Adjust Status [I-485] or being the named Form I-797 Notice of Action
alien relative from a petitioner, I-130) from the DHS that they are in Form I-797 is USCIS’s formal communi-
the U.S. for other than a temporary purpose and intend to become a cation with customers issued when an
citizen or permanent resident. DHS will usually respond to the filing application or petition is approved or to
of an I-485 with an I-797 and a parolee must provide this I-797 or confer an immigration benefit.
any other immigration document from DHS showing the student is in
the U.S. for other than a temporary purpose and intends to become a
citizen or LPR. If the student does not submit an I-797, send his alter-
native documentation to SAVE and ensure that the SAVE comments
indicate “Application Pending I-485” (Form I-485 is an application for
Lawful Permanent Resident status).
• Cuban-Haitian Entrants as defined by Section 501(e) of the Refugee
Education Assistance Act of 1980. All Cuban-Haitian entrants are po-
tentially eligible for Federal Student Aid. Note that certain documents
showing that the holder is a Cuban-Haitian entrant continue to convey
CHE status even if the expiration date has passed. When submitting
CHE documentation (typically an I-94 with a CHE Entrant stamp),
click on the Cuban/Haitian Entrant button in SAVE for CHE status
verification.
• Victims of human trafficking have the same eligibility for federal
benefits as refugees under the Victims of Trafficking and Violence Pro-
tection Act, though the Department of Health and Human Services
(HHS), rather than the DHS, is responsible for certifying this status.
Because of this, these students will not pass the DHS match, and the
normal paper third-step confirmation does not apply. These individu-
als may have an I-94 with a T1, T2, T3, or T COA code for principal, Victims of human trafficking
spouse, child, or parent, respectively. You must instead review the stu- DCL GEN-06-09
dent’s certification or eligibility letter from the HHS and call the Office
on Trafficking in Persons at 1-866-401-5510, as noted on the letter, to
verify its validity and confirm that the eligibility has not expired. You
must note the date, time, and results of the call and retain a copy of
the letter. If the student applies for federal student aid in a subsequent
year at your school, you must call again to ensure that the student’s
status is still in force.
The spouse, child, or parent of a trafficking victim might be eligible for
aid. They will not have a certification letter but will have a T-visa (e.g.,
T2 or T3). They will also likely fail the DHS match; if so you must call
the same office as noted above, verify the validity of the T-visa as well
as the victim’s certification letter, note the time and results, and save a
copy of both documents. VAWA verification
Battered immigrants-qualified aliens
• Battered immigrants-qualified aliens are victims of domestic DCL GEN-10-07
violence by their U.S. citizen or lawful permanent resident (LPR)
spouses or parents. They may, with their designated children, be eli- If the school has reservations about the
gible under the Violence Against Women Act (VAWA) for federal documentation provided, or is unclear
about the outcome reflected in the doc-
public benefits, including federal student aid. Note that both men and
umentation, after reviewing this section
women may be approved as victims under VAWA.
of the FSA Handbook, the financial aid
administrator must submit third step
They indicate on the FAFSA that they are eligible noncitizens, though verification data to DHS-USCIS.
they will not pass the automated DHS match. Instead, they will need
to obtain and provide you with documentation based on their case
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type: self-petition, suspension of deportation, or cancellation of re-
moval.
Check the student’s documentation carefully. If the immigration docu-
ments match the description below for an approval of petition or a
prima facie case, the student should be considered an eligible nonciti-
zen. Third-step verification through the SAVE system is not required.
In self-petitioning cases under VAWA, the immigrant submits an
I-360 form to the USCIS, which will deny the petition, approve it, or
find that a “prima facie” case has been established. Either an approval
or a prima facie finding makes a student eligible for aid, though the
latter has an expiration date after which the person becomes ineligible.
In some cases, the USCIS will acknowledge receipt of a petition. This
does not establish eligibility for aid.
With an approval of a petition, the USCIS will provide a Form I-797,
Notice of Action form, that will indicate it is an approval notice for a
self-petitioning spouse of a U.S. citizen or LPR. and that the petition
has been approved. A separate I-797 will be issued with the names and
dates of birth of children listed by the applicant, and it will indicate
that they are named on the approved petition. These children are eli-
gible for aid, and because their USCIS status continues after reaching
the age of majority, their eligibility for aid continues as well. In some
cases, a dependent child can petition for battered immigrant status;
the I-797 would then indicate a self-petitioning child of a U.S.C. or
LPR.
With a prima facie case, the USCIS will sometimes issue an I-797 that
indicates an establishment of prima facie case. This status is usually for
a period of up to 180 days, though the USCIS may extend that period
until the case is approved or denied. Petitioners can submit a written
request for the extension. The DHS may also return, via the SAVE
system, a result of “pending prima facie VAWA self-petition” (in the
“DHS Comments” field), which indicates the applicant has established
a prima facie case and therefore the applicant is eligible until the I-797
expires. If SAVE returns a response of “application filed” the applicant
is not eligible. As long as the deadline has not expired, the person is
eligible for FSA funds. Children may be included on the I-797, though
their eligibility is subject to the same expiration date. If a spouse is
ultimately denied approval, the children on the I-797 would also be
denied and ineligible for aid.
Therefore, it is important to examine the notice carefully. For example,
USCIS may issue a Notice of Deferred Action on an I-797, which is an
administrative choice to give lower priority for removal of an immi-
grant from the U.S. Such a notice could pertain to cases unrelated to
petitions for battered immigrant status, and it would not be sufficient
for documentation of a self-petitioner. It generally will have a termina-
tion date. Be sure to examine the notice carefully to be sure it relates
to the student’s claim for eligible noncitizen status and that it conveys
relevant information to the student’s case. If a termination date is in-
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dicated on the I-797, a petition approval or an establishment of prima
facie case will be eligible for aid through that date and ineligible after-
ward.
An immigration judge may issue a suspension of deportation of the
abused person under the VAWA. The applicant will receive a copy of
the court order. As long as it has not expired and clearly indicates
suspension of deportation by the judge, an otherwise eligible person
can receive FSA funds.
An immigration judge can also issue a cancellation of removal of the
abused person under the VAWA. The applicant will receive a copy of
the court order. As long as that has not expired and clearly indicates
cancellation of removal by the judge, an otherwise eligible person can
receive FSA funds.
You must examine the USCIS document and keep a copy in the stu-
dent’s file. If it indicates he is eligible for aid and the expiration date
has not passed, you may award aid. If the student applies for FSA
funds in a subsequent year, you may rely on the original document
if it has not expired, but you must have the student provide a dated,
written statement that his immigration status under VAWA remains
in effect without change. If his documentation has expired, he must
renew it.
If you are unclear about a student’s documentation, submit it for third
step verification through the SAVE system. Type “requesting VAWA
status review” in the “Special Comments box of the SAVE “Submit
Document” screen requesting review for VAWA status verification.
You will determine the student’s eligibility for aid based on the result
of the submission.
Jay Treaty
Section 289 of the Immigration and Nationality Act (INA) gives per-
sons with at least 50% Native American blood who were born in Canada
the legal right to live and work indefinitely in the U.S. This is based on the
Jay Treaty of 1794 and subsequent court decisions. Such individuals are not
subject to the legal restrictions typically imposed on aliens by the DHS, are
not required to obtain documentation from the DHS, and are considered
“lawfully admitted for permanent residence.” They must obtain an SSN for
purposes of applying for Title IV aid.
Students who may be eligible for FSA funds should enter their valid
ARN (or a A999999999 if they don’t have an ARN) on the FAFSA and in-
dicate they are eligible noncitizens. If they fail the DHS match, you must
submit a third step verification with the documentation. If they fail third step
verification, they can still be considered eligible if they meet the documenta-
tion requirements below for students without an ARN. Students who enter
all 9’s for their ARN will receive comment 144 on the output document.
The school must obtain proof that such a student has 50% Native American
blood and was born in Canada. To do so, the student should provide one or
more of the following documents:
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• A “band card” issued by the Band Council of a Canadian Reserve, or
by the Department of Indian Affairs in Ottawa;
• Birth or baptism records;
• An affidavit from a tribal official or other person knowledgeable about
the applicant’s or recipient’s family history;
• Identification from a recognized Native American provincial or
territorial organization.
If the student can provide this documentation and is otherwise eligible,
the school must note this in the student’s file and can award FSA funds.
Ineligible statuses and documents
Several types of documentation do not prove a student’s eligible nonciti-
zen status. Below, we list a variety of forms and their related statuses which
are ineligible. If a student does not provide a document that proves his eligi-
bility for Title IV aid, he is not eligible with these documents alone. Gener-
ally, if a student has both an eligible noncitizen status as well as an ineligible
status, the eligible status will trump the ineligible status, and the student will
be potentially eligible for Title IV aid (pending other aspects of student eligi-
bility as discussed in this Volume).
• A Social Security card or driver’s license isn’t acceptable for docu-
menting U.S. citizenship or national status since these individuals
can also have these forms of identification. “Enhanced” driver’s
licenses (provided by a limited number of states to permit non-air
travel entry to the U.S. from Canada, Mexico, and the Caribbean)
are also not acceptable.
• Someone who has only a “Notice of Approval to Apply for Per-
manent Residence (I-171 or I-464)” cannot receive FSA funds. The
State Department publishes a list of nonimmigrant visas at:
https://travel.state.gov/content/travel/en/us-visas/tourism-visit.html.
• Employment authorization card. Someone with a nonimmigrant
visa isn’t eligible for FSA funds unless he/she has a Form I-94 with
one of the endorsements given in the eligible document section.
• Nonimmigrant visas include those with work visas, students,
visitors, and foreign government officials. Someone with a nonim-
migrant visa isn’t eligible for FSA funds unless he/she has a Form
I-94 with one of the endorsements given in the eligible document
section. Nonimmigrant visas include (but are not limited to) the:
• F-1, F-2, or M-1 Student Visa,
• NATO Visas (NATO),
• A2 and A3 Visas (foreign official, including attendants),
• B-1 or B-2 Visitor Visa,
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• J-1 or J-2 Exchange Visitors Visa,
• H series or L series Visa (which allow temporary employment
in the U.S.), or
• G series Visa (pertaining to international organizations).
• Form I-817, Application or approval for Family Unity Benefits.
U-Visa information
• Temporary residents are allowed to live and work in the U.S. un- More information on U Visas may
be found on the following website:
der the Legalization or Special Agricultural Worker program. This
www.uscis.gov/green-card/other-ways-
usually is recognized on an I-688 form. These residents are no longer get-green-card/green-card-victim-crime-
eligible for Title IV funds. u-nonimmigrant.
• Illegal aliens under the legalization (also called the amnesty) pro-
gram established by the Immigration Reform and Control Act of 1986
(IRCA). These individuals were given documentation that allowed
them to work while their application for permanent resident status Procedures when ineligibility is
was being processed, but they aren’t eligible for aid unless their appli- determined after disbursement
cation was approved. 34 CFR 668.136(c)
• I-94 forms stamped with “Temporary Protected Status.”
• Deferred Action for Childhood Arrivals (DACA) status is con-
ferred by the USCIS office of DHS. Students granted DACA often are
assigned an SSN, and they are not eligible for Title IV aid, but may be
eligible for state or college aid, and submitting a FAFSA can help them
access those other types of aid. To complete the FAFSA, DACA status
students must enter their SSN and answer the “Are you a U.S. citizen?”
question as “No, I am not a U.S. citizen or eligible noncitizen.” After
submitting the FAFSA, the student should check with the school’s
financial aid office to see what types of non-federal financial aid they
may be eligible to receive.
• “Withholding of removal” order issued by an immigration judge
or by the Board of Immigration Appeals. This is used to protect a
person from return to a country that threatens the person’s life or free-
dom.
• “U-Visa” holders are not designated as qualified aliens under
the Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA) and are therefore not eligible for Title IV program funds.
However, U-Visa holders may convert to lawful permanent resident
(LPR) status after they have physically been present in the U.S. for a
continuous period of at least three years after the date of admission
given on their U-Visa. Documentation is usually on an form I-797. It
is important for you to inspect the content of the document since the
I-797 is used for a variety of purposes.
If the student becomes an LPR, he or she becomes a qualified alien
under the PRWORA (see above), and thus potentially eligible for
Title IV funds (assuming they meet all other eligibility requirements.
U-Visa holders should be encouraged to explore non-federal aid op-
tions to help them pay for school while waiting for their application
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for LPR status (I-485) to be approved. FSA’s studentaid website con-
tains information to help students search for possible scholarships and
other resources.
If the document a student submits is for an ineligible status, you
shouldn’t submit the documentation for third step verification. Unless
you have conflicting information or the student compels you to do
so. USCIS will only confirm current immigration status based on the
document presented; it doesn’t determine whether the student is eli-
gible for FSA funds. Unless the student can submit documentation for
an eligible status, as described above, or USCIS confirms the student’s
status as an eligible student, the student can’t receive aid.
USING THE SAVE SYSTEM FOR THIRD STEP VERIFICATION
If the student’s immigration documentation appears to support an eli-
gible noncitizen status, or if you have conflicting information after receiving
a secondary match result, you must complete a third step verification request
through the SAVE system.
In a collaborative effort, DHS and the Department of Education designed
and implemented special functionality for schools to submit third step veri-
fication requests through the SAVE system, to check students’ eligibility for
Title IV aid. A unique SAVE user ID was issued to the Primary Destination
“Third Step” Verification
Point Administrator (PDPA) at each school to access the SAVE system.
through the SAVE system
All the instructions you needed to access and navigate the SAVE system
The “Paper Secondary Confirmation”
step, which required you to submit a are available on the DHS-SAVE Eligible Noncitizen, DHS-SAVE Electronic
paper form G-845, is called “third step Third Step Verification link on IFAP.
verification.” DHS-USCIS now returns
the response via the SAVE system. · SAVE Instructions for U.S. Department of Education (School)
Users Available
To access the SAVE system, go to:
https://www.uscis.gov/save · Volume 1-Student Eligibility of the Federal Student Aid
Handbook, and
· Resend Record to Matches Functionality Available in FAA Access
to CPS on Line to Streamline SAVE Third Step Process
If the student’s immigration documentation appears to support that he/
she is an eligible noncitizen, or if you have conflicting information after re-
ceiving a match result, you must complete a third step verification request.
Third step verification preparation & submission
1. Request the student’s most current, unexpired immigration document.
When it is submitted, make a copy of it.
2. Carefully review the student’s immigration documentation against the
status and document descriptions below.
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3. Determine whether the student’s immigration documentation sup-
ports eligibility for Title IV aid. If it does do not support an eligible
status, you can tell the student that he/she is not eligible now, but may
be eligible if/when they provide eligible noncitizen documentation.
You should not complete third step verification for this student.
SAVE Third Step Responses
A USCIS status verifier will search the SAVE databases, and enter the
student’s immigration status in the SAVE system within three to five business
days of the request.
If you don’t receive a response from the USCIS after at least 15 business
days from the date you sent the third step verification request, if you have
sufficient documentation to make a decision, and if you have no information
that conflicts with the student’s documents or claimed status, you should re-
view his file and determine whether he meets the eligible noncitizen require-
ments. If he does meet the requirements, make any disbursement for which 15 business day USCIS time-
he is eligible and note in his file that SAVE exceeded the time allotment and frame
that noncitizen eligibility was determined without their verification. 34 CFR 668.136(b)(3)
When third step verification results in an eligible status, you must keep
a copy of the SAVE response screen. If the confirmation process indicates Lack of response example
a discrepancy, you must ask the student to correct the discrepancy with the Javier is a refugee and received aid from
USCIS. No certification of loans or further disbursement of funds can be Schwarber University. His status wasn’t
confirmed through the DHS match,
made until the discrepancy is corrected. If the discrepancy isn’t reconciled,
so Schwarber performed third step
the student must repay all aid except wages earned under FWS. Whenever
verification. The DHS didn’t respond in
the student is able to provide new information, it must be submitted to the time, so Schwarber paid Javier without
USCIS as a third step verification request. any response. When Javier applies
again, the CPS still doesn’t confirm his
If you have followed the procedures outlined here, including notifying status. Even though Schwarber began
the student of the discrepancy and withholding further payments and loan third step verification for Javier last year
certifications as soon as a discrepancy is found, your school isn’t liable for aid and his documents haven’t expired,
disbursed prior to third step verification. This assumes that you had no other because the school never received a
conflicting information prior to making the disbursement and had reviewed DHS response, it must perform third
the available documentation and concluded that the student was otherwise step verification again.
eligible.
Interpreting the SAVE response
When you receive the SAVE response, you determine the student’s eligi-
bility by referencing the SAVE response against the following list. The SAVE
response does not directly state whether the student is eligible for Title IV
funds. If they match, but do not support an eligible status, tell the student
they are ineligible until/unless they can provide documentation that sup-
ports an eligible status, and stop third step verification for the student. If the
student’s documentation supports an eligible noncitizen status but the SAVE
system response shows an ineligible status, request a new DHS verification
number (see “resend to matches” sidebar on following page) to resubmit the
verification.
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The following list explains whether a response means the student is eli-
gible or ineligible for Title IV aid. For descriptions of the following immigra-
tion statuses, see the earlier sections on eligible and ineligible noncitizens and
their documentation:
Potentially eligible statuses:
“Lawful Permanent Resident”
“Conditional Resident”
“Asylum or refugee status”
“Parolee” The student is eligible for aid if paroled into the U.S. for one
Resend record to matches year or more. The SAVE response will include the parole expiration date
process which must be after the day the student starts classes AND has evidence
E-Announcement February 14, 2019 from the DHS (such as a form I-797 Notice of Approval of I-485 Perma-
nent Residence Status) that he is in the U.S. for other than a temporary
When you determine that third-step purpose and intends to become a U.S. citizen or permanent resident.
confirmation cannot be completed for The SAVE response will include a note that the student’s I-485 applica-
a student, for example, when the case
tion is pending, if applicable. Note that if the student has not filed the
status is “closed,” or the SAVE response
I-485, nor had that application accepted by DHS, they are not an eli-
doesn’t match the immigration docu-
mentation provided by the student,
gible noncitizen parolee.
you must complete the “resend record
to matches” process in the FAA Access “U.S. citizen” Because the verification request is used to check the
to CPS Online system. This replaces status of noncitizens, this box should be infrequently checked. You
the “requesting a new DHS verification should not see this in the financial aid office because, as explained ear-
number” process. lier in the chapter, you would have reviewed the student’s documenta-
tion, which identified them as a U.S. citizen, and you would not have
submitted it to the USCIS.
“Cuban/Haitian Entrant” SAVE has a special box that you click to re-
ceive a Cuban-Haitian Entrant response.
“American Indian born in Canada” For details, see the Jay Treaty sec-
tion earlier in this chapter.
“Texas or Oklahoma Band of Kickapoo Indians” If this response is
received, the financial aid administrator must contact U.S. Department
of Education staff by emailing Aaron Washington
(Aaron.Washington@ed.gov).
“VAWA Self-Petitioner” See GEN-10-07. If you have questions about
VAWA status, contact Aaron Washington at Aaron.Washington@
ed.gov.
Ineligible statuses
Each of the following statuses are by themselves insufficient to make a
student eligible for FSA funds. Unless an eligible status is also submitted, or
the student can provide other documentation that can be confirmed by the
USCIS, the following types of student are not Title IV eligible:
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Glossary CFR DCL Chapter 2—U.S. Citizenship & Eligible Noncitizens
“Employment Authorized”
“Not Employment Authorized”
“Application Pending for the following USCIS benefit” A pending
application for an immigration status doesn’t by itself make the stu-
dent eligible for FSA funds; he must have an eligible status indicated
on the SAVE response.
“Nonimmigrant”
“Deferred Action for Childhood Arrivals (DACA)”
“Family Unity”
“Temporary Protected Status (TPS)”
“Deferred Action Status”
“Withholding of Removal”
“Document Expired, Altered, or Counterfeit.” Notify the student
that unless corrective action is taken with the USCIS, the case will be
submitted to the Office of Inspector General (OIG). Until this is re-
solved, no further aid may be disbursed, awarded, or certified. If the
student does not take corrective action in a timely manner, you must
report the case to the OIG. If SAVE was unable to process the request
you may receive one of the following error messages:
• Resubmit request with both sides of the applicant’s immigra-
tion document. Resubmit the student’s immigration documents
with copies of both sides of each document.
• Applicant’s Immigration document is illegible. Resubmit the
student’s immigration documents with higher quality copies of the
original documentation.
“Unable to verify status based on the document provided.” If this is
checked, DHS-USCIS was not able to verify the student’s status based
on the documentation provided. The student must contact the ap-
propriate agency, i.e., USCIS, Immigration and Customs Enforcement
(ICE), or Customs and Border Protection (CBP) to correct their re-
cords.
Student rights
You must allow the student at least 30 days from the time you receive the
SAVE response to provide documentation of his immigration status. Dur-
ing this period and until the results of the third step verification are received,
you can’t deny, reduce, or terminate aid to him. Unless you can determine
that the documentation doesn’t support an eligible noncitizen status, you
must submit the student’s immigration documents within ten business days
of receipt. If the documentation supports the student’s status as an eligible
noncitizen, and if at least 15 business days passed since the date on which the
documentation was submitted to the USCIS, you can disburse aid to an oth-
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erwise eligible student pending the USCIS response.
Your school isn’t liable if you erroneously conclude that a student is an
eligible noncitizen, provided that you had no conflicting data on file and you
relied on:
• A SAR or ISIR indicating that the student meets the requirements for
federal student aid;
• A USCIS determination of an eligible immigration status in response
to a request for third step verification; or
• Immigration status documents submitted by the student, if the USCIS
did not respond in a timely fashion.
The student (or parent borrower of a PLUS loan) is liable for any FSA
funds received if he is ineligible. If you made your decision without having
one of the documents above, your school is held responsible for repaying
FSA funds to the Department. Your school should establish procedures to
ensure due process for the student if FSA funds are disbursed but the aid of-
fice later determines (using third step verification) that the student isn’t an
eligible noncitizen. The student must be notified of his ineligibility and given
an opportunity to contest the decision by submitting to your school any ad-
ditional documents that support his claim to be an eligible noncitizen. If the
documents appear to support the student’s claim, you should submit them to
USCIS using third step verification. You must notify the student of your of-
fice’s final decision based on the third step verification results.
For every student required to undergo third step verification, you must
furnish written instructions providing:
• An explanation of the documentation the student must submit as evi-
dence of eligible noncitizen status;
• Your school’s deadline for submitting documentation (which must be
at least 30 days from the date your office receives the results of the pri-
mary confirmation);
• Notification that if the student misses the deadline, he may not receive
FSA funds for the award period or period of enrollment; and
• A statement that you won’t decide the student’s eligibility until he has
a chance to submit immigration status documents.
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Glossary CFR DCL Chapter 2—U.S. Citizenship & Eligible Noncitizens
DOCUMENTING IMMIGRATION STATUS
IN LATER AWARD YEARS
There are several cases in which you must document a student’s im- Exclusion from subsequent
migration status in a subsequent award year if that student is not confirmed confirmation
34 CFR 668.133(b)
as an eligible non citizen on the SAR/ISIR process. For example, a student
who presented a Temporary Form I-551 in a prior award year should have
received a permanent I-551 by the next year and shouldn’t still have a tem-
porary card. You should refer the student to USCIS to obtain a permanent
I-551 or an updated endorsement on the previous card.
You must also document the eligible noncitizen status each award year
for a conditional permanent resident, a refugee, a Cuban-Haitian entrant,
or a person granted asylum. Students in any of these categories may have
been redesignated to permanent-resident status or may have had their status-
es revoked. You will have to send the documents for third step verification if
the student’s status isn’t confirmed through the USCIS match.
You don’t have to document a student’s eligible noncitizen status in
subsequent award years if you’ve documented that the student is:
• a U.S. citizen or national;
• a citizen of the Freely Associated States;
• has a Form I-551 or I-151; or
• if the SAVE response indicates that for the previous award year, the
student was an eligible noncitizen and the documents supporting the
status in question have not expired.
You must also have no conflicting information or reason to doubt the
student’s claim of having eligible noncitizen status. Also note that you must
have confirmed the status in a previous award year. You may disburse aid
without the USCIS response if the USCIS doesn’t respond in time for that
award year, but you can’t count that lack of response as confirmation for the
following year.
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REPLACING LOST DHS DOCUMENTS
If a student can’t locate his official USCIS documentation, the student
must request that the documents be replaced because noncitizens who are 18
years and older must have immigration documentation in their possession
at all times while in the United States. Requests for replacement documents
should be made by the student to the nearest USCIS District Office.
The student will be asked to complete a Form I-90, “Application to Re-
place Alien Registration Card” or a Form I-102, “Application for Replace-
ment/Initial Nonimmigrant Arrival-Departure Document.” PDF versions
of these forms can be downloaded from the USCIS website at uscis.gov. A
temporary I-94 may be issued while the replacement documents are pending.
In cases of undue hardship, where the student urgently needs documen-
tation of his status, the Freedom of Information Act (FOIA) allows him to
obtain photocopies of the documents from the USCIS District Office that is-
sued the original documents. The student can submit a Form G-639 to make
this request or can simply send a letter to the district office. If he is not sure
which district office issued the original documents, he can submit the request
to the field office nearest to his place of residence.
A naturalized U.S. citizen student who lost documents or surrendered
them when entering prison is responsible for getting copies of them before
third step verification is submitted for the student (see “Replacing Lost DHS
Documents”). You can request copies of immigration documents directly
from penal institutions at the request of the student.
EXAMPLES OF U.S. CITIZENSHIP AND ELIGIBLE
NONCITIZEN DOCUMENTS
The next few pages show some common documents used to demon-
strate citizenship for various categories/types of citizenship. Note that not all
documents shown may satisfy citizenship requirements in all cases. See the
specific notes on each document shown, and also refer to the discussion of
citizenship requirements described in detail earlier in this chapter.
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CITIZEN NOT BORN IN U.S./NONCITIZEN NATIONAL
U.S. Passport
Can be used to document
citizenship for citizen born abroad.
For a noncitizen national, must be
stamped “Noncitizen National.”
(Note that a passport issued by
another country may be used to
document U.S. permanent resident
status if it has the endorsement
“Processed for I-551” and has a
currently valid expiration date.)
U.S. Passport Card
This resembles a credit card in
size and form. Though it cannot
be used for international air
travel, it is, like the passport
book, proof of U.S. citizenship.
Certificate of
Naturalization
The Certificate of Naturalization is
issued to naturalized U.S. citizens
A revised version of the Certificate
of Naturalization (Form N-550)
was created in 2010.
All previously issued certificates
remain valid.
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Certificate of Citizenship
The Certificate of Citizenship is issued to persons who were
born abroad of U.S. parent(s), who became citizens when their
parents were naturalized, or who were adopted by U.S. parents.
Certification of
Birth Abroad
Issued to U.S. citizens
born abroad. Must have
embossed seal of the
State Department.
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CITIZEN NOT BORN IN U.S./NONCITIZEN NATIONAL
PERMANENT RESIDENT/OTHER ELIGIBLE NONCITIZEN
Form CBP I-94
Here is a sample paper form.
Although such are no longer
normally issued for air and
sea arrivals, legacy paper
forms are still valid and in
use, and one may still en-
CU 6
counter recently issued valid
paper forms.
Form CBP I-94A
Below, the computer-generated
Form CBP I-94A replaces
the paper Form I-94 that
was completed manually. For
eligible noncitizens, it must be
annotated as described earlier
in this chapter.
See also the I-94 website at:
https://i94.cbp.dhs.gov/I94/#/
home. The website allows you
to look up I-94 student data,
if the student grants you per-
mission to do so.
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I-94 Arrival-Departure Record
For permanent resident status, must be stamped “Processed for I‑551” with expiration date or “Temporary Form
I-551” with appropriate information filled in. For other eligible noncitizens, must be stamped as Refugee, Asylum
Status, Conditional Entrant (before April 1, 1980), Parolee, or Cuban-Haitian Entrant.
United States Travel Document
(front cover)
This contains the Reentry Permit (Form I-327) and
the Refugee Travel Document (Form I-571). It is
used by lawful permanent residents, refugees, and
asylees.
I-571 Refugee Travel
document
Contained in the U.S. Travel
document, the I-571 helps
document the status of refugees.
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CBP I-94 Website
Printout
Travelers have access to their electronic
I-94 via DHS’s I-94 website. The website
printout serves the same purpose as any
other I-94. A sample of what the printout
looks like is shown here.
Machine Readable
Immigrant Visa (MRIV)
The MRIV will appear in the holder’s
(foreign) passport. If the passport
is unexpired and endorsed with
an admission stamp and the state-
ment, “Upon endorsement serves as
temporary I-551 evidencing perma-
nent residence for 1 year,” it serves
as a temporary I-551 and as valid
documentation for establishing aid
eligibility.
Re-entry permit
USCIS issues the Form I-327, Re-
Entry Permit to permanent resi-
dents and conditional residents to
allow them to re-enter the U.S. for
a period of two years. The re-entry
permit is found in the U.S. Travel
Document.
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Permanent residents are issued identification cards that they are required to have in their possession at all
times. The first Alien Registration Receipt Card was introduced in 1946 and through various revisions was
primarily green, which caused it to be known as a “green card.” This term is still used, though the cards have
changed color over the years.
Alien Registration
Receipt Card I-151
(front and back)
Issued prior to June 1978
to permanent residents.
Note: As of March 20,
1996, Form I-151 is no
longer acceptable to USCIS
as evidence of permanent
residence, though it may be
used to receive FSA funds.
Resident Alien Card
I-551 (two versions, front only)
The I-551 is a revised version
of the I-151. It was phased
in beginning in January 1977
and was revised in 1989. The
“Conditional Resident Alien
Card” is identified by a “C”
on the front and an expiration
date on the back. (1989)
Permanent Resident
Card I-551 (front only for
older versions, front and back for
the current version)
The Permanent Resident Card
was introduced in December (1997) (2004)
1997 and revised in 2004. In
2010 it was again updated,
with the color green used once
more in the design of the front
of the card.
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Number and percentage of students enrolled in degree-granting postsecondary institutions, by distance education participation, location of student, level of enrollment, and control and level of institution: Fall 2017 and fall 2018
Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 160 of 305
IES NCES National Center for
Education Statistics
Search Go
2019 Tables and Figures All Years of Tables and Figures Most Recent Full Issue of the Digest
Previous Page Download Excel (47KB)
Table 311.15. Number and percentage of students enrolled in degree-granting postsecondary institutions, by distance education
participation, location of student, level of enrollment, and control and level of institution: Fall 2017 and fall 2018
Number of students Percent of students
Taking any distance education course(s) Taking any distance education course(s)
Exclusively distance education courses, At least Exclusively distance education courses,
At least by location of student No Total, one, but by location of student
Year, level of Total, any one, but Outside distance any not all, Outside
enrollment, and No distance distance not all, of State of the Loca- educa- distance of Differ- State of the
control and level of education education student's Same Different not United tion tion education student's Same ent not United Location
institution Total courses course(s) courses Total state state known States unknown Total courses course(s) courses Total state state known States unknown
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Fall 2017
All students,
total 19,778,151 13,155,348 6,622,803 3,515,659 3,107,144 1,775,555 1,251,709 15,777 45,368 18,735 100.0 66.5 33.5 17.8 15.7 9.0 6.3 0.1 0.2 0.1
Public 14,571,739 9,907,335 4,664,404 3,002,916 1,661,488 1,394,179 225,502 11,534 17,749 12,524 100.0 68.0 32.0 20.6 11.4 9.6 1.5 0.1 0.1 0.1
Private 5,206,412 3,248,013 1,958,399 512,743 1,445,656 381,376 1,026,207 4,243 27,619 6,211 100.0 62.4 37.6 9.8 27.8 7.3 19.7 0.1 0.5 0.1
Nonprofit 4,108,489 2,929,755 1,178,734 390,579 788,155 273,133 491,664 3,141 17,292 2,925 100.0 71.3 28.7 9.5 19.2 6.6 12.0 0.1 0.4 0.1
For-profit 1,097,923 318,258 779,665 122,164 657,501 108,243 534,543 1,102 10,327 3,286 100.0 29.0 71.0 11.1 59.9 9.9 48.7 0.1 0.9 0.3
Fall 2018
All students,
total 19,645,918 12,713,844 6,932,074 3,674,087 3,257,987 1,869,652 1,293,454 17,083 44,321 33,477 100.0 64.7 35.3 18.7 16.6 9.5 6.6 0.1 0.2 0.2
4-year 13,900,710 8,941,162 4,959,548 2,506,759 2,452,789 1,144,147 1,238,866 13,504 40,619 15,653 100.0 64.3 35.7 18.0 17.6 8.2 8.9 0.1 0.3 0.1
2-year 5,745,208 3,772,682 1,972,526 1,167,328 805,198 725,505 54,588 3,579 3,702 17,824 100.0 65.7 34.3 20.3 14.0 12.6 1.0 0.1 0.1 0.3
Public 14,529,264 9,569,412 4,959,852 3,153,470 1,806,382 1,475,262 271,659 11,794 18,583 29,084 100.0 65.9 34.1 21.7 12.4 10.2 1.9 0.1 0.1 0.2
4-year 8,982,560 5,945,224 3,037,336 2,005,490 1,031,846 755,127 242,105 8,215 14,997 11,402 100.0 66.2 33.8 22.3 11.5 8.4 2.7 0.1 0.2 0.1
2-year 5,546,704 3,624,188 1,922,516 1,147,980 774,536 720,135 29,554 3,579 3,586 17,682 100.0 65.3 34.7 20.7 14.0 13.0 0.5 0.1 0.1 0.3
Private 5,116,654 3,144,432 1,972,222 520,617 1,451,605 394,390 1,021,795 5,289 25,738 4,393 100.0 61.5 38.5 10.2 28.4 7.7 20.0 0.1 0.5 0.1
Nonprofit 4,134,244 2,878,717 1,255,527 418,048 837,479 288,963 525,951 3,705 14,838 4,022 100.0 69.6 30.4 10.1 20.3 7.0 12.7 0.1 0.4 0.1
4-year 4,089,090 2,857,653 1,231,437 414,132 817,305 286,033 508,712 3,705 14,834 4,021 100.0 69.9 30.1 10.1 20.0 7.0 12.4 0.1 0.4 0.1
2-year 45,154 21,064 24,090 3,916 20,174 2,930 17,239 0 4 1 100.0 46.6 53.4 8.7 44.7 6.5 38.2 0.0 # #
For-profit 982,410 265,715 716,695 102,569 614,126 105,427 495,844 1,584 10,900 371 100.0 27.0 73.0 10.4 62.5 10.7 50.5 0.2 1.1 0.0
4-year 829,060 138,285 690,775 87,137 603,638 102,987 488,049 1,584 10,788 230 100.0 16.7 83.3 10.5 72.8 12.4 58.9 0.2 1.3 0.0
2-year 153,350 127,430 25,920 15,432 10,488 2,440 7,795 0 112 141 100.0 83.1 16.9 10.1 6.8 1.6 5.1 0.0 0.1 0.1
Undergraduate 16,610,235 10,885,526 5,724,709 3,399,567 2,325,142 1,464,038 798,815 9,641 24,188 28,460 100.0 65.5 34.5 20.5 14.0 8.8 4.8 0.1 0.1 0.2
4-year 10,865,027 7,112,844 3,752,183 2,232,239 1,519,944 738,533 744,227 6,062 20,486 10,636 100.0 65.5 34.5 20.5 14.0 6.8 6.8 0.1 0.2 0.1
2-year 5,745,208 3,772,682 1,972,526 1,167,328 805,198 725,505 54,588 3,579 3,702 17,824 100.0 65.7 34.3 20.3 14.0 12.6 1.0 0.1 0.1 0.3
Public 13,049,326 8,598,151 4,451,175 3,008,133 1,443,042 1,243,404 155,170 6,914 10,746 26,808 100.0 65.9 34.1 23.1 11.1 9.5 1.2 0.1 0.1 0.2
4-year 7,502,622 4,973,963 2,528,659 1,860,153 668,506 523,269 125,616 3,335 7,160 9,126 100.0 66.3 33.7 24.8 8.9 7.0 1.7 # 0.1 0.1
2-year 5,546,704 3,624,188 1,922,516 1,147,980 774,536 720,135 29,554 3,579 3,586 17,682 100.0 65.3 34.7 20.7 14.0 13.0 0.5 0.1 0.1 0.3
Private 3,560,909 2,287,375 1,273,534 391,434 882,100 220,634 643,645 2,727 13,442 1,652 100.0 64.2 35.8 11.0 24.8 6.2 18.1 0.1 0.4 #
Nonprofit 2,821,653 2,044,170 777,483 298,740 478,743 141,490 325,964 1,416 8,527 1,346 100.0 72.4 27.6 10.6 17.0 5.0 11.6 0.1 0.3 #
4-year 2,776,499 2,023,106 753,393 294,824 458,569 138,560 308,725 1,416 8,523 1,345 100.0 72.9 27.1 10.6 16.5 5.0 11.1 0.1 0.3 #
2-year 45,154 21,064 24,090 3,916 20,174 2,930 17,239 0 4 1 100.0 46.6 53.4 8.7 44.7 6.5 38.2 0.0 # #
For-profit 739,256 243,205 496,051 92,694 403,357 79,144 317,681 1,311 4,915 306 100.0 32.9 67.1 12.5 54.6 10.7 43.0 0.2 0.7 #
4-year 585,906 115,775 470,131 77,262 392,869 76,704 309,886 1,311 4,803 165 100.0 19.8 80.2 13.2 67.1 13.1 52.9 0.2 0.8 #
2-year 153,350 127,430 25,920 15,432 10,488 2,440 7,795 0 112 141 100.0 83.1 16.9 10.1 6.8 1.6 5.1 0.0 0.1 0.1
Postbaccalaureate 3,035,683 1,828,318 1,207,365 274,520 932,845 405,614 494,639 7,442 20,133 5,017 100.0 60.2 39.8 9.0 30.7 13.4 16.3 0.2 0.7 0.2
Public 1,479,938 971,261 508,677 145,337 363,340 231,858 116,489 4,880 7,837 2,276 100.0 65.6 34.4 9.8 24.6 15.7 7.9 0.3 0.5 0.2
Private 1,555,745 857,057 698,688 129,183 569,505 214,514 97,062 4,140 6,991 1,202 100.0 55.1 44.9 8.3 36.6 13.8 6.2 0.3 0.4 0.1
Nonprofit 1,312,591 834,547 478,044 119,308 358,736 147,473 199,987 2,289 6,311 2,676 100.0 63.6 36.4 9.1 27.3 11.2 15.2 0.2 0.5 0.2
For-profit 243,154 22,510 220,644 9,875 210,769 26,283 178,163 273 5,985 65 100.0 9.3 90.7 4.1 86.7 10.8 73.3 0.1 2.5 #
#Rounds to zero.
NOTE: Degree-granting institutions grant associate’s or higher degrees and participate in Title IV federal financial aid programs. Some data have been revised from previously
published figures.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), Spring 2018 and Spring 2019,
Fall Enrollment component. (This table was prepared December 2019.)
2019 Tables and Figures All Years of Tables and Figures Most Recent Full Issue of the Digest
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Number and percentage of students enrolled in degree-granting postsecondary institutions, by distance education participation, location of student, level of enrollment, and control and level of institution: Fall 2017 and fall 2018
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Twelve-month full-time-equivalent enrollment at Title IV institutions, by student level and
institution
Search sector:
for tables, charts,United States,
publications, 2017-18
or other products related to postsecondary education by keywords and filters.
Institution sector All students Undergraduate Graduate1
Limit by: Surveys Collection Year Data Year Source Remove Filters
All institutions 16,043,150 13,965,823 2,077,327
All Public
1093 4-year
Text Tables 929 Charts 164 7,526,609 6,527,266 999,343
Public 2-year 3,689,366 3,689,366 0
929 items found - Filtered by: [X] Data Year (2017-18)
Public less-than-2-year 44,024 44,024 0
Sort By Date
Date descending
descending
Private nonprofit 4-year 3,498,999 2,616,367 882,632
Twelve-month full-time-equivalent enrollment at Title IV institutions by student
Private nonprofit
level, level2-year
and control of institution 52,481 52,467 14
Survey: 12-month Enrollment (E12); Data Year: 2017-18 Collection Year: 2018-19
Private nonprofit less-than-2-year 9,551 9,551 0
Source: Tables Library;
Private for-profit 4-year 743,312 547,974 195,338
Twelve-month unduplicated headcount enrollment at Title IV institutions by
student
Private level,
for-profit sector of institution, race/ethnicity,
2-year 242,795 gender, other
242,795selected 0
characteristics
Private for-profit
Survey: less-than-2-year
12-month 236,013 Collection Year:
Enrollment (E12); Data Year: 2017-18 236,013
2018-19 0
Source: Tables Library;
Number of items in library collections and the number of times items are in
1 One 2-year institution reported full-time-equivalent (FTE) enrollment in graduate-level courses.
NOTE: circulation at Title
Title IV institutions IV degree-granting
are those with a written agreement institutions by control
with the U.S. Department of institution,
of Education that allowslevel
the of
institution,
institution to type
participate ofof the
in any library collection
Title IV federal or financial
student circulation
assistance programs. The four U.S. service
academies Survey: Academic
that are not Libraries
Title IV (AL);included
eligible are Data in
Year:
the 2017-18
Integrated Collection
Postsecondary Year: 2018-19
Education Data System (IPEDS)
universeSource:
becauseTables
they are federally
Library; funded and open to the public. Data in this table cover the period from July 1,
2017 to June 30, 2018. The full-time-equivalent (FTE) enrollment displayed in this table is calculated from institutions’
instructional activity over a 12-month period. For institutions following a quarter calendar system, 45 undergraduate
Number of applications, admissions, and enrollments as first-time
credit hours is considered one undergraduate FTE and 36 graduate credit hours is considered one graduate FTE. For
degree/certificate-seeking undergraduate students at Title IV institutions that do
institutions following a semester, trimester, 4-1-4, or other academic year calendar system, 30 undergraduate credit
hoursnot have an
is considered oneopen admissions
undergraduate FTE and policy by credit
24 graduate levelhours
of institution,
is considered one gender,
graduate control of
FTE. For all
institution,
calendar and
systems (both enrollment
academic year-basedstatus
systems and continuous enrollment systems), 900 undergraduate
Survey:
contact hours Admissions
is considered one(ADM); Data Year:
undergraduate FTE.2017-18 Collection
Definitions for Year:
terms used 2017-18
in this Source:
table may be found in the
Tables Library;
IPEDS online glossary located at https://surveys.nces.ed.gov/ipeds/VisGlossaryAll.aspx.
Acceptance
SOURCE: U.S. rates;
Department number of
of Education, applications,
National Center admissions,
for Education andFall 2018,
Statistics, IPEDS, enrollees; and
12-Month
enrollees’ SAT and ACT scores for degree-granting postsecondary institutions
Enrollment component (provisional data). Top
with first-year undergraduates by control and level of institution
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Survey: Admissions (ADM); Data Year: 2017-18 Collection Year: 2017-18
Source: Digest of Education;
Number and percentage of degree-granting postsecondary institutions with first-
year undergraduates using various selection criteria for admission by control and
level of institution
Survey: Admissions (ADM); Data Year: 2017-18 Collection Year: 2017-18
Source: Digest of Education;
Percentage of degree-granting postsecondary institutions with first-year
undergraduates offering remedial services by control and level of institution
Survey: Admissions (ADM); Data Year: 2017-18 Collection Year: 2017-18
Source: Digest of Education;
Number and percentage of awards conferred and students receiving awards at
Title IV degree-granting institutions by control of institution, level of institution,
gender, race/ethnicity, level of award
Survey: Completions (C); Data Year: 2017-18 Collection Year: 2018-19 Source: Tables Library;
Number of awards conferred by Title IV institutions by race/ethnicity, level of
award, gender
Survey: Completions (C); Data Year: 2017-18 Collection Year: 2018-19 Source: Tables Library;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Degree-granting status
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Control of institution
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Level of institution
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, State
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Award level
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Race/ethnicity
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
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Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Gender
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Geographic region
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Institutional category
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Highest degree offered
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Historically Black College or University
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, Degree of urbanization (Urban-centric locale)
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Sector
of institution, CIP Code
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Control of institution
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Level of institution
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, State
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Award level
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
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Degree-granting status, Race/ethnicity
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Gender
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Geographic region
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Institutional category
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Highest degree offered
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Historically Black College or University
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, Degree of urbanization (Urban-centric locale)
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by
Degree-granting status, CIP Code
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Level of institution
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, State
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Award level
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Race/ethnicity
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Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Gender
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Geographic region
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Institutional category
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Highest degree offered
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Historically Black College or University
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, Degree of urbanization (Urban-centric locale)
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Control
of institution, CIP Code
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Level of
institution, State
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Level of
institution, Award level
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Level of
institution, Race/ethnicity
. Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
Number of degrees/certificates awarded at postsecondary institutions by Level of
institution, Gender
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
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Number of degrees/certificates awarded at postsecondary institutions by Level of
institution, Geographic region
Survey: Completions (C); Data Year: 2017-18 Source: Trend Generator;
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Sales and Related Workers, All Other
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OES HOME
OES OVERVIEW 41-9099 Sales and Related Workers, All Other
OES NEWS RELEASES All sales and related workers not listed separately.
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OES CHARTS Industry profile for this occupation
OES VIDEOS
Geographic profile for this occupation
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National estimates for this occupation: Top
OES PUBLICATIONS
Employment estimate and mean wage estimates for this occupation:
OES DATABASES
Employment Mean hourly Mean annual
OES FAQS Employment (1) Wage RSE (3)
RSE (3) wage wage (2)
CONTACT OES
118,910 1.7 % $19.53 $40,620 0.9 %
SEARCH OES Percentile wage estimates for this occupation:
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OES TOPICS 50%
Percentile 10% 25% 75% 90%
(Median)
RESPONDENTS
Hourly Wage $10.41 $11.90 $15.30 $22.85 $33.63
DOCUMENTATION
Annual Wage (2) $21,650 $24,740 $31,820 $47,530 $69,940
SPECIAL NOTICES
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Industry profile for this occupation: Top
Industries with the highest published employment and wages for this occupation are provided. For a list of all industries with employment
in this occupation, see the Create Customized Tables function.
Subscribe
to the OES Industries with the highest levels of employment in this occupation:
Update
Percent of
Employment Hourly mean Annual mean
Industry industry
(1) wage wage (2)
employment
Food and Beverage Stores (4451 and 4452
6,710 0.23 $15.69 $32,630
only)
Nondepository Credit Intermediation 5,780 1.01 $15.05 $31,310
Automobile Dealers 4,860 0.38 $20.77 $43,210
Electronic Shopping and Mail-Order Houses 4,520 1.16 $24.57 $51,100
Miscellaneous Store Retailers (4532 and 4533
4,410 1.03 $13.84 $28,800
only)
Email Address GO
Industries with the highest concentration of employment in this occupation:
Percent of
Employment Hourly mean Annual mean
Industry industry
(1) wage wage (2)
employment
Vending Machine Operators 480 1.21 (8) (8)
Electronic Shopping and Mail-Order Houses 4,520 1.16 $24.57 $51,100
Miscellaneous Store Retailers (4532 and 4533
4,410 1.03 $13.84 $28,800
only)
Farm Product Raw Material Merchant
710 1.02 $20.49 $42,620
Wholesalers
Nondepository Credit Intermediation 5,780 1.01 $15.05 $31,310
Top paying industries for this occupation:
Percent of
Employment Hourly mean Annual mean
Industry industry
(1) wage wage (2)
employment
Data Processing, Hosting, and Related Services 570 0.17 $34.94 $72,680
Petroleum and Coal Products Manufacturing (8) (8) $33.25 000168
$69,150
Software Publishers 1,040 0.24 $33.23 $69,120
Sales and Related Workers, All Other.html[8/2/2020 3:11:37 PM]
Sales and Related Workers, All Other
Case 4:20-cv-03215-YGR0.03 Document
Postal Service (federal government)
180 $32.48 52-3
$67,550 Filed 09/23/20 Page 169 of 305
Fabricated Metal Product Manufacturing (3321,
150 0.03 $32.22 $67,020
3322, 3325, 3326, and 3329 only)
Geographic profile for this occupation: Top
States and areas with the highest published employment, location quotients, and wages for this occupation are provided. For a list of all
areas with employment in this occupation, see the Create Customized Tables function.
States with the highest employment level in this occupation:
Employment
Employment Location Hourly mean Annual mean
State per thousand
(1) quotient (9) wage wage (2)
jobs
California 29,030 1.67 2.06 $24.71 $51,400
Texas 13,070 1.05 1.30 $16.26 $33,820
Florida 8,560 0.97 1.20 $16.93 $35,210
New Jersey 6,310 1.54 1.91 $27.40 $57,000
Georgia 4,510 1.01 1.25 $19.72 $41,020
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States with the highest concentration of jobs and location quotients in this occupation:
Employment
Employment Location Hourly mean Annual mean
State per thousand
(1) quotient (9) wage wage (2)
jobs
California 29,030 1.67 2.06 $24.71 $51,400
New Jersey 6,310 1.54 1.91 $27.40 $57,000
Colorado 3,750 1.40 1.73 $20.39 $42,420
Texas 13,070 1.05 1.30 $16.26 $33,820
Maryland 2,810 1.04 1.28 $18.76 $39,020
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Top paying States for this occupation:
Employment
Employment Location Hourly mean Annual mean
State per thousand
(1) quotient (9) wage wage (2)
jobs
New Jersey 6,310 1.54 1.91 $27.40 $57,000
Massachusetts 1,810 0.50 0.62 $25.14 $52,300
California 29,030 1.67 2.06 $24.71 $51,400
Vermont (8) (8) (8) $24.68 $51,340
Connecticut 690 0.41 0.51 $22.94 $47,720
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Metropolitan areas with the highest employment level in this occupation:
Employment
Employment Location Hourly mean Annual mean
Metropolitan area per thousand
(1) quotient (9) wage wage (2)
jobs
Los Angeles-Long Beach-
12,940 2.07 2.56 $24.37 $50,690
Anaheim, CA
New York-Newark-Jersey City,
6,540 0.68 0.84 $25.54 $53,110
NY-NJ-PA
Dallas-Fort Worth-Arlington, TX 3,640 1.00 1.23 $16.58 $34,490
Houston-The Woodlands-Sugar
3,020 0.99 1.22 $16.61 $34,550
Land, TX
Atlanta-Sandy Springs-Roswell,
2,910 1.06 1.31 $20.83 $43,320
GA
Miami-Fort Lauderdale-West
2,600 0.98 1.21 $16.81 $34,960
Palm Beach, FL
San Jose-Sunnyvale-Santa
2,440 2.14 2.64 $27.51 $57,220
Clara, CA
Denver-Aurora-Lakewood, CO 2,430 1.61 1.99 $22.24 $46,260
Riverside-San Bernardino-
2,370 1.54 1.91 $19.06 $39,650
Ontario, CA
San Diego-Carlsbad, CA 2,350 1.57 1.94 $23.56 $49,000
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Metropolitan areas with the highest concentration of jobs and location quotients in this occupation:
Employment
Employment Location Hourly mean Annual mean
Metropolitan area per thousand
(1) quotient (9) wage wage (2)
jobs
Killeen-Temple, TX 460 3.27 4.04 $12.95 $26,930
Napa, CA 200 2.56 3.16 $28.12 $58,480
San Jose-Sunnyvale-Santa
2,440 2.14 2.64 $27.51 $57,220
Clara, CA
Victoria, TX 80 2.08 2.56 $14.80 $30,790
Los Angeles-Long Beach-
12,940 2.07 2.56 $24.37 $50,690
Anaheim, CA
Medford, OR 170 2.01 2.48 $19.40 $40,350
Oxnard-Thousand Oaks-
620 1.97 2.43 $23.10 $48,060
Ventura, CA
Odessa, TX 160 1.92 2.37 $18.63 $38,740
McAllen-Edinburg-Mission, TX 510 1.92 2.37 $13.85 $28,810
Clarksville, TN-KY 160 1.90 2.35 $12.95 $26,940
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Top paying metropolitan areas for this occupation:
Employment
Employment Location Hourly mean Annual mean
Metropolitan area per thousand
(1) quotient (9) wage wage (2)
jobs
Napa, CA 200 2.56 3.16 $28.12 $58,480
Modesto, CA 270 1.43 1.77 $27.58 $57,370
San Jose-Sunnyvale-Santa
2,440 2.14 2.64 $27.51 $57,220
Clara, CA
Boston-Cambridge-Nashua,
1,530 0.55 0.67 $26.27 $54,640
MA-NH
Green Bay, WI 90 0.49 0.61 $25.56 $53,160
New York-Newark-Jersey City,
6,540 0.68 0.84 $25.54 $53,110
NY-NJ-PA
Burlington-South Burlington, VT 50 0.38 0.47 $24.72 $51,430
Fresno, CA 330 0.85 1.05 $24.60 $51,160
Los Angeles-Long Beach-
12,940 2.07 2.56 $24.37 $50,690
Anaheim, CA
Salinas, CA 200 1.12 1.38 $24.30 $50,550
Nonmetropolitan areas with the highest employment in this occupation:
Employment
Employment Location Hourly mean Annual mean
Nonmetropolitan area per thousand
(1) quotient (9) wage wage (2)
jobs
North Northeastern Ohio non-
metropolitan area (non- 230 0.67 0.83 $14.02 $29,160
contiguous)
Hill Country Region of Texas
220 1.10 1.36 $12.88 $26,790
nonmetropolitan area
Northwest Minnesota
210 1.09 1.35 $17.24 $35,860
nonmetropolitan area
Kansas nonmetropolitan area 200 0.52 0.64 $13.92 $28,950
Southwest Maine
200 1.01 1.25 $15.34 $31,920
nonmetropolitan area
Nonmetropolitan areas with the highest concentration of jobs and location quotients in this occupation:
Employment
Employment Location Hourly mean Annual mean
Nonmetropolitan area per thousand
(1) quotient (9) wage wage (2)
jobs 000174
Maryland nonmetropolitan area 100 1.58 1.96 $12.78 $26,580
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Sales and Related Workers, All Other
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170 1.55 1.92
Document
$15.35
52-3
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Filed 09/23/20 Page 175 of 305
nonmetropolitan area
North Missouri nonmetropolitan
170 1.53 1.89 $13.04 $27,120
area
Northwest Colorado
180 1.45 1.79 $17.24 $35,860
nonmetropolitan area
Coast Oregon nonmetropolitan
160 1.39 1.72 $18.02 $37,480
area
Top paying nonmetropolitan areas for this occupation:
Employment
Employment Location Hourly mean Annual mean
Nonmetropolitan area per thousand
(1) quotient (9) wage wage (2)
jobs
East Central Illinois
80 0.70 0.87 $21.33 $44,360
nonmetropolitan area
Northern Vermont
(8) (8) (8) $21.17 $44,030
nonmetropolitan area
South Central Wisconsin
170 0.78 0.97 $20.98 $43,650
nonmetropolitan area
East North Dakota
50 0.73 0.91 $20.94 $43,550
nonmetropolitan area
Central Oregon
30 0.52 0.64 $20.22 $42,070
nonmetropolitan area
About May 2019 National, State, Metropolitan, and Nonmetropolitan Area Occupational Employment and Wage Estimates
These estimates are calculated with data collected from employers in all industry sectors, all metropolitan and nonmetropolitan areas,
and all states and the District of Columbia. The top employment and wage figures are provided above. The complete list is available in
the downloadable XLS files.
The percentile wage estimate is the value of a wage below which a certain percent of workers fall. The median wage is the 50th
percentile wage estimate--50 percent of workers earn less than the median and 50 percent of workers earn more than the median. More
about percentile wages.
(1) Estimates for detailed occupations do not sum to the totals because the totals include occupations not shown separately. Estimates
do not include self-employed workers.
(2) Annual wages have been calculated by multiplying the hourly mean wage by a "year-round, full-time" hours figure of 2,080 hours; for
those occupations where there is not an hourly wage published, the annual wage has been directly calculated from the reported survey
data.
(3) The relative standard error (RSE) is a measure of the reliability of a survey statistic. The smaller the relative standard error, the more
precise the estimate.
(8) Estimate not released.
(9) The location quotient is the ratio of the area concentration of occupational employment to the national average concentration. A
location quotient greater than one indicates the occupation has a higher share of employment than average, and a location quotient less
than one indicates the occupation is less prevalent in the area than average.
Other OES estimates and related information:
May 2019 National Occupational Employment and Wage Estimates
May 2019 State Occupational Employment and Wage Estimates
May 2019 Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates
May 2019 National Industry-Specific Occupational Employment and Wage Estimates
May 2019 Occupation Profiles
Technical Notes
Last Modified Date: July 6, 2020
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Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 177 of 305
An official website of the United States government HereHere
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PRINTER-FRIENDLY
Postsecondary Education Administrators
Summary What They Do Work Environment How to Become One Pay Job Outlook State & Area Data Similar Occupations More Info
Summary
Quick Facts: Postsecondary Education Administrators
$95,410 per year
2019 Median Pay
$45.87 per hour
Typical Entry-Level Education Master's degree
Work Experience in a Related Occupation Less than 5 years
On-the-job Training None
Number of Jobs, 2018 192,600
Job Outlook, 2018-28 7% (Faster than average)
Employment Change, 2018-28 13,500
What Postsecondary Education Administrators Do
Postsecondary education administrators oversee student services, academics, and faculty research at colleges and universities.
Work Environment
Postsecondary education administrators work for public and private schools. Most work full time.
How to Become a Postsecondary Education Administrator
Postsecondary education administrators typically need a master’s degree. However, there will be some opportunities for those with a bachelor’s degree.
Employers typically prefer to hire candidates who have experience working in a postsecondary education administrative office, especially for occupations such as
registrars and academic deans.
Pay
The median annual wage for postsecondary education administrators was $95,410 in May 2019.
Job Outlook
Employment of postsecondary education administrators is projected to grow 7 percent from 2018 to 2028, faster than the average for all occupations. Expected
growth may result from increasing student enrollment in colleges and universities.
State & Area Data
Explore resources for employment and wages by state and area for postsecondary education administrators.
Similar Occupations
Compare the job duties, education, job growth, and pay of postsecondary education administrators with similar occupations.
More Information, Including Links to O*NET
Learn more about postsecondary education administrators by visiting additional resources, including O*NET, a source on key characteristics of workers and
occupations.
What They Do ->
SUGGESTED CITATION:
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Postsecondary Education Administrators,
on the Internet at https://www.bls.gov/ooh/management/postsecondary-education-administrators.htm (visited July 16, 2020).
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Journal of College Access
Volume 2 | Issue 1 Article 3
1-2016
Increasing College Opportunity: School
Counselors and FAFSA Completion
Laura Owen
San Diego State University, lowen@mail.sdsu.edu
Erik Westlund
University of Iowa, erik-westlund@uiowa.edu
Follow this and additional works at: http://scholarworks.wmich.edu/jca
Part of the Behavioral Economics Commons, Community College Leadership Commons,
Counselor Education Commons, Educational Psychology Commons, Education Economics
Commons, Higher Education Commons, and the Student Counseling and Personnel Services
Commons
Recommended Citation
Owen, Laura and Westlund, Erik (2016) "Increasing College Opportunity: School Counselors and FAFSA Completion," Journal of
College Access: Vol. 2: Iss. 1, Article 3.
Available at: http://scholarworks.wmich.edu/jca/vol2/iss1/3
This Article is brought to you for free and open access by the Office of
Enrollment Management at ScholarWorks at WMU. It has been accepted
for inclusion in Journal of College Access by an authorized administrator of
ScholarWorks at WMU. For more information, please contact
maira.bundza@wmich.edu.
000179
Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 180 of 305
Increasing College Opportunity: School Counselors and FAFSA
Completion
Cover Page Footnote
The authors would like to acknowledge the Albuqueque Public Schools (APS) research department providing
the anonymous student level FAFSA completion and college enrollment data, all of the APS school
counselors who worked with the students on the FAFSA intervention, the US Department of Education
Federal Student Aid staff for training the counselors on FAFSA completion, Eric Bettinger (Stanford
University) and Bridget Terry Long (Harvard) for their support on the project and the Bill and Melinda Gates
Foundation for funding the summer work.
This article is available in Journal of College Access: http://scholarworks.wmich.edu/jca/vol2/iss1/3
000180
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Increasing College Opportunity:
School Counselors and FAFSA Completion
Authored by
Laura Owen (San Diego State University)
Erik Westlund (University of Iowa)
ABSTRACT INTRODUCTION
Closing postsecondary opportunity gaps has become a Opportunity gaps continue to widen in terms
na onal, state and local educa onal priority. To help
eliminate these gaps, the U.S. Department of Educa on
of who attends college and persists through
ini ated a project that provided real‐ me, student‐level graduation, with underserved and
Free Applica on for Federal Student Aid (FAFSA) comple on underprivileged students remaining less
status to large, urban school districts. Leveraging this
informa on, school counselors iden fied and supported likely to apply and attend college than their
students and families as they navigated the financial aid more advantaged peers (Swail & Perna, 2002;
process. In this ar cle, we discuss this ini a ve and
document sta s cally significant increases in FAFSA
Perna, 2002; Roderick, Nagaoka, Coca, &
comple on and college a endance in one par cipa ng Moeller, 2008; Ross, Kena, Rathbun,
school. KewalRamini, Zhang, Kristapovich, &
Keywords: School counseling, financial aid, FAFSA Manning, 2012). These disparities are
comple on, college matricula on, college opportunity gaps, especially pronounced when attendance and
college advising persistence data is reported by race/ethnicity,
socioeconomic status, and gender (Bailey &
Acknowledgements Dynarski, 2012). National initiatives such as
We are grateful for the collaboration with
the President’s College Opportunity Agenda
Albuquerque Public Schools (APS) and would
and the First Lady’s Reach Higher Campaign
like to thank Sade Bonilla, Andy Gutierrez
have drawn increased attention to inequitable
and the school counselors who participated in
student educational outcomes (Hatch &
the FAFSA Completion project. We thank
Owen, 2015; Savitz-Romer & Liu, 2014). Two
Eric Bettinger for his feedback and guidance
recent White House Convenings held at
in the development of the project and
Harvard University (July 2014) and San Diego
evaluation plan. We appreciate the support of
State University (November 2014) focused
Bridgit Terry Long and her facilitation of
specifically on the lack of adequate school
financial support from the Bill & Melinda
counseling and college advising resources
Gates Foundation to support the summer
available to many students (Hatch & Owen,
outreach. We also thank Gene Eakin and
2015; Savitz-Romer & Liu, 2014). The
Vivian Lee for their support throughout the
Convenings called for renewed attention and
project. All opinions expressed in this article
evaluation of school counseling practices and
and any errors or omissions are our own.
interventions that create postsecondary
pathways for all students (Hatch & Owen,
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School Counselors and FAFSA Completion
2015; Savitz-Romer & Liu, 2014). studies provide some evidence that
evaluating K-12 district and higher education
While some individuals might argue that school counseling and college advising
school counselors are not primed for this interventions hold promise for promoting
work, there are increasing numbers of postsecondary opportunity for all students
researchers and practitioners who have (Hatch & Owen, 2015; Savitz-Romer & Liu,
advocated for school counseling as a means to 2014).
address inequitable postsecondary
opportunities. The College Board’s 2012 In this article, we investigate a project
National Survey of School Counselors found initiated by the U.S. Department of Education.
that principals and counselors believe that This project’s aim was to provide real-time
school counselors should spend time building student-level Free Application for Federal
a college-going culture within schools and Student Aid (FAFSA) completion status
that extra attention should data to the largest urban
be given to supporting school districts across the
students from low-income, country. School counselors
disadvantaged, and “We found that increased used this verified FAFSA
immigrant backgrounds counselor outreach and completion information to
(Heart Research
financial aid support not only provide targeted outreach
Associates, 2012). Engberg and support to students
and Gilbert (2013) found increased FAFSA completion, and their families as they
the number of hours school but also had a large impact on navigated the financial aid
counselors spent on college process. Prior to this
college attendance.”
counseling was a strong project, school counselors
predictor of the school’s four-year college relied on student self-reported FAFSA
going rates. They also noted that school completion information or the Expected
counseling departments that offered financial Family Contribution (EFC) determination to
aid assistance to students were approximately verify FAFSA completion status.
12 percentage points higher in four-year
college going rates compared to schools that Because the U.S. Department of Education
did not offer that type of assistance (Engberg uses a completed FAFSA to determine
& Gilbert, 2013). Similarly, Hurwitz and whether a student is eligible for financial aid,
Howell (2014) found the addition of one extra FAFSA completion is a crucial action many
high school counselor increased four-year students must undertake to be able to pay for
college enrollment rates by 10 percentage and attend college. With this in mind, we
points. While more research is needed to analyzed data from a large U.S. school district
fully understand the impact of school that participated in the U.S. Department of
counseling on college opportunity, these Education outreach program. We found that
Volume 2 | January 2016 7
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School Counselors and FAFSA Completion
increased counselor outreach and financial navigate the complex college admissions and
aid support not only increased FAFSA financial aid process (Bryan, Moore-Thomas,
completion, but also had a large impact Day-Vines, & Holcomb-McCoy, 2011;
on college attendance. Simmons, 2011).
Literature Review High schools can help ensure that students
The last decade has seen a surge of initiatives take the necessary steps to obtain financial aid
and policy recommendations to increase by educating students and their parents early
college attendance for low-income and in high school about college affordability and
underrepresented groups (Holcomb-McCoy, the availability of financial aid and by helping
Lee, Bryan, & Young, 2011). As a result, a them identify potential sources of aid
variety of college access programs have been (Tierney, Bailey, Constantine, Finkelstein, &
designed to address college-going barriers Hurd, 2009). Students may also benefit from
(Swail & Perna, 2002; U.S. Department of hands-on assistance in meeting financial aid
Education, 2013). Even with these programs, deadlines and completing application forms
many students remained without access to (Bettinger et al., 2012; Tierney et al., 2009).
these resources and missed out on valuable Castleman and Page (2014c) found that many
information and counseling support students and families have unanswered
necessary to navigate the complex college questions related to financial aid after high
admissions and financial aid processes school graduation and may need support
(Gullatt & Jan, 2003: Simmons, 2011; Swail & throughout the summer months to review
Perna, 2002; Tierney, Corwin, & Colyar, 2005). financial aid award letters and navigate the
tasks needed for successful on-time college
Inability to pay and misinformation regarding matriculation. Comprehensive programs
college costs are barriers to college-going. supporting students and families through the
These barriers are especially salient for financial aid process has significant impacts
minority, low-income, and first generation on college attendance especially for
students (Long, 2009; Long & Riley, 2007; underrepresented youth who otherwise
Porter, 2006). Many students and families find would be unable to go (Bettinger et al., 2012;
the financial aid process confusing and Castleman & Page, 2014a, 2014b, 2014c;
cumbersome (Castleman, Arnold, & Castleman, Page, & Schooley, 2014; Hoxby &
Wartman, 2012; Bettinger, Long, Oreopoulos, Turner, 2013). However, very little research
& Sanbonmatsu, 2012; Chen & DesJardins, has been documented on how to implement
2007, Perna, 2004). This scenario is especially school-wide efforts to provide student and
true for African American and Hispanic/ parent support through the financial aid
Latino students who often lack access to process. Research is not clear on whether
adequate college counseling that supports attempting to work with every student would
and provides valuable information to truly improve college outcomes and receipt of
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School Counselors and FAFSA Completion
aid (Bettinger et al., 2012). education (Bridgeland & Bruce, 2011;
Clinedinst, Hurley, & Hawkins, 2011;
School Counselors and College Admissions Engberg & Gilbert, 2013; Ross et al., 2012),
Numerous researchers have examined the these findings might lead some individuals to
role school counselors play in college access believe that this important task should be
(McDonough, 2005; Perna, 2008; Plank & relegated to other parties. However, when
Jordan, 2001; Venezia, Kirst, & Antonio, 2008). school counselors are available and able to
A review of the literature reveals a dichotomy provide assistance to students and families
of opinions. Some authors have focused on navigating the college admissions process,
deficits, noting that role confusion, high college attendance rates increase and
student-to-school counselor ratios, fiscal opportunity gaps begin to close (Belasco,
constraints, lack of preparation, and 2013; Castleman, Owen, & Page, 2015;
inadequate expertise in college admissions Hurwitz & Howell, 2014; Owen, 2014).
prevent school counselors from fulfilling the
college counseling role (Dounay, 2008; Johnson and Rochkind (2010) found a
Johnson & Rochkind, 2010; McDonough, 2005; correlation between the degree to which
McDonough & McClafferty, 2001; Oliver, students had a poor relationship with their
Ricard, Witt, Alvarado, & Hill, 2010; Perna, Li, school counselor and whether they felt like
Anderson, Thomas, Rowan-Kenyon, & Bell, they were disappointed in their college
2008; Tierney et al., 2005). Low-income, first choice. Analyzing data from the Educational
generation, and students of color have the Longitudinal Study of 2002, Belasco (2013)
greatest need for access to a school counselor, found that school-based counseling made
yet they are often the least likely to meet with distinct and substantial contributions to the
a school counselor for college admissions or college enrollment and destinations of low
financial aid support because they are more socioeconomic students (SES). Engberg and
likely to attend schools where their counselors Gilbert (2013), analyzing the High School
tend to be heavily focused on crisis related Longitudinal Study of 2009, found that both
matters, social-emotional concerns, and other school counselor norms (average caseload and
counseling and/or administrative issues hours spent on college counseling) and
(Bryan, Holcomb-McCoy, Moore-Thomas, & resources (college fairs, college course
Day-Vines, 2009; Cabrera & La Nasa, 2001; offerings, and financial aid) were important
Corwin, Venegas, Oliverez, & Colyar, 2004; predictors of a school’s four-year college-
McDonough, 2005; Perna et. al, 2008; Plank & going rates.
Jordan, 2001; Trusty & Niles, 2003).
Two recent multi-site studies utilized high
Given that school counselors rarely report school counselors or community-based
that their program’s primary goal is to help financial aid advisors to help college
students plan and prepare for postsecondary intending seniors review their financial aid
Volume 2 | January 2016 9
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School Counselors and FAFSA Completion
packages, understand and complete Participants
paperwork, and negotiate social/emotional The sample for this study was taken from a
barriers to enrollment during the summer large urban school district in the
after high school graduation. Across sites, southwestern U.S. comprising 8,655 high
students to whom counselors offered school graduates across 21 high schools over
additional support were five to fourteen two years. Cohorts were similar in size, with
percentage points more likely to enroll in 4,365 graduates in 2010 and 4,290 graduates in
college (Castleman, Arnold, & Wartman, 2011. District K-12 demographics show a total
2012; Castleman, Page, & Schooley, 2014). population average of 56% Hispanic, 32%
white, 5% Native American, 4% African
These studies shed light on the impact school American, and 3% Asian. Special education
counselors may have on college attendance. services were received by 13% of the students.
However, compared to other role groups,
very little research has focused on specific Procedure
school-wide school counselor efforts to The U.S. Department of Education’s FAFSA
increase college attendance. This fact, Completion Project was designed to
combined with the purported encourage, support, and increase FAFSA
underutilization of school counselors as completion in some of the largest school
resources for increasing college attendance, districts across the country (U.S. Department
informed the design of this study. of Education, Office of Elementary and
Secondary Education, 2011). School districts
Method in the pilot project were able to request and
Our primary goal was to determine if school receive FAFSA completion information from
counselor outreach and support can positively the U.S. Department of Education’s office of
affect FAFSA completion and college Federal Student Aid (FSA) for individual high
attendance. We asked the following research school students. One person from each local
questions: education agency (LEA) submitted directory
information (name, date of birth, and zip
Does increased school counselor outreach code) to the U.S. Department of Education
and support increase the number of and in return, the U.S. Department of
students who complete a FAFSA? Education provided the LEA with student-
specific FAFSA submission information.
Does increased school counselor outreach Reports came back identifying students who
and support increase the number of had submitted a FAFSA, on what date the
students who attend college the fall FAFSA was submitted, and if the expected
semester after graduation? family contribution had been calculated. This
information allowed counselors to reach out
to students who had not yet completed the
Volume 2 | January 2016 10
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School Counselors and FAFSA Completion
FAFSA or who had submitted it with errors. FSA FAFSA demo test site and completed a
The pilot project encouraged the development full FAFSA application based on a fictitious
of school-wide counselor driven outreach but student’s financial information. A post-test
allowed each district the flexibility to design consisting of a variety of scenarios was
how that would look. administered after the training to measure
counselor skills and knowledge needed to
Actions taken to provide outreach and adequately support families through the
support completion process. All counselors who
The superintendent and school district attended the training passed the post-test,
leadership team in Albuquerque, New Mexico demonstrating proficient knowledge and
were enthusiastic about participating in the understanding of information required to
U.S. Department of Education’s FAFSA provide individual support to students and
completion project and asserted the project families.
aligned well with their district-wide focus and
commitment to increase the number of The school district set up “trusted centers” in
students attending college. School principals fourteen comprehensive high schools
also acknowledged their support for throughout the city. The term “trusted center”
prioritizing school counselor time and energy was used to encourage the students, parents,
on the FAFSA Completion project. and community that the centers were places
where they could safely seek help with
The U.S. Department of Education’s Federal financial aid information. Each trusted center
Student Aid (FSA) office offered FAFSA was located in a high school computer lab
training to equip school counselors with the where FAFSA applications could be accessed
knowledge and skills needed to properly and completed. Each high school held a
assist students and families throughout the minimum of eight FAFSA completion events
FAFSA completion process. Seventy-five high between February and March. The FAFSA
school counselors across the district completion events lasted one to two hours
participated in three hours of training with and were advertised on the radio, TV,
staff from the U.S. Department of Education newspaper, via the web, and through the use
Federal Student Aid office on the FAFSA. of the individual high school’s automated
They learned about the myths surrounding telephone messaging system. Messages were
financial aid, the different types of federal sent to parents in their native language to
grants, basic eligibility requirements, the inform them of the trusted centers and school
Student Aid Report (SAR), FAFSA filing counselor support available. When requested,
options, the Estimated Family Contribution counselors also worked with students and
(EFC), the Internal Revenue Service (IRS) parents one on one in their offices.
retrieval tool, and the IRS authentication
process. Each counselor then logged into the
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School Counselors and FAFSA Completion
FAFSA completion support was offered to the enrolled in college. The district then
entire class of 2011 and records were eliminated all student identifiers, assigned a
maintained to monitor individual student random identification number to each
meetings. The FAFSA match from the U.S. student, and provided student-level
Department of Education’s Financial Student information (e.g., race/ethnicity, grade point
Aid system was postponed until mid-May average, receipt of special education services)
due to some unforeseen programming issues to match the DOE data.
for the U.S. Department of Education. This
unexpected delay prevented the school Measures
counselors from having access to the Federal Summary statistics for all measures used in
Student Aid FAFSA completion status during the study are provided in Table 1.
the school year. Recognizing the importance
of the student specific data, the district took Table 1.
advantage of the completion information that Descriptive Statistics
was accessible beginning in May 2011 and
hired school counselors to work during the
summer months of June and July. The
counselors were tasked with reaching out to
students who had not completed a FAFSA as
of graduation. Students and parents received
calls from school counselors over the summer
months to offer support with FAFSA
completion and college transition issues. Dependent variables
Two dependent variables are examined in this
Research Design study: FAFSA completion and college
The U.S. Department of Education (DOE) enrollment.
provided data on FAFSA completion. The
school district submitted the names, FAFSA completion was coded 0 for
birthdates, and zip codes for the graduating incomplete if students did not file a FAFSA,
seniors in 2010 and 2011 to the DOE. The DOE or initiated a FAFSA but never completed it.
then matched each student’s information to FAFSA completion was coded 1 if students
their FAFSA record and returned students’ filed a complete FAFSA.
FAFSA filing date and students’ current
completion status to the school district. When College enrollment was coded 0 for students
the school district received the FAFSA data, with no record in the National Student
they used student records to match the data Clearinghouse of attending college after
with records in the National Student graduating from high school. Students with a
Clearinghouse to determine whether students record of post-high school college attendance
Volume 2 | January 2016 12
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School Counselors and FAFSA Completion
are coded 1. It should be noted that 4% of to be missing at random. For example, among
colleges do not participate in the NSC, and those who completed a FAFSA, 17% had data
our records cannot capture students who on GPAs missing, whereas 18% of those who
enroll at these colleges (National Student completed a FAFSA had GPAs missing. This
Clearinghouse, 2015). difference is not statistically significant
according to a two-sample t-test (p=0.42).
Independent variables Among those who attended college, 16% are
The primary independent variable in this missing the GPA measure, compared to 20%
analysis is whether students were in the of those who did not attend college. This
intervention year, meaning they had access to difference is statistically significant on a two-
the counselor services described above. Thus, sample t-test (p=0.00). However, this
students who graduated high school in 2010 difference is driven by high-school level
were coded 0 for no access to intervention. differences, not GPA itself. In a bivariate
Students who graduated in 2011, the year the linear regression model that accounts for
intervention was initiated, were coded 1. clustering by high school, in which the
dependent variable is whether GPA is
Other covariates include race/ethnicity, grade missing and the independent variable is
point average, and whether a student whether a student attended college, the
received special education services. Race/ coefficient for college attendance is
ethnicity is a categorical measure taking five statistically non-significant (p=0.34). For these
possible values: white, African American, reasons, we feel comfortable that our data
Hispanic, Asian, or Native American. Grade meet the assumptions required for multiple
point average (GPA) is a continuous measure imputation procedures. The ICE package in
taking values from 0 to 4 of students’ STATA was used to impute missing GPA
cumulative high school GPA. Whether a using a multiple imputations by chained
student received special education services is equations procedure (Royston, 2005). Ten
a categorical variable taking a value of 0 for imputations were generated. Models using
students who never received special the GPA measured are estimated once for
education services and 1 for students who each imputation (i.e., both Model 3s in Table
received these services. 3), and the coefficients and standard errors
are combined using Rubin’s rules (Rubin,
Missing data 2004). All other data are complete and
Data on high school grade point average required no imputation procedures.
(GPA) was missing for approximately 18% of
students in the data files provided to us by Our research design is a comparison of non-
the school district. These missing values were equivalent groups (Shadish, Cook, &
not able to be recovered by the school district. Campbell, 2002). Our “control” group
Fortunately, the missing GPA values appear comprises students who graduated in 2010,
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School Counselors and FAFSA Completion
before the intervention was implemented. We estimate three models for each outcome.
Our intervention, or “treatment” group, Model 1 is a bivariate regression, comparing
comprises students who graduated in 2011, all outcome rates across intervention groups.
of whom had access to school counseling This model, equivalent to a two-sample t-test,
financial aid support. tells us the difference in probability of
completing a FAFSA and attending college for
The baseline differences in rates of FAFSA students with access (i.e., 2011 graduates) or
completion and college attendance between without access (i.e., 2010 graduates) to school
groups were calculated by subtracting the counseling financial aid support. In Model 2,
proportion of students in the control group indicator variables for race/ethnicity are
who completed a FAFSA or attended college added. This model tells us the conditional
from the respective proportion of students in difference in probability of FAFSA completion
the intervention group. Two sample t-tests and college attendance for students who
were used to determine if these differences received the outcomes versus students who
are statistically significant. did not receive the outcome, controlling for
race/ethnicity. In Model 3, measures of
Multivariate regression models were used to students’ academic history are added to the
calculate differences in rates of FAFSA model. This model tells us the difference in
completion and college attendance probability of FAFSA completion and college
conditional upon potentially confounding attendance for students who received the
measures, such as race/ethnicity, GPA, and outcomes versus students who did not receive
whether a student received special education the outcome, controlling for race/ethnicity
services. All models were estimated in Stata and academic history.
14 (StataCorp, 2015).
We reported linear probability models (LPMs)
Modeling strategy because the results obtained from these
We report the results from a linear probability models are substantively similar to more
model with standard errors adjusted to allow complicated models and easier to interpret.
for correlation among students who attended For example, we ran logistic regression
the same high school. In this model, the models using the same independent variables
coefficient of the treatment intervention tells and then calculated marginal effects telling us
us the marginal effect of being in the the change in probability associated with a
intervention group, conditional upon change in the interventions. After rounding,
modeled covariates. This allows for easy the probability changes for the FAFSA model
comparison of rates of FAFSA completion and were identical to the probability change
college attendance. indicated by an LPM. The probability change
associated with college attendance and
intervention participation was 0.02 smaller in
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School Counselors and FAFSA Completion
the LPM than the logistic regression model, of the observed differences between years.
meaning that LPM gives us more conservative We assess the plausibility of systematic
results. The standard errors in the LPM and difference between groups explaining
the marginal effects of the logistic regression differences in outcomes in two ways. First, we
model were identical after rounding. We compare measures from one year to the next
estimated several other models. To model to see if there are systematic differences.
differences across high schools, we estimated Second, we use a tool, Konfound-It! to
three multilevel regression models: a linear perform sensitivity analyses (Frank, Maroulis,
probability model where intercepts are Duong, & Kelcey, 2013; Frank, 2014). These
allowed to vary by high school, a logistic analyses allow us to quantify how much bias
regression model where intercepts were there would need to be to change the
allowed to vary by high school, and a inferences made. The results of these efforts
population-average logistic regression model are discussed later.
(Raudenbush & Bryk, 2002). Compared to the
linear probability model reported here, the Results
more complex models all result in the same We find strong evidence that the introduction
substantive conclusions. For this reason, we of the school counseling financial aid
opted to report only the linear probability intervention resulted in substantial increase in
model results. An expanded discussion of this rates of FAFSA completion and college
choice is provided in Appendix A (see p. 21). attendance. FAFSA completion rates post-
intervention were 10 percentage points higher
Threats to validity and sensitivity analysis than pre-intervention. College attendance
Our research design relies upon comparing rates post-intervention were 11 percentage
students without access to the intervention points higher than pre-intervention. Both of
(2010 graduates) to those students with access these effects are statistically significant and
to the intervention (2011 graduates). If there are robust to unobserved confounding
are systematic differences between these measures. Table 2 provides results from
groups, our findings may be biased. Given linear probability models of FAFSA
that we are comparing students from a later completion and college attendance.
cohort to an earlier cohort, we are primarily
concerned that the graduating classes of 2010
and 2011 vary systematically for reasons other
than that they had access to the counseling
intervention. This is not unreasonable. Every
year, schools and school systems are generally
trying to improve their academic outcomes
compared to the prior year. If these efforts
were successful, they may explain all or some
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School Counselors and FAFSA Completion
Table 2. from those in Model 1. The FAFSA
Linear Probability Models of FAFSA completion intervention coefficient increased
Completion and College Attendance from 0.103 to 0.104, a difference in only a
thousandth of a point. The college completion
intervention coefficient increased 0.117 to
0.120, a difference of only three-thousandths
of a point. Both coefficients remain
statistically significant (p<0.00).
Model 3
In Model 3, we add statistical controls for
measures of academic history. Again, the
coefficients on the intervention barely change.
The FAFSA completion intervention
coefficient increased from 0.104 to 0.107, a
difference in only three-thousandths of a
point. The college completion intervention
Model 1
coefficient increased 0.120 to 0.122, a
Model 1, equivalent to a two-sample t-test,
difference of only two-thousandths of a point.
tells us about the baseline differences between
Again, both coefficients remain statistically
students who receive the intervention versus
significant (p<0.00).
those who did not. We see that the probability
of FAFSA completion is 0.103 higher for post-
Adding statistical controls does not
intervention students than for pre-
substantially change our estimates of the
intervention students. The probability of
counseling program’s effect on FAFSA
college attendance is 0.117 higher for post-
completion and college attendance. This is
intervention students than for pre-
desirable because the “treatment effect”
intervention students. Both differences are
estimates should remain stable when the
statistically significant (p<0.00).
“treatment” and “control” groups are
balanced, as they would be in a randomized
Model 2
controlled trial. In all, we see sizable, stable,
In Model 2, we add statistical controls for
and statistically significant differences in
race/ethnicity. Adjusting for race/ethnicity
FAFSA completion and college attendance
does not substantially change our estimates of
when comparing pre-intervention students
the marginal effect of the intervention. The
and post-intervention students, even after
coefficient for the intervention in models of
controlling for background characteristics and
both FAFSA completion and college
academic performance.
attendance are virtually indistinguishable
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School Counselors and FAFSA Completion
It is clear that there are sizable, statistically white students in 2011 than in 2010, while
significant differences in FAFSA completion GPAs were 0.03 points lower in 2011 than
and college attendance for pre-intervention 2010. This provides some evidence that,
students and post-intervention students. demographically, there were no substantial
differences between students in the “control”
Threats to Validity from Unobserved and “treatment” groups.
Confounders
The above results provide strong evidence of A more sophisticated approach to assessing
the efficacy of the intervention only if we can potential threats to validity is to perform a
assume that, besides the intervention, there sensitivity analysis where we quantify how
are no systematic differences between the much bias would need to exist to change the
2010 and 2011 graduating classes. inferences made in this study. We used a
method developed by Frank et al. (2013) to do
In Table 3, we provide summary statistics of this. This method, based on Rubin’s Causal
all variables used in this analysis, cross- Model framework, lets us calculate how many
classified by students who had access to the cases in a data set would have to be replaced
intervention and those who did not. with cases for which the independent variable
had zero effect to change the inference made
Table 3. (Rubin 1974; Rosenbaum and Rubin 1983). We
Balance Table Comparing Means of calculated these values using KonFound-it!, a
Variables By Intervention Year program written by those who developed this
sensitivity analysis technique (Frank, 2014).
The results of the sensitivity analysis are
provided in Table 4.
Table 4.
Sensitivity Analyses.
There are clear differences in FAFSA
completion and college attendance by This table tells us that in order to reduce the
intervention status, but no strong differences coefficient of the effect of the intervention on
in other measures. Statistically significant FAFSA completion in Model 3 (presented in
differences from 2010 to 2011 are only Table 3) to statistical non-significance, over
observed between the proportion of white 68% of students in the 2011 graduating class
students and GPA. In both cases, these would have to be replaced with students for
differences are not substantively meaningful. whom the intervention had no effect. To
There were only two percentage points fewer similarly reduce the coefficient of the
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School Counselors and FAFSA Completion
intervention on college attendance, 72% of about the effect of the counseling services
students in the 2011 graduating class would intervention on FAFSA completion and
have to be replaced with students for whom college attendance.
the intervention had no effect. Put differently,
in terms of students’ FAFSA completion and Discussion
college attendance, the students from the School counselors are an underutilized
intervention year (2011) are so substantially resource in preparing students to graduate
different from those in the non-intervention college and career ready. In 2008, the
year (2010) that for us to remove the Consortium on Chicago School Research at
differences observed, we would have to the University of Chicago released a report,
remove over two-thirds of students from 2011 From High School to the Future: Potholes on the
from the sample and replace them with Road to College, and concluded that students
students who could not have the received need more than high aspirations to go to
counseling services that are part of the college (Roderick, et al., 2008). The report
intervention introduced that year. revealed that first generation, low-income
students require greater access to structured
This exercise provides us with a yardstick for social support, mentoring, parental
understanding the likelihood that the involvement and early college planning.
observed causal effects is actually the result of They also found two critical steps are needed
bias. It may be useful to compare the results to improve college enrollment and success:
of our exercise to those from randomized first, creating a college-going culture in the
trials, where the research design assures that school and, second, providing students with
the effects are not the result of confounding. adequate support and guidance. They
As documented by Frank et al. (2013), the suggested that school counselors were in a
amount of bias required to change the unique position to do both (Roderick, et al.,
inference made in this analysis is larger than 2008). When students, parents, and
the level needed to change the inferences counselors work together and communicate
made in Borman, Dowling, & Schneck's (2008) steps needed to navigate the college going
evaluation of the Open Court Reading process, student’s chances of attending
intervention, Finn & Achilles' (1990) college significantly increase (McDonough,
evaluation of the effect of class size on 2005). School counselors, as sources of extra
kindergarten students’ standardized test social capital, must form collaborative
scores, and Clements & Sarama’s (2008) strategic partnerships and develop systems
evaluation of a preschool mathematics that will support students and parents with
curriculum on learning environment. We thus the tasks needed for on time college
find it implausible that bias from unobserved matriculation (Bryan et al., 2009; Simmons,
measures would be strong enough to 2011).
invalidate the inference made in this study
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Recognizing the current disparities in school that impact the entire graduating class.
counseling programs and the lack of support
that many students receive with the college The prospect of attending college is often
going process, especially those in most need, ruled out due to fears concerning the ability to
recent national attention has focused on cover college costs and as a result, directly
efforts to strengthen current school addressing affordability and funding options
counseling and school-based college and may make the difference between going to
career advising practices to increase student college or not (Cabrera & La Nasa, 2001;
postsecondary outcomes (Hatch & Owen, Heller, 2006; Poynton, Lapan, & Marcotte,
2015; Savitz-Romer & Liu, 2015; St. John, Paulsen, &
2014). The school Carter, 2005; Tierney, et al.,
counseling field must “The results of this study 2005; Tierney, 2006).
move to empirically based Providing assistance with
practices that go beyond
show a ten percentage point
the financial aid process
good intentions. increase in the total number not only increases financial
of submitted FAFSA aid receipt, but it also
Financial aid research has significantly increases the
frequently focused on the
applications and a twelve chances of on-time college
impact of interventions percentage point increase in matriculation (Bettinger et
and programs led by college attendance when al., 2012; Castleman &
organizations and groups Page, 2014a, 2014b, 2014c;
that function more
comparing the class of 2010 to Castleman, Page, &
tangentially to school 2011, suggesting a positive Schooley, 2014; Hoxby &
systems with studies connection between school Turner, 2013).
designed to evaluate
interventions where
counselor outreach/FAFSA The results of this study
students have been completion and college show a ten percentage
randomly selected to attendance. “ point increase in the total
participate or receive the number of submitted
intervention. Few studies have concentrated FAFSA applications and a twelve percentage
on school counseling programs or point increase in college attendance when
interventions working with all students comparing the class of 2010 to 2011,
(Holcomb-McCoy et al., 2011). This study suggesting a positive connection between
becomes especially helpful for school counselor outreach/FAFSA
conceptualizing large-scale, school counselor completion and college attendance. These
led interventions designed to impact financial findings are encouraging and show that large-
aid receipt and college attendance and scale, school wide, school counselor led
measuring the effectiveness of interventions programs and interventions can have
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School Counselors and FAFSA Completion
significant impacts on student’s and a willingness to understand diverse
postsecondary decisions. perspectives related to the college going
process are needed. Patience and
Implications for School Counselors perseverance will be required as best practices
As advocates for all children, school leveraging collaborative partnerships are
counselors must have the vision to creatively discovered and evaluated for impact. A one-
address equitable educational access for size all approach will likely yield
college readiness for all students, especially disappointing outcomes.
those students with the most need (Pham &
Keenan, 2011; Weinstein & Savitz-Romer, Implications for Researchers
2009). Delivering a seamless stream of We have provided evidence of statistically
resources supporting students through the significant differences in FAFSA completion
college going process will require leadership, and college enrollment between pre-
advocacy, consultation skills, patience, and intervention and post-intervention students.
perseverance as best practices are discovered, We have also provided evidence from
leveraging every possible source of social sensitivity analyses suggesting that these
capital. Opportunities to educate school differences are robust to unobserved
counselors, parents, and the community on confounders. Nevertheless, more research is
issues of college readiness will be essential to needed to ascertain which supports and
advance college readiness for all students. interventions have the greatest efficacy.
Important questions to ask include: What
Professional development for practicing differences, if any, exist by race, SES, and first
school counselors who have little or outdated generation status? Are there differences
training in financial aid counseling must be between two year and four year enrollment
provided. Institutions of higher education patterns for students who receive support
could establish strong district partnerships by with financial aid concerns? Do parent and
providing FAFSA training and financial aid student support needs differ? Will efforts
updates. University financial aid offices could such as FAFSA completion close the
partner with school districts to offer FAFSA opportunity gap over time such that we might
completion events. Also, pre-service training eventually eliminate it? What other barriers
institutions could include financial aid and impact college going decisions? Who might
college admissions training as a mandatory school counselors form collaborative
requirement in their school counselor relationships with to increase FAFSA
preparation programs. completion and college going?
Finally, successful interventions in one Timing is also an important consideration and
community "may" not be the most effective in future research is needed to understand the
the next community. Cultural competence K-12 practices necessary to increase college
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School Counselors and FAFSA Completion
going. This study focused on interventions planning ahead and developing a system for
that occurred during the senior year, but addressing concerns is important. We
college readiness and financial preparedness suggest that memorandums of understanding
activities must begin in kindergarten and between higher education institutions
research is needed to evaluate and better and school districts would simplify the
understand the most promising practices research process and encourage stronger
(Hillman, Gast, & George-Jackson, 2015; research practitioner collaboration.
MacCann, Lipnevich, & Roberts, 2012;
McCollough, 2011). We believe the above suggestions will help
researchers in their efforts to understand and
This study was designed to assess the devise effective practices that enable students
potential effect of increased school counselor to complete college applications, obtain
support on how often students completed financial aid, and enroll in college.
FAFSAs and enrolled in college. It does not,
however, allow us to distinguish between the Appendix
relative effectiveness of different outreach Results From Other Model Specifications
activities. Future research into which aspects In this article, we report the results from a
of outreach have the highest impact on linear probability model, where the coefficient
student’s postsecondary decision-making on the intervention tells us the marginal effect
process would be beneficial to both ―measured in probability of “success”―on
researchers and practitioners. It would also be the outcome of the intervention, controlling
helpful to understand how parents and for other variables. A potential problem with
students responded to the offer for school this model is that the linear combination from
counselor support. the model for certain combinations of values
can be below zero or above one, which is
Similar to findings in the H&R Block Study, it impossible. Furthermore, it may also be
remains to be seen if the enrollment effects informative to model variation in the
translate into real, long-term benefits outcomes between high schools using
(Bettinger et al., 2009). One concern is that the multilevel models. (In the reported linear
support may have encouraged students to probably model, we did adjust standard
enroll in college, but questions remain errors to allow for correlation among students
regarding persistence through college who attended the same high school.)
graduation. Issues of college persistence were
not addressed in this study. To account for the binary measurement of the
outcomes, we estimated a logistic regression
Finally, navigating large urban school district model, which tells us the log odds of
policies around research and program “success” vs. “failure” in each outcome as a
implementation is a daunting task. Thus, function of the intervention and other
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School Counselors and FAFSA Completion
covariates. This model constrains the in the model on college attendance, this same
probability of success or failure to fall marginal effect was 0.07 lower. In the
between 0 and 1. Compared to the reported population average model, however, the
linear probability model, a logistic regression marginal effects were slightly higher than the
model of FAFSA completion yielded identical linear probability, by 0.04 for the FAFSA
marginal effects after rounding. The linear completion model and 0.07 for the college
probability model of college attendance has a attendance model. Compared to multilevel
probability 0.02 smaller than the marginal models, the linear probability model provides
effects from the logistic regression. Thus, in effect sizes about halfway between the
comparison to a logistic regression model, the relatively lower ones in a random intercepts
linear probability model leads us to the same model and the relatively higher ones in a
substantive conclusions but provides us population average model.
slightly more conservative estimates in the
case of college attendance. These more complex models tell the same
story while providing less intuitive
We also estimated multilevel models to allow interpretations and requiring additional
the effect of the intervention to vary by high assumptions about the data-generating
school. To do this we estimated both a linear mechanism of the data. For these reasons, we
probability model and logistic regression opted to report the results of the linear
model where intercepts were allowed to vary probability model.
by high school. We also estimated a
population average logistic regression model
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Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
KeyCite Yellow Flag - Negative Treatment West Headnotes (7)
Not Followed on State Law Grounds Count My Vote, Inc. v. Cox, Utah,
October 10, 2019
104 S.Ct. 2778 [1] Federal Courts Decisions Reviewable
Supreme Court of the United States Supreme Court reviews judgments, not opinions.
CHEVRON, U.S.A., INC., Petitioner, 109 Cases that cite this headnote
v.
NATURAL RESOURCES [2] Administrative Law and
DEFENSE COUNCIL, INC., et al. Procedure Plain, literal, or clear meaning;
AMERICAN IRON AND STEEL ambiguity or silence
INSTITUTE, et al., Petitioners, Administrative Law and
v. Procedure Permissible or reasonable
NATURAL RESOURCES construction
DEFENSE COUNCIL, INC., et al. When court reviews agency's construction of
William D. RUCKELSHAUS, Administrator, statute which it administers, court is confronted
Environmental Protection Agency, Petitioner, with two questions: whether Congress has
v. directly spoken on precise question at issue;
NATURAL RESOURCES if statute is silent or ambiguous with respect
to specific issue, question for court is whether
DEFENSE COUNCIL, INC., et al. * agency's answer is based on permissible
construction of statute.
Nos. 82-1005, 82-1247 and 82-1591.
| 7026 Cases that cite this headnote
Argued Feb. 29, 1984.
|
Decided June 25, 1984. [3] Administrative Law and
Procedure Erroneous or unreasonable
Synopsis construction; conflict with statute
Rehearing Denied Aug. 16, 1984. Judiciary is final authority on issues of statutory
construction and must reject administrative
See 468 U.S. 1227, 105 S.Ct. 28, 29. constructions which are contrary to clear
congressional intent.
Petition was filed for review of order of the Environmental
Protection Agency. The Court of Appeals, 685 F.2d 1782 Cases that cite this headnote
718,vacated regulations, and certiorari was granted. The
Supreme Court, Justice Stevens, held that Environmental
[4] Administrative Law and
Protection Agency regulation allowing states to treat all
Procedure Permissible or reasonable
pollution-emitting devices within same industrial grouping as
construction
though they were encased within single “bubble” was based
Court need not conclude that agency's
on permissible construction of term “stationary source” in
construction of statute which it administered was
Clean Air Act Amendments.
only one it permissibly could have adopted to
uphold construction, or even reading the court
Reversed.
would have reached if question initially had
arisen in judicial proceeding.
2665 Cases that cite this headnote
000202
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Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
in 1981 to implement the permit requirement allow a State
[5] Administrative Law and to adopt a plantwide definition of the term “stationary
Procedure Permissible or reasonable source,” under which an existing plant that contains several
construction pollution-emitting devices may install or modify one piece
Where legislative delegation to agency on of equipment without meeting the permit conditions if the
particular question is implicit rather than explicit, alteration will not increase the total emissions from the plant,
court may not substitute its own construction of thus allowing a State to treat all of the pollution-emitting
statutory provision for reasonable interpretation devices within the same industrial grouping as though they
made by administrator of agency. were encased within a single “bubble.” Respondents filed a
petition for review in the Court of Appeals, which set aside
6151 Cases that cite this headnote the regulations embodying the “bubble concept” as contrary
to law. Although recognizing that the amended Clean Air
[6] Administrative Law and Act does not explicitly define what Congress envisioned as
Procedure Relationship of agency with a “stationary source” to which the permit program should
statute in general apply, and that the issue was not squarely addressed in the
Considerable weight should be accorded to legislative history, the court concluded that, in view of the
executive department's construction of statutory purpose of the nonattainment program to improve rather
scheme it is entrusted to administer. than merely maintain air quality, a plantwide definition was
“inappropriate,” while stating it was mandatory in programs
624 Cases that cite this headnote designed to maintain existing air quality.
Held: The EPA's plantwide definition is a permissible
[7] Environmental Law Stationary sources in
construction of the statutory term “stationary source.” Pp.
general
2781–2793.
Environmental Protection Agency regulation
allowing states to treat all pollution-emitting (a) With regard to judicial review of an agency's construction
devices within same industrial grouping as of the statute which it administers, if Congress has not directly
though they were encased within single “bubble” spoken to the precise question at issue, the question for the
was based on permissible construction of court is whether the *838 agency's answer is based on a
term “stationary source” in Clean Air Act permissible construction of the statute. Pp. 2781–2783.
Amendments. Clean Air Act, §§ 111(a)(3),
172(b)(6), 302(j), as amended, 42 U.S.C.A. §§ (b) Examination of the legislation and its history supports
7411(a)(3), 7502(b)(6), 7602(j). the Court of Appeals' conclusion that Congress did not have
a specific intention as to the applicability of the “bubble
297 Cases that cite this headnote
concept” in these cases. Pp. 2783–2786.
(c) The legislative history of the portion of the 1977
Amendments dealing with nonattainment areas plainly
discloses that in the permit program Congress sought to
Syllabus a1
accommodate the conflict between the economic interest
The Clean Air Act Amendments of 1977 impose certain in permitting capital improvements to continue and the
requirements on States **2779 that have not achieved environmental interest in improving air quality. Pp. 2786–
the national air quality standards established by the 2787.
Environmental Protection Agency (EPA) pursuant to
earlier legislation, including the requirement that such (d) Prior to the 1977 Amendments, the EPA had used
“nonattainment” States establish a permit program regulating a plantwide definition of the term “source,” but in 1980
“new or modified major stationary sources” of air pollution. the EPA ultimately adopted a regulation that, in essence,
Generally, a permit may not be issued for such sources unless applied the basic reasoning of the Court of Appeals here,
stringent conditions are met. EPA regulations promulgated precluding use of the “bubble concept” in nonattainment
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Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
States' programs designed to enhance air quality. However, Patberg, Charles F. Lettow, and Barton C. Green filed briefs
when a new administration took office 1981, the EPA, in for petitioners in No. 82-1247.
promulgating the regulations involved here, reevaluated the
various arguments that had been advanced in connection with *839 David D. Doniger argued the cause and filed a brief
the proper definition of the term “source” and concluded for respondents.†>>>
that the term should be given the plantwide definition in
† Briefs of amici curiae urging reversal were filed for
nonattainment areas. Pp. 2787–2790.
the American Gas Association by John A. Myler; for the
Mid-America Legal Foundation by John M. Cannon, Susan
(e) Parsing the general terms in the text of the amended
W. Wanat, and Ann P. Sheldon; and for the Pacific Legal
Clean Air Act—particularly the provisions of §§ 302(j) and
Foundation by Ronald A. Zumbrun and Robin L. Rivett.
111(a)(3) pertaining to the definition of “source”—does not
reveal any actual intent of Congress as to the issue in A brief of amici curiae urging affirmance was filed for
these cases. To the extent any congressional “intent” can be the Commonwealth of Pennsylvania et al. by LeRoy S.
discerned from the statutory language, it would appear that Zimmerman, Attorney General of Pennsylvania, Thomas Y.
the listing of overlapping, illustrative terms was intended Au, Duane Woodard, Attorney General of Colorado, Richard
to enlarge, rather than to confine, the scope of the EPA's L. Griffith, Assistant Attorney General, Joseph I. Lieberman,
power to regulate particular sources in order to effectuate Attorney General of Connecticut, Robert A. Whitehead,
the policies of the Clean Air Act. Similarly, the legislative Jr., Assistant Attorney General, James S. Tierney, Attorney
history is consistent with the **2780 view that the EPA General of Maine, Robert Abrams, Attorney General of New
should have broad discretion in implementing the policies York, Marcia J. Cleveland and Mary L. Lyndon, Assistant
of the 1977 Amendments. The plantwide definition is fully Attorneys General, Irwin I. Kimmelman, Attorney General of
consistent with the policy of allowing reasonable economic New Jersey, John J. Easton, Jr., Attorney General of Vermont,
growth, and the EPA has advanced a reasonable explanation Merideth Wright, Assistant Attorney General, Bronson C. La
for its conclusion that the regulations serve environmental Follette, Attorney General of Wisconsin, and Maryann Sumi,
objectives as well. The fact that the EPA has from time to time Assistant Attorney General.
changed its interpretation of the term “source” does not lead to
the conclusion that no deference should be accorded the EPA's James D. English, Mary-Win O'Brien, and Bernard Kleiman
interpretation of the statute. An agency, to engage in informed filed a brief for the United Steelworkers of America, AFL-
rulemaking, must consider varying interpretations and the CIO-CLC, as amicus curiae.
wisdom of its policy on a continuing basis. Policy arguments
concerning the “bubble concept” should be addressed to Opinion
legislators or administrators, not to judges. The EPA's
Justice STEVENS delivered the opinion of the Court.
interpretation of the statute here represents a reasonable
accommodation of manifestly competing interests and is In the Clean Air Act Amendments of 1977, Pub.L. 95–95, 91
entitled to deference. Pp. 2790–2793. Stat. 685, Congress enacted certain requirements applicable
*840 to States that had not achieved the national air
222 U.S.App.D.C. 268, 685 F.2d 718 (1982), reversed. quality standards established by the Environmental Protection
Agency (EPA) pursuant to earlier legislation. The amended
Clean Air Act required these “nonattainment” States to
Attorneys and Law Firms
establish a permit program regulating “new or modified
Deputy Solicitor General Bator argued the cause for major stationary sources” of air pollution. Generally, a permit
petitioners in all cases. With him on the briefs for may not be issued for a new or modified major stationary
petitioner in No. 82-1591 were Solicitor General Lee, source unless several stringent conditions are met. 1 The EPA
Acting Assistant Attorney General Habicht, Deputy Assistant regulation promulgated to implement this permit requirement
Attorney General Walker, Mark I. Levy, Anne S. Almy, William allows a State to adopt a plantwide definition of the term
F. Pedersen, and Charles S. Carter. Michael H. Salinsky and “stationary source.” 2 Under this definition, an existing plant
Kevin M. Fong filed briefs for petitioner in No. 82-1005. that contains several pollution-emitting devices may install
Robert A. Emmett, David Ferber, Stark Ritchie, Theodore or modify one piece of equipment without meeting the
L. Garrett, Patricia A. Barald, Louis E. Tosi, William L. permit conditions if the alteration will not increase the
000204
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Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
total emissions from the plant. The question presented by determine whether the Court of Appeals' legal error resulted
these cases is whether EPA's decision to allow States to in an erroneous judgment on the validity of the regulations.
treat all of the pollution-emitting devices within the same
industrial grouping as though they were encased within a
single “bubble” is based on a reasonable construction of the
II
statutory term “stationary source.”
[2] [3] [4] When a court reviews an agency's construction
I of the statute which it administers, it is confronted with two
questions. First, always, is the question whether Congress
The EPA regulations containing the plantwide definition of has directly spoken to the precise question at issue. If the
the term stationary source were promulgated on October intent of Congress is clear, that is the end of the matter;
*841 14, 1981. 46 Fed.Reg. 50766. Respondents 3 filed for the court, *843 as well as the agency, must give effect
a timely petition for review in the United States Court of to the unambiguously expressed intent of Congress. 9 If,
Appeals for the District of Columbia Circuit pursuant to 42 however, **2782 the court determines Congress has not
U.S.C. § 7607(b)(1). 4 The Court of Appeals **2781 set directly addressed the precise question at issue, the court does
aside the regulations. Natural Resources Defense Council, not simply impose its own construction on the statute, 10
Inc. v. Gorsuch, 222 U.S.App.D.C. 268, 685 F.2d 718 (1982). as would be necessary in the absence of an administrative
interpretation. Rather, if the statute is silent or ambiguous
The court observed that the relevant part of the amended with respect to the specific issue, the question for the court
Clean Air Act “does not explicitly define what Congress is whether the agency's answer is based on a permissible
envisioned as a ‘stationary source, to which the permit
construction of the statute. 11
program ... should apply,” and further stated that the precise
issue was not “squarely addressed in the legislative history.”
[5] “The power of an administrative agency to administer
Id., at 273, 685 F.2d, at 723. In light of its conclusion
a congressionally created ... program necessarily requires the
that the legislative history bearing on the question was “at
formulation of policy and the making of rules to fill any
best contradictory,” it reasoned that “the purposes of the
gap left, implicitly or explicitly, by Congress.” Morton v.
nonattainment program should guide our decision here.” Id.,
Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39 L.Ed.2d
at 276, n. 39, 685 F.2d, at 726, n. 39. 5 Based on two of its 270 (1974). If Congress has explicitly left a gap for the
precedents concerning the applicability of the bubble concept agency to fill, there is an express delegation *844 of
to certain Clean Air Act programs, 6 the court stated that authority to the agency to elucidate a specific provision of
the bubble concept was “mandatory” in programs designed the statute by regulation. Such legislative regulations are
merely to maintain existing air quality, but held that it was given controlling weight unless they are arbitrary, capricious,
“inappropriate” in programs enacted to improve air quality. or manifestly contrary to the statute. 12 Sometimes the
Id., at 276, 685 F.2d, at 726. Since the purpose of the permit legislative delegation to an agency on a particular question
*842 program—its “raison d’être,” in the court's view—was is implicit rather than explicit. In such a case, a court may
to improve air quality, the court held that the bubble concept not substitute its own construction of a statutory provision for
was inapplicable in these cases under its prior precedents. a reasonable interpretation made by the administrator of an
Ibid. It therefore set aside the regulations embodying the
agency. 13
bubble concept as contrary to law. We granted certiorari to
review that judgment, 461 U.S. 956, 103 S.Ct. 2427, 77
[6] We have long recognized that considerable weight
L.Ed.2d 1314 (1983), and we now reverse.
should be accorded to an executive department's construction
[1] The basic legal error of the Court of Appeals was
to adopt a static judicial definition of the term “stationary of a statutory scheme it is entrusted to administer, 14 and the
source” when it had decided that Congress itself had not principle of deference to administrative interpretations.
commanded that definition. Respondents do not defend the
“has been consistently followed by this Court whenever
legal reasoning of the Court of Appeals. 7 Nevertheless,
decision as to the meaning or reach of a statute has
since this Court reviews judgments, not opinions, 8 we must involved reconciling conflicting policies, and a full **2783
understanding of the force of the statutory policy in the given
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situation has depended upon more than ordinary knowledge at 64, 95 S.Ct., at 1474, but continued to assign “primary
respecting the matters subjected to agency regulations. See, responsibility for assuring air quality” to the several States, 84
e.g., National Broadcasting Co. v. United States, 319 U.S. Stat. 1678. Section 109 of the 1970 Amendments directed the
190 [63 S.Ct. 997, 87 L.Ed. 1344]; Labor Board v. Hearst EPA to promulgate National Ambient Air Quality Standards
Publications, Inc., 322 U.S. 111 [64 S.Ct. 851, 88 L.Ed. 1170]; (NAAQS's) 15 and § 110 directed the States to develop
*845 Republic Aviation Corp. v. Labor Board, 324 U.S. plans (SIP's) to implement the standards within specified
793 [65 S.Ct. 982, 89 L.Ed. 1372]; Securities & Exchange deadlines. In addition, § 111 provided that major new sources
Comm'n v. Chenery Corp., [332] 322 U.S. 194 [67 S.Ct. 1575, of pollution would be required to conform to technology-
91 L.Ed. 1995]; Labor Board v. Seven–Up Bottling Co., 344 based performance standards; the EPA was directed to publish
U.S. 344 [73 S.Ct. 287, 97 L.Ed. 377]. a list of categories of sources of pollution and to establish
“... If this choice represents a reasonable accommodation of new source performance standards (NSPS) for each. Section
conflicting policies that were committed to the agency's care 111(e) prohibited the operation of any new source in violation
by the statute, we should not disturb it unless it appears from of a performance standard.
the statute or its legislative history that the accommodation is
not one that Congress would have sanctioned.” United States Section 111(a) defined the terms that are to be used in setting
v. Shimer, 367 U.S. 374, 382, 383, 81 S.Ct. 1554, 1560, 1561, and enforcing standards of performance for new stationary
6 L.Ed.2d 908 (1961). sources. It provided:
“For purposes of this section:
Accord Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699– .....
700, 104 S.Ct. 2694, 2700–2701, 81 L.Ed.2d 580 (1984).
“(3) The term ‘stationary source’ means any building,
structure, facility, or installation which emits or may emit any
In light of these well-settled principles it is clear that the Court
air pollutant.” 84 Stat. 1683.
of Appeals misconceived the nature of its role in reviewing
the regulations at issue. Once it determined, after its own
examination of the legislation, that Congress did not actually **2784 In the 1970 Amendments that definition was not
have an intent regarding the applicability of the bubble only applicable to the NSPS program required by § 111,
concept to the permit program, the question before it was but also was made applicable to a requirement of § 110
not whether in its view the concept is “inappropriate” in the that each state implementation plan contain a procedure for
general context of a program designed to improve air quality, reviewing the location of any proposed new source and
but whether the Administrator's view that it is appropriate in preventing its construction if it would preclude the attainment
the context of this particular program is a reasonable one.
or maintenance of national air quality standards. 16
Based on the examination of the legislation and its history
which follows, we agree with the Court of Appeals that In due course, the EPA promulgated NAAQS's, approved
Congress did not have a specific intention on the applicability SIP's, and adopted detailed regulations governing NSPS's
of the bubble concept in these cases, and conclude that the *847 for various categories of equipment. In one of its
EPA's use of that concept here is a reasonable policy choice programs, the EPA used a plantwide definition of the
for the agency to make. term “stationary source.” In 1974, it issued NSPS's for the
nonferrous smelting industry that provided that the standards
III would not apply to the modification of major smelting units
if their increased emissions were offset by reductions in other
In the 1950's and the 1960's Congress enacted a series portions of the same plant. 17
of statutes designed to encourage and to assist the States
in curtailing air pollution. See generally Train v. Natural
Resources Defense Council, Inc., 421 U.S. 60, 63–64, 95 Nonattainment
S.Ct. 1470, 1474–1475, 43 L.Ed.2d 731 (1975). The Clean
The 1970 legislation provided for the attainment of primary
Air Amendments of 1970, Pub.L. 91–604, 84 Stat. 1676,
NAAQS's by 1975. In many areas of the country, particularly
“sharply increased federal authority and responsibility *846
the most industrialized States, the statutory goals were not
in the continuing effort to combat air pollution,” 421 U.S.,
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attained. 18 In 1976, the 94th Congress was confronted required to contain a number of provisions designed to
with this fundamental problem, as well as many others achieve the goals as expeditiously as possible. 23
respecting pollution control. As always in this area, the
legislative struggle was basically between interests seeking *850 Most significantly for our purposes, the statute
strict schemes to reduce pollution rapidly to eliminate its provided that each plan shall
social costs and interests advancing the economic concern “(6) require permits for the construction and operation of
that strict schemes would retard industrial development with new or modified major stationary sources in accordance with
attendant social costs. The 94th Congress, confronting these section 173....” Id., 747.
competing interests, was unable to agree on what response
was in the public interest: legislative proposals to deal with
Before issuing a permit, § 173 requires (1) the state agency to
nonattainment failed to command the necessary consensus. 19 determine that there will be sufficient emissions reductions in
the region to offset the emissions from the new source and also
In light of this situation, the EPA published an Emissions
to allow for reasonable further progress toward attainment, or
Offset Interpretative Ruling in December 1976, see 41
that the increased emissions will not exceed an allowance for
Fed.Reg. 55524, to “fill the gap,” as respondents put it, until
growth established pursuant to § 172(b)(5); (2) the applicant
Congress acted. The Ruling stated that it was intended to
to certify that his other sources in the State are in compliance
*848 address “the issue of whether and to what extent
with the SIP, (3) the agency to determine that the applicable
national air quality standards established under the Clean
SIP is otherwise being implemented, and (4) the proposed
Air Act may restrict or prohibit growth of major new or
source to comply with the lowest achievable emission rate
expanded stationary air pollution sources.” Id., at 55524–
55525. In general, the Ruling provided that “a major new (LAER). 24
source may locate in an area with air quality worse than a
**2786 *851 The 1977 Amendments contain no specific
national standard only if stringent conditions can be met.”
reference to the “bubble concept.” Nor do they contain a
Id., at 55525. The Ruling gave primary emphasis to the rapid
specific definition of the term “stationary source,” though
attainment of the statute's environmental goals. 20 Consistent they did not disturb the definition of “stationary source”
with that emphasis, the construction of every new source contained in § 111(a)(3), applicable by the terms of the Act to
in nonattainment areas had to meet the “lowest achievable the NSPS program. Section 302(j), however, defines the term
emission rate” under the current state of the art for that “major stationary source” as follows:
type of facility. See Ibid. The 1976 Ruling did not, however, “(j) Except as otherwise expressly provided, the terms ‘major
explicitly adopt or reject the “bubble concept.” 21 stationary source’ and ‘major emitting facility’ mean any
stationary facility or source of air pollutants which directly
emits, or has the potential to emit, one hundred tons per year
**2785 IV
or more of any air pollutant (including any major emitting
The Clean Air Act Amendments of 1977 are a lengthy, facility or source of fugitive emissions of any such pollutant,
detailed, technical, complex, and comprehensive response to as determined by rule by the Administrator).” 91 Stat. 770.
a major social issue. A small portion of the statute—91 Stat.
*849 745–751 (Part D of Title I of the amended Act, 42
U.S.C. §§ 7501–7508)—expressly deals with nonattainment V
areas. The focal point of this controversy is one phrase in that
portion of the Amendments. 22 The legislative history of the portion of the 1977 Amendments
dealing with nonattainment areas does not contain any
Basically, the statute required each State in a nonattainment specific comment on the “bubble concept” or the question
area to prepare and obtain approval of a new SIP by July 1, whether a plantwide definition of a stationary source is
1979. In the interim those States were required to comply permissible under the permit program. It does, however,
with the EPA's interpretative Ruling of December 21, 1976. plainly disclose that in the permit program Congress sought
91 Stat. 745. The deadline for attainment of the primary to accommodate the conflict between the economic interest
NAAQS's was extended until December 31, 1982, and in in permitting capital improvements to continue and the
some cases until December 31, 1987, but the SIP's were environmental interest in improving air quality. Indeed, the
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House Committee Report identified the economic interest as whether the source will emit a pollutant into an area which
one of the “two main purposes” of this section of the bill. It is exceeding a national ambient air quality standard for that
stated: pollutant—or precursor. Thus, a new source is still subject to
“Section 117 of the bill, adopted during full committee such requirements as ‘lowest achievable emission rate’ even if
markup establishes a new section 127 of the Clean Air it is constructed as a replacement for an older facility resulting
Act. The section has two main purposes: (1) to allow in a net reduction from previous emission levels.
reasonable economic growth to continue in an area while
making reasonable further progress to assure attainment of “A source—including an existing facility ordered to convert
the standards by a fixed date; and (2) to allow *852 States to coal—is subject to all the nonattainment requirements as
greater flexibility for the former purpose than EPA's present a modified source if it makes any physical change which
interpretative regulations afford. increases the amount of any air pollutant for which the
standards in the area are exceeded.” 123 Cong.Rec. 26847
“The new provision allows States with nonattainment areas to (1977).
pursue one of two options. First, the State may proceed under
EPA's present ‘tradeoff’ or ‘offset’ ruling. The Administrator
is authorized, moreover, to modify or amend that ruling in
VI
accordance with the intent and purposes of this section.
As previously noted, prior to the 1977 Amendments, the
“The State's second option would be to revise its EPA had adhered to a plantwide definition of the term
implementation plan in accordance with this new provision.” “source” under a NSPS program. After adoption of the
H.R.Rep. No. 95–294, p. 211 (1977), U.S.Code Cong. & 1977 Amendments, proposals for a plantwide definition were
Admin.News 1977, pp. 1077, 1290. 25 considered in at least three formal proceedings.
In January 1979, the EPA considered the question whether the
The portion of the Senate Committee Report dealing with same restriction on new construction in nonattainment areas
nonattainment areas states generally that it was intended that had been included in its December 1976 Ruling *854
to “supersede the EPA administrative approach,” and that should be required in the revised SIP's that were scheduled
expansion should be permitted if a State could “demonstrate to go into effect in July 1979. After noting that the 1976
that these facilities can be accommodated within its overall Ruling was ambiguous on the question “whether a plant with
plan to provide for attainment of air quality standards.” a number of different processes and emission points would
**2787 S.Rep. No. 95–127, p. 55 (1977). The Senate Report be considered a single source,” 44 Fed.Reg. 3276 (1979), the
notes the value of “case-by-case review of each new or EPA, in effect, provided a bifurcated answer to that question.
modified major source of pollution that seeks to locate in a In those areas that did not have a revised SIP in effect by July
region exceeding an ambient standard,” explaining that such 1979, the EPA rejected the plantwide definition; on the other
a review “requires matching reductions from existing sources hand, it expressly concluded that the plantwide approach
against *853 emissions expected from the new source in would be permissible in certain circumstances if authorized
order to assure that introduction of the new source will not by an approved SIP. It stated:
prevent attainment of the applicable standard by the statutory “Where a state implementation plan is revised and
deadline.” Ibid. This description of a case-by-case approach implemented to satisfy the requirements of Part D,
to plant additions, which emphasizes the net consequences of including the reasonable further progress requirement, the
the construction or modification of a new source, as well as its plan requirements for major modifications may exempt
impact on the overall achievement of the national standards, modifications of existing facilities that are accompanied by
was not, however, addressed to the precise issue raised by intrasource offsets so that there is no net increase in emissions.
these cases. The agency endorses such exemptions, which would provide
greater flexibility to sources to effectively manage their air
Senator Muskie made the following remarks:
emissions at least cost.” Ibid. 26
“I should note that the test for determining whether a new or
modified source is subject to the EPA interpretative regulation
[the Offset Ruling]—and to the permit requirements of the
revised implementation plans under the conference bill—is
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and individual pieces of process equipment, causing the plant-
**2788 *855 In April, and again in September 1979, the wide bubble not to apply for new and modified major pieces
EPA published additional comments in which it indicated of equipment.
that revised SIP's could adopt the plantwide definition of
source in nonattainment areas in certain circumstances. See “In addition, for the restrictions on construction, EPA is
id., at 20372, 20379, 51924, 51951, 51958. On the latter proposing to define ‘major modification’ so as to prohibit
occasion, the EPA made a formal rulemaking proposal that the bubble entirely. Finally, an alternative discussed but not
would have permitted the use of the “bubble concept” for favored is to have only pieces of process equipment reviewed,
new installations within a plant as well as for modifications resulting in no plant-wide bubble and allowing minor pieces
of existing units. It explained: of equipment to escape **2789 NSR *857 regardless of
“ ‘Bubble’ Exemption: The use of offsets inside the same whether they are within a major plant.” Id., at 51934.
source is called the ‘bubble.’ EPA proposes use of the
definition of ‘source’ (see above) to limit the use of the bubble
under nonattainment requirements in the following respects:
In August 1980, however, the EPA adopted a regulation
“i. Part D SIPs that include all requirements needed to assure that, in essence, applied the basic reasoning of the Court
reasonable further progress and attainment by the deadline of Appeals in these cases. The EPA took particular note of
under section 172 and that are being carried out need not the two then-recent Court of Appeals decisions, which had
restrict the use of a plantwide bubble, the same as under the created the bright-line rule that the “bubble concept” should
PSD proposal. be employed in a program designed to maintain air quality but
not in one designed to enhance air quality. Relying heavily
“ii. Part D SIPs that do not meet the requirements on those cases, 29 EPA adopted a dual definition of “source”
specified must limit use of the bubble by including a for nonattainment areas that required a permit whenever a
definition of ‘installation’ as an identifiable piece of process change in either the entire plant, or one of its components,
equipment.” 27 would result in a significant increase in emissions even if the
increase was completely offset by reductions elsewhere in the
*856 Significantly, the EPA expressly noted that the word plant. The EPA expressed the opinion that this interpretation
“source” might be given a plantwide definition for some was “more consistent with congressional intent” than the
purposes and a narrower definition for other purposes. It plantwide definition because it “would bring in more sources
wrote: or modifications for review,” 45 Fed.Reg. 52697 (1980), but
“Source means any building structure, facility, or installation its primary legal analysis was predicated on the two Court of
which emits or may emit any regulated pollutant. ‘Building, Appeals decisions.
structure, facility or installation’ means plant in PSD
areas and in nonattainment areas except where the growth In 1981 a new administration took office and initiated a
prohibitions would apply or where no adequate SIP exists or “Government-wide reexamination of regulatory burdens and
complexities.” 46 Fed.Reg. 16281. In the context of that
is being carried out.” Id., at 51925. 28
*858 review, the EPA reevaluated the various arguments that
had been advanced in connection with the proper definition
of the term “source” and concluded that the term should be
The EPA's summary of its proposed Ruling discloses a
given the same definition in both nonattainment areas and
flexible rather than rigid definition of the term “source” to
PSD areas.
implement various policies and programs:
“In summary, EPA is proposing two different ways to define In explaining its conclusion, the EPA first noted that the
source for different kinds of NSR programs: definitional issue was not squarely addressed in either
the statute or its legislative history and therefore that
“(1) For PSD and complete Part D SIPs, review would apply the issue involved an agency “judgment as how to best
only to plants, with an unrestricted plant-wide bubble. carry out the Act.” Ibid. It then set forth several reasons
for concluding that the plantwide definition was more
“(2) For the offset ruling, restrictions on construction, and appropriate. It pointed out that the dual definition “can
incomplete Part D SIPs, review would apply to both plants act as a disincentive to new investment and modernization
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104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
by discouraging modifications to existing facilities” and the term “major stationary source.” See supra, at 2786. We
“can actually retard progress in air pollution control by disagree with petitioners on this point.
discouraging replacement of older, dirtier processes or pieces
of equipment with new, cleaner ones.” Ibid. Moreover, the The definition in § 302(j) tells us what the word “major”
new definition “would simplify EPA's rules by using the means—a source must emit at least 100 tons of pollution
same definition of ‘source’ for PSD, nonattainment new to qualify—but it sheds virtually no light on the meaning
source review and the construction moratorium. This reduces of the term “stationary source.” It does equate a source
confusion and inconsistency.” Ibid. Finally, the agency with a facility—a “major emitting facility” and a “major
explained that additional requirements that remained in place stationary source” are synonymous under § 302(j). The
would accomplish the fundamental purposes of achieving ordinary meaning of the term “facility” is some collection of
integrated elements which has been designed and constructed
attainment with NAAQS's as expeditiously as possible. 30
to achieve some purpose. Moreover, it is certainly no affront
These conclusions were **2790 expressed *859 in a
to common English usage to take a reference to a major
proposed rulemaking in August 1981 that was formally
facility or a major source to connote an entire plant as opposed
promulgated in October. See id., at 50766.
to its constituent parts. Basically, however, the language of §
302(j) simply does not compel any given interpretation of the
VII term “source.”
[7] In this Court respondents expressly reject the basic Respondents recognize that, and hence point to § 111(a)
rationale of the Court of Appeals' decision. That court viewed (3). Although the definition in that section is not literally
the statutory definition of the term “source” as sufficiently applicable to the permit program, it sheds as much light on the
flexible to cover either a plantwide definition, a narrower meaning of the word “source” as anything in the statute. 32 As
definition covering each unit within a plant, or a dual respondents point out, use of the words “building, structure,
definition that could apply to both the entire “bubble” and its facility, or installation,” as the definition of source, could be
components. It interpreted the policies of the statute, however, read to impose the permit conditions on an individual building
to mandate the plantwide definition in programs designed
that is a part of a plant. 33 A “word may have a character
to maintain clean air and to forbid it in programs designed
of its own not to be submerged by its association.” *861
to improve air quality. Respondents place a fundamentally
Russell Motor Car Co. v. United States, 261 U.S. 514, 519,
different construction on the statute. They contend that the
43 S.Ct. 428, 429, 67 L.Ed. 778 (1923). On the other hand,
text of the Act requires the EPA to use a dual definition—if
the meaning of a word must be ascertained in the context of
either a component of a plant, or the plant as a whole, emits
achieving particular objectives, and the words associated with
over 100 tons of pollutant, it is a major stationary source. They
it may **2791 indicate that the true meaning of the series
thus contend that the EPA rules adopted in 1980, insofar as
is to convey a common idea. The language may reasonably
they apply to the maintenance of the quality of clean air, as
be interpreted to impose the requirement on any discrete,
well as the 1981 rules which apply to nonattainment areas,
but integrated, operation which pollutes. This gives meaning
violate the statute. 31 to all of the terms—a single building, not part of a larger
operation, would be covered if it emits more than 100 tons
of pollution, as would any facility, structure, or installation.
Statutory Language Indeed, the language itself implies a “bubble concept” of
sorts: each enumerated item would seem to be treated as if it
The definition of the term “stationary source” in § 111(a) were encased in a bubble. While respondents insist that each
(3) refers to “any building, structure, facility, or installation” of these terms must be given a discrete meaning, they also
which emits air pollution. See supra, at 2784. This definition argue that § 111(a)(3) defines “source” as that term is used in
is applicable only to the NSPS program by the express terms § 302(j). The latter section, however, equates a source with
of the statute; the text of the statute does not make this a facility, whereas the former defines “source” as a facility,
definition *860 applicable to the permit program. Petitioners among other items.
therefore maintain that there is no statutory language even
relevant to ascertaining the meaning of stationary source We are not persuaded that parsing of general terms in the
in the permit program aside from § 302(j), which defines text of the statute will reveal an actual intent of Congress. 34
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104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
*862 We know full well that this language is not dispositive;
the terms are overlapping and the language is not precisely Our review of the EPA's varying interpretations of the
directed to the question of the applicability of a given term word “source”—both before and after the 1977 Amendments
in the context of a larger operation. To the extent any —convinces us that the agency primarily responsible for
congressional “intent” can be discerned from this language, it administering this important legislation has consistently
would appear that the listing of overlapping, illustrative terms interpreted it flexibly—not in a sterile textual vacuum, but in
was intended to enlarge, rather than to confine, the scope of the context of implementing policy decisions in a technical
the agency's power to regulate particular sources in order to and complex arena. The fact that the agency has from time to
effectuate the policies of the Act. time changed its interpretation of the term “source” does not,
as respondents argue, lead us to conclude that no deference
should be accorded the agency's interpretation of the statute.
Legislative History An initial agency interpretation is not instantly carved in
stone. On the contrary, the agency, to engage in informed
In addition, respondents argue that the legislative history and
rulemaking, must consider varying interpretations *864 and
policies of the Act foreclose the plantwide definition, and that
the wisdom of its policy on a continuing basis. Moreover,
the EPA's interpretation is not entitled to deference because it
the fact that the agency has adopted different definitions
represents a sharp break with prior interpretations of the Act.
in different contexts adds force to the argument that the
Based on our examination of the legislative history, we agree definition itself is flexible, particularly since Congress has
with the Court of Appeals that it is unilluminating. The never indicated any disapproval of a flexible reading of the
general remarks pointed to by respondents “were obviously statute.
not made with this narrow issue in mind and they cannot
Significantly, it was not the agency in 1980, but rather the
be said to demonstrate a Congressional desire....” Jewell
Court of Appeals that read the statute inflexibly to command a
Ridge Coal Corp. v. Mine Workers, 325 U.S. 161, 168–
plantwide definition for programs designed to maintain clean
169, 65 S.Ct. 1063, 1067–1068, 89 L.Ed. 1534 (1945).
air and to forbid such a definition for programs designed to
Respondents' argument based on the legislative history relies
improve air quality. The distinction the court drew may well
heavily on Senator Muskie's observation that a new source is
be a sensible one, but our labored review of the problem has
subject to the LAER requirement. 35 But the full statement surely disclosed that it is not a distinction that Congress ever
is ambiguous and like the text of § 173 itself, this comment articulated itself, or one that the EPA found in the statute
does not tell us what a new source is, much less that it is before the courts began to review the legislative work product.
to have an inflexible definition. We find that the legislative We conclude that it was the Court of Appeals, rather than
history as a whole is silent on the precise issue before us. It is, Congress or any of the decisionmakers who are authorized
however, consistent with the view that the EPA should have by Congress to administer this legislation, that was primarily
broad discretion in implementing the policies of the 1977 responsible for the 1980 position taken by the agency.
Amendments.
*863 More importantly, that history plainly identifies the Policy
policy concerns that motivated the enactment; the plantwide
definition is fully consistent with one of those concerns The arguments over policy that are advanced in the parties'
**2792 —the allowance of reasonable economic growth— briefs create the impression that respondents are now waging
and, whether or not we believe it most effectively implements in a judicial forum a specific policy battle which they
the other, we must recognize that the EPA has advanced a ultimately lost in the agency and in the 32 jurisdictions opting
reasonable explanation for its conclusion that the regulations for the “bubble concept,” but one which was never waged
serve the environmental objectives as well. See supra, at in the Congress. Such policy arguments are more properly
2789–2790, and n. 29; see also supra, at 2788, n. 27. Indeed, addressed to legislators or administrators, not to judges. 38
its reasoning is supported by the public record developed
*865 In these cases, the Administrator's interpretation
in the rulemaking process, 36 as well as by certain private
represents a reasonable accommodation of manifestly
studies. 37 competing in **2793 terests and is entitled to deference: the
regulatory scheme is technical and complex, 39 the agency
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of the agency's policy, rather than whether it is a reasonable
considered the matter in a detailed and reasoned fashion, 40
choice within a gap left open by Congress, the challenge must
and the decision involves reconciling conflicting policies. 41 fail. In such a case, federal judges—who have no constituency
Congress intended to accommodate both interests, but did not —have a duty to respect legitimate policy choices made by
do so itself on the level of specificity presented by these cases. those who do. The responsibilities for assessing the wisdom
Perhaps that body consciously desired the Administrator to of such policy choices and resolving the struggle between
strike the balance at this level, thinking that those with great competing views of the public interest are not judicial ones:
expertise and charged with responsibility for administering “Our Constitution vests such responsibilities in the political
the provision would be in a better position to do so; perhaps it branches.” TVA v. Hill, 437 U.S. 153, 195, 98 S.Ct. 2279,
simply did not consider the question at this level; and perhaps 2302, 57 L.Ed.2d 117 (1978).
Congress was unable to forge a coalition on either side of the
question, and those on each side decided to take their chances We hold that the EPA's definition of the term “source”
with the scheme devised by the agency. For judicial purposes, is a permissible construction of the statute which seeks
it matters not which of these things occurred. to accommodate progress in reducing air pollution with
economic growth. “The Regulations which the Administrator
Judges are not experts in the field, and are not part of either has adopted provide what the agency could allowably view
political branch of the Government. Courts must, in some as ... [an] effective reconciliation of these twofold ends....”
cases, reconcile competing political interests, but not on the United States v. Shimer, 367 U.S., at 383, 81 S.Ct., at 1560.
basis of the judges' personal policy preferences. In contrast,
an agency to which Congress has delegated policy-making The judgment of the Court of Appeals is reversed.
responsibilities may, within the limits of that delegation,
It is so ordered.
properly rely upon the incumbent administration's views of
wise policy to inform its judgments. While agencies are
not directly accountable to the people, the Chief Executive Justice MARSHALL and Justice REHNQUIST took no part
is, and it is entirely appropriate for this political branch of in the consideration or decision of these cases.
the Government to make such policy choices—resolving the
competing interests which Congress itself either inadvertently Justice O'CONNOR took no part in the decision of these
did not resolve, or intentionally left to be resolved by the cases.
*866 agency charged with the administration of the statute
All Citations
in light of everyday realities.
467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694, 21 ERC 1049,
When a challenge to an agency construction of a statutory
14 Envtl. L. Rep. 20,507
provision, fairly conceptualized, really centers on the wisdom
Footnotes
* US Reports Title: Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.
a1 The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the
convenience of the reader. See United States v. Detroit Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.
1 Section 172(b)(6), 42 U.S.C. § 7502(b)(6), provides:
“The plan provisions required by subsection (a) shall—
.....
“(6) require permits for the construction and operation of new or modified major stationary sources in accordance with
section 173 (relating to permit requirements).” 91 Stat. 747.
2 “(i) ‘Stationary source’ means any building, structure, facility, or installation which emits or may emit any air pollutant
subject to regulation under the Act.
“(ii) ‘Building, structure, facility, or installation’ means all of the pollutant-emitting activities which belong to the same
industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same
person (or persons under common control) except the activities of any vessel.” 40 CFR §§ 51.18(j)(1)(i) and (ii) (1983).
3 National Resources Defense Council, Inc., Citizens for a Better Environment, Inc., and North Western Ohio Lung
Association, Inc.
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Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
4 Petitioners, Chevron U.S.A. Inc., American Iron and Steel Institute, American Petroleum Institute, Chemical
Manufacturers Association, Inc., General Motors Corp., and Rubber Manufacturers Association were granted leave to
intervene and argue in support of the regulation.
5 The court remarked in this regard:
“We regret, of course, that Congress did not advert specifically to the bubble concept's application to various Clean Air
Act programs, and note that a further clarifying statutory directive would facilitate the work of the agency and of the court
in their endeavors to serve the legislators' will.” 222 U.S.App.D.C., at 276, n. 39, 685 F.2d, at 726, n. 39.
6 Alabama Power Co. v. Costle, 204 U.S.App.D.C. 51, 636 F.2d 323 (1979); ASARCO Inc. v. EPA, 188 U.S.App.D.C. 77,
578 F.2d 319 (1978).
7 Respondents argued below that EPA's plantwide definition of “stationary source” is contrary to the terms, legislative
history, and purposes of the amended Clean Air Act. The court below rejected respondents' arguments based on the
language and legislative history of the Act. It did agree with respondents contention that the regulations were inconsistent
with the purposes of the Act, but did not adopt the construction of the statute advanced by respondents here. Respondents
rely on the arguments rejected by the Court of Appeals in support of the judgment, and may rely on any ground that finds
support in the record. See Ryerson v. United States, 312 U.S. 405, 408, 61 S.Ct. 656, 658, 85 L.Ed. 917 (1941); LeTulle
v. Scofield, 308 U.S. 415, 421, 60 S.Ct. 313, 316, 84 L.Ed. 355 (1940); Langnes v. Green, 282 U.S. 531, 533–539, 51
S.Ct. 243, 244–246, 75 L.Ed. 520 (1931).
8 E.g., Black v. Cutter Laboratories, 351 U.S. 292, 297, 76 S.Ct. 824, 827, 100 L.Ed. 1188 (1956); J.E. Riley Investment
Co. v. Commissioner, 311 U.S. 55, 59, 61 S.Ct. 95, 97, 85 L.Ed. 36 (1940); Williams v. Norris, 12 Wheat. 117, 120, 6
L.Ed. 571 (1827); McClung v. Silliman, 6 Wheat. 598, 603, 5 L.Ed. 340 (1821).
9 The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which
are contrary to clear congressional intent. See, e.g., FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27,
32, 102 S.Ct. 38, 42, 70 L.Ed.2d 23 (1981); SEC v. Sloan, 436 U.S. 103, 117–118, 98 S.Ct. 1702, 1711–1712, 56 L.Ed.2d
148 (1978); FMC v. Seatrain Lines, Inc., 411 U.S. 726, 745–746, 93 S.Ct. 1773, 1784–1785, 36 L.Ed.2d 620 (1973);
Volkswagenwerk v. FMC, 390 U.S. 261, 272, 88 S.Ct. 929, 935, 19 L.Ed.2d 1090 (1968); NLRB v. Brown, 380 U.S. 278,
291, 85 S.Ct. 980, 988, 13 L.Ed.2d 839 (1965); FTC v. Colgate–Palmolive Co., 380 U.S. 374, 385, 85 S.Ct. 1035, 1042,
13 L.Ed.2d 904 (1965); Social Security Board v. Nierotko, 327 U.S. 358, 369, 66 S.Ct. 637, 643, 90 L.Ed. 718 (1946);
Burnet v. Chicago Portrait Co., 285 U.S. 1, 16, 52 S.Ct. 275, 281, 76 L.Ed. 587 (1932); Webster v. Luther, 163 U.S. 331,
342, 16 S.Ct. 963, 967, 41 L.Ed. 179 (1896). If a court, employing traditional tools of statutory construction, ascertains
that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.
10 See generally, R. Pound, The Spirit of the Common Law 174–175 (1921).
11 The court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the
construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.
FEC v. Democratic Senatorial Campaign Committee, 454 U.S., at 39, 102 S.Ct., at 46; Zenith Radio Corp. v. United
States, 437 U.S. 443, 450, 98 S.Ct. 2441, 2445, 57 L.Ed.2d 337 (1978); Train v. Natural Resources Defense Council,
Inc., 421 U.S. 60, 75, 95 S.Ct. 1470, 1479, 43 L.Ed.2d 731 (1975); Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13
L.Ed.2d 616 (1965); Unemployment Compensation Comm'n v. Aragon, 329 U.S. 143, 153, 67 S.Ct. 245, 250, 91 L.Ed.
136 (1946); McLaren v. Fleischer, 256 U.S. 477, 480–481, 41 S.Ct. 577, 577–578, 65 L.Ed. 1052 (1921).
12 See, e.g., United States v. Morton, 467 U.S. 822, 834, 104 S.Ct. 2769, 2776, 81 L.Ed.2d 680 (1984) Schweiker v. Gray
Panthers, 453 U.S. 34, 44, 101 S.Ct. 2633, 2640, 69 L.Ed.2d 460 (1981); Batterton v. Francis, 432 U.S. 416, 424–426,
97 S.Ct. 2399, 2404–2406, 53 L.Ed.2d 448 (1977); American Telephone & Telegraph Co. v. United States, 299 U.S. 232,
235–237, 57 S.Ct. 170, 172–173, 81 L.Ed. 142 (1936).
13 E.g., INS v. Jong Ha Wang, 450 U.S. 139, 144, 101 S.Ct. 1027, 1031, 67 L.Ed.2d 123 (1981); Train v. Natural Resources
Defense Council, Inc., 421 U.S., at 87, 95 S.Ct., at 1485.
14 Aluminum Co. of America v. Central Lincoln Peoples' Util. Dist., 467 U.S. 380, 389, 104 S.Ct. 2472, 2479–2480, 81
L.Ed.2d 301 (1984); Blum v. Bacon, 457 U.S. 132, 141, 102 S.Ct. 2355, 2361, 72 L.Ed.2d 728 (1982); Union Electric Co.
v. EPA, 427 U.S. 246, 256, 96 S.Ct. 2518, 2525, 49 L.Ed.2d 474 (1976); Investment Company Institute v. Camp, 401
U.S. 617, 626–627, 91 S.Ct. 1091, 1097, 28 L.Ed.2d 367 (1971); Unemployment Compensation Comm'n v. Aragon, 329
U.S., at 153–154, 67 S.Ct., at 250–251; NLRB v. Hearst Publications, Inc., 322 U.S. 111, 131, 64 S.Ct. 851, 860, 88 L.Ed.
1170 (1944); McLaren v. Fleischer, 256 U.S., at 480–481, 41 S.Ct., at 577–578; Webster v. Luther, 163 U.S., at 342, 16
S.Ct., at 967; Brown v. United States, 113 U.S. 568, 570–571, 5 S.Ct. 648, 649–650, 28 L.Ed. 1079 (1885); United States
v. Moore, 95 U.S. 760, 763, 24 L.Ed. 588 (1878); Edwards' Lessee v. Darby, 12 Wheat. 206, 210, 6 L.Ed. 603 (1827).
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15 Primary standards were defined as those whose attainment and maintenance were necessary to protect the public health,
and secondary standards were intended to specify a level of air quality that would protect the public welfare.
16 See §§ 110(a)(2)(D) and 110(a)(4).
17 The Court of Appeals ultimately held that this plantwide approach was prohibited by the 1970 Act, see ASARCO Inc., 188
U.S.App.D.C., at 83–84, 578 F.2d, at 325–327. This decision was rendered after enactment of the 1977 Amendments,
and hence the standard was in effect when Congress enacted the 1977 Amendments.
18 See Report of the National Commission on Air Quality, To Breathe Clean Air, 3.3–20 through 3.3–33 (1981).
19 Comprehensive bills did pass both Chambers of Congress; the Conference Report was rejected in the Senate. 122
Cong.Rec. 34375–34403, 34405–34418 (1976).
20 For example, it stated:
“Particularly with regard to the primary NAAQS's, Congress and the Courts have made clear that economic considerations
must be subordinated to NAAQS achievement and maintenance. While the ruling allows for some growth in areas violating
a NAAQS if the net effect is to insure further progress toward NAAQS achievement, the Act does not allow economic
growth to be accommodated at the expense of the public health.” 41 Fed.Reg. 55527 (1976).
21 In January 1979, the EPA noted that the 1976 Ruling was ambiguous concerning this issue:
“A number of commenters indicated the need for a more explicit definition of ‘source.’ Some readers found that it was
unclear under the 1976 Ruling whether a plant with a number of different processes and emission points would be
considered a single source. The changes set forth below define a source as ‘any structure, building, facility, equipment,
installation, or operation (or combination thereof) which is located on one or more contiguous or adjacent properties
and which is owned or operated by the same person (or by persons under common control.’ This definition precludes
a large plant from being separated into individual production lines for purposes of determining applicability of the offset
requirements.” 44 Fed.Reg. 3276.
22 Specifically, the controversy in these cases involves the meaning of the term “major stationary sources” in § 172(b)(6) of
the Act, 42 U.S.C. § 7502(b)(6). The meaning of the term “proposed source” in § 173(2) of the Act, 42 U.S.C. § 7503(2),
is not at issue.
23 Thus, among other requirements, § 172(b) provided that the SIP's shall—
“(3) require, in the interim, reasonable further progress (as defined in section 171(1)) including such reduction in emissions
from existing sources in the area as may be obtained through the adoption, at a minimum, of reasonably available control
technology;
“(4) include a comprehensive, accurate, current inventory of actual emissions from all sources (as provided by rule of
the Administrator) of each such pollutant for each such area which is revised and resubmitted as frequently as may be
necessary to assure that the requirements of paragraph (3) are met and to assess the need for additional reductions to
assure attainment of each standard by the date required under paragraph (1);
“(5) expressly identify and quantify the emissions, if any, of any such pollutant which will be allowed to result from the
construction and operation of major new or modified stationary sources for each such area; ...
.....
“(8) contain emission limitations, schedules of compliance and such other measures as may be necessary to meet the
requirements of this section.” 91 Stat. 747.
Section 171(1) provided:
“(1) The term ‘reasonable further progress' means annual incremental reductions in emissions of the applicable air
pollutant (including substantial reductions in the early years following approval or promulgation of plan provisions
under this part and section 110(a)(2)(I) and regular reductions thereafter) which are sufficient in the judgment of the
Administrator, to provide for attainment of the applicable national ambient air quality standard by the date required in
section 172(a).” Id., at 746.
24 Section 171(3) provides:
“(3) The term ‘lowest achievable emission rate’ means for any source, that rate of emissions which reflects—
“(A) the most stringent emission limitation which is contained in the implementation plan of any State for such class
or category of source, unless the owner or operator of the proposed source demonstrates that such limitations are not
achievable, or
“(B) the most stringent emission limitation which is achieved in practice by such class or category of source, whichever
is more stringent. “In no event shall the application of this term permit a proposed new or modified source to emit any
pollutant in excess of the amount allowable under applicable new source standards of performance.”
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The LAER requirement is defined in terms that make it even more stringent than the applicable new source performance
standard developed under § 111 of the Act, as amended by the 1970 statute.
25 During the floor debates Congressman Waxman remarked that the legislation struck
“a proper balance between environmental controls and economic growth in the dirty air areas of America.... There is no
other single issue which more clearly poses the conflict between pollution control and new jobs. We have determined
that neither need be compromised....
“This is a fair and balanced approach, which will not undermine our economic vitality, or impede achievement of our
ultimate environmental objectives.” 123 Cong.Rec. 27076 (1977).
The second “main purpose” of the provision—allowing the States “greater flexibility” than the EPA's interpretative Ruling
—as well as the reference to the EPA's authority to amend its Ruling in accordance with the intent of the section, is
entirely consistent with the view that Congress did not intend to freeze the definition of “source” contained in the existing
regulation into a rigid statutory requirement.
26 In the same Ruling, the EPA added:
“The above exemption is permitted under the SIP because, to be approved under Part D, plan revisions due by January
1979 must contain adopted measures assuring that reasonable further progress will be made. Furthermore, in most
circumstances, the measures adopted by January 1979 must be sufficient to actually provide for attainment of the
standards by the dates required under the Act, and in all circumstances measures adopted by 1982 must provide for
attainment. See Section 172 of the Act and 43 FR 21673–21677 (May 19, 1978). Also, Congress intended under Section
173 of the Act that States would have some latitude to depart from the strict requirements of this Ruling when the State
plan is revised and is being carried out in accordance with Part D. Under a Part D plan, therefore, there is less need to
subject a modification of an existing facility to LAER and other stringent requirements if the modification is accompanied
by sufficient intrasource offsets so that there is no net increase in emissions.” 44 Fed.Reg. 3277 (1979).
27 Id., at 51926. Later in that Ruling, the EPA added:
“However, EPA believes that complete Part D SIPs, which contain adopted and enforceable requirements sufficient to
assure attainment, may apply the approach proposed above for PSD, with plant-wide review but no review of individual
pieces of equipment. Use of only a plant-wide definition of source will permit plant-wide offsets for avoiding NSR of new
or modified pieces of equipment. However, this is only appropriate once a SIP is adopted that will assure the reductions in
existing emissions necessary for attainment. See 44 FR 3276 col. 3 (January 16, 1979). If the level of emissions allowed
in the SIP is low enough to assure reasonable further progress and attainment, new construction or modifications with
enough offset credit to prevent an emission increase should not jeopardize attainment.” Id., at 51933.
28 In its explanation of why the use of the “bubble concept” was especially appropriate in preventing significant deterioration
(PSD) in clean air areas, the EPA stated: “In addition, application of the bubble on a plant-wide basis encourages voluntary
upgrading of equipment, and growth in productive capacity.” Id., at 51932.
29 “The dual definition also is consistent with Alabama Power and ASARCO. Alabama Power held that EPA had broad
discretion to define the constituent terms of ‘source’ so as best to effectuate the purposes of the statute. Different
definitions of ‘source’ can therefore be used for different sections of the statute....
“Moreover, Alabama Power and ASARCO taken together suggest that there is a distinction between Clean Air Act
programs designed to enhance air quality and those designed only to maintain air quality....
.....
“Promulgation of the dual definition follows the mandate of Alabama Power, which held that, while EPA could not define
‘source’ as a combination of sources, EPA had broad discretion to define ‘building,’ ‘structure,’ ‘facility,’ and ‘installation’
so as to best accomplish the purposes of the Act.” 45 Fed.Reg. 52697 (1980).
30 It stated:
“5. States will remain subject to the requirement that for all nonattainment areas they demonstrate attainment of NAAQS
as expeditiously as practicable and show reasonable further progress toward such attainment. Thus, the proposed change
in the mandatory scope of nonattainment new source review should not interfere with the fundamental purpose of Part
D of the Act.
“6. New Source Performance Standards (NSPS) will continue to apply to many new or modified facilities and will assure
use of the most up-to-date pollution control techniques regardless of the applicability of nonattainment area new source
review.
“7. In order to avoid nonattainment area new source review, a major plant undergoing modification must show that it
will not experience a significant net increase in emissions. Where overall emissions increase significantly, review will
continue to be required.” 46 Fed.Reg. 16281 (1981).
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Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
104 S.Ct. 2778, 21 ERC 1049, 81 L.Ed.2d 694, 14 Envtl. L. Rep. 20,507
31 “What EPA may not do, however, is define all four terms to mean only plants. In the 1980 PSD rules, EPA did just that.
EPA compounded the mistake in the 1981 rules here under review, in which it abandoned the dual definition.” Brief for
Respondents 29, n. 56.
32 We note that the EPA in fact adopted the language of that definition in its regulations under the permit program. 40 CFR
§§ 51.18(j)(1)(i), (ii) (1983).
33 Since the regulations give the States the option to define an individual unit as a source, see 40 CFR § 51.18(j)(1) (1983),
petitioners do not dispute that the terms can be read as respondents suggest.
34 The argument based on the text of § 173, which defines the permit requirements for nonattainment areas, is a classic
example of circular reasoning. One of the permit requirements is that “the proposed source is required to comply with
the lowest achievable emission rate” (LAER). Although a State may submit a revised SIP that provides for the waiver
of another requirement—the “offset condition”—the SIP may not provide for a waiver of the LAER condition for any
proposed source. Respondents argue that the plantwide definition of the term “source” makes it unnecessary for newly
constructed units within the plant to satisfy the LAER requirement if their emissions are offset by the reductions achieved
by the retirement of older equipment. Thus, according to respondents, the plantwide definition allows what the statute
explicitly prohibits—the waiver of the LAER requirement for the newly constructed units. But this argument proves nothing
because the statute does not prohibit the waiver unless the proposed new unit is indeed subject to the permit program.
If it is not, the statute does not impose the LAER requirement at all and there is no need to reach any waiver question.
In other words, § 173 of the statute merely deals with the consequences of the definition of the term “source” and does
not define the term.
35 See supra, at 2787. We note that Senator Muskie was not critical of the EPA's use of the “bubble concept” in one NSPS
program prior to the 1977 amendments. See ibid.
36 See, for example, the statement of the New York State Department of Environmental Conservation, pointing out that
denying a source owner flexibility in selecting options made it “simpler and cheaper to operate old, more polluting sources
than to trade up....” App. 128–129.
37 “Economists have proposed that economic incentives be substituted for the cumbersome administrative-legal framework.
The objective is to make the profit and cost incentives that work so well in the marketplace work for pollution control....
[The ‘bubble’ or ‘netting’ concept] is a first attempt in this direction. By giving a plant manager flexibility to find the places
and processes within a plant that control emissions most cheaply, pollution control can be achieved more quickly and
cheaply.” L. Lave & G. Omenn, Cleaning Air: Reforming the Clean Air Act 28 (1981) (footnote omitted).
38 Respondents point out if a brand new factory that will emit over 100 tons of pollutants is constructed in a nonattainment
area, that plant must obtain a permit pursuant to § 172(b)(6) and in order to do so, it must satisfy the § 173 conditions,
including the LAER requirement. Respondents argue if an old plant containing several large emitting units is to be
modernized by the replacement of one or more units emitting over 100 tons of pollutant with a new unit emitting less—
but still more than 100 tons—the result should be no different simply because “it happens to be built not at a new site,
but within a pre-existing plant.” Brief for Respondents 4.
39 See e.g., Aluminum Co. of America v. Central Lincoln Peoples' Util. Dist., 467 U.S., at 390, 104 S.Ct., at 2480 (1984).
40 See SEC v. Sloan, 436 U.S., at 117, 98 S.Ct., at 1711; Adamo Wrecking Co. v. United States, 434 U.S. 275, 287, n.
5, 98 S.Ct. 566, 574, n. 5, 54 L.Ed.2d 538 (1978); Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89
L.Ed. 124 (1944).
41 See Capital Cities Cable, Inc. v. Crisp, 467 U.S. at 699–700, 104 S.Ct. at 2700–2701; United States v. Shimer, 367 U.S.
374, 382, 81 S.Ct. 1554, 1560, 6 L.Ed.2d 908 (1961).
End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.
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Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000)
120 S.Ct. 1291, 146 L.Ed.2d 121, 00 Cal. Daily Op. Serv. 2215...
42 Cases that cite this headnote
KeyCite Yellow Flag - Negative Treatment
Superseded by Statute as Stated in Big Time Vapes, Incorporated v. Food &
Drug Administration, 5th Cir.(Miss.), June 25, 2020
[2] Administrative Law and
120 S.Ct. 1291 Procedure Plain, literal, or clear meaning;
Supreme Court of the United States ambiguity or silence
Although agencies are generally entitled to
FOOD AND DRUG deference in the interpretation of statutes that
ADMINISTRATION, et al., Petitioners, they administer, a reviewing court, as well as the
v. agency, must give effect to the unambiguously
BROWN & WILLIAMSON expressed intent of Congress.
TOBACCO CORPORATION, et al.
96 Cases that cite this headnote
No. 98–1152.
| [3] Administrative Law and
Argued Dec. 1, 1999. Procedure Plain, literal, or clear meaning;
| ambiguity or silence
Decided March 21, 2000.
Administrative Law and
Synopsis Procedure Permissible or reasonable
Tobacco manufacturers, retailers, and advertisers brought construction
action challenging Food and Drug Administration (FDA) When reviewing administrative agency's
regulation of tobacco products. The United States District construction of a statute that it administers,
Court for the Middle District of North Carolina, William L. reviewing court must first ask whether Congress
Osteen, Sr., J., 966 F.Supp. 1374, granted in part and denied has directly spoken to the precise question at
in part plaintiffs' motion for summary judgment, and appeals issue, and, if Congress has done so, the inquiry
were taken. The Court of Appeals for the Fourth Circuit, is at an end, and the court must give effect to
153 F.3d 155,reversed. Certiorari was granted. The Supreme the unambiguously expressed intent of Congress,
Court, Justice O'Connor, held that FDA lacks authority to but, if Congress has not specifically addressed
regulate tobacco products as customarily marketed. the question, a reviewing court must respect the
agency's construction of the statute so long as it
Court of Appeals affirmed. is permissible.
Justice Breyer filed dissenting opinion, in which Justices 157 Cases that cite this headnote
Stevens, Souter, and Ginsburg joined.
[4] Administrative Law and
Procedure Permissible or reasonable
construction
West Headnotes (23)
Constitutional Law Review of
administrative decisions in general
[1] Administrative Law and
Judicial deference to agency's permissible
Procedure Statutory basis and limitation
construction of a statute, when Congress has
Regardless of how serious the problem an not specifically addressed the question at issue,
administrative agency seeks to address, it may is justified because the responsibilities for
not exercise its authority in a manner that is assessing the wisdom of such policy choices
inconsistent with the administrative structure and resolving the struggle between competing
that Congress enacted into law. views of the public interest are not judicial ones,
and because of the agency's greater familiarity
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Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000)
120 S.Ct. 1291, 146 L.Ed.2d 121, 00 Cal. Daily Op. Serv. 2215...
with the ever-changing facts and circumstances In determining whether Food and Drug
surrounding the subjects regulated. Administration (FDA) had authority under Food,
Drug, and Cosmetic Act (FDCA) to regulate
42 Cases that cite this headnote tobacco products, Supreme Court was guided to
a degree by common sense as to the manner
[5] Administrative Law and in which Congress was likely to delegate a
Procedure Plain, literal, or clear meaning; policy decision of such economic and political
ambiguity or silence magnitude to an administrative agency. Federal
Food, Drug, and Cosmetic Act, § 1 et seq., as
In determining whether Congress has
amended, 21 U.S.C.A. § 301 et seq.
specifically addressed the question at issue, for
purposes of reviewing administrative agency's 62 Cases that cite this headnote
construction of a statute that it administers, a
reviewing court should not confine itself to
examining a particular statutory provision in [10] Health Drugs and devices regulated
isolation, as the meaning, or ambiguity, of certain Food and Drug Administration (FDA) regulation
words or phrases may only become evident when of tobacco products would be inconsistent with
placed in context. Food, Drug, and Cosmetic Act's (FDCA) core
objective of ensuring that every drug or device
258 Cases that cite this headnote is safe and effective, given FDA's findings that
tobacco products were dangerous and unsafe;
[6] Statutes Context FDA's findings logically implied that, if tobacco
products were “devices” under the FDCA, the
Statutes Statutory scheme in general
FDA would be required to remove them from
Words of a statute must be read in their context
the market in view of FDCA's misbranding and
and with a view to their place in the overall
device classification provisions. Federal Food,
statutory scheme.
Drug, and Cosmetic Act, §§ 301(a), 513(b)(1),
398 Cases that cite this headnote 520(e), 903(b)(2), as amended, 21 U.S.C.A. §§
331(a), 360c(b)(1), 360j(e), 393(b)(2).
[7] Statutes Design, structure, or scheme 38 Cases that cite this headnote
Statutes Construing together; harmony
Court must interpret statute as a symmetrical and [11] Health Safety and effectiveness in general
coherent regulatory scheme, and fit, if possible, Food, Drug, and Cosmetic Act (FDCA)
all parts into an harmonious whole. generally requires Food and Drug
Administration (FDA) to prevent the marketing
229 Cases that cite this headnote
of any drug or device where the potential for
inflicting death or physical injury is not offset
[8] Statutes General and specific statutes by the possibility of therapeutic benefit. Federal
Statutes Earlier and later statutes Food, Drug, and Cosmetic Act, §§ 520(e), 903(b)
(2), as amended, 21 U.S.C.A. §§ 360j(e), 393(b)
The meaning of one statute may be affected
(2).
by other Acts, particularly where Congress has
spoken subsequently and more specifically to the 4 Cases that cite this headnote
topic at hand.
41 Cases that cite this headnote [12] Health Drugs and devices regulated
Any ban of tobacco products by Food and
[9] Health Drugs and devices regulated Drug Administration (FDA) would contradict
congressional policy; Congress' decisions to
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regulate labeling and advertising of tobacco as customarily marketed, without manufacturer
products and to adopt the express policy of claims of therapeutic benefits, as such authority
protecting commerce and the national economy is inconsistent with the intent that Congress
to the maximum extent reveal its intent has expressed in the Food, Drug, and Cosmetic
that tobacco products remain on the market. Act's (FDCA) overall regulatory scheme and
Agricultural Adjustment Act of 1938, § 311(a), 7 in the tobacco-specific legislation that it has
U.S.C.A. § 1311(a); Federal Cigarette Labeling enacted subsequent to the FDCA. Federal Food,
and Advertising Act, § 2, 15 U.S.C.A. § 1331. Drug, and Cosmetic Act, §§ 201, 503(g)(1), 513,
520(e), 903(b)(2), as amended, 21 U.S.C.A. §§
59 Cases that cite this headnote 321, 353(g)(1), 360c, 360j(e), 393(b)(2).
35 Cases that cite this headnote
[13] Health Safety and effectiveness in general
Finding that a ban on tobacco products would
likely be dangerous, because of the high level [16] Health Safety and effectiveness in general
of addiction among tobacco users, did not A fundamental precept of the Food, Drug,
support finding that tobacco products themselves and Cosmetic Act (FDCA) is that any product
were “safe” within meaning of Food, Drug, regulated by the Food and Drug Administration
and Cosmetic Act (FDCA); Food and Drug (FDA), but not banned, must be safe for its
Administration (FDA) was required to determine intended use, and this refers to the safety
that the product itself was safe as used by of using the product to obtain its intended
consumers, i.e., that the product's probable effects, not the public health ramifications of
therapeutic benefits outweighed its risk of harm. alternative administrative actions by the FDA;
Federal Food, Drug, and Cosmetic Act, §§502(j), in other words, FDA must determine that there
520(a)(2), 903(b)(2), as amended, 21 U.S.C.A. is a reasonable assurance that the product's
§§ 352(j), 360c(a)(2), 393(b)(2). therapeutic benefits outweigh the risk of harm to
the consumer. Federal Food, Drug, and Cosmetic
26 Cases that cite this headnote Act, §§ 513, 903(b)(2), as amended, 21 U.S.C.A.
§§ 360c, 393(b)(2).
[14] Health Safety and effectiveness in general
25 Cases that cite this headnote
The Food and Drug Administration (FDA) may,
consistent with the Food, Drug, and Cosmetic
Act (FDCA), regulate many “dangerous” [17] Statutes General and specific statutes
products without banning them, but the FDA Statutes Earlier and later statutes
may not conclude that a drug or device cannot be Classic judicial task of reconciling many laws
used safely for any therapeutic purpose and yet, enacted over time, and getting them to “make
at the same time, allow that product to remain sense” in combination, necessarily assumes that
on the market, as such regulation is incompatible the implications of a statute may be altered
with the FDCA's core objective of ensuring that by the implications of a later statute, and this
every drug or device is safe and effective. Federal is particularly so where scope of the earlier
Food, Drug, and Cosmetic Act, §§502(j), 520, statute is broad but the subsequent statutes more
903(b)(2), as amended, 21 U.S.C.A. §§ 352(j), specifically address the topic at hand.
360c, 393(b)(2).
42 Cases that cite this headnote
18 Cases that cite this headnote
[18] Statutes General and specific statutes
[15] Health Drugs and devices regulated
Statutes Earlier and later statutes
Food and Drug Administration (FDA) does
Statutes Implied amendment
not have authority to regulate tobacco products
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A specific policy embodied in a later federal Food, Drug, and Cosmetic Act (FDCA) as
statute should control court's construction of giving FDA jurisdiction over tobacco products,
the earlier statute, even though it has not been where Congress had created a distinct regulatory
expressly amended. scheme for tobacco products, squarely rejected
proposals to give FDA jurisdiction over
28 Cases that cite this headnote tobacco, and repeatedly acted to preclude any
agency from exercising significant policymaking
[19] Health Drugs and devices regulated authority in the area. Federal Food, Drug, and
Cosmetic Act, § 1 et seq., as amended, 21
Congress' tobacco-specific legislation
U.S.C.A. § 301 et seq.
effectively ratified Food and Drug
Administration's (FDA) previous position that 63 Cases that cite this headnote
it lacked jurisdiction to regulate tobacco.
Federal Cigarette Labeling and Advertising Act,
§5(a), 15 U.S.C.A. § 1334(a); Comprehensive [23] Administrative Law and
Smokeless Tobacco Health Education Act of Procedure Statutory basis and limitation
1986, § 7(a), 15 U.S.C.A. § 4406(a). No matter how important, conspicuous, and
controversial the issue, and regardless of how
29 Cases that cite this headnote likely the public is to hold the Executive
Branch politically accountable, an administrative
[20] Administrative Law and agency's power to regulate in the public interest
Procedure Relationship of agency with must always be grounded in a valid grant of
statute in general authority from Congress.
Administrative Law and 13 Cases that cite this headnote
Procedure Contemporaneous or
subsequent construction in general
Agency's initial interpretation of a statute that
it is charged with administering is not “carved
in stone,” and agencies must be given ample **1294 Syllabus *
latitude to adapt their rules and policies to the
demands of changing circumstances. The Food, Drug, and Cosmetic Act (FDCA or Act), 21 U.S.C.
§ 301 et seq., grants the Food and Drug Administration
4 Cases that cite this headnote (FDA), as the designee of the Secretary of Health and Human
Services (HHS), the authority to regulate, among other items,
[21] Administrative Law and “drugs” and “devices,” §§ 321(g)–(h), 393. In 1996, the FDA
Procedure Plain, literal, or clear meaning; asserted jurisdiction to regulate tobacco products, concluding
ambiguity or silence that, under the FDCA, nicotine is a “drug” and cigarettes
and smokeless tobacco are “devices” that deliver nicotine to
Deference under Chevron to an agency's
the body. Pursuant to this authority, the FDA promulgated
construction of a statute that it administers is
regulations governing tobacco products' promotion, labeling,
premised on the theory that a statute's ambiguity
and accessibility to children and adolescents. The FDA found
constitutes an implicit delegation from Congress
that tobacco use is the Nation's leading cause of premature
to the agency to fill in the statutory gaps.
death, resulting in more than 400,000 deaths annually, and
57 Cases that cite this headnote that most adult smokers begin when they are minors. The
regulations therefore aim to reduce tobacco use by minors so
as to substantially reduce the prevalence of addiction in future
[22] Health Drugs and devices regulated
generations, and thus the incidence of tobacco-related death
Supreme Court would not defer to Food and and disease. Respondents, a group of tobacco manufacturers,
Drug Administration's (FDA) construction of retailers, and advertisers, filed this suit challenging the FDA's
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regulations. They moved for summary judgment on the Cf. MCI Telecommunications Corp. v. American Telephone
ground, inter alia, that the FDA lacked jurisdiction to regulate & Telegraph Co., 512 U.S. 218, 231, 114 S.Ct. 2223, 129
tobacco products as customarily marketed, that is, without L.Ed.2d 182. Pp. 1300–1301.
manufacturer claims of therapeutic benefit. The District
Court upheld the FDA's authority, but the Fourth Circuit (b) Considering the FDCA as a whole, it is clear that
reversed, holding that Congress has not granted the FDA Congress intended to exclude tobacco products from the
jurisdiction to regulate tobacco products. The court concluded FDA's jurisdiction. A fundamental precept of the FDCA is
that construing the FDCA to include tobacco products would that any product regulated by the FDA that remains on the
lead to several internal inconsistencies in the Act. It also market must be safe and effective for its intended use. See,
found that evidence external to the FDCA—that the FDA e.g., § 393(b)(2). That is, the potential for inflicting death or
consistently stated before 1995 that it lacked jurisdiction physical injury must be offset by the possibility of therapeutic
over tobacco, that Congress has enacted several tobacco- benefit. United States v. Rutherford, 442 U.S. 544, 556, 99
specific statutes fully cognizant of the FDA's position, and S.Ct. 2470, 61 L.Ed.2d 68. In its rulemaking proceeding, the
that Congress has considered and rejected many bills that FDA quite exhaustively documented that tobacco products
would have given the agency such authority—confirms this are unsafe, dangerous, and cause great pain and suffering
conclusion. from illness. These findings logically imply that, if tobacco
products were “devices” under the FDCA, the FDA would be
Held:Reading the FDCA as a whole, as well as in conjunction required to remove them from the market under the FDCA's
with Congress' subsequent tobacco-specific legislation, it is misbranding, see, e.g., § 331(a), and device classification,
plain that Congress has not given the FDA the authority to see, e.g., § 360e(d)(2)(A), provisions. In fact, based on such
regulate tobacco products as customarily marketed. Pp. 1300– provisions, the FDA itself has previously asserted that if
1316. tobacco products were within its jurisdiction, they would
have to be removed from the market because it would be
*121 a) Because this case involves an agency's construction impossible to prove they were safe for their intended use.
of a statute it administers, the Court's analysis is governed by Congress, however, has foreclosed a ban of such products,
Chevron U.S.A. Inc. v. Natural Resources Defense Council, choosing instead to create a distinct regulatory scheme
Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694, under focusing on the labeling and advertising of cigarettes and
which a reviewing court must first ask whether Congress smokeless tobacco. Its express policy is to protect commerce
has directly spoken to the precise question at issue, id., at and the national economy while informing consumers about
842, 104 S.Ct. 2778. If so, the court must give effect to any adverse health effects. *122 See 15 U.S.C. § 1331.
Congress' unambiguously expressed intent. E.g., id., at 843, Thus, an FDA ban would plainly contradict congressional
104 S.Ct. 2778. If not, the court must defer to the agency's intent. Apparently recognizing this dilemma, the FDA has
construction of the statute so long as it is permissible. See, concluded that tobacco products are actually “safe” under the
e.g., INS v. Aguirre–Aguirre, 526 U.S. 415, 424, 119 S.Ct. FDCA because banning them would cause a greater harm
1439, 143 L.Ed.2d 590. In determining whether Congress to public health than leaving them on the market. But this
has specifically addressed the question at issue, the court safety determination—focusing on the relative harms caused
should not confine itself to examining a particular statutory by alternative remedial measures—is not a substitute for those
provision in isolation. Rather, it must place the provision in required by the FDCA. Various provisions in the Act require
context, interpreting the statute to create a symmetrical and the agency to determine that, at least for some consumers,
coherent regulatory scheme. Gustafson v. Alloyd Co., 513 the product's therapeutic benefits outweigh the risks of illness
U.S. 561, 569, 115 S.Ct. 1061, 131 L.Ed.2d 1. In addition, or serious injury. This the FDA cannot do, because tobacco
the meaning of one statute may be affected by other Acts, products are unsafe for obtaining any therapeutic benefit. The
particularly where Congress has spoken subsequently and inescapable conclusion is that there is no room for tobacco
more specifically to the topic at hand. See, e.g., United States products within the FDCA's regulatory scheme. If they cannot
v. Estate of Romani, 523 U.S. 517, 530–531, 118 S.Ct. 1478, be used safely for any therapeutic purpose, and yet they
140 L.Ed.2d 710. Finally, the court must be guided to a degree cannot be banned, they simply do not fit. Pp. 1301–1306.
by common sense as to the manner in which Congress is
likely to delegate a policy decision of such economic and (c) The history of tobacco-specific legislation also
**1295 political magnitude to an administrative agency. demonstrates that Congress has spoken directly to the FDA's
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authority to regulate tobacco products. Since 1965, Congress it to determine that tobacco products provide no “reasonable
has enacted six separate statutes addressing the problem of assurance of safety,” it would have the authority to ban
tobacco use and human health. Those statutes, among other cigarettes and smokeless tobacco entirely. It is highly unlikely
things, require that health warnings appear on all packaging that Congress would leave the determination as to whether the
and in all print and outdoor advertisements, see 15 U.S.C. sale of tobacco products would be regulated, or even banned,
§§ 1331, 1333, 4402; prohibit the advertisement of tobacco to the FDA's discretion in so cryptic a fashion. See MCI
products through any electronic communication medium Telecommunications, supra, at 231, 114 S.Ct. 2223. Given
regulated by the Federal Communications Commission, see tobacco's unique political history, as well as the breadth of the
§§ 1335, 4402(f); require the Secretary of HHS to report authority that the FDA has asserted, the Court is obliged to
every three years to Congress on research findings concerning defer not to the agency's expansive construction of the statute,
tobacco's addictive property, 42 U.S.C. § 290aa–2(b)(2); and but to Congress' consistent judgment to deny the FDA this
make States' receipt of certain federal block grants contingent power. Pp. 1314–1315.
on their prohibiting any tobacco product manufacturer,
retailer, or distributor from selling or distributing any such (e) No matter how important, conspicuous, and controversial
product to individuals under age 18, § 300x–26(a)(1). This the issue, and regardless of how likely the public is to hold the
tobacco-specific legislation has created a specific regulatory Executive Branch politically accountable, an administrative
scheme for addressing the problem of tobacco and health. And agency's power to regulate in the public interest must always
it was adopted against the backdrop of the FDA consistently be grounded in a valid grant of authority from Congress.
and resolutely stating that it was without authority under the Courts must take care not to extend a statute's scope beyond
FDCA to regulate tobacco products as customarily marketed. the point where Congress indicated it would stop. E.g., United
In fact, Congress several times States v. Article of Drug ... Bacto—Unidisk, 394 U.S. 784,
800, 89 S.Ct. 1410, 22 L.Ed.2d 726. Pp. 1315–1316.
**1296 considered and rejected bills that would have
given the FDA such authority. Indeed, Congress' actions 153 F.3d 155, affirmed.
in this area have evidenced a clear intent to preclude
a meaningful policymaking role for any administrative O'CONNOR, J., delivered the opinion of the Court, in
agency. Further, Congress' tobacco legislation prohibits which REHNQUIST, C.J., and SCALIA, KENNEDY, and
any additional regulation of tobacco product labeling with THOMAS, JJ., joined. BREYER, J., filed a dissenting
respect to tobacco's health consequences, a central aspect of opinion, in which STEVENS, SOUTER, and GINSBURG,
regulation under the FDCA. Under these circumstances, it is JJ., joined, post, p. 1316.
evident that Congress has ratified the FDA's previous, long-
held position that it lacks jurisdiction to regulate tobacco
products as customarily marketed. Congress has *123 Attorneys and Law Firms
created a distinct scheme for addressing the subject, and that
Seth P. Waxman, Washington, DC, for petitioners.
scheme excludes any role for FDA regulation. Pp. 1306–
1314. Richard M. Cooper, Washington, DC, for respondents.
(d) Finally, the Court's inquiry is shaped, at least in some Opinion
measure, by the nature of the question presented. Chevron
deference is premised on the theory that a statute's ambiguity *125 Justice O'CONNOR delivered the opinion of the
constitutes an implicit delegation from Congress to the Court.
agency to fill in the statutory gaps. See 467 U.S., at 844,
This case involves one of the most troubling public health
104 S.Ct. 2778. In extraordinary cases, however, there may
problems facing our Nation today: the thousands of premature
be reason to hesitate before concluding that Congress has
deaths that occur each year because of tobacco use. In
intended such an implicit delegation. This is hardly an
1996, the Food and Drug Administration (FDA), after having
ordinary case. Contrary to the agency's position from its
expressly disavowed any such authority since **1297 its
inception until 1995, the FDA has now asserted jurisdiction
inception, asserted jurisdiction to regulate tobacco products.
to regulate an industry constituting a significant portion of
See 61 Fed.Reg. 44619–45318. The FDA concluded that
the American economy. In fact, the FDA contends that, were
nicotine is a “drug” within the meaning of the Food, Drug,
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and Cosmetic Act (FDCA or Act), 52 Stat. 1040, as amended, a drug, device, or biological product.” § 353(g)(1). The FDA
21 U.S.C. § 301 et seq., and that cigarettes and smokeless has construed this provision as giving it the discretion to
tobacco are “combination products” that deliver nicotine regulate combination products as drugs, as devices, or as both.
to the body. 61 Fed.Reg. 44397 (1996). Pursuant to this See 61 Fed.Reg. 44400 (1996).
authority, it promulgated regulations intended to reduce
tobacco consumption among children and adolescents. Id., On August 11, 1995, the FDA published a proposed rule
at 44615–44618. The agency believed that, because most concerning the sale of cigarettes and smokeless tobacco
tobacco consumers begin their use before reaching the age of to children and adolescents. 60 Fed.Reg. 41314–41787.
18, curbing tobacco use by minors could substantially reduce The rule, which included several restrictions on the sale,
the prevalence of addiction in future generations and thus the distribution, and advertisement of tobacco products, was
incidence of tobacco-related death and disease. Id., at 44398– designed to reduce the availability and attractiveness of
44399. tobacco products to young people. Id., at 41314. A public
comment period followed, during which the FDA received
[1] [2] Regardless of how serious the problem an over 700,000 submissions, *127 more than “at any other
administrative agency seeks to address, however, it may not time in its history on any other subject.” 61 Fed.Reg. 44418
exercise its authority “in a manner that is inconsistent with (1996).
the administrative structure that Congress enacted into law.”
ETSI Pipeline Project v. Missouri, 484 U.S. 495, 517, 108 On August 28, 1996, the FDA issued a final rule entitled
S.Ct. 805, 98 L.Ed.2d 898 (1988). And although agencies “Regulations Restricting the Sale and Distribution of
are generally entitled to deference in the interpretation of Cigarettes and Smokeless Tobacco to Protect Children and
statutes that they administer, a reviewing “court, as well as Adolescents.” Id., at 44396. The FDA determined that
the agency, must give effect to the unambiguously *126 nicotine is a “drug” and that cigarettes and smokeless tobacco
expressed intent of Congress.” Chevron U.S.A. Inc. v. Natural are “drug delivery devices,” and therefore it had jurisdiction
Resources Defense Council, Inc., 467 U.S. 837, 842–843, 104 under the FDCA to regulate tobacco products as customarily
S.Ct. 2778, 81 L.Ed.2d 694 (1984). In this case, we believe **1298 marketed—that is, without manufacturer claims of
that Congress has clearly precluded the FDA from asserting therapeutic benefit. Id., at 44397, 44402. First, the FDA
jurisdiction to regulate tobacco products. Such authority is found that tobacco products “ ‘affect the structure or any
inconsistent with the intent that Congress has expressed in the function of the body’ ” because nicotine “has significant
FDCA's overall regulatory scheme and in the tobacco-specific pharmacological effects.” Id., at 44631. Specifically, nicotine
legislation that it has enacted subsequent to the FDCA. In “exerts psychoactive, or mood-altering, effects on the brain”
light of this clear intent, the FDA's assertion of jurisdiction is that cause and sustain addiction, have both tranquilizing
impermissible. and stimulating effects, and control weight. Id., at 44631–
44632. Second, the FDA determined that these effects
were “intended” under the FDCA because they “are so
widely known and foreseeable that [they] may be deemed
I
to have been intended by the manufacturers,” id., at
The FDCA grants the FDA, as the designee of the Secretary 44687; consumers use tobacco products “predominantly or
of Health and Human Services (HHS), the authority to nearly exclusively” to obtain these effects, id., at 44807;
regulate, among other items, “drugs” and “devices.” See and the statements, research, and actions of manufacturers
21 U.S.C. §§ 321(g)–(h), 393 (1994 ed. and Supp. III). revealed that they “have ‘designed’ cigarettes to provide
The Act defines “drug” to include “articles (other than pharmacologically active doses of nicotine to consumers,”
food) intended to affect the structure or any function of id., at 44849. Finally, the agency concluded that cigarettes
the body.” 21 U.S.C. § 321(g)(1)(C). It defines “device,” and smokeless tobacco are “combination products” because,
in part, as “an instrument, apparatus, implement, machine, in addition to containing nicotine, they include device
contrivance, ... or other similar or related article, including components that deliver a controlled amount of nicotine to the
any component, part, or accessory, which is ... intended to body, id., at 45208–45216.
affect the structure or any function of the body.” § 321(h). The
Act also grants the FDA the authority to regulate so-called Having resolved the jurisdictional question, the FDA next
“combination products,” which “constitute a combination of explained the policy justifications for its regulations, detailing
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the deleterious health effects associated with tobacco use. § 360j(e). The FDA construed § 353(g)(1) as giving it
It found that tobacco consumption was “the single leading the discretion to regulate “combination products” using the
cause of preventable death in the United States.” Id., at 44398. Act's drug authorities, device authorities, or both, depending
According to the FDA, “[m]ore than 400,000 *128 people on “how the public health goals of the act can be best
die each year from tobacco-related illnesses, such as cancer, accomplished.” 61 Fed.Reg. 44403 (1996). Given the greater
respiratory illnesses, and heart disease.” Ibid. The agency flexibility in the FDCA for the regulation of devices, the
also determined that the only way to reduce the amount FDA determined that “the device authorities provide the
of tobacco-related illness and mortality was to reduce the most appropriate basis for regulating cigarettes and smokeless
level of addiction, a goal that could be accomplished only tobacco.” Id., at 44404. Under 21 U.S.C. § 360j(e), the agency
by preventing children and adolescents from starting to use may “require that a device be restricted to sale, distribution,
tobacco. Id., at 44398–44399. The FDA found that 82% of or use ... upon such other conditions as [the FDA] may
adult smokers had their first cigarette before the age of 18, prescribe in such regulation, if, because of its potentiality
and more than half had already become regular smokers for harmful effect or the collateral measures necessary to its
by that age. Id., at 44398. It also found that children were use, [the FDA] determines that there cannot otherwise be
beginning to smoke at a younger age, that the prevalence reasonable assurance of its safety and effectiveness.” The
of youth smoking had recently increased, and that similar FDA reasoned that its regulations fell within the authority
problems existed with respect to smokeless tobacco. Id., at granted by § 360j(e) because they related to the sale or
44398–44399. The FDA accordingly concluded that if “the distribution of tobacco products and were necessary for
number of children and adolescents who begin tobacco use providing a reasonable assurance of safety. 61 Fed.Reg.
can be substantially diminished, tobacco-related illness can 44405–44407 (1996).
be correspondingly reduced because data suggest that anyone
who does not begin smoking in childhood or adolescence is Respondents, a group of tobacco manufacturers, retailers,
unlikely ever to begin.” Id., at 44399. and advertisers, filed suit in United States District Court
for the Middle District of North Carolina challenging the
Based on these findings, the FDA promulgated regulations regulations. See Coyne Beahm, Inc. v. FDA, 966 F.Supp.
concerning tobacco products' promotion, labeling, and 1374 (1997). They moved for summary judgment on
accessibility to children and adolescents. See id., at 44615– the grounds that the FDA lacked jurisdiction to regulate
44618. The access regulations prohibit the sale of cigarettes tobacco products as customarily marketed, the regulations
or smokeless tobacco to persons younger than 18; require exceeded the FDA's authority under 21 U.S.C. § 360j(e),
retailers to verify through photo identification the age of all and the advertising *130 restrictions violated the First
purchasers younger than 27; prohibit the sale of cigarettes Amendment. Second Brief in Support of Plaintiffs' Motion
in quantities smaller than 20; prohibit the distribution of for Summary Judgment in No. 2:95CV00591 (MDNC), in
free samples; and prohibit sales through self-service displays 3 Rec. in No. 97–1604(CA4), Tab No. 40; Third Brief in
and vending machines except in adult-only locations. Id., Support of Plaintiffs' Motion for Summary Judgment in No.
at 44616–44617. The promotion regulations require that 2:95CV00591 (MDNC), in 3 Rec. in No. 97–1604(CA4), Tab
any print advertising appear in a black-and-white, text-only No. 42. The District Court granted respondents' motion in
format unless the publication in which it appears is read part and denied it in part. 966 F.Supp., at 1400. The court
almost exclusively by adults; prohibit outdoor advertising held that the FDCA authorizes the FDA to regulate tobacco
within 1,000 feet of any public playground or school; prohibit products as customarily marketed and that the FDA's access
the distribution of any promotional items, such as T-shirts or and labeling regulations are permissible, but it also found that
hats, bearing the manufacturer's brand name; and prohibit a the agency's advertising and promotion restrictions exceed its
*129 manufacturer from sponsoring any athletic, musical, authority under § 360j(e). Id., at 1380–1400. The court stayed
artistic, or other social or cultural event using its brand name. implementation of the regulations it found valid (except the
Id., at 44617–44618. The labeling regulation requires that the prohibition on the sale of tobacco products to minors) and
statement, “A Nicotine–Delivery Device for Persons 18 or certified its order for immediate interlocutory appeal. Id., at
Older,” appear on all tobacco product packages. Id., at 44617. 1400–1401.
**1299 The FDA promulgated these regulations pursuant to The Court of Appeals for the Fourth Circuit reversed, holding
its authority to regulate “restricted devices.” See 21 U.S.C. that Congress has not granted the FDA jurisdiction to regulate
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tobacco products. See 153 F.3d 155 (1998). Examining the FDA's reading of “intended,” arguing that it is a term of art
FDCA as a whole, the court concluded that the FDA's that refers exclusively to claims made by the manufacturer or
regulation of tobacco products would create a number of vendor about the product. See Brief for Respondent Brown
internal inconsistencies. Id., at 162–167. Various provisions & Williamson Tobacco Corp. 6. That is, a product is not a
of the Act require the agency to determine that any regulated drug or device under the FDCA unless the manufacturer or
product is “safe” before it can be sold or allowed to remain on vendor makes some express claim concerning the product's
the market, yet the FDA found in its rulemaking proceeding therapeutic benefits. See id., at 6–7. We *132 need not
that tobacco products are “dangerous” and “unsafe.” Id., resolve this question, however, because assuming, arguendo,
at 164–167. Thus, the FDA would apparently have to ban that a product can be “intended to affect the structure or any
tobacco products, a result the court found clearly contrary to function of the body” absent claims of therapeutic or medical
congressional intent. Ibid. This apparent anomaly, the Court benefit, the FDA's claim to jurisdiction contravenes the clear
of Appeals concluded, demonstrates that Congress did not intent of Congress.
intend to give the FDA authority to regulate tobacco. Id., at
167. The court also found that evidence external to the FDCA [3] [4] A threshold issue is the appropriate framework for
confirms this conclusion. Importantly, the FDA consistently analyzing the FDA's assertion of authority to regulate tobacco
stated before 1995 that it lacked jurisdiction over tobacco, and products. Because this case involves an administrative
Congress has enacted *131 several tobacco-specific statutes agency's construction of a statute that it administers, our
fully cognizant of the FDA's position. See id., at 168–176. In analysis is governed by Chevron U.S.A. Inc. v. Natural
fact, the court reasoned, Congress has considered and rejected Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct.
many bills that would have given the agency such authority. 2778, 81 L.Ed.2d 694 (1984). Under Chevron, a reviewing
See id., at 170–171. This, along with the absence of any intent court must first ask “whether Congress has directly spoken
by the enacting Congress in **1300 1938 to subject tobacco to the precise question at issue.” Id., at 842, 104 S.Ct. 2778.
products to regulation under the FDCA, demonstrates that If Congress has done so, the inquiry is at an end; the court
Congress intended to withhold such authority from the FDA. “must give effect to the unambiguously expressed intent of
Id., at 167–176. Having resolved the jurisdictional question Congress.” Id., at 843, 104 S.Ct. 2778; see also United States
against the agency, the Court of Appeals did not address v. Haggar Apparel Co., 526 U.S. 380, 392, 119 S.Ct. 1392,
whether the regulations exceed the FDA's authority under 21 143 L.Ed.2d 480 (1999); Holly Farms Corp. v. NLRB, 517
U.S.C. § 360j(e) or violate the First Amendment. See 153 U.S. 392, 398, 116 S.Ct. 1396, 134 L.Ed.2d 593 (1996).
F.3d, at 176, n. 29. But if Congress has not specifically addressed the question,
a reviewing court must respect the agency's construction of
We granted the federal parties' petition for certiorari, 526 U.S. the statute so long as it is permissible. See INS v. Aguirre–
1086, 119 S.Ct. 1495, 143 L.Ed.2d 650 (1999), to determine Aguirre, 526 U.S. 415, 424, 119 S.Ct. 1439, 143 L.Ed.2d 590
whether the FDA has authority under the FDCA to regulate (1999); Auer v. Robbins, 519 U.S. 452, 457, 117 S.Ct. 905,
tobacco products as customarily marketed. 137 L.Ed.2d 79 (1997). Such deference is justified because
“[t]he responsibilities for assessing the wisdom of such policy
choices and resolving the struggle between competing views
of the public interest are not judicial ones,” Chevron, supra,
II
at 866, 104 S.Ct. 2778, and because of the agency's greater
The FDA's assertion of jurisdiction to regulate tobacco familiarity with the ever-changing facts and circumstances
products is founded on its conclusions that nicotine is a “drug” surrounding the subjects regulated, see Rust v. Sullivan, 500
and that cigarettes and smokeless tobacco are “drug delivery U.S. 173, 187, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991).
devices.” Again, the FDA found that tobacco products are
“intended” to deliver the pharmacological effects of satisfying [5] [6] [7] [8] [9] In determining whether Congress
addiction, stimulation and tranquilization, and weight control has specifically addressed the question at issue, a reviewing
because those effects are foreseeable to any reasonable court should not confine itself to examining a particular
manufacturer, consumers use tobacco products to obtain statutory provision in isolation. The meaning—or ambiguity
those effects, and tobacco manufacturers have designed their —of certain words **1301 or phrases may only become
products to produce those effects. 61 Fed.Reg. 44632–44633 evident when placed in context. See Brown v. Gardner,
(1996). As an initial matter, respondents take issue with the 513 U.S. 115, 118, 115 S.Ct. 552, 130 L.Ed.2d 462 (1994)
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(“Ambiguity is a creature not of definitional possibilities but limited exceptions, and states that the FDA “shall issue an
of statutory *133 context”). It is a “fundamental canon of order refusing to approve the application” of a new drug if it
statutory construction that the words of a statute must be read is not safe and effective for its intended purpose. §§ 355(d)
in their context and with a view to their place in the overall (1)–(2), (4)–(5). If the FDA discovers after approval that a
statutory scheme.” Davis v. Michigan Dept. of Treasury, 489 drug is unsafe or ineffective, it “shall, after due notice and
U.S. 803, 809, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989). A opportunity for hearing to the applicant, withdraw approval”
court must therefore interpret the statute “as a symmetrical of the drug. 21 U.S.C. §§ 355(e)(1)–(3). The Act also requires
and coherent regulatory scheme,” Gustafson v. Alloyd Co., the FDA to classify all devices into one of three categories. §
513 U.S. 561, 569, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995), 360c(b)(1). Regardless of which category the FDA chooses,
and “fit, if possible, all parts into an harmonious whole,” there must be a “reasonable assurance of the safety and
FTC v. Mandel Brothers, Inc., 359 U.S. 385, 389, 79 S.Ct. effectiveness of the device.” 21 U.S.C. §§ 360c(a)(1)(A)(i),
818, 3 L.Ed.2d 893 (1959). Similarly, the meaning of one (B), (C) (1994 ed. and Supp. III); 61 Fed.Reg. 44412 (1996).
statute may be affected by other Acts, particularly where Even the “restricted device” provision pursuant to which the
Congress has spoken subsequently and more specifically to FDA promulgated the regulations at issue here authorizes
the topic at hand. See United States v. Estate of Romani, the agency to place conditions on the sale or distribution
523 U.S. 517, 530–531, 118 S.Ct. 1478, 140 L.Ed.2d 710 of a device specifically when “there cannot otherwise be
(1998); United States v. Fausto, 484 U.S. 439, 453, 108 reasonable assurance of its safety and effectiveness.” 21
S.Ct. 668, 98 L.Ed.2d 830 (1988). In addition, we must be U.S.C. § 360j(e). Thus, the Act generally requires the FDA
guided to a degree by common sense as to the manner in to prevent the marketing of any drug or device where the
which Congress is likely to delegate a policy decision of “potential for inflicting death or physical injury is not offset
such economic and political magnitude to an administrative by the possibility of therapeutic benefit.” United States v.
agency. Cf. MCI Telecommunications Corp. v. American Rutherford, 442 U.S. 544, 556, 99 S.Ct. 2470, 61 L.Ed.2d 68
Telephone & Telegraph Co., 512 U.S. 218, 231, 114 S.Ct. (1979).
2223, 129 L.Ed.2d 182 (1994).
**1302 In its rulemaking proceeding, the FDA quite
With these principles in mind, we find that Congress has exhaustively documented that “tobacco products are unsafe,”
directly spoken to the issue here and precluded the FDA's “dangerous,” and “cause great pain and suffering from
jurisdiction to regulate tobacco products. illness.” 61 Fed.Reg. 44412 (1996). It found that the
consumption of tobacco products presents “extraordinary
health risks,” and that “tobacco use is the single leading cause
of preventable death in the United States.” Id., at 44398. It
A
stated that “[m]ore than 400,000 people die each year from
[10] [11] Viewing the FDCA as a whole, it is evident tobacco-related illnesses, such as cancer, respiratory illnesses,
that one of the Act's core objectives is to ensure that any and *135 heart disease, often suffering long and painful
product regulated by the FDA is “safe” and “effective” for its deaths,” and that “[t]obacco alone kills more people each
intended use. See 21 U.S.C. § 393(b)(2) (1994 ed., Supp. III) year in the United States than acquired immunodeficiency
(defining the FDA's mission); More Information for Better syndrome (AIDS), car accidents, alcohol, homicides, illegal
Patient Care: Hearing before the Senate Committee on Labor drugs, suicides, and fires, combined.” Ibid. Indeed, the FDA
and Human Resources, 104th Cong., 2d Sess., 83 (1996) characterized smoking as “a pediatric disease,” id., at 44421,
(statement of FDA Deputy Comm'r Schultz) (“A fundamental because “one out of every three young people who become
precept of drug and device regulation in this country is that regular smokers ... will die prematurely as a result,” id., at
these products must be proven safe and effective before they 44399.
can be sold”). This essential purpose pervades the FDCA. For
instance, 21 U.S.C. § 393(b)(2) (1994 ed., Supp. III) defines These findings logically imply that, if tobacco products were
*134 the FDA's “[m]ission” to include “protect[ing] the “devices” under the FDCA, the FDA would be required
public health by ensuring that ... drugs are safe and effective” to remove them from the market. Consider, first, the
and that “there is reasonable assurance of the safety and FDCA's provisions concerning the misbranding of drugs or
effectiveness of devices intended for human use.” The FDCA devices. The Act prohibits “[t]he introduction or delivery
requires premarket approval of any new drug, with some for introduction into interstate commerce of any food, drug,
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device, or cosmetic that is adulterated or misbranded.” 21 assurance that such device is safe under the conditions of
U.S.C. § 331(a). In light of the FDA's findings, two distinct use prescribed, recommended, or suggested in the proposed
FDCA provisions would render cigarettes and smokeless labeling thereof.” 21 U.S.C. § 360e(d)(2)(A). In view of the
tobacco misbranded devices. First, § 352(j) deems a drug FDA's conclusions regarding the health effects of tobacco
or device misbranded “[i]f it is dangerous to health when use, the agency would have no basis for finding any such
used in the dosage or manner, or with the frequency reasonable assurance of safety. Thus, once the FDA fulfilled
or duration prescribed, recommended, or suggested in the its statutory obligation to classify tobacco products, it could
labeling thereof.” The FDA's findings make clear that tobacco not allow them to be marketed.
products are “dangerous to health” when used in the manner
prescribed. Second, a drug or device is misbranded under *137 The FDCA's misbranding and device classification
the Act “[u]nless its labeling bears ... adequate directions provisions therefore make evident that were the FDA to
for use ... in such manner and form, as are necessary for regulate cigarettes and smokeless tobacco, the Act would
the protection of users,” except where such directions are require the agency to ban them. In fact, based on these
“not necessary for the protection of the public health.” § provisions, the FDA itself has previously taken the position
352(f)(1). Given the FDA's conclusions concerning the health that if tobacco products were within its jurisdiction, “they
consequences of tobacco use, there are no directions that would have to be removed from the market because it
could adequately protect consumers. That is, there are no would be impossible to prove they were safe for their
directions that could make tobacco products safe for obtaining intended us[e].” Public Health Cigarette Amendments of
their intended effects. Thus, were tobacco products within 1971: Hearings before the Commerce Subcommittee on S.
the FDA's jurisdiction, the Act would deem them misbranded 1454, 92d Cong., 2d Sess., 239 (1972) (hereinafter 1972
devices that could not be introduced into interstate *136 Hearings) (statement of FDA Comm'r Charles Edwards). See
commerce. Contrary to the dissent's contention, the Act also Cigarette Labeling and Advertising: Hearings before
admits no remedial discretion once it is evident that the device the House Committee on Interstate and Foreign Commerce,
is misbranded. 88th Cong., 2d Sess., 18 (1964) (hereinafter 1964 Hearings)
(statement of Dept. of Health, Education, and Welfare (HEW)
Second, the FDCA requires the FDA to place all devices Secretary Anthony Celebrezze that proposed amendments to
that it regulates into one of three classifications. See § the FDCA that would have given the FDA jurisdiction over
360c(b)(1). The agency relies on a device's classification in “smoking product[s]” “might well completely outlaw at least
determining the degree of control and regulation necessary cigarettes”).
to ensure that there is “a reasonable assurance of safety and
effectiveness.” 61 Fed.Reg. 44412 (1996). The FDA has yet [12] Congress, however, has foreclosed the removal of
to classify tobacco products. Instead, the regulations at issue tobacco products from the market. A provision of the
here represent so-called “general controls,” which the Act United States Code currently in force states that “[t]he
entitles the agency to impose in advance of classification. marketing of tobacco constitutes one of the greatest basic
See id., at 44404–44405. Although the FDCA prescribes no industries of the United States with ramifying activities
deadline for device classification, the FDA has stated that which directly affect interstate and foreign commerce at
it will classify tobacco products “in a future rulemaking” every point, and stable conditions therein are necessary to
as required by the Act. Id., at 44412. Given the FDA's the general welfare.” 7 U.S.C. § 1311(a). More importantly,
findings regarding the health consequences of tobacco use, Congress has directly addressed the problem of tobacco and
the agency would have to place cigarettes and smokeless health through legislation on six occasions since 1965. See
tobacco in Class III because, even after the application of Federal Cigarette Labeling and Advertising Act (FCLAA),
the Act's available controls, they would “presen[t] a potential Pub.L. 89–92, 79 Stat. 282; Public Health Cigarette Smoking
unreasonable risk of illness or injury.” 21 U.S.C. § 360c(a)(1) Act of 1969, Pub.L. 91–222, 84 Stat. 87; Alcohol and
(C). As Class III devices, tobacco products would be subject Drug Abuse Amendments of 1983, Pub.L. 98–24, 97 Stat.
to the FDCA's premarket approval process. See 21 U.S.C. 175; Comprehensive Smoking Education Act, Pub.L. 98–
§ 360c(a)(1)(C) (1994 ed., Supp. III); 21 U.S.C. § 360e; 61 474, 98 Stat. 2200; Comprehensive Smokeless Tobacco
Fed.Reg. 44412 (1996). Under these provisions, the FDA Health Education Act of 1986, Pub.L. 99–252, 100 Stat.
would be **1303 prohibited from approving an application 30; Alcohol, Drug Abuse, and Mental *138 Health
for premarket approval without “a showing of reasonable Administration Reorganization Act, Pub.L. 102–321, § 202,
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106 Stat. 394. When Congress enacted these statutes, the [13] The FDA apparently recognized this dilemma and
adverse health consequences of tobacco use were well concluded, somewhat ironically, that tobacco products are
known, as were nicotine's pharmacological effects. See, actually “safe” within the meaning of the FDCA. In
e.g., U.S. Dept. of Health, Education, and Welfare, U.S. promulgating its regulations, the agency conceded that
Surgeon General's Advisory Committee, Smoking and Health “tobacco products are unsafe, as that term is conventionally
25–40, 69–75 (1964) (hereinafter 1964 Surgeon General's understood.” 61 Fed.Reg. 44412 (1996). Nonetheless, the
Report) (concluding that cigarette smoking causes lung FDA reasoned that, in determining whether a device is safe
cancer, coronary artery disease, and chronic bronchitis and under the Act, it must consider “not only the risks presented
emphysema, and that nicotine has various pharmacological by a product but also any of the countervailing effects of use
effects, including stimulation, tranquilization, and appetite of that product, including the consequences of not permitting
suppression); U.S. Dept. of Health and Human Services, the product to be marketed.” Id., at 44412–44413. Applying
Public Health Service, Health Consequences of Smoking for this standard, the FDA found that, because of the high level
Women 7–12 (1980) (finding that mortality rates for lung of addiction among tobacco users, a ban would likely be
cancer, chronic lung disease, and coronary heart disease “dangerous.” Id., at 44413. In particular, current tobacco users
are increased for both women and men smokers, and that could suffer from extreme withdrawal, the health care system
smoking during pregnancy is associated with significant and available pharmaceuticals might not be able to meet
adverse health effects on the unborn fetus and newborn child); the treatment demands of those suffering from withdrawal,
U.S. Dept. of Health and Human Services, Public Health and a black market offering cigarettes even more dangerous
Service, Why People Smoke Cigarettes (1983), in Smoking than those currently sold legally would likely develop. Ibid.
Prevention Education Act, Hearings on H.R. 1824 before The FDA therefore concluded that, “while taking cigarettes
the Subcommittee on Health and the Environment of the and smokeless tobacco off the market could prevent some
House Committee on Energy and Commerce, 98th Cong., people from becoming addicted and reduce death and disease
1st **1304 Sess., 32–37 (1983) (hereinafter 1983 House for others, the record does not establish that such a ban is
Hearings) (stating that smoking is “the most widespread the appropriate public health response under the act.” Id., at
example of drug dependence in our country,” and that 44398.
cigarettes “affect the chemistry of the brain and nervous
system”); U.S. Dept. of Health and Human Services, Public *140 It may well be, as the FDA asserts, that “these factors
Health Service, The Health Consequences of Smoking: must be considered when developing a regulatory scheme
Nicotine Addiction 6–9, 145–239 (1988) (hereinafter 1988 that achieves the best public health result for these products.”
Surgeon General's Report) (concluding that tobacco products Id., at 44413. But the FDA's judgment that leaving tobacco
are addicting in much the same way as heroin and cocaine, and products on the market “is more effective in achieving
that nicotine is the drug that causes addiction). Nonetheless, public health goals than a ban,” ibid., is no substitute for
Congress stopped well short of ordering a ban. Instead, it the specific safety determinations required by the FDCA's
has generally regulated the labeling and advertisement of various operative provisions. Several provisions in the Act
tobacco products, expressly providing that it is the policy of require the FDA to determine that the product itself is
Congress that “commerce and the national *139 economy safe as used by consumers. That is, the product's probable
may be ... protected to the maximum extent consistent with” therapeutic benefits must outweigh its risk of harm. See
consumers “be[ing] adequately informed about any adverse United States v. Rutherford, 442 U.S., at 555, 99 S.Ct. 2470
health effects.” 15 U.S.C. § 1331. Congress' decisions to (“[T]he Commissioner generally considers a drug safe when
regulate labeling and advertising and to adopt the express the expected therapeutic gain justifies the risk entailed by
policy of protecting “commerce and the national economy ... its use”). In contrast, the FDA's conception of safety would
to the maximum extent” reveal its intent that tobacco products allow the agency, with respect to each provision of the FDCA
remain on the market. Indeed, the collective premise of these that requires the agency to determine a product's “safety”
statutes is that cigarettes and smokeless tobacco will continue or “dangerousness,” to compare the aggregate health effects
to be sold in the United States. A ban of tobacco products of alternative administrative actions. This is a qualitatively
by the FDA would therefore plainly contradict congressional different inquiry. Thus, although the FDA has concluded
policy. that a ban would be “dangerous,” it **1305 has not
concluded that tobacco products are “safe” as that term is used
throughout the Act.
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might be detrimental to public health in aggregate, the product
Consider 21 U.S.C. § 360c(a)(2), which specifies those could still be “dangerous to health” when used as directed.
factors that the FDA may consider in determining the safety Section 352(j) focuses on dangers to the consumer from use of
and effectiveness of a device for purposes of classification, the product, not those stemming from the agency's remedial
performance standards, and premarket approval. For all measures.
devices regulated by the FDA, there must at least be a
“reasonable assurance of the safety and effectiveness of the *142 Consequently, the analogy made by the FDA and the
device.” See 21 U.S.C. §§ 360c(a)(1)(A)(i), (B), (C) (1994 dissent to highly toxic drugs used in the treatment of various
ed. and Supp. III); 61 Fed.Reg. 44412 (1996). Title 21 U.S.C. cancers is unpersuasive. See 61 Fed.Reg. 44413 (1996);
§ 360c(a)(2) provides that post, at 1323–1324 (opinion of BREYER, J.). Although
“dangerous” in some sense, these drugs are safe within
“the safety and effectiveness of a device are to be the meaning of the Act because, for certain patients, the
determined— therapeutic benefits outweigh the risk of harm. Accordingly,
such drugs cannot properly be described as “dangerous to
“(A) with respect to the persons for whose use the device
health” under 21 U.S.C. § 352(j). The same is not true for
is represented or intended,
tobacco products. As the FDA has documented in great detail,
*141 “(B) with respect to the conditions of use prescribed, cigarettes and smokeless tobacco are an unsafe means to
recommended, or suggested in the labeling of the device, obtaining any pharmacological effect.
and
[14] The dissent contends that our conclusion means that
“(C) weighing any probable benefit to health from the use “the FDCA requires the FDA to ban outright ‘dangerous'
of the device against any probable risk of injury or illness drugs or devices,” post, at 1322, and that this is a
from such use.” “perverse” reading of the statute, post, at 1322, 1325. This
misunderstands our holding. The FDA, consistent with the
A straightforward reading of this provision dictates that
FDCA, may clearly regulate many “dangerous” products
the FDA must weigh the probable therapeutic benefits of
without banning them. Indeed, virtually every drug or device
the device to the consumer against the probable risk of
poses dangers under certain conditions. What the **1306
injury. Applied to tobacco products, the inquiry is whether
FDA may not do is conclude that a drug or device cannot
their purported benefits—satisfying addiction, stimulation
be used safely for any therapeutic purpose and yet, at the
and sedation, and weight control—outweigh the risks to
same time, allow that product to remain on the market. Such
health from their use. To accommodate the FDA's conception
regulation is incompatible with the FDCA's core objective of
of safety, however, one must read “any probable benefit to
ensuring that every drug or device is safe and effective.
health” to include the benefit to public health stemming from
adult consumers' continued use of tobacco products, even
[15] [16] Considering the FDCA as a whole, it is clear
though the reduction of tobacco use is the raison d'être of the
that Congress intended to exclude tobacco products from the
regulations. In other words, the FDA is forced to contend that
FDA's jurisdiction. A fundamental precept of the FDCA is
the very evil it seeks to combat is a “benefit to health.” This
that any product regulated by the FDA—but not banned—
is implausible.
must be safe for its intended use. Various provisions of the Act
make clear that this refers to the safety of using the product to
The FDA's conception of safety is also incompatible with
obtain its intended effects, not the public health ramifications
the FDCA's misbranding provision. Again, § 352(j) provides
of alternative administrative actions by the FDA. That is,
that a product is “misbranded” if “it is dangerous to health
the FDA must determine that there is a reasonable assurance
when used in the dosage or manner, or with the frequency
that the product's therapeutic benefits outweigh the risk of
or duration prescribed, recommended, or suggested in the
harm to the consumer. According to this standard, *143 the
labeling thereof.” According to the FDA's understanding,
FDA has concluded that, although tobacco products might
a product would be “dangerous to health,” and therefore
be effective in delivering certain pharmacological effects,
misbranded under § 352(j), when, in comparison to leaving
they are “unsafe” and “dangerous” when used for these
the product on the market, a ban would not produce “adverse
purposes. Consequently, if tobacco products were within the
health consequences” in aggregate. Quite simply, these are
FDA's jurisdiction, the Act would require the FDA to remove
different inquiries. Although banning a particular product
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them from the market entirely. But a ban would contradict it lacked authority under the FDCA to regulate tobacco absent
Congress' clear intent as expressed in its more recent, tobacco- claims of therapeutic **1307 benefit by the manufacturer.
specific legislation. The inescapable conclusion is that there In fact, on several occasions over this period, and after
is no room for tobacco products within the FDCA's regulatory the health consequences of tobacco use and nicotine's
scheme. If they cannot be used safely for any therapeutic pharmacological effects had become well known, Congress
purpose, and yet they cannot be banned, they simply do not fit. considered and rejected bills that would have granted the FDA
such jurisdiction. Under these circumstances, it is evident that
Congress' tobacco-specific statutes have effectively ratified
the FDA's long-held position that it lacks jurisdiction under
B
the FDCA to regulate tobacco products. Congress has created
[17] [18] In determining whether Congress has spoken a distinct regulatory scheme to address the problem of
directly to the FDA's authority to regulate tobacco, we must tobacco and health, and that scheme, as presently constructed,
also consider in greater detail the tobacco-specific legislation precludes any role for the FDA.
that Congress has enacted over the past 35 years. At the time a
statute is enacted, it may have a range of plausible meanings. On January 11, 1964, the Surgeon General released the
Over time, however, subsequent acts can shape or focus those report of the Advisory Committee on Smoking and Health.
meanings. The “classic judicial task of reconciling many That report documented the deleterious health effects of
laws enacted over time, and getting them to ‘make sense’ in smoking in great detail, concluding, in relevant part, “that
combination, necessarily assumes that the implications of a cigarette smoking contributes substantially to mortality from
statute may be altered by the implications of a later statute.” certain specific diseases and to the overall death rate.”
United States v. Fausto, 484 U.S., at 453, 108 S.Ct. 668. 1964 Surgeon General's Report 31. It also identified the
This is particularly so where the scope of the earlier statute pharmacological effects of nicotine, including “stimulation,”
is broad but the subsequent statutes more specifically address “tranquilization,” and “suppression of appetite.” Id., at 74–75.
the topic at hand. As we recognized recently in United States Seven days after the report's release, the Federal Trade *145
v. Estate of Romani, “a specific policy embodied in a later Commission (FTC) issued a notice of proposed rulemaking,
federal statute should control our construction of the [earlier] see 29 Fed.Reg. 530–532 (1964), and in June 1964, the FTC
statute, even though it ha[s] not been expressly amended.” promulgated a final rule requiring cigarette manufacturers “to
523 U.S., at 530–531, 118 S.Ct. 1478. disclose, clearly and prominently, in all advertising and on
every pack, box, carton or other container ... that cigarette
Congress has enacted six separate pieces of legislation since smoking is dangerous to health and may cause death from
1965 addressing the problem of tobacco use and human cancer and other diseases,” id., at 8325. The rule was to
health. See supra, at 1303–1304. Those statutes, among become effective January 1, 1965, but, on a request from
other things, require that health warnings appear on all Congress, the FTC postponed enforcement for six months.
packaging and in all print and outdoor advertisements, See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 513–514,
see *144 15 U.S.C. §§ 1331, 1333, 4402; prohibit the 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992).
advertisement of tobacco products through “any medium
of electronic communication” subject to regulation by the In response to the Surgeon General's report and the FTC's
Federal Communications Commission (FCC), see §§ 1335, proposed rule, Congress convened hearings to consider
4402(f); require the Secretary of HHS to report every three legislation addressing “the tobacco problem.” 1964 Hearings
years to Congress on research findings concerning “the 1. During those deliberations, FDA representatives testified
addictive property of tobacco,” 42 U.S.C. § 290aa–2(b) before Congress that the agency lacked jurisdiction under
(2); and make States' receipt of certain federal block grants the FDCA to regulate tobacco products. Surgeon General
contingent on their making it unlawful “for any manufacturer, Terry was asked during hearings in 1964 whether HEW had
retailer, or distributor of tobacco products to sell or distribute the “authority to brand or label the packages of cigarettes
any such product to any individual under the age of 18,” § or to control the advertising there.” Id., at 56. The Surgeon
300x–26(a)(1). General stated that “we do not have such authority in existing
laws governing the ... Food and Drug Administration.” Ibid.
In adopting each statute, Congress has acted against the Similarly, FDA Deputy Commissioner Rankin testified in
backdrop of the FDA's consistent and repeated statements that 1965 that “[t]he Food and Drug Administration has no
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jurisdiction under the Food, Drug, and Cosmetic Act over its legislative history that Congress in 1938 even considered
tobacco, unless it bears drug claims.” Cigarette Labeling *147 the applicability of the Act to tobacco products. See
and Advertising—1965: Hearings on H.R. 2248 before the Brief for Petitioners 22, n. 4. Given the economic and political
House Committee on Interstate and Foreign Commerce, 89th significance of the tobacco industry at the time, it is extremely
Cong., 1st Sess., 193 (hereinafter 1965 Hearings). See also unlikely that Congress could have intended to place tobacco
Letter to Directors of Bureaus, Divisions and Directors of within the ambit of the FDCA absent any discussion of the
Districts from FDA Bureau of Enforcement (May 24, 1963), matter. Of course, whether the Congress that enacted the
in 1972 Hearings 240 (“[T]obacco marketed for chewing or FDCA specifically intended the Act to cover tobacco products
smoking without accompanying therapeutic claims, does not is not determinative; “it is ultimately the provisions of our
meet the definitions in the Food, Drug, and Cosmetic Act laws rather than the principal concerns of our legislators
for food, drug, device or cosmetic”). In fact, HEW Secretary by which we are governed.” Oncale v. Sundowner Offshore
Celebrezze urged Congress not to amend the FDCA to cover Services, Inc., 523 U.S. 75, 79, 118 S.Ct. 998, 140 L.Ed.2d
*146 “smoking products” because, in light of the findings 201 (1998); see also TVA v. Hill, 437 U.S. 153, 185, 98 S.Ct.
in the Surgeon General's report, such a “provision might well 2279, 57 L.Ed.2d 117 (1978) (“It is not for us to speculate,
completely outlaw at least cigarettes. This would be contrary much less act, on whether Congress would have altered its
to what, we understand, is intended or what, in the light of our stance had the specific events of this case been anticipated”).
experience with the 18th amendment, would be acceptable to Nonetheless, this intent is certainly relevant to understanding
the American people.” 1964 Hearings 18. the basis for the FDA's representations to Congress and
the background against which Congress enacted subsequent
The FDA's disavowal of jurisdiction was consistent with the tobacco-specific legislation.
position that it had taken since the agency's inception. As the
FDA concedes, it never asserted authority to regulate tobacco Moreover, before enacting the FCLAA in 1965, Congress
products as customarily marketed until it promulgated the considered and rejected several proposals to give the FDA the
regulations at issue here. See Brief for Petitioners 37; see authority to regulate tobacco. In April 1963, Representative
also Brief for Appellee (FDA) in Action on Smoking and Udall introduced a bill “[t]o amend the Federal Food, Drug,
Health **1308 v. Harris, 655 F.2d 236 (C.A.D.C.1980), in and Cosmetic Act so as to make that Act applicable to
9 Rec. in No. 97–1604(CA4), Tab No. 4, pp. 14–15 (“In the smoking products.” H.R. 5973, 88th Cong., 1st Sess., 1. Two
73 years since the enactment of the original Food and Drug months later, Senator Moss introduced an identical bill in the
Act, and in the 41 years since the promulgation of the modern Senate. S. 1682, 88th Cong., 1st Sess. (1963). In discussing
Food, Drug, and Cosmetic Act, the FDA has repeatedly his proposal on the Senate floor, Senator Moss explained that
informed Congress that cigarettes are beyond the scope of the “this amendment simply places smoking products under FDA
statute absent health claims establishing a therapeutic intent jurisdiction, along with foods, drugs, and cosmetics.” 109
on behalf of the manufacturer or vendor”). Cong. Rec. 10322 (1963). In December 1963, Representative
Rhodes introduced another bill that would have amended the
The FDA's position was also consistent with Congress' FDCA “by striking out ‘food, drug, device, or cosmetic,’ each
specific intent when it enacted the FDCA. Before the Act's place where it appears therein and inserting in lieu thereof
adoption in 1938, the FDA's predecessor agency, the Bureau ‘food, drug, device, cosmetic, or smoking product.’ ” H.R.
of Chemistry, announced that it lacked authority to regulate 9512, 88th Cong., 1st Sess., § 3 (1963). And in January
tobacco products under the Pure Food and Drug Act of 1965, five months before passage of *148 the FCLAA,
1906, ch. 3915, 34 Stat. 768, unless they were marketed with Representative Udall again introduced a bill to amend the
therapeutic claims. See U.S. Dept. of Agriculture, Bureau of FDCA “to make that Act applicable to smoking products.”
Chemistry, 13 Service and Regulatory Announcements 24 H.R. 2248, 89th Cong., 1st Sess., 1. None of these proposals
(Apr.1914) (Feb.1914 Announcements ¶ 13, Opinion of Chief became law.
of Bureau C.L. Alsberg). In 1929, Congress considered and
rejected a bill “[t]o amend the Food and Drugs Act of June Congress ultimately decided in 1965 to subject tobacco
30, 1906, by extending its provisions to tobacco and tobacco products to the less extensive regulatory scheme of the
products.” S. 1468, 71st Cong., 1st Sess., 1. See also 71 FCLAA, which created a “comprehensive Federal program
Cong. Rec. 2589 (1929) (remarks of Sen. Smoot). And, as the to deal with cigarette labeling and advertising with respect
FDA admits, there is no evidence in the text of the FDCA or to any relationship between smoking and health.” **1309
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Pub.L. 89–92, § 2, 79 Stat. 282. The FCLAA rejected relating to smoking and health shall be required in the
any regulation of advertising, but it required the warning, advertising of any cigarettes the packages of which are labeled
“Caution: Cigarette Smoking May Be Hazardous to Your in conformity with the provisions of this Act.” Pub.L. 89–92,
Health,” to appear on all cigarette packages. Id., § 4, 79 Stat. § 5(b), 79 Stat. 283. Thus, in reaction to the FTC's attempt to
283. In the FCLAA's “Declaration of Policy,” Congress stated regulate cigarette labeling and advertising, Congress enacted
that its objective was to balance the goals of ensuring that “the a statute reserving exclusive control over both subjects to
public may be adequately informed that cigarette smoking itself.
may be hazardous to health” and protecting “commerce and
the national economy ... to the maximum extent.” Id., § 2, 79 Subsequent tobacco-specific legislation followed a similar
Stat. 282 (codified at 15 U.S.C. § 1331). pattern. By the FCLAA's own terms, the prohibition on
any additional cigarette labeling or advertising regulations
Not only did Congress reject the proposals to grant the FDA relating to smoking and health was to expire July 1, 1969.
jurisdiction, but it explicitly pre-empted any other regulation See § 10, 79 Stat. 284. In anticipation of the provision's
of cigarette labeling: “No statement relating to smoking and expiration, both the FCC and the FTC proposed rules
health, other than the statement required by ... this Act, shall governing the advertisement of cigarettes. See 34 Fed.Reg.
be required on any cigarette package.” Pub. L. 89–92, § 5(a), 1959 (1969) (FCC proposed rule to “ban the broadcast of
79 Stat. 283. The regulation of product labeling, however, cigarette commercials by radio and television stations”); id.,
is an integral aspect of the FDCA, both as it existed in at 7917 *150 FTC proposed rule requiring manufacturers
1965 and today. The labeling requirements currently imposed to disclose on all packaging and in all print advertising
by the FDCA, which are essentially identical to those in “ ‘that cigarette smoking is dangerous to health and may
force in 1965, require the FDA to regulate the labeling of cause death from cancer, coronary heart disease, chronic
drugs and devices to protect the safety of consumers. See bronchitis, pulmonary emphysema, and other diseases' ”).
21 U.S.C. § 352; 21 U.S.C. § 352 (1964 ed. and Supp. After debating the proper role for administrative **1310
IV). As discussed earlier, the Act requires that all products agencies in the regulation of tobacco, see generally Cigarette
bear “adequate directions for use ... as are necessary for the Labeling and Advertising—1969: Hearings before the House
protection of users,” 21 U.S.C. § 352(f)(1); 21 U.S.C. § 352(f) Committee on Interstate and Foreign Commerce, 91st Cong.,
(1) (1964 ed.); requires that all products provide “adequate 1st Sess., pt. 2 (1969), Congress amended the FCLAA
warnings against use in those pathological *149 conditions by banning cigarette advertisements “on any medium of
or by children where its use may be dangerous to health,” electronic communication subject to the jurisdiction of the
21 U.S.C. § 352(f)(2); 21 U.S.C. § 352(f)(2) (1964 ed.); and Federal Communications Commission” and strengthening the
deems a product misbranded “[i]f it is dangerous to health warning required to appear on cigarette packages. Public
when used in the dosage or manner, or with the frequency Health Cigarette Smoking Act of 1969, Pub.L. 91–222,
or duration prescribed, recommended, or suggested in the §§ 4, 6, 84 Stat. 88–89. Importantly, Congress extended
labeling thereof,” 21 U.S.C. § 352(j); 21 U.S.C. § 352(j) indefinitely the prohibition on any other regulation of
(1964 ed.). In this sense, the FCLAA was—and remains— cigarette labeling with respect to smoking and health (again
incompatible with FDA regulation of tobacco products. This despite the importance of labeling regulation under the
is not to say that the FCLAA's preemption provision by itself FDCA). § 5(a), 84 Stat. 88 (codified at 15 U.S.C. § 1334(a)).
necessarily foreclosed FDA jurisdiction. See Cipollone v. Moreover, it expressly forbade the FTC from taking any
Liggett Group, Inc., 505 U.S., at 518–519, 112 S.Ct. 2608. But action on its pending rule until July 1, 1971, and it required
it is an important factor in assessing whether Congress ratified the FTC, if it decided to proceed with its rule thereafter, to
the agency's position—that is, whether Congress adopted a notify Congress at least six months in advance of the rule's
regulatory approach to the problem of tobacco and health that becoming effective. § 7(a), 84 Stat. 89. As the chairman of
contemplated no role for the FDA. the House committee in which the bill originated stated, “the
Congress—the body elected by the people—must make the
Further, the FCLAA evidences Congress' intent to preclude policy determinations involved in this legislation—and not
any administrative agency from exercising significant some agency made up of appointed officials.” 116 Cong. Rec.
policymaking authority on the subject of smoking and health. 7920 (1970) (remarks of Rep. Staggers).
In addition to prohibiting any additional requirements for
cigarette labeling, the FCLAA provided that “[n]o statement
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Four years later, after Congress had transferred the authority Congress. Any such move by FDA would be inconsistent with
to regulate substances covered by the Hazardous Substances the clear congressional intent.” Ibid.
Act (HSA) from the FDA to the Consumer Products
Safety Commission (CPSC), the American Public Health In 1977, ASH filed a citizen petition requesting that the
Association, joined by Senator Moss, petitioned the CPSC FDA regulate cigarettes, citing many of the same grounds
to regulate cigarettes yielding more than 21 milligrams of that motivated the FDA's rulemaking here. See Citizen
tar. See *151 Action on Smoking and Health v. Harris, 655 Petition, No. 77P–0185 (May 26, 1977), 10 Rec. in No. 97–
F.2d 236, 241 (C.A.D.C. 1980); R. Kluger, Ashes to Ashes 1604(CA4), Tab No. 22, pp. 1–10. ASH asserted that nicotine
375–376 (1996). After the CPSC determined that it lacked was highly addictive and had strong physiological effects
authority under the HSA to regulate cigarettes, a District on the body; that those effects were “intended” because
Court held that the HSA did, in fact, grant the CPSC such consumers use tobacco products precisely to obtain those
jurisdiction and ordered it to reexamine the petition. See effects; and that tobacco causes thousands of premature
American Public Health Association v. Consumer Product deaths annually. Ibid. In denying ASH's petition, FDA
Safety Commission, [1972–1975 Transfer Binder] CCH Commissioner Kennedy stated that “[t]he interpretation of
Consumer Prod. Safety Guide ¶ 75,081 (DC 1975), vacated the Act by FDA consistently has been that cigarettes are
as moot, No. 75–1863 (CADC 1976). Before the CPSC could not a drug unless health claims are made by the vendors.”
take any action, however, Congress mooted the issue by Letter to ASH Executive Director Banzhaf (Dec. 5, 1977),
adopting legislation that eliminated the agency's authority to App. 47. After the matter proceeded to litigation, the FDA
regulate “tobacco and tobacco products.” Consumer Product argued in its brief to the Court of Appeals that “cigarettes
Safety Commission Improvements Act of 1976, Pub.L. 94– are not comprehended within the statutory definition of the
284, § 3(c), 90 Stat. 503 (codified at 15 U.S.C. § 1261(f)(2)). term ‘drug’ absent objective evidence that vendors represent
Senator Moss acknowledged that the “legislation, in effect, or intend that their products be used as a drug.” Brief for
reverse[d]” the District Court's decision, 121 Cong. Rec. Appellee in Action on Smoking and Health v. Harris, 655 F.2d
23563 (1975), and the FDA later observed that the episode 236 (C.A.D.C.1980), 9 Rec. in No. 97–1604(CA4), Tab No.
was “particularly” “indicative of the policy of Congress 4, at 27–28. The FDA also contended that Congress had “long
to limit the regulatory authority over cigarettes by Federal been aware that the FDA does not consider cigarettes to be
Agencies,” Letter to Action on Smoking and Health (ASH) within its regulatory authority in the absence of health claims
Executive Director Banzhaf from FDA Comm'r Goyan (Nov. made on behalf of the manufacturer or vendor,” and that,
25, 1980), App. 59. A separate statement in the Senate because “Congress has never acted to disturb the agency's
Report underscored that the legislation's purpose was to interpretation,” it had “acquiesced in the FDA's interpretation
“unmistakably reaffirm the clear mandate of the Congress of the statutory limits on its authority to regulate cigarettes.”
that the basic regulation of tobacco and tobacco products is Id., at 23, 27, n. 23. The Court of Appeals upheld the FDA's
governed by the legislation dealing with the subject, ... and position, concluding that “[i]f the statute *153 requires
that any further regulation in this sensitive and complex area expansion, that is the job of Congress.” Action on Smoking
must be reserved for specific Congressional action.” S.Rep. and Health v. Harris, 655 F.2d, at 243. In 1980, the FDA
No. 94–251, p. 43 (1975) (additional views of Sens. Hartke, also denied a request by ASH to commence rulemaking
Hollings, Ford, Stevens, and Beall). proceedings to establish the agency's jurisdiction to regulate
cigarettes as devices. See Letter to ASH Executive Director
Meanwhile, the FDA continued to maintain that it lacked Banzhaf from FDA Comm'r Goyan (Nov. 25, 1980), App.
jurisdiction under the FDCA to regulate tobacco products as 50–51. The agency stated that “[i]nsofar as rulemaking would
customarily marketed. In 1972, FDA Commissioner Edwards relate to cigarettes or attached filters as customarily marketed,
testified before Congress that “cigarettes recommended for we have concluded that FDA has no jurisdiction under section
smoking pleasure are beyond the Federal Food, Drug, and 201(h) of the Act [21 U.S.C. § 321(h) ].” Id., at 67.
Cosmetic Act.” 1972 Hearings 239, 242. He further *152
stated that the FDA believed that the Public Health Cigarette In 1983, Congress again considered legislation on the subject
Smoking Act “demonstrates that the regulation of cigarettes of smoking and health. HHS Assistant Secretary Brandt
is **1311 to be the domain of Congress,” and that “labeling testified that, in addition to being “a major cause of cancer,”
or banning cigarettes is a step that can be take[n] only by the smoking is a “major cause of heart disease” and other
serious illnesses, and can result in “unfavorable pregnancy
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outcomes.” 1983 House Hearings 19–20. He also stated that “[c]igarettes and other forms of tobacco are addicting,”
it was “well-established that cigarette smoking is a drug and that “nicotine is psychoactive” and “causes physical
dependence, and that smoking is addictive for many people.” dependence characterized by a withdrawal syndrome that
Id., at 20. Nonetheless, Assistant Secretary Brandt maintained usually accompanies nicotine abstinence.” 1988 Surgeon
that “the issue of regulation of tobacco ... is something General's Report 14. The report further concluded that the
that Congress has reserved to itself, and we do not within “pharmacologic and behavioral processes that determine
the Department have the authority to regulate nor are we tobacco addiction are similar to those that determine addiction
seeking such authority.” Id., at 74. He also testified before to drugs such as heroin and cocaine.” Id., at 15. In
the Senate, stating that, despite the evidence of tobacco's the same year, FDA Commissioner Young stated before
health effects and addictiveness, the Department's view was Congress that “it doesn't look like it is possible to regulate
that “Congress has assumed the responsibility of regulating ... [tobacco] under the *155 Food, Drug and Cosmetic Act
cigarettes.” Smoking Prevention and Education Act: Hearings even though smoking, I think, has been widely recognized
on S. 772 before the Senate Committee on Labor and Human as being harmful to human health.” Rural Development,
Resources, 98th Cong., 1st Sess., 56 (1983) (hereinafter 1983 Agriculture, and Related Agencies Appropriations for 1989:
Senate Hearings). Hearings before a Subcommittee of the House Committee
on Appropriations, 100th Cong., 2d Sess., 409 (1988). At
Against this backdrop, Congress enacted three additional the same hearing, the FDA's General Counsel testified that
tobacco-specific statutes over the next four years that “what is fairly important in FDA law is whether a product has
incrementally expanded its regulatory scheme for tobacco a therapeutic purpose,” and “[c]igarettes themselves are not
products. In 1983, Congress adopted the Alcohol and Drug used for a therapeutic purpose as that concept is ordinarily
Abuse Amendments, Pub.L. 98–24, 97 Stat. 175 (codified understood.” Id., at 410. Between 1987 and 1989, Congress
at *154 42 U.S.C. § 290aa et seq.), which require considered three more bills that would have amended the
**1312 the Secretary of HHS to report to Congress every FDCA to grant the FDA jurisdiction to regulate tobacco
three years on the “addictive property of tobacco” and products. See H.R. 3294, 100th Cong., 1st Sess. (1987); H.R.
to include recommendations for action that the Secretary 1494, 101st Cong., 1st Sess. (1989); S. 769, 101st Cong., 1st
may deem appropriate. A year later, Congress enacted the Sess. (1989). As before, Congress rejected the proposals. In
Comprehensive Smoking Education Act, Pub.L. 98–474, 98 1992, Congress instead adopted the Alcohol, Drug Abuse, and
Stat. 2200, which amended the FCLAA by again modifying Mental Health Administration Reorganization Act, Pub.L.
the prescribed warning. Notably, during debate on the Senate 102–321, § 202, 106 Stat. 394 (codified at 42 U.S.C. § 300x
floor, Senator Hawkins argued that the FCLAA was necessary et seq.), which creates incentives for States to regulate the
in part because “[u]nder the Food, Drug and Cosmetic retail sale of tobacco products by making States' receipt of
Act, the Congress exempted tobacco products.” 130 Cong. certain block grants contingent on their prohibiting the sale of
Rec. 26953 (1984). And in 1986, Congress enacted the tobacco products to minors.
Comprehensive Smokeless Tobacco Health Education Act of
1986 (CSTHEA), Pub.L. 99–252, 100 Stat. 30 (codified at Taken together, these actions by Congress over the past 35
15 U.S.C. § 4401 et seq.), which essentially extended the years preclude an interpretation of the FDCA that grants
regulatory provisions of the FCLAA to smokeless tobacco the FDA jurisdiction to regulate tobacco products. We do
products. Like the FCLAA, the CSTHEA provided that not rely on Congress' failure to act—its consideration and
“[n]o statement relating to the use of smokeless tobacco rejection of bills that would have given the FDA this
products and health, other than the statements required by authority—in reaching this conclusion. Indeed, this is not
[the Act], shall be required by any Federal agency to appear a case of simple inaction by Congress that purportedly
on any package ... of a smokeless tobacco product.” § 7(a), represents its acquiescence in an agency's position. To the
100 Stat. 34 (codified at 15 U.S.C. § 4406(a)). Thus, as contrary, Congress has enacted several statutes addressing the
with cigarettes, Congress reserved for itself an aspect of particular subject of tobacco and health, creating a distinct
smokeless tobacco regulation that is particularly important to regulatory scheme for **1313 cigarettes and smokeless
the FDCA's regulatory scheme. tobacco. In doing so, Congress has been aware of tobacco's
health hazards and its pharmacological effects. It has also
In 1988, the Surgeon General released a report summarizing enacted this legislation *156 against the background of
the abundant scientific literature demonstrating that the FDA repeatedly and consistently asserting that it lacks
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jurisdiction under the FDCA to regulate tobacco products enactment of its tobacco-specific legislation. When the FDA
as customarily marketed. Further, Congress has persistently repeatedly informed Congress that the FDCA does not grant
acted to preclude a meaningful role for any administrative it the authority to regulate tobacco products, its statements
agency in making policy on the subject of tobacco and health. were consistent with the agency's unwavering position since
Moreover, the substance of Congress' regulatory scheme is, its inception, and with the position that its predecessor agency
in an important respect, incompatible with FDA jurisdiction. had first taken in 1914. Although not crucial, the consistency
Although the supervision of product labeling to protect of the FDA's prior position bolsters the conclusion that when
consumer health is a substantial component of the FDA's Congress created a distinct regulatory scheme addressing the
regulation of drugs and devices, see 21 U.S.C. § 352 (1994 subject of tobacco and health, it understood that the FDA is
ed. and Supp. III), the FCLAA and the CSTHEA explicitly without jurisdiction to regulate tobacco products and ratified
prohibit any federal agency from imposing any health-related that position.
labeling requirements on cigarettes or smokeless tobacco
products, see 15 U.S.C. §§ 1334(a), 4406(a). The dissent also argues that the proper inference to be drawn
from Congress' tobacco-specific legislation is “critically
[19] Under these circumstances, it is clear that Congress' ambivalent.” Post, at 1326. We disagree. In that series of
tobacco-specific legislation has effectively ratified the FDA's statutes, Congress crafted a specific legislative response to
previous position that it lacks jurisdiction to regulate tobacco. the problem of tobacco and health, and it did so with the
As in Bob Jones Univ. v. United States, 461 U.S. 574, 103 understanding, based on repeated assertions by the FDA,
S.Ct. 2017, 76 L.Ed.2d 157 (1983), “[i]t is hardly conceivable that the agency **1314 has no authority under the FDCA
that Congress—and in this setting, any Member of Congress to regulate tobacco products. Moreover, Congress expressly
—was not abundantly aware of what was going on.” Id., at pre-empted any other regulation of the labeling of tobacco
600–601, 103 S.Ct. 2017. Congress has affirmatively acted products concerning their health consequences, even though
to address the issue of tobacco and health, relying on the the oversight of labeling is central to the FDCA's regulatory
representations of the FDA that it had no authority to regulate scheme. And in addressing the subject, Congress consistently
tobacco. It has created a distinct scheme to regulate the sale evidenced its intent to preclude any federal agency from
of tobacco products, focused on labeling and advertising, and exercising significant policymaking authority in the area.
premised on the belief that the FDA lacks such jurisdiction Under these circumstances, we believe the appropriate *158
under the FDCA. As a result, Congress' tobacco-specific inference that Congress intended to ratify the FDA's prior
statutes preclude the FDA from regulating tobacco products position that it lacks jurisdiction—is unmistakable.
as customarily marketed.
The dissent alternatively argues that, even if Congress'
[20] Although the dissent takes issue with our discussion subsequent tobacco-specific legislation did, in fact, ratify
of the FDA's change in position, post, at 1328–1330, the FDA's position, that position was merely a contingent
our conclusion does not rely on the fact that the FDA's disavowal of jurisdiction. Specifically, the dissent contends
assertion of jurisdiction represents a sharp break with its that “the FDA's traditional view was largely premised on a
prior interpretation of the FDCA. Certainly, an agency's initial perceived inability to prove the necessary statutory ‘intent’
interpretation of a statute that it is charged with administering requirement.” Post, at 1330. A fair reading of the FDA's
is not “carved *157 in stone.” Chevron, 467 U.S., at 863, 104 representations prior to 1995, however, demonstrates that the
S.Ct. 2778; see also Smiley v. Citibank (South Dakota), N. A., agency's position was essentially unconditional. See, e.g.,
517 U.S. 735, 742, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996). As 1972 Hearings 239, 242 (statement of Comm'r Edwards)
we recognized in Motor Vehicle Mfrs. Assn. of United States, (“[R]egulation of cigarettes is to be the domain of Congress,”
Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, and “[a]ny such move by FDA would be inconsistent with
103 S.Ct. 2856, 77 L.Ed.2d 443 (1983), agencies “must be the clear congressional intent”); 1983 House Hearings 74
given ample latitude to ‘adapt their rules and policies to the (statement of Assistant Secretary Brandt) (“[T]he issue of
demands of changing circumstances.’ ” Id., at 42, 103 S.Ct. regulation of tobacco ... is something that Congress has
2856 (quoting Permian Basin Area Rate Cases, 390 U.S. 747, reserved to itself”); 1983 Senate Hearings 56 (statement
784, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968)). The consistency of Assistant Secretary Brandt) (“Congress has assumed the
of the FDA's prior position is significant in this case for a responsibility of regulating ... cigarettes”); Brief for Appellee
different reason: It provides important context to Congress' in Action on Smoking and Health v. Harris, 655 F.2d 236
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(C.A.D.C.1980), 9 Rec. in No. 97–1604(CA4), Tab No. 4, provide no “reasonable assurance of safety,” it would have
at 27, n. 23 (because “Congress has never acted to disturb the authority to ban cigarettes and smokeless tobacco entirely.
the agency's interpretation,” it “acquiesced in the FDA's See Brief for Petitioners 35–36; Reply Brief for Petitioners
interpretation”). To the extent the agency's position could 14. Owing to its unique place in American history and society,
be characterized as equivocal, it was only with respect to tobacco has its own unique political history. Congress, for
the well-established exception of when the manufacturer better or for worse, has created a distinct regulatory scheme
makes express claims of therapeutic benefit. See, e.g., 1965 for tobacco products, squarely rejected proposals to *160
Hearings 193 (statement of Deputy Comm'r Rankin) (“The give the FDA jurisdiction over tobacco, and repeatedly
Food and Drug Administration has no jurisdiction under the acted to preclude any agency from exercising significant
Food, Drug, and Cosmetic Act over tobacco, unless it bears policymaking authority in the area. Given this history and the
drug claims”); Letter to ASH Executive Director Banzhaf breadth of the authority that the FDA has asserted, we are
from FDA Comm'r Kennedy (Dec. 5, 1977), App. 47 (“The obliged to defer not to the agency's expansive construction of
interpretation of the Act by FDA consistently has been that the statute, but to Congress' consistent judgment to deny the
cigarettes are not a drug unless health claims are made by FDA this power.
the vendors”); Letter to ASH Executive Director Banzhaf
from *159 FDA Comm'r Goyan (Nov. 25, 1980), id., at Our decision in MCI Telecommunications Corp. v. American
67 (“Insofar as rulemaking would relate to cigarettes or Telephone & Telegraph Co., 512 U.S. 218, 114 S.Ct. 2223,
attached filters as customarily marketed, we have concluded 129 L.Ed.2d 182 (1994), is instructive. That case involved
that FDA has no jurisdiction”). Thus, what Congress ratified the proper construction of the term “modify” in § 203(b)
was the FDA's plain and resolute position that the FDCA of the Communications Act of 1934. The FCC contended
gives the agency no authority to regulate tobacco products as that, because the Act gave it the discretion to “modify any
customarily marketed. requirement” imposed under the statute, it therefore possessed
the authority to render voluntary the otherwise mandatory
requirement that long distance carriers file their rates. Id.,
at 225, 114 S.Ct. 2223. We rejected the FCC's construction,
C
finding “not the slightest doubt” that Congress had directly
[21] Finally, our inquiry into whether Congress has directly spoken to the question. Id., at 228, 114 S.Ct. 2223. In
spoken to the precise question at issue is shaped, at least reasoning even more apt here, we concluded that “[i]t is
in some measure, by the nature of the question presented. highly unlikely that Congress would leave the determination
Deference under Chevron to an agency's construction of a of whether an industry will be entirely, or even substantially,
statute that it administers is premised on the theory that a rate-regulated to agency discretion—and even more unlikely
statute's ambiguity constitutes an implicit delegation from that it would achieve that through such a subtle device as
Congress to the agency to fill in the statutory gaps. See permission to ‘modify’ rate-filing requirements.” Id., at 231,
Chevron, supra, at 844, 104 S.Ct. 2778. In extraordinary 114 S.Ct. 2223.
cases, however, there may be reason to hesitate before
concluding that Congress has intended such an implicit As in MCI, we are confident that Congress could not have
delegation. Cf. Breyer, Judicial Review of Questions of Law intended to delegate a decision of such economic and political
and Policy, 38 Admin. L.Rev. 363, 370 (1986) (“A court significance to an agency in so cryptic a fashion. To find
may also ask whether the legal question is an important that the FDA has the authority to regulate tobacco products,
one. Congress is more likely to have focused upon, and one must not only adopt an extremely strained understanding
answered, major questions, while leaving interstitial matters of “safety” as it is used throughout the Act—a concept
to answer themselves in the course of the statute's daily central to the FDCA's regulatory scheme—but also ignore the
administration”). plain implication of Congress' subsequent tobacco-specific
legislation. It is therefore clear, based on the FDCA's overall
**1315 [22] This is hardly an ordinary case. Contrary regulatory scheme and the subsequent tobacco legislation,
to its representations to Congress since 1914, the FDA has that Congress has directly spoken to the *161 question
now asserted jurisdiction to regulate an industry constituting at issue and precluded the FDA from regulating tobacco
a significant portion of the American economy. In fact, the products.
FDA contends that, were it to determine that tobacco products
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Second, the statute's basic purpose—the protection of public
***
health—supports the inclusion of cigarettes within its scope.
[23] By no means do we question the seriousness of the See United States v. Article of Drug ... Bacto–Unidisk,
problem that the FDA has sought to address. The agency 394 U.S. 784, 798, 89 S.Ct. 1410, 22 L.Ed.2d 726 (1969)
has amply demonstrated that tobacco use, particularly among (FDCA “is to be given a liberal construction consistent
children and adolescents, poses perhaps the single most with [its] overriding purpose to protect the public health
significant threat to public health in the United States. ” (emphasis added)). Unregulated tobacco use causes “[m]ore
Nonetheless, no matter how “important, conspicuous, and than 400,000 people [to] die each year from tobacco-related
controversial” the issue, and regardless of how likely the illnesses, such as cancer, respiratory illnesses, and heart
public is to hold the Executive Branch politically accountable, disease.” 61 Fed.Reg. 44398 (1996). Indeed, tobacco products
post, at 1331, an administrative agency's power to regulate in kill more people in this country every year “than ... AIDS ...,
the public interest must always be grounded in a valid grant of car accidents, alcohol, homicides, illegal drugs, suicides, and
authority from Congress. And “ ‘[i]n our anxiety to effectuate fires, combined.” Ibid. (emphasis added).
the congressional purpose of protecting the public, we must
take care not to extend the scope of the statute beyond the Despite the FDCA's literal language and general purpose
point where Congress indicated it would stop.’ ” United States (both of which support the FDA's finding that cigarettes
v. Article of Drug ... Bacto–Unidisk, 394 U.S. 784, 800, 89 come within its statutory authority), the majority nonetheless
S.Ct. 1410, 22 L.Ed.2d 726 (1969) (quoting 62 Cases, More reads the statute as excluding tobacco products for two basic
or Less, Each Containing Six Jars of Jam v. United States, 340 reasons:
U.S. 593, 600, 71 S.Ct. 515, 95 L.Ed. 566 (1951)). **1316
(1) the FDCA does not “fit” the case of tobacco because
Reading the FDCA as a whole, as well as in conjunction with
the statute requires the FDA to prohibit dangerous drugs or
Congress' subsequent tobacco-specific legislation, it is plain
devices (like cigarettes) outright, and the agency concedes
that Congress has not given the FDA the authority that it seeks
that simply banning the sale of cigarettes is not a proper
to exercise here. For these reasons, the judgment of the Court
remedy, ante, at 1304–1305; and
of Appeals for the Fourth Circuit is affirmed.
(2) Congress has enacted other statutes, which, when
It is so ordered. viewed in light of the FDA's long history of denying *163
tobacco-related jurisdiction and considered together with
Congress' failure explicitly to grant the agency tobacco-
Justice BREYER, with whom Justice STEVENS, Justice specific authority, demonstrate that Congress did not intend
SOUTER, and Justice GINSBURG join, dissenting. for the FDA to exercise jurisdiction over tobacco, ante, at
The Food and Drug Administration (FDA) has the authority 1312–1313.
to regulate “articles (other than food) intended to affect the
structure or any function of the body ....” Federal Food, Drug, In my view, neither of these propositions is valid. Rather,
and Cosmetic Act (FDCA), 21 U.S.C. § 321(g)(1)(C). Unlike the FDCA does not significantly limit the FDA's remedial
the majority, I believe that tobacco products fit within this alternatives. See infra, at 1322–1326. And the later statutes
statutory language. do not tell the FDA it cannot exercise jurisdiction, but
simply leave FDA jurisdictional law where Congress found
*162 In its own interpretation, the majority nowhere denies it. See infra, at 1326–1328; cf. Food and Drug Administration
the following two salient points. First, tobacco products Modernization Act of 1997, 111 Stat. 2380 (codified at note
(including cigarettes) fall within the scope of this statutory following 21 U.S.C. § 321 (1994 ed., Supp. III)) (statute
definition, read literally. Cigarettes achieve their mood- “shall” not “be construed to affect the question of whether”
stabilizing effects through the interaction of the chemical the FDA “has any authority to regulate any tobacco product”).
nicotine and the cells of the central nervous system. Both
cigarette manufacturers and smokers alike know of, and The bulk of the opinion that follows will explain the
desire, that chemically induced result. Hence, cigarettes are basis for these latter conclusions. In short, I believe that
“intended to affect” the body's “structure” and “function,” in the most important indicia of statutory meaning—language
the literal sense of these words. and purpose—along with the FDCA's legislative history
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(described **1317 briefly in Part I) are sufficient to Legislative History of the Federal Food, Drug, and Cosmetic
establish that the FDA has authority to regulate tobacco. Act and Its Amendments 107–108 (1979) (hereinafter Leg.
The statute-specific arguments against jurisdiction that the Hist.). Indeed, “[t]he purpose” of the new definition was to
tobacco companies and the majority rely upon (discussed in “make possible the regulation of a great many products that
Part II) are based on erroneous assumptions and, thus, do have been found on the market that cannot be alleged to
not defeat the jurisdiction-supporting thrust of the FDCA's be treatments for diseased conditions.” Id., at 108. While
language and purpose. The inferences that the majority draws the drafters focused specifically upon the need to give the
from later legislative history are not persuasive, since (as I FDA jurisdiction *165 over “slenderizing” products such
point out in Part III) one can just as easily infer from the later as “antifat remedies,” ibid., they were aware that, in doing
laws that Congress did not intend to affect the FDA's tobacco- so, they had created what was “admittedly an inclusive, a
related authority at all. And the fact that the FDA changed wide definition,” id., at 107. And that broad language was
its mind about the scope of its own jurisdiction is legally included deliberately, so that jurisdiction could be had over
insignificant because (as Part IV establishes) the agency's “all substances and preparations, other than food, and all
reasons for changing course are fully justified. Finally, as I devices intended to affect the structure or any function of the
explain in Part V, the degree of accountability that likely will body ....” Ibid. (emphasis added); see also Hearings on S.
attach to the FDA's action in this case should alleviate any 2800 before the Senate Committee on Commerce, 73d Cong.,
concern *164 that Congress, rather than an administrative 2d Sess., 516 (1934), reprinted in 2 Leg. Hist. 519 (statement
agency, ought to make this important regulatory decision. of then-FDA Chief Walter Campbell acknowledging that
“[t]his definition of ‘drugs' is all-inclusive”).
After studying the FDCA's history, experts have written
I
that the statute “is a purposefully broad delegation of
Before 1938, the federal Pure Food and Drug Act contained discretionary powers by Congress,” 1 J. O'Reilly, Food and
only two jurisdictional definitions of “drug”: Drug Administration § 6.01, p. 6–1 (2d ed.1995) (hereinafter
O'Reilly), and that, in a sense, the FDCA “must be regarded
“[1] medicines and preparations recognized in the United as a constitution” that “establish[es] general principles”
States Pharmacopoeia or National Formulary ... and [2] any and “permit[s] implementation within broad parameters”
substance or mixture of substances intended to be used for **1318 so that the FDA can “implement these objectives
the cure, mitigation, or prevention of disease.” Act of June through the most effective and efficient controls that can be
30, 1906, ch. 3915, § 6, 34 Stat. 769. devised.” Hutt, Philosophy of Regulation Under the Federal
Food, Drug and Cosmetic Act, 28 Food Drug Cosm. L.J. 177,
In 1938, Congress added a third definition, relevant here:
178–179 (1973) (emphasis added). This Court, too, has said
“(3) articles (other than food) intended to affect the that the
structure or any function of the body ....” Act of June 25,
“historical expansion of the definition of drug, and the
1938, ch. 675, § 201(g), 52 Stat. 1041 (codified at 21 U.S.C.
creation of a parallel concept of devices, clearly show ...
§ 321(g)(1)(C)).
that Congress fully intended that the Act's coverage be as
It also added a similar definition in respect to a “device.” See broad as its literal language indicates—and equally clearly,
§ 201(h), 52 Stat. 1041 (codified at 21 U.S.C. § 321(h)). As broader than any strict medical definition might otherwise
I have mentioned, the literal language of the third definition allow.” Bacto–Unidisk, 394 U.S., at 798, 89 S.Ct. 1410.
and the FDCA's general purpose both strongly support a
projurisdiction reading of the statute. See supra, at 1316. That Congress would grant the FDA such broad jurisdictional
authority should surprise no one. In 1938, the President
The statute's history offers further support. The FDA drafted and much of Congress believed that federal administrative
the new language, and it testified before Congress that the agencies needed broad authority and would exercise that
third definition would expand the FDCA's jurisdictional authority wisely—a view embodied in much Second New
scope significantly. See Hearings on S.1944 before a *166 Deal legislation. Cf. Gray v. Powell, 314 U.S. 402,
Subcommittee of the Senate Committee on Commerce, 411–412, 62 S.Ct. 326, 86 L.Ed. 301 (1941) (Congress
73d Cong., 2d Sess., 15–16 (1933), reprinted in 1 FDA, “could have legislated specifically” but decided “to delegate
that function to those whose experience in a particular
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field gave promise of a better informed, more equitable” “transportation” of natural gas includes authority to regulate
determination). Thus, at around the same time that it added “prices” charged by field producers); Phillips Petroleum Co.
the relevant language to the FDCA, Congress enacted v. **1319 Wisconsin, 347 U.S. 672, 677–684, 74 S.Ct. 794,
laws granting other administrative agencies even broader 98 L.Ed. 1035 (1954) (independent gas producer subject to
powers to regulate much of the Nation's transportation and regulation despite Natural Gas Act's express exemption of
communication. See, e.g., Civil Aeronautics Act of 1938, ch. gathering and production facilities).
601, § 401(d)(1), 52 Stat. 987 (Civil Aeronautics Board to
regulate airlines within confines of highly general “public I shall not pursue these general matters further, for neither
convenience and necessity” standard); Motor Carrier Act of the companies nor the majority denies that the FDCA's literal
1935, ch. 498, § 204(a)(1), 49 Stat. 546 (Interstate Commerce language, its general purpose, and its particular legislative
Commission to establish “reasonable requirements” for history favor the FDA's present jurisdictional view. Rather,
trucking); Communications Act of 1934, ch. 652, § 201(a), they have made several specific arguments in support of one
48 Stat. 1070 (Federal Communications Commission (FCC) basic contention: Even if the statutory delegation is broad, it
to regulate radio, later television, within confines of even is not broad enough to include tobacco. I now turn to each of
broader “public interest” standard). Why would the 1938 those arguments.
New Deal Congress suddenly have hesitated to delegate
to so well established an agency as the FDA all of the
discretionary authority that a straightforward reading of the
II
relevant statutory language implies?
Nor is it surprising that such a statutory delegation of power A
could lead after many years to an assertion of jurisdiction
that the 1938 legislators might not have expected. Such The tobacco companies contend that the FDCA's words
a possibility is inherent in the very nature of a broad cannot possibly be read to mean what they literally say.
delegation. In 1938, it may well have seemed unlikely that The statute defines “device,” for example, as “an instrument,
the FDA would ever bring cigarette manufacturers within the apparatus, implement, machine, contrivance, implant, in vitro
FDCA's statutory language by proving that cigarettes produce reagent, or other similar or related article ... intended to
chemical changes in the body and that the makers “intended” affect the structure or any function of the body ....” *168
their product chemically to affect the body's “structure” or 21 U.S.C. § 321(h). Taken literally, this definition might
“function.” Or, back then, it may have seemed unlikely that, include everything from room air conditioners to thermal
even assuming such proof, the FDA actually would exercise pajamas. The companies argue that, to avoid such a result,
its discretion to regulate so popular a product. See R. Kluger, the meaning of “drug” or “device” should be confined to
Ashes to Ashes 105 (1997) (in the 1930's “Americans were medical or therapeutic products, narrowly defined. See Brief
in love with smoking ...”). for Respondent United States Tobacco Co. 8–9.
*167 But it should not have seemed unlikely that, assuming The companies may well be right that the statute should not
the FDA decided to regulate and proved the particular be read to cover room air conditioners and winter underwear.
jurisdictional prerequisites, the courts would rule such a But I do not agree that we must accept their proposed
jurisdictional assertion fully authorized. Cf. United States limitation. For one thing, such a cramped reading contravenes
v. Southwestern Cable Co., 392 U.S. 157, 172, 88 S.Ct. the established purpose of the statutory language. See Bacto–
1994, 20 L.Ed.2d 1001 (1968) (reading Communications Act Unidisk, 394 U.S., at 798, 89 S.Ct. 1410 (third definition is
of 1934 as authorizing FCC jurisdiction to regulate cable “clearly, broader than any strict medical definition”); 1 Leg.
systems while noting that “Congress could not in 1934 have Hist. 108 (definition covers products “that cannot be alleged
foreseen the development of” advanced communications to be treatments for diseased conditions”). For another, the
systems). After all, this Court has read more narrowly phrased companies' restriction would render the other two “drug”
statutes to grant what might have seemed even more unlikely definitions superfluous. See 21 U.S.C. §§ 321(g)(1)(A), (g)(1)
assertions of agency jurisdiction. See, e.g., Permian Basin (B) (covering articles in the leading pharmacology compendia
Area Rate Cases, 390 U.S. 747, 774–777, 88 S.Ct. 1344, 20 and those “intended for use in the diagnosis, cure, mitigation,
L.Ed.2d 312 (1968) (statutory authority to regulate interstate treatment, or prevention of disease”).
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Most importantly, the statute's language itself supplies a loss products). Indeed, addiction, sedation, stimulation, and
different, more suitable, limitation: that a “drug” must be a weight loss are precisely the kinds of product effects that the
chemical agent. The FDCA's “device” definition states that FDA typically reviews and controls. And, since the nicotine
an article which affects the structure or function of the body in cigarettes *170 plainly is not a “food,” its chemical effects
is a “device” only if it “does not achieve its primary intended suffice to establish that it is as a “drug” (and the cigarette that
purposes through chemical action within ... the body,” and “is delivers it a drug-delivery “device”) for the purpose of the
not dependent upon being metabolized for the achievement of FDCA.
its primary intended purposes.” § 321(h) (emphasis added).
One can readily infer from this language that at least an article
that does achieve its primary purpose through chemical action
B
within the body and that is dependent upon being metabolized
is a “drug,” provided that it otherwise falls within the scope The tobacco companies' principal definitional argument
of the “drug” definition. And one need not hypothesize about focuses upon the statutory word “intended.” See 21 U.S.C.
air conditioners or thermal *169 pajamas to recognize that § 321(g)(1)(C). The companies say that “intended” in this
the chemical nicotine, an important tobacco ingredient, meets context is a term of art. See Brief for Respondent Brown &
this test. Williamson Tobacco Corp. 2. They assert that the statutory
word “intended” means that the product's maker has made
Although I now oversimplify, the FDA has determined that an express claim about the effect that its product will have
once nicotine enters the body, the blood carries it almost on the body. Ibid. Indeed, according to the companies, the
immediately to the brain. See 61 Fed.Reg. 44698–44699 FDA's inability to prove that cigarette manufacturers make
(1966). Nicotine then binds to receptors on the surface such claims is precisely why that agency historically has said
of brain cells, setting off a series of chemical reactions it lacked the statutory power to regulate tobacco. See id., at
that alter one's mood and produce feelings of sedation and 19–20.
stimulation. See id., at 44699, 44739. Nicotine also increases
the number of nicotinic receptors on the brain's surface, and The FDCA, however, does not use the word “claimed”; it
alters its normal electrical activity. See id., at 44739. And uses the word “intended.” And the FDA long ago issued
nicotine stimulates the transmission of a natural chemical that regulations that say the relevant “intent” can be shown not
“rewards” the body with pleasurable sensations (dopamine), only by a manufacturer's “expressions,” but also “by the
causing nicotine addiction. See id., at 44700, 44721–44722. circumstances surrounding the distribution of the article.” 41
The upshot is that **1320 nicotine stabilizes mood, Fed.Reg. 6896 (1976) (codified at 21 CFR § 801.4 (1999));
suppresses appetite, tranquilizes, and satisfies a physical see also 41 Fed.Reg. 6896 (1976) (“objective intent” shown
craving that nicotine itself has helped to create—all through if “article is, with the knowledge [of its makers], offered and
chemical action within the body after being metabolized. used” for a particular purpose). Thus, even in the absence
of express claims, the FDA has regulated products that
This physiology—and not simply smoker psychology—helps affect the body if the manufacturer wants, and knows, that
to explain why as many as 75% of adult smokers believe that consumers so use the product. See, e.g., 60 Fed.Reg. 41527–
smoking “reduce[s] nervous irritation,” 60 Fed.Reg. 41579 41531 (1995) (describing agency's regulation of topical
(1995); why 73% of young people (10– to 22–year–olds) hormones, sunscreens, fluoride, tanning lamps, thyroid in
who begin smoking say they do so for “relaxation,” 61 food supplements, novelty condoms—all marketed without
Fed.Reg. 44814 (1996); and why less than 3% of smokers express claims); see also 1 O'Reilly § 13.04, at 13–15
succeed in quitting each year, although 70% want to quit, (“Sometimes the very nature of the material makes it a
id., at 44704. That chemistry also helps to explain the drug ...”).
Surgeon General's findings that smokers believe “smoking
[makes them] feel better” and smoke more “in situations Courts ordinarily reverse an agency interpretation of this kind
involving negative mood.” Id., at 44814. And, for present only if Congress has clearly answered the interpretive *171
purposes, that chemistry demonstrates that nicotine affects question or if the agency's interpretation is unreasonable.
the “structure” and “function” of the body in a manner that Chevron U.S.A. Inc. v. Natural Resources Defense Council,
is quite similar to the effects of other regulated substances. Inc., 467 U.S. 837, 842–843, 104 S.Ct. 2778, 81 L.Ed.2d
See id., at 44667 (FDA regulates Valium, NoDoz, weight- 694 (1984). The companies, in an effort to argue the former,
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point to language in the legislative history tying the word that “ ‘[r]ecognized laboratory tests have conclusively proven
“intended” to a technical concept called “intended use.” the advantage of Phillip [sic] Morris' ”); id., at 88 (RJR
But nothing in Congress' discussion either of “intended” proclaimed “ ‘For Digestion's sake, smoke Camels! ... Camels
or “intended use” suggests that an express claim (which make mealtime more pleasant—digestion is stimulated—
often shows intent) is always necessary. Indeed, the primary alkalinity increased’ ”). Although in recent decades cigarette
statement to which the companies direct our attention says manufacturers have stopped making express health claims
only that a manufacturer can determine what kind of in their advertising, consumers have come to understand
regulation applies **1321 —“food” or “drug”—because, what the companies no longer need to express—that through
“through his representations in connection with its sale, [the chemical action cigarettes stabilize mood, sedate, stimulate,
manufacturer] can determine” whether an article is to be used and help suppress appetite.
as a “food,” as a “drug,” or as “both.” S.Rep. No. 361, 74th
Cong., 1st Sess., 4 (1935), reprinted in 3 Leg. Hist. 696. Second, even though the companies refused to acknowledge
publicly (until only very recently) that the nicotine in
Nor is the FDA's “objective intent” interpretation cigarettes has chemically induced, and habit-forming,
unreasonable. It falls well within the established scope of effects, see, e.g., Regulation of Tobacco Products (Part
the ordinary meaning of the word “intended.” See Agnew 1): Hearings before the House Subcommittee on Health
v. United States, 165 U.S. 36, 53, 17 S.Ct. 235, 41 L.Ed. and the Environment, 103d Cong., 2d Sess., 628 (1994)
624 (1897) (intent encompasses the known consequences of (hereinafter 1994 Hearings) (heads of seven major tobacco
an act). And the companies acknowledge that the FDA can companies testified under oath that they believed “nicotine
regulate a drug-like substance in the ordinary circumstance, is not addictive” (emphasis added)), the FDA recently has
i.e., where the manufacturer makes an express claim, so it gained access to solid, documentary evidence proving that
is not unreasonable to conclude that the agency retains such cigarette manufacturers have long known tobacco produces
power where a product's effects on the body are so well known these effects within the body through the metabolizing of
(say, like those of aspirin or calamine lotion), that there is no chemicals, and that they *173 have long wanted their
need for express representations because the product speaks products to produce those effects in this way.
for itself.
For example, in 1972, a tobacco-industry scientist explained
The companies also cannot deny that the evidence of their that “ ‘[s]moke is beyond question the most optimized vehicle
intent is sufficient to satisfy the statutory word “intended” of nicotine,’ ” and “ ‘the cigarette is the most optimized
as the FDA long has interpreted it. In the first place, there dispenser of smoke.’ ” 61 Fed.Reg. 44856 (1996) (emphasis
was once a time when they actually did make express deleted). That same scientist urged company executives to
advertising claims regarding tobacco's mood-stabilizing and
weight-reducing properties—and historical representations “ ‘[t]hink of the cigarette pack as a storage container for a
can portend present expectations. In the late 1920's, for day's supply of nico **1322 tine.... Think of the cigarette
example, the American Tobacco Company urged weight- as a dispenser for a dose unit of nicotine [and][t]hink of
conscious smokers to “ ‘Reach for a Lucky instead of a a puff of smoke as the vehicle of nicotine.’ ” Ibid. (Philip
*172 sweet.’ ” Kluger, Ashes to Ashes, at 77–78. The Morris) (emphasis deleted).
advertisements of R J Reynolds (RJR) emphasized mood
That same year, other tobacco industry researchers told their
stability by depicting a pilot remarking that “ ‘It Takes Steady
superiors that
Nerves to Fly the Mail at Night .... That's why I smoke
Camels. And I smoke plenty!’ ” Id., at 86. RJR also advertised “ ‘in different situations and at different dose levels,
the stimulating quality of cigarettes, stating in one instance nicotine appears to act as a stimulant, depressant,
that “ ‘You get a Lift with a Camel,’ ” and, in another, tranquilizer, psychic energizer, appetite reducer, anti-
that Camels are “ ‘A Harmless Restoration of the Flow of fatigue agent, or energizer.... Therefore, [tobacco] products
Natural Body Energy.’ ” Id., at 87. And claims of medical may, in a sense, compete with a variety of other products
proof of mildness (and of other beneficial effects) once were with certain types of drug action.’ ” Id., at 44669 (RJR)
commonplace. See, e.g., id., at 93 (Brown & Williamson (emphasis deleted).
advertised Kool-brand mentholated cigarettes as “a tonic to
hot, tired throats”); id., at 101, 131 (Philip Morris contended
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immediate total ban, turning to a potentially more dangerous
A draft report prepared by authorities at Philip Morris said black-market substitute, while a less draconian remedy (say,
that nicotine adequate notice) would wean them gradually away to a
safer product. Would the FDCA still force the FDA to
“ ‘is a physiologically active, nitrogen containing substance
impose *175 the more dangerous remedy? For the following
[similar to] quinine, cocaine, atropine and morphine. [And]
reasons, I think not.
[w]hile each of these [other] substances can be used to
affect human physiology, nicotine has a particularly broad
First, the statute's language does not restrict the FDA's
range of influence.’ ” Id., at 44668–44669.
remedial powers in this way. The FDCA permits the FDA
And a 1980 manufacturer's study stated that to regulate a “combination product”—i.e., a “device” (such
as a cigarette) that contains a “drug” (such as nicotine)
“ ‘the pharmacological response of smokers to nicotine —under its “device” provisions. 21 U.S.C. § 353(g)(1).
is believed to be responsible for an individual's smoking And the FDCA's “device” provisions explicitly grant the
*174 behaviour, providing the motivation for and the FDA wide remedial discretion. For example, where the
degree of satisfaction required by the smoker.’ ” Id., at FDA cannot “otherwise” obtain “reasonable assurance” of a
44936 (Brown & Williamson). device's “safety and effectiveness,” the agency may restrict
by regulation a product's “sale, distribution, or use” upon
With such evidence, the FDA has more than sufficiently “such ... conditions as the Secretary may prescribe.” § 360j(e)
established that the companies “intend” their products to (1) (emphasis added). And the statutory section that most
“affect” the body within the meaning of the FDCA. clearly addresses the FDA's **1323 power to ban (entitled
“Banned devices”) says that, where a device presents “an
unreasonable and substantial risk of illness or injury,” the
C Secretary “may”—not must—“initiate a proceeding ... to
make such device a banned device.” § 360f(a) (emphasis
The majority nonetheless reaches the “inescapable added).
conclusion” that the language and structure of the FDCA as a
whole “simply do not fit” the kind of public health problem The Court points to other statutory subsections which it
that tobacco creates. Ante, at 1306. That is because, in the believes require the FDA to ban a drug or device entirely, even
majority's view, the FDCA requires the FDA to ban outright where an outright ban risks more harm than other regulatory
“dangerous” drugs or devices (such as cigarettes); yet, the responses. See ante, at 1302–1303. But the cited provisions
FDA concedes that an immediate and total cigarette-sale ban do no such thing. It is true, as the majority contends, that “the
is inappropriate. Ibid. FDCA requires the FDA to place all devices” in “one of three
classifications” and that Class III devices require “premarket
This argument is curious because it leads with similarly approval.” Ante, at 1302. But it is not the case that the
“inescapable” force to precisely the opposite conclusion, FDA must place cigarettes in Class III because tobacco itself
namely, that the FDA does have jurisdiction but that it must “presents a potential unreasonable risk of illness or injury.” 21
ban cigarettes. More importantly, the argument fails to take U.S.C. § 360c(a)(1)(C). In fact, Class III applies only where
into account the fact that a statute interpreted as requiring regulation cannot otherwise “provide reasonable assurance
the FDA to pick a more dangerous over a less dangerous of ... safety.” §§ 360c(a)(1)(A), (B) (placing a device in Class
remedy would be a perverse statute, causing, rather than I or Class II when regulation can provide that assurance).
preventing, unnecessary harm whenever a total ban is likely Thus, the statute plainly allows the FDA to consider the
the more dangerous response. And one can at least imagine relative, overall “safety” of *176 a device in light of its
such circumstances. regulatory alternatives, and where the FDA has chosen the
least dangerous path, i.e., the safest path, then it can—and
Suppose, for example, that a commonly used, mildly does—provide a “reasonable assurance” of “safety” within
addictive sleeping pill (or, say, a kind of popular contact the meaning of the statute. A good football helmet provides a
lens), plainly within the FDA's jurisdiction, turned out to pose reasonable assurance of safety for the player even if the sport
serious health risks for certain consumers. Suppose further itself is still dangerous. And the safest regulatory choice by
that many of those addicted consumers would ignore an
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definition offers a “reasonable” assurance of safety in a world added). But that word “shall” in this context cannot mean
where the other alternatives are yet more dangerous. that the Secretary must resort to the recall remedy whenever a
device would have serious, adverse health effects. Rather, that
In any event, it is not entirely clear from the statute's text that a language must mean that the Secretary “shall issue” a cease
Class III categorization would require the FDA affirmatively distribution order in compliance with the section's procedural
to withdraw from the market dangerous devices, such as requirements if the Secretary chooses in her discretion to
cigarettes, which are already widely distributed. See, e.g., use that particular subsection's recall remedy. Otherwise, the
§ 360f(a) (when a device presents an “unreasonable and subsection would trump and make meaningless the same
substantial risk of illness or injury,” the Secretary “may” make section's provision of other lesser remedies such as simple
it “a banned device”); § 360h(a) (when a device “presents an “notice” (which the Secretary similarly can impose if, but
unreasonable risk of substantial harm to the public health,” only if, she finds that the device “presents an unreasonable
the Secretary “may” require “notification”); § 360h(b) (when risk of substantial harm to the public”). § 360h(a)(1). And
a defective device creates an “unreasonable risk” of harm, the reading the statute to compel the FDA to “recall” every
Secretary “may” order “[r]epair, replacement, or refund”); cf. dangerous device likewise would conflict with that same
2 O'Reilly § 18.08, at 18–29 (point of Class III “premarket subsection's statement that the recall remedy “shall be in
approval” is to allow “careful scientific review” of each “truly addition to [the other] remedies provided” in the statute. §
new” device “before it is exposed” to users (emphasis added)). 360h(e)(3) (emphasis added).
Noting that the FDCA requires banning a “misbranded” *178 The statute's language, then, permits the agency
drug, the majority also points to 21 U.S.C. § 352(j), which to choose remedies consistent with its basic purpose—the
deems a drug or device “misbranded” if “it is dangerous overall protection of public health.
to health when used” as “prescribed, recommended, or
suggested in the labeling.” See ante, at 1302. In addition, the The second reason the FDCA does not require the FDA
majority mentions § 352(f)(1), which calls a drug or device to select the more dangerous remedy, see supra, at 1322–
“misbranded” unless “its labeling bears ... adequate directions 1323, is that, despite the majority's assertions to the contrary,
for use” as “are necessary for the protection of users.” Ibid. the statute does not distinguish among the kinds of health
But this “misbranding” language is not determinative, for effects that the agency may take into account when assessing
it permits the FDA to conclude that a drug or device is safety. The Court insists that the statute only permits the
not “dangerous to health” and that it does have “adequate” agency to take into account the health risks and benefits of
*177 directions when regulated so as to render it as the “product itself” as used by individual consumers, ante, at
harmless as possible. And surely the agency can determine 1304, and, thus, that the FDA is prohibited from considering
that a substance is comparatively “safe” (not “dangerous”) that a ban on smoking would lead many smokers to suffer
whenever it would be less dangerous to make the product severe withdrawal symptoms or to buy possibly stronger,
available (subject to regulatory requirements) than suddenly more dangerous, black market cigarettes—considerations
to withdraw it from the market. Any other interpretation risks that the majority calls “the aggregate health effects of
substantial harm of the sort that my sleeping pill example alternative administrative actions.” Ibid. But the FDCA
illustrates. See supra, at 1322 and this page. And nothing expressly permits the FDA to take account of comparative
in the statute prevents the agency from adopting a view of safety in precisely this manner. See, e.g., 21 U.S.C. § 360h(e)
“safety” that would avoid such harm. Indeed, the FDA already (2)(B)(i)(II) (no device recall if “risk of recal[l]” presents “a
seems to have taken this position when permitting distribution greater health risk than” no recall); § 360h(a) (notification
of toxic drugs, such as poisons used for chemotherapy, that “unless” notification “would present a greater danger” than
are dangerous for the user but **1324 are not deemed “no such notification”).
“dangerous to health” in the relevant sense. See 61 Fed.Reg.
44413 (1996). Moreover, one cannot distinguish in this context between
a “specific” health risk incurred by an individual and an
The tobacco companies point to another statutory provision “aggregate” risk to a group. All relevant risk is, at bottom,
which says that if a device “would cause serious, adverse risk to an individual; all relevant risk attaches to “the product
health consequences or death, the Secretary shall issue” a itself”; and all relevant risk is “aggregate” in the sense that
cease distribution order. 21 U.S.C. § 360h(e)(1) (emphasis the agency aggregates health effects in order to determine
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risk to the individual consumer. If unregulated smoking will needed to induce the appearance of a single carcinogenic cell.
kill 4 individuals out of a typical group of 1,000 people, if See H.R.Rep. No. 95–658, p. 7 (1977) (discussing agency's
regulated smoking will kill 1 out of 1,000, and if a smoking view). The FDA believed that the statute's ban mandate was
ban (because of the black market) will kill 2 out of 1,000; absolute and prevented it from establishing a level of “safe
then these three possibilities mean that in each group four, use” or even to judge whether “the benefits of continued use
one, and two individuals, on average, will die respectively. outweigh the risks involved.” Id., at 5. This interpretation—
And the risk to each individual consumer is 4/1,000, *179 which in principle could have required the ban of everything
1/1,000, and 2/1,000 respectively. A “specific” risk to an from herbal teas to mushrooms—actually led the FDA to
individual consumer and “aggregate” risks are two sides of ban saccharine, see 42 Fed.Reg. 19996 (1977), though this
the same coin; each calls attention to the same set of facts. extremely controversial regulatory response never took effect
While there may be a theoretical distinction between the risk because Congress enacted, and has continually renewed, a
of the product itself and the risk related to the presence or law postponing the ban. See Saccharin Study and Labeling
absence of an intervening voluntary act (e.g., the search for a Act, Pub.L. 95–203, § 3, 91 Stat. 1452; e.g., Pub.L. 102–142,
replacement on the black market), the majority does not rely Tit. VI, 105 Stat. 910.
upon any such distinction, and the FDA's history of regulating
“replacement” drugs such as methadone shows that it has long The Court's interpretation of the statutory language before
**1325 taken likely actual alternative consumer behavior us risks Delaney-type consequences with even less linguistic
into account. reason. Even worse, the view the Court advances undermines
the FDCA's overall health-protecting purpose by placing the
I concede that, as a matter of logic, one could consider the FDA in the strange dilemma of either banning completely
FDA's “safety” evaluation to be different from its choice of a potentially dangerous drug or device or doing nothing at
remedies. But to read the statute to forbid the agency from all. Saying that I have misunderstood its conclusion, the
taking account of the realities of consumer behavior either in majority maintains that the FDA “may clearly regulate many
assessing safety or in choosing a remedy could increase the ‘dangerous' products without banning them.” Ante, at 1305.
risks of harm—doubling the risk of death to each “individual But it then adds that the FDA must ban—rather than otherwise
user” in my example above. Why would Congress insist that regulate—a drug or device that “cannot be used safely for
the FDA ignore such realities, even if the consequent harm any therapeutic purpose.” Ante, at 1306. If I misunderstand,
would occur only unusually, say, where the FDA evaluates it is only because this linchpin of the majority's conclusion
a product (a sleeping pill; a cigarette; a contact lens) that is remains unexplained. Why must a widely used but unsafe
already on the market, potentially habit forming, or popular? device be withdrawn from the market when that particular
I can find no satisfactory answer to this question. And that, remedy threatens the health of many and is thus more
I imagine, is why the statute itself says nothing about any of dangerous than another regulatory response? It is, indeed, a
the distinctions that the Court has tried to draw. See 21 U.S.C. perverse interpretation that reads the FDCA *181 to require
§ 360c(a)(2) (instructing FDA to determine the safety and the ban of a device that has no “safe” therapeutic purpose
effectiveness of a “device” in part by weighing “any probable where a ban is the most dangerous remedial alternative.
benefit to health ... against any probable risk of injury or
illness ...” (emphasis added)). In my view, where linguistically permissible, we should
interpret the FDCA in light of Congress' overall desire to
Third, experience counsels against an overly rigid protect health. That purpose requires a flexible interpretation
interpretation of the FDCA that is divorced from the statute's that both permits the FDA to take into account the realities of
overall health-protecting purposes. A different set of words, human behavior and allows it, in appropriate **1326 cases,
added to the FDCA in 1958 by the Delaney Amendment, to choose from its arsenal of statutory remedies. A statute so
provides that “no [food] additive shall be deemed to be interpreted easily “fit[s]” this, and other, drug- and device-
safe if it is found [after appropriate tests] to induce cancer related health problems.
when ingested by man or animal.” § 348(c)(3). The FDA
*180 once interpreted this language as requiring it to ban
any food additive, no matter how small the amount, that
III
appeared in any food product if that additive was ever found
to induce cancer in any animal, no matter how large a dose
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In the majority's view, laws enacted since 1965 require us to the subsequent legislative history is critically ambivalent,
deny jurisdiction, whatever the FDCA might mean in their for it can be read either as (a) “ratif [ying]” a no-
absence. But why? Do those laws contain language barring jurisdiction assumption, see ante, at 1313, or as (b) leaving
FDA jurisdiction? The majority must concede that they do the jurisdictional question just where Congress found it.
not. Do they contain provisions that are inconsistent with And the fact that both inferences are “equally tenable,”
the FDA's exercise of jurisdiction? With one exception, see Pension Benefit Guaranty Corp., supra, at 650, 110 S.Ct.
infra, at 1327, the majority points to no such provision. Do 2668 (citation and internal quotation marks omitted); Johnson
they somehow repeal the principles of law (discussed in v. Transportation Agency, Santa Clara Cty., 480 U.S. 616,
Part II, supra) that otherwise would lead to the conclusion 672, 107 S.Ct. 1442, 94 L.Ed.2d 615 (1987) (SCALIA, J.,
that the FDA has jurisdiction in this area? The companies dissenting), prevents the majority from drawing from the later
themselves deny making any such claim. See Tr. of Oral statutes the firm, antijurisdiction implication that it needs.
Arg. 27 (denying reliance on doctrine of “partial repeal”).
Perhaps the later laws “shape” and “focus” what the 1938 Consider, for example, Congress' failure to provide the FDA
Congress meant a generation earlier. Ante, at 1306. But this with express authority to regulate tobacco—a circumstance
Court has warned against using the views of a later Congress *183 that the majority finds significant. See ante, at 1306–
to construe a statute enacted many years before. See Pension 1307, 1308–1309, 1312–1313. But cf. Southwestern Cable
Benefit Guaranty Corporation v. LTV Corp., 496 U.S. 633, Co., supra, at 170, 88 S.Ct. 1994 (failed requests do not
650, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990) (later history prove agency “did not already possess” authority). **1327
is a “ ‘hazardous basis for inferring the intent of an earlier’ In fact, Congress both failed to grant express authority to the
Congress” (quoting United States v. Price, 361 U.S. 304, FDA when the FDA denied it had jurisdiction over tobacco
313, 80 S.Ct. 326, 4 L.Ed.2d 334 (1960))). And, while the and failed to take that authority expressly away when the
majority suggests that the subsequent history “control[s] our agency later asserted jurisdiction. See, e.g., S. 1262, 104th
construction” of the FDCA, see ante, at 1306 (citation and Cong., 1st Sess., § 906 (1995) (failed bill seeking to amend
internal quotation marks omitted), this Court *182 expressly FDCA to say that “[n]othing in this Act or any other Act
has held that such subsequent views are not “controlling.” shall provide the [FDA] with any authority to regulate in any
Haynes v. United States, 390 U.S. 85, 87–88, n. 4, 88 S.Ct. manner tobacco or tobacco products”); see also H.R. 516,
722, 19 L.Ed.2d 923 (1968); accord, Southwestern Cable Co., 105th Cong., 1st Sess., § 2 (1997) (similar); H.R. Res. 980,
392 U.S., at 170, 88 S.Ct. 1994 (such views have “ ‘very reprinted in 142 Cong. Rec. 5018 (1996) (Georgia legislators
little, if any, significance’ ”); see also Sullivan v. Finkelstein, unsuccessfully requested that Congress “rescind any action
496 U.S. 617, 632, 110 S.Ct. 2658, 110 L.Ed.2d 563 (1990) giving the FDA authority” over tobacco); H.R. 2283, 104th
(SCALIA, J., concurring) (“Arguments based on subsequent Cong., 1st Sess. (1995) (failed bill “[t]o prohibit the [FDA]
legislative history ... should not be taken seriously, not even regulation of the sale or use of tobacco”); H.R. 2414, 104th
in a footnote”). Cong., 1st Sess., § 2(a) (1995) (similar). Consequently, the
defeat of various different proposed jurisdictional changes
Regardless, the later statutes do not support the majority's proves nothing. This history shows only that Congress could
conclusion. That is because, whatever individual Members not muster the votes necessary either to grant or to deny the
of Congress after 1964 may have assumed about the FDA's FDA the relevant authority. It neither favors nor disfavors the
jurisdiction, the laws they enacted did not embody any such majority's position.
“no jurisdiction” assumption. And one cannot automatically
infer an antijurisdiction intent, as the majority does, for The majority also mentions the speed with which Congress
the later statutes are both (and similarly) consistent with acted to take jurisdiction away from other agencies once
quite a different congressional desire, namely, the intent to they tried to assert it. See ante, at 1307, 1309–1310. But
proceed without interfering with whatever authority the FDA such a congressional response again proves nothing. On the
otherwise may have possessed. See, e.g., Cigarette Labeling one hand, the speedy reply might suggest that Congress
and Advertising—1965: Hearings on H.R. 2248 et al. before somehow resented agency assertions of jurisdiction in an area
the House Committee on Interstate and Foreign Commerce, it desired to reserve for itself—a consideration that supports
89th Cong., 1st Sess., 19 (1965) (hereinafter 1965 Hearings) the majority. On the other hand, Congress' quick reaction
(statement of Rep. Fino that the proposed legislation would with respect to other agencies' regulatory efforts contrasts
not “erode” agency authority). As I demonstrate below, dramatically with its failure to enact any responsive law (at
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any speed) after the FDA asserted jurisdiction over tobacco the pre-emption provision as “merely prohibit[ing] state
more than three years ago. And that contrast supports the and federal rulemaking bodies from mandating particular
opposite conclusion. cautionary statements on cigarette labels ....” Ibid.
*184 In addition, at least one post–1938 statute reveals This negative answer is fully consistent with Congress'
quite a different congressional intent than the majority infers. intentions in regard to the pre-emption language. When
See note following 21 U.S.C. § 321 (1994 ed., Supp. III) Congress enacted the FCLAA, it focused upon the regulatory
(FDA Modernization Act of 1997) (law “shall [not] be efforts of the Federal Trade Commission (FTC), not the FDA.
construed to affect the question of whether the [FDA] has See 1965 Hearings 1–2. And the Public Health Cigarette
any authority to regulate any tobacco product,” and “[s]uch Smoking Act of 1969, Pub.L. 91–222, § 7(c), 84 Stat. 89,
authority, if any, shall be exercised under the [FDCA] as expressly amended the FCLAA to provide that “[n]othing
in effect on the day before the date of [this] enactment”). in this Act shall be construed to affirm or deny the [FTC's]
Consequently, it appears that the only interpretation that can holding that it has the authority to issue trade regulation
reconcile all of the subsequent statutes is the inference that rules” for tobacco. See also H.R. Conf. Rep. No. 91–897, p.
Congress did not intend, either explicitly or implicitly, for 7 (1970), U.S. CodeCong. & Admin.News 1970, pp. 2652,
its later laws to answer the question of the scope of the 2679 (statement of House Managers) (we have “no intention
FDA's jurisdictional authority. See 143 Cong. Rec. S8860 to resolve the question as to whether” the FTC could regulate
(Sept. 5, 1997) (the Modernization Act will “not interfere tobacco in a different way); see also 116 Cong. Rec. 7921
or substantially negatively affect any of the FDA tobacco (1970) (statement of Rep. Satterfield) (same). Why would
authority”). one read the FCLAA's pre-emption clause—a provision that
Congress intended to limit even in respect to the agency
The majority's historical perspective also appears to be directly at issue—so broadly that it would bar a different
shaped by language in the Federal Cigarette Labeling and agency from engaging in any other cigarette regulation at all?
Advertising Act (FCLAA), 79 Stat. 282, 15 U.S.C. § 1331 The answer is that the Court need not, and should not, do so.
et seq. See ante, at 1308–1309. The FCLAA requires And, inasmuch as the Court already has declined to view the
manufacturers to place on cigarette packages, etc., health FCLAA as pre-empting the entire field of tobacco regulation,
warnings such as the following: I cannot accept that that same law bars the FDA's regulatory
efforts here.
“SURGEON GENERAL'S WARNING: Smoking Causes
Lung Cancer, Heart Disease, Emphysema, And May When the FCLAA's narrow pre-emption provision is set
Complicate Pregnancy.” 15 U.S.C. § 1333(a). aside, the majority's conclusion that Congress clearly
intended for its tobacco-related statutes to be the exclusive
The FCLAA has an express pre-emption provision which says *186 “response” to “the problem of tobacco and health,”
that “[n]o statement relating to smoking and health, other ante, at 1313, is based on legislative silence. Notwithstanding
than the statement required by [this Act], shall be required the views voiced by various legislators, Congress itself has
on any cigarette package.” § 1334(a). This pre-emption addressed expressly the issue of the FDA's tobacco-related
clause plainly prohibits the FDA from requiring on “any authority only once—and, as I have said, its statement was
cigarette package” any other “statement relating to smoking that the statute was not to “be construed to affect the question
and health,” but no one contends that the FDA has failed of whether the [FDA] has any authority to regulate any
to abide by this prohibition. See, e.g., 61 Fed.Reg. 44399 tobacco product.” Note following 21 U.S.C. § 321 (1994 ed.,
(1996) (describing the other regulatory prescriptions). Rather, Supp. III). The proper inference to be drawn from all of
the question is whether the FCLAA's pre-emption *185 the post–1965 statutes, then, is one that interprets Congress'
provision does more. Does it forbid the FDA to regulate at all? general legislative silence consistently with this statement.
**1328 This Court has already answered that question
expressly and in the negative. See Cipollone v. Liggett Group,
Inc., 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). IV
Cipollone held that the FCLAA's pre-emption provision does
I now turn to the final historical fact that the majority views
not bar state or federal regulation outside the provision's
as a factor in its interpretation of the subsequent legislative
literal scope. Id., at 518, 112 S.Ct. 2608. And it described
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history: the FDA's former denials of its tobacco-related Other agency statements occasionally referred to additional
authority. problems. Commissioner Kessler, for example, said that the
“enormous social consequences” flowing from a decision
Until the early 1990's, the FDA expressly maintained that the to regulate tobacco counseled in favor of obtaining specific
1938 statute did not give it the power that it now seeks to congressional “guidance.” 1994 Hearings 69; see also ante,
assert. It then changed its mind. The majority agrees with at 1311 (quoting statement of Health and Human Services
me that the FDA's change of positions does not make a Secretary Brandt to the effect that Congress wanted to make
significant legal difference. See ante, at 1313–1314; see also the relevant jurisdictional decision). But a fair reading of
Chevron, 467 U.S., at 863, 104 S.Ct. 2778 (“An initial agency the FDA's denials suggests that the overwhelming problem
interpretation is not instantly carved in stone”); accord, Smiley was one of proving the requisite manufacturer intent.
v. Citibank (South Dakota), N. A., 517 U.S. 735, 742, 116 S.Ct. See Action on Smoking and Health v. Harris, 655 F.2d
1730, 135 L.Ed.2d 25 (1996) (“[C]hange is not invalidating”). 236, 238–239 (C.A.D.C.1980) (FDA “comments” reveal its
Nevertheless, it labels those denials “important context” for “understanding” *188 that “the crux of FDA jurisdiction
drawing an inference about Congress' intent. Ante, at 1313. over drugs lay in manufacturers' representations as revelatory
In my view, the FDA's change of policy, like the subsequent of their intent”).
statutes themselves, does nothing to advance the majority's
position. What changed? For one thing, the FDA obtained evidence
sufficient to prove the necessary “intent” despite the absence
When it denied jurisdiction to regulate cigarettes, the FDA of specific “claims.” See supra, at 1321–1322. This evidence,
consistently stated why that was so. In 1963, for example, which first became available in the early 1990's, permitted
FDA administrators wrote that cigarettes did not satisfy the agency to demonstrate that the tobacco companies knew
the relevant FDCA definitions **1329 —in particular, the nicotine achieved appetite-suppressing, mood-stabilizing,
“intent” requirement—because cigarette makers did not sell and habituating effects through chemical (not psychological)
their product with accompanying “therapeutic claims.” *187 means, even at a time when the companies were publicly
Letter to Directors of Bureaus, Divisions and Directors denying such knowledge.
of Districts from FDA Bureau of Enforcement (May 24,
1963), in Public Health Cigarette Amendments of 1971: Moreover, scientific evidence of adverse health effects
Hearings on S. 1454 before the Consumer Subcommittee mounted, until, in the late 1980's, a consensus on the
of the Senate Committee on Commerce, 92d Cong., 2d seriousness of the matter became firm. That is not to say
Sess., 240 (1972) (hereinafter FDA Enforcement Letter). that concern about smoking's adverse health effects is a new
And subsequent FDA Commissioners made roughly the same phenomenon. See, e.g., Higginson, A New Counterblast, in
assertion. One pointed to the fact that the manufacturers Out-door Papers 179, 194 (1863) (characterizing tobacco
only “recommended” cigarettes “for smoking pleasure.” Two as “ ‘a narcotic poison of the most active class' ”). It is
others reiterated the evidentiary need for “health claims.” to say, however, that convincing epidemiological evidence
Yet another stressed the importance of proving “intent,” began to appear mid–20th century; that the first Surgeon
adding that “[w]e have not had sufficient evidence” of General's Report documenting the adverse health effects
“intent with regard to nicotine.” See, respectively, id., at appeared in 1964; and that the Surgeon General's Report
239 (Comm'r Edwards); Letter of Dec. 5, 1977, App. 47 establishing nicotine's addictive effects appeared in 1988.
(Comm'r Kennedy); 1965 Hearings 193 (Comm'r Rankin); At each stage, the health conclusions were the subject of
1994 Hearings 28 (Comm'r Kessler). Tobacco company controversy, diminishing somewhat over time, until recently
counsel also testified that the FDA lacked jurisdiction because —and only recently—has it become clear that there is a wide
jurisdiction “depends on ... intended use,” which in turn consensus about the health problem. See 61 Fed.Reg. 44701–
“depends, in general, on the claims and representations made 44706 (1996).
by the manufacturer.” Health Consequences of Smoking:
Nicotine Addiction, Hearing before the Subcommittee on Finally, administration policy changed. Earlier
Health and the Environment of the House Committee on administrations may have hesitated to assert jurisdiction
Energy and Commerce, 100th Cong., 2d Sess., 288 (1988) for the reasons **1330 prior Commissioners expressed.
(testimony of Richard Cooper) (emphasis added). See supra, at 1328–1329. Commissioners of the current
administration simply took a different regulatory attitude.
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without accompanying therapeutic claims, does not meet
Nothing in the law prevents the FDA from changing its the definitions ... for food, drug, device or cosmetic”). The
policy for such reasons. By the mid–1990's, the evidence statement, “we cannot assert jurisdiction over substance X
*189 needed to prove objective intent—even without an unless it is treated as a food,” would not bar jurisdiction if the
express claim—had been found. The emerging scientific agency later establishes that substance X is, and is intended
consensus about tobacco's adverse, chemically induced, to be, eaten. The FDA's denials of tobacco-related authority
health effects may have convinced the agency that it should sufficiently resemble this kind of statement that they should
spend its resources on this important regulatory effort. As not make the critical interpretive difference.
for the change of administrations, I agree with then-Justice
REHNQUIST's statement in a different case, where he wrote: Second, one might claim that courts, when interpreting
statutes, should assume in close cases that a decision with
“The agency's changed view ... seems to be related to “enormous social consequences,” 1994 Hearings 69, should
the election of a new President of a different political be made by democratically elected Members of Congress
party. It is readily apparent that the responsible members rather than by unelected agency administrators. Cf. Kent
of one administration may consider public resistance v. Dulles, 357 U.S. 116, 129, 78 S.Ct. 1113, 2 L.Ed.2d
and uncertainties to be more important than do their 1204 (1958) (assuming Congress did not want to delegate
counterparts in a previous administration. A change in the power to make rules interfering with exercise of basic
administration brought about by the people casting their human liberties). If there is such a background canon of
votes is a perfectly reasonable basis for an executive interpretation, however, I do not believe it controls the
agency's reappraisal of the costs and benefits of its outcome here.
programs and regulations. As long as the agency remains
within the bounds established by Congress, it is entitled Insofar as the decision to regulate tobacco reflects the
to assess administrative records and evaluate priorities policy of an administration, it is a decision for which that
in light of the philosophy of the administration.” Motor administration, and those politically elected officials who
Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. support it, must (and will) take responsibility. And the very
Automobile Ins. Co., 463 U.S. 29, 59, 103 S.Ct. 2856, 77 importance of the decision taken here, as well as its **1331
L.Ed.2d 443 (1983) (concurring in part and dissenting in attendant publicity, means that the public is likely to be
part). aware of it and to hold those officials politically accountable.
Presidents, just like Members of Congress, are elected by the
public. Indeed, the President and Vice President are the only
V public officials whom the entire Nation elects. I do not believe
that an administrative agency decision of this magnitude—
One might nonetheless claim that, even if my interpretation one that is important, conspicuous, and controversial—can
of the FDCA and later statutes gets the words right, it lacks escape the kind of public scrutiny that is essential in any
a sense of their “music.” See Helvering v. Gregory, 69 F.2d democracy. *191 And such a review will take place whether
809, 810–811 (C.A.2 1934) (L. Hand, J.) (“[T]he meaning of it is the Congress or the Executive Branch that makes the
a [statute] may be more than that of the separate words, as a relevant decision.
melody is more than the notes ...”). Such a claim might rest
on either of two grounds.
***
First, one might claim that, despite the FDA's legal right to
change its mind, its original statements played a critical part According to the FDA, only 2.5% of smokers successfully
in the enactment of the later statutes and now should play stop smoking each year, even though 70% say they want
a critical part in their interpretation. But the FDA's *190 to quit and 34% actually make an attempt to do so. See 61
traditional view was largely premised on a perceived inability Fed.Reg. 44704 (1996) (citing Centers for Disease Control
to prove the necessary statutory “intent” requirement. See, and Prevention, Cigarette Smoking Among Adults—United
e.g., FDA Enforcement Letter 240 (“The statutory basis for States, 1993; 43 Morbidity and Mortality Weekly Report
the exclusion of tobacco products from FDA's jurisdiction 929 (Dec. 23, 1994)). The fact that only a handful of those
is the fact that tobacco marketed for chewing or smoking who try to quit smoking actually succeed illustrates a certain
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specific statutes emerged. But a legislative atmosphere is not
reality—the reality that the nicotine in cigarettes creates a
a law, unless it is embodied in a statutory word or phrase. And
powerful physiological addiction flowing from chemically
the relevant words and phrases here reveal *192 nothing
induced changes in the brain. The FDA has found that the
more than an intent not to change the jurisdictional status quo.
makers of cigarettes “intend” these physical effects. Hence,
nicotine is a “drug”; the cigarette that delivers nicotine to the
The upshot is that the Court today holds that a regulatory
body is a “device”; and the FDCA's language, read in light
statute aimed at unsafe drugs and devices does not authorize
of its basic purpose, permits the FDA to assert the disease-
regulation of a drug (nicotine) and a device (a cigarette)
preventing jurisdiction that the agency now claims.
that the Court itself finds unsafe. Far more than most, this
particular drug and device risks the life-threatening harms
The majority finds that cigarettes are so dangerous that the
that administrative regulation seeks to rectify. The majority's
FDCA would require them to be banned (a result the majority
conclusion is counterintuitive. And, for the reasons set forth,
believes Congress would not have desired); thus, it concludes
I believe that the law does not require it.
that the FDA has no tobacco-related authority. I disagree
that the statute would require a cigarette ban. But even if I
Consequently, I dissent.
am wrong about the ban, the statute would restrict only the
agency's choice of remedies, not its jurisdiction.
All Citations
The majority also believes that subsequently enacted statutes
deprive the FDA of jurisdiction. But the later laws say next to 529 U.S. 120, 120 S.Ct. 1291, 146 L.Ed.2d 121, 00 Cal. Daily
nothing about the FDA's tobacco-related authority. Previous Op. Serv. 2215, 2000 Daily Journal D.A.R. 2987, 13 Fla. L.
FDA disclaimers of jurisdiction may have helped to form the Weekly Fed. S 161, 13 Fla. L. Weekly Fed. S 178
legislative atmosphere out of which Congress' own tobacco-
Footnotes
* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the
convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50
L.Ed. 499.
End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.
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Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 250 of 305
Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982)
102 S.Ct. 3245, 1982 A.M.C. 2377, 73 L.Ed.2d 973
during which wage penalty was assessed, but
imposition of penalty was mandatory for each
KeyCite Yellow Flag - Negative Treatment day that payment was withheld and could not be
Called into Doubt by MORI Associates, Inc. v. U.S., Fed.Cl., December 15,
limited to period of seaman's unemployment. 46
2011
U.S.C.A. § 596.
102 S.Ct. 3245
Supreme Court of the United States 70 Cases that cite this headnote
Danny L. GRIFFIN, Petitioner
v. [2] Seamen Extra wages
OCEANIC CONTRACTORS, INC. Pursuant to statute requiring certain masters and
vessel owners to pay seamen promptly after their
No. 81–614. discharge and authorizing seamen to recover
| double wages for each day that payment is
Argued April 26, 1982. delayed without sufficient cause, district court's
| entry of judgment for back pay will not toll
Decided June 30, 1982. running of penalty period unless delays beyond
that date are explained by sufficient cause. 46
Synopsis
U.S.C.A. § 596.
Seaman sued his former employer for back wages and
penalties. The District Court rendered judgment for the 79 Cases that cite this headnote
seaman, awarding him back wages and a penalty for his
period of unemployment. On the seaman's appeal, the United
States Court of Appeals for the Fifth Circuit, 664 F.2d 36, [3] Statutes Unintended or unreasonable
affirmed, and certiorari was granted. The Supreme Court, results; absurdity
Justice Rehnquist, held that the statute requiring certain Interpretations of statute which would produce
masters and vessel owners to pay seamen promptly after their absurd results are to be avoided if alternative
discharge and authorizing seamen to recover double wages interpretations consistent with legislative
for each day that payment is delayed without sufficient cause purpose are available.
did not give the district court discretion to limit the period
1053 Cases that cite this headnote
during which the wage penalty is assessed, but imposition of
the penalty was mandatory for each day that payment was
withheld in violation of the statute.
Reversed and remanded.
**3246 *564 Syllabus *
Justice Stevens filed a dissenting opinion in which Justice
Title 46 U.S.C. § 596, after obligating the master or owner
Blackmun joined.
of a vessel making coasting or foreign voyages to pay a
seaman's unpaid wages within specified periods after his
discharge, provides that a master or owner who fails to
West Headnotes (3) make such payment “without sufficient cause shall pay to
the seaman a sum equal to two days' pay for each and every
day during which payment is delayed beyond the respective
[1] Seamen Extra wages periods.” Petitioner, who was injured while working aboard
Pursuant to statute requiring certain masters respondent's vessel in foreign waters, brought suit under the
and vessel owners to pay seamen promptly Jones Act and general maritime law in Federal District Court
after their discharge and authorizing seamen after respondent refused to pay his medical expenses and to
to recover double wages for each day that furnish transportation back to the United States. In addition
payment is delayed without sufficient cause, to damages, petitioner sought to recover penalty wages under
district court had no discretion to limit period § 596 for respondent's failure to pay $412.50 in earned wages
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Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982)
102 S.Ct. 3245, 1982 A.M.C. 2377, 73 L.Ed.2d 973
allegedly due upon discharge. The court found, inter alia, paid the wages by satisfying the District Court's judgment—
that petitioner had been discharged from respondent's employ would be over $300,000, awards made under § 596 were not
on the day of the injury, and that respondent's failure to intended to be merely compensatory. Since the District Court
pay petitioner the $412.50 was “without sufficient cause.” found that respondent's refusal to pay petitioner following his
In assessing the penalty wages at $6,881.60, the court held discharge was without sufficient cause, and since it made no
that “[t]he period during which the penalty runs is to be finding that respondent's continuing delay in payment beyond
determined by the sound discretion of the district court and the period petitioner was unable to work was for sufficient
depends on the equities of the case.” It determined that the cause, its decision to limit the penalty was error. Pacific Mail
appropriate penalty period was the 34-day period from the S.S. Co. v. Schmidt, 241 U.S. 245, 36 S.Ct. 581, 60 L.Ed. 982.
date of discharge through the date when petitioner began Pp. 3252–3253.
work for another company. Petitioner appealed the award of
damages as inadequate, but the Court of Appeals affirmed.
5th Cir., 664 F.2d 36, reversed and remanded.
Held : The district courts have no discretion to limit the period
during which the wage penalty is assessed. Imposition of
Attorneys and Law Firms
**3247 the penalty is mandatory for each day that payment
is withheld in violation of § 596. Pp. 3249–3253. Robert A. Chaffin argued the cause and filed briefs for
petitioner.
(a) The words chosen by Congress, given their plain meaning,
leave no room for the exercise of discretion either in deciding Theodore Goller argued the cause and filed a brief for
whether to exact payment or in choosing the period of days respondent.
by which the payment is to be calculated. After the District
Opinion
Court found that respondent had refused to pay petitioner the
balance of his earned wages promptly after discharge and that
Justice REHNQUIST delivered the opinion of the Court.
its refusal was “without sufficient cause,” nothing in § 596's
language vested the court with discretion to limit the penalty This case concerns the application of 46 U.S.C. § 596,
assessment to the period of petitioner's unemployment. Pp. which requires certain masters and vessel owners to pay
3249–3250. seamen promptly after their discharge and authorizes seamen
to *566 recover double wages for each day that payment
*565 (b) This is not the type of case where literal application is delayed without sufficient cause. The question is whether
of a statute would thwart its obvious purpose. Section the district courts, in the exercise of discretion, may limit
596's “evident purpose” is “to secure prompt payment of the period during which this wage penalty is assessed, or
seamen's wages ... and thus to protect them from the harsh whether imposition of the penalty is mandatory for each day
consequences of arbitrary and unscrupulous action of their that payment is withheld in violation of the statute.
employers, to which, as a class, they are peculiarly exposed.”
Collie v. Fergusson, 281 U.S. 52, 55, 50 S.Ct. 189, 191,
74 L.Ed. 696. Although the statute's purpose is remedial,
I
Congress has chosen to secure that purpose through the use of
potentially punitive sanctions designed to deter negligent or On February 18, 1976, petitioner signed an employment
arbitrary delays in payment. The legislative history confirms contract with respondent in New Orleans, agreeing to work
that Congress intended the statute to mean exactly what its as a senior pipeline welder on board vessels operated by
plain language says. Pp. 3250–3252. respondent in the North Sea. The contract specified that
petitioner's employment would extend “until December 15,
(c) Nor is literal application of § 596 in this case precluded 1976 or until Oceanic's 1976 pipeline committal in the
on the asserted ground that it would produce an absurd and North Sea is fulfilled, whichever shall occur first.” App. 41.
unjust result which Congress could not have intended. Even The contract also provided that respondent would pay for
though the penalty for respondent's failure to promptly pay transportation to and from the worksite, but that if petitioner
the $412.50 in wages—if computed on the basis of the period quit the job prior to its termination date, or if his services
from petitioner's discharge until the date respondent actually were terminated for cause, he would be charged with the
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Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982)
102 S.Ct. 3245, 1982 A.M.C. 2377, 73 L.Ed.2d 973
cost of transportation back to the United States. Respondent sufficient *568 cause.” Id., at 20, ¶ 20; 25, ¶ 11. 2 Finally,
reserved the **3248 right to withhold $137.50 from each the court found that petitioner had exercised due diligence in
of petitioner's first four paychecks “as a cash deposit for the attempting to collect those wages. Id., at 20, ¶ 21.
payment of your return transportation in the event you should
become obligated for its payment.” Id., at 47. On March In assessing penalty wages under 46 U.S.C. § 596, the court
6, 1976, petitioner flew from the United States to Antwerp, held that “[t]he period during which the penalty runs is to
Belgium, where he reported to work at respondent's vessel, be determined by the sound discretion of the district court
the “Lay Barge 27,” berthed in the Antwerp harbor for repairs. and depends on the equities of the case.” App. 25, ¶ 11. It
determined that the appropriate period for imposition of the
On April 1, 1976, petitioner suffered an injury while working penalty was from the date of discharge, April 1, 1976, through
on the deck of the vessel readying it for sea. Two days the date of petitioner's reemployment, May 5, 1976, a period
later he underwent emergency surgery in Antwerp. On of 34 days. Applying the statute, it computed a penalty of
April 5, petitioner was discharged from the hospital and
$6,881.60. 3 Petitioner appealed the award of damages as
went to respondent's Antwerp office, where he spoke with
inadequate.
Jesse Williams, the welding superintendent, and provided a
physician's statement that he was not fit for duty. Williams
**3249 The Court of Appeals for the Fifth Circuit affirmed.
refused to acknowledge that petitioner's injury was work-
664 F.2d 36 (1981). That court concluded, inter alia, that
related *567 and denied that respondent was liable for
the District Court had not erred in limiting assessment of the
medical and hospital expenses, maintenance, or unearned
penalty provided by 46 U.S.C. § 596 to the period beginning
wages. Williams also refused to furnish transportation back to
April 1 and ending May 5. The court recognized that the
the United States, and continued to retain $412.50 in earned
statute required payment of a penalty for each day during
wages that had been deducted from petitioner's first three
which wages were withheld until the date they were actually
paychecks for that purpose. Petitioner returned to his home
paid, which in this case did not occur until September 17,
in Houston, Tex., the next day at his own expense. He was
1980, when respondent satisfied the judgment of the District
examined there by a physician who determined that he would
Court. Id., at 40; see App. 30. Nevertheless, the court believed
be able to resume work on May 3, 1976. On May 5, petitioner
itself bound by prior decisions within the Circuit, which left
began working as a welder for another company operating in
calculation of the penalty period to the sound discretion of
the North Sea.
the district courts. 664 F.2d, at 40. It concluded *569 that
the District Court in this case had not abused its discretion by
In 1978 he brought suit against respondent under the Jones
assessing a penalty only for the period during which petitioner
Act, § 20, 38 Stat. 1185, as amended, 46 U.S.C. § 688, and
was unemployed.
under general maritime law, seeking damages for respondent's
failure to pay maintenance, cure, unearned wages, repatriation
We granted certiorari to resolve a conflict among the Circuits
expenses, and the value of certain personal effects lost on
board respondent's vessel. Petitioner also sought penalty regarding the proper application of the wage penalty statute. 4
wages under Rev.Stat. § 4529, as amended, 46 U.S.C. § 596, 454 U.S. 1052, 102 S.Ct. 595, 70 L.Ed.2d 587 (1981). We
for respondent's failure to pay over the $412.50 in earned reverse the judgment of the Court of Appeals as to that issue. 5
wages allegedly due upon discharge. The District Court found
for petitioner and awarded damages totalling $23,670.40.
II
Several findings made by that court are particularly relevant
to this appeal. First, the court found that petitioner's injury
was proximately caused by an unseaworthy condition of A
respondent's vessel. App. 17, ¶ 10; 23, ¶ 6. Second, the
[1] The language of the statute first obligates the master or
court found that petitioner was discharged from respondent's
owner of any vessel making coasting or foreign voyages to
employ on the day of the injury, and that the termination
pay every seaman the balance of his unpaid wages within
of his employment was caused solely by that injury. Id., at
specified periods after his discharge. 6 It then provides:
18, ¶ 16; 23, ¶ 7. 1 Third, it found that respondent's failure
to pay petitioner the $412.50 in earned wages was “without
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Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982)
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interpreted literally to produce a monetary award that is so far
*570 “Every master or owner who refuses or neglects in excess of any equitable remedy as to be punitive.
to make payment in the manner hereinbefore mentioned
without sufficient cause shall pay to the seaman a sum Respondent, however, is unable to support this view of
equal to two days' pay for each and every day during which legislative purpose by reference to the terms of the statute.
payment is delayed beyond the respective periods....” “There is, of course, no more persuasive evidence of the
The statute in straightforward terms provides for the payment purpose of a statute than the words by which the legislature
of double wages, depending upon the satisfaction of two undertook to give expression to its wishes.” United States v.
conditions. First, the master or owner must have refused American Trucking Assns., Inc., 310 U.S. 534, 543, 60 S.Ct.
or failed to pay the seaman his wages within the periods 1059, 1063, 84 L.Ed. 1345 (1940). See Caminetti v. United
specified. Second, this failure or refusal must be “without States, 242 U.S. 470, 490, 37 S.Ct. 192, 196, 61 L.Ed. 442
sufficient cause.” Once these conditions are satisfied, (1917). Nevertheless, in rare cases the literal application of
however, the unadorned **3250 language of the statute a statute will produce a result demonstrably at odds with
dictates that the master or owner “shall pay to the seaman” the the intentions of its drafters, and those intentions must be
sums specified “for each and every day during which payment controlling. We have reserved “some ‘scope for adopting
is delayed.” The words chosen by Congress, given their plain a restricted rather than a literal or usual meaning of its
meaning, leave no room for the exercise of discretion either in words where acceptance of that meaning ... would thwart the
deciding whether to exact payment or in choosing the period obvious purpose of the statute.’ ” Commissioner v. Brown,
of days by which the payment is to be calculated. As this Court 380 U.S. 563, 571, 85 S.Ct. 1162, 1166, 14 L.Ed.2d 75 (1965)
described the statute many years ago, it “affords a definite and (quoting Helvering v. Hammel, 311 U.S. 504, 510–511, 61
reasonable procedure by which the seaman may establish his S.Ct. 368, 371, 85 L.Ed. 303 (1941)). This, however, is not
right to recover double pay where his wages are unreasonably the exceptional case.
withheld.” McCrea v. United States, 294 U.S. 23, 32, 55 S.Ct.
291, 295, 79 L.Ed. 735 (1935). Our task is to give effect to
the will of Congress, and where its will has been expressed *572 As the Court recognized in Collie v. Fergusson, 281
in reasonably plain terms, “that language must ordinarily be U.S. 52, 50 S.Ct. 189, 74 L.Ed. 696 (1930), the “evident
regarded as conclusive.” Consumer Product Safety Comm'n v. purpose” of the statute is “to secure prompt payment of
GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, seamen's wages ... and thus to protect them from the harsh
64 L.Ed.2d 766 (1980). consequences of arbitrary and unscrupulous action of their
employers, to which, as a class, they are peculiarly exposed.”
Id., at 55, 50 S.Ct., at 191. This was to be accomplished
*571 The District Court found that respondent had refused “by the imposition of a liability which is not exclusively
to pay petitioner the balance of his earned wages promptly compensatory, but designed to prevent, by its coercive effect,
after discharge, and that its refusal was “without sufficient arbitrary refusals to pay wages, and to induce prompt payment
cause.” Respondent challenges neither of these findings. when payment is possible.” Id., at 55–56, 50 S.Ct., at 191.
Although the two statutory conditions were satisfied, Thus, although the sure purpose of the statute is remedial,
however, the District Court obviously did not assess double Congress has chosen to secure that purpose through the use
wages “for each and every day” during which payment was of potentially punitive sanctions designed to deter negligent
delayed, but instead limited the assessment to the period or arbitrary delays in payment.
of petitioner's unemployment. Nothing in the language of The legislative history of the statute leaves little if any doubt
the statute vests the courts with the discretion to set such a that this understanding **3251 is correct. The law owes
limitation. its origins to the Act of July 20, 1790, ch. 29, § 6, 1 Stat.
133, passed by the First Congress. Although the statute as
B originally enacted gave every seaman the right to collect
the wages due under his contract “as soon as the voyage
Nevertheless, respondent urges that the legislative purpose is ended,” it did not provide for the recovery of additional
of the statute is best served by construing it to permit some sums to encourage compliance. Such a provision was added
choice in determining the length of the penalty period. In by the Shipping Commissioners Act of 1872, ch. 322, § 35,
respondent's view, the purpose of the statute is essentially 17 Stat. 269, which provided for the payment of “a sum not
remedial and compensatory, and thus it should not be exceeding the amount of two days' pay for each of the days,
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Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982)
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not exceeding ten days, during which payment is delayed.” [2] Respondent argues, however, that a literal construction
The Act of 1872 obviously established a ceiling of 10 days of the statute in this case would produce an absurd and unjust
on the period during which the penalty could be assessed result which Congress could not have intended. The District
and, by use of the words “not exceeding,” left the courts Court found that the daily wage to be used in computing
with discretion to choose an appropriate penalty within that the penalty was $101.20. If the statute is applied literally,
period. 7 petitioner would receive twice this amount for each day after
his discharge until September 17, 1980, when respondent
satisfied the District Court's judgment. 9 Petitioner would
*573 Congress amended the law again in 1898. As amended, receive *575 over $300,000 simply because respondent
it read in relevant part: improperly withheld $412.50 in wages. In respondent's view,
Congress could not have intended seamen to receive windfalls
“Every master or owner who refuses or neglects to
of this nature without regard to the equities of the case.
make payment in manner hereinbefore mentioned without
sufficient cause shall pay to the seaman a sum equal to one
[3] It is true that interpretations of a statute which would
day's pay for each and every day during which payment
produce absurd results are to be avoided if alternative
is delayed beyond the respective periods.” Act of Dec. 21,
interpretations consistent with the legislative purpose are
1898, ch. 28, § 4, 30 Stat. 756.
available. See United States v. American Trucking Assns.,
The amending legislation thus effected two changes: first, it Inc., 310 U.S., at 542–543, 60 S.Ct., at 1063; Haggar Co. v.
removed the discretion theretofore existing by which courts Helvering, 308 U.S. 389, 394, 60 S.Ct. 337, 339, 84 L.Ed.
might award less than an amount calculated on the basis of 340 (1940). In refusing to nullify statutes, however hard or
each day during which payment was delayed, and, second, unexpected the particular effect, this Court has said:
it removed the 10-day ceiling which theretofore limited the
“Laws enacted with good intention, when put to the
number of days upon which an award might be calculated.
test, frequently, and to the surprise of the law maker
The accompanying Committee Reports identify the purpose
himself, turn out to be mischievous, absurd or otherwise
of the legislation as “the amelioration of the condition of
objectionable. But in such case the remedy lies with the
the American seamen,” and characterize the amended wage
law making authority, and not with the courts.” Crooks v.
penalty in particular as “designed to secure the promptest
Harrelson, 282 U.S. 55, 60, 51 S.Ct. 49, 50, 75 L.Ed. 156
possible payment of wages.” H.R.Rep.No.1657, 55th Cong.,
(1930).
2d Sess., 2, 3 (1898). See also S.Rep.No.832, 54th Cong.,
1st Sess., 2 (1896). 8 Nothing in the legislative history of It is highly probable that respondent is correct in its contention
the *574 1898 Act suggests that Congress intended to do that a recovery in excess of $300,000 in this case greatly
anything other than what the Act's enacted language plainly exceeds any actual injury suffered by petitioner as a result of
demonstrates: to strengthen the deterrent effect of the statute respondent's delay in paying his wages. But this Court has
by removing the courts' latitude in assessing the wage penalty. previously recognized that awards made under this statute
The statute was amended for the last time in 1915 to increase were not intended to be merely compensatory:
further the severity of the penalty by doubling the wages due
for each day during which payment of earned wages was “We think the use of this language indicates a purpose
delayed. Seamen's Act of 1915, ch. 153, § 3, 38 Stat. 1164. to protect seamen from delayed payments of wages by
There is no suggestion in the Committee Reports or in the the imposition of a liability which is not exclusively
floor debates that, in so doing, Congress intended to reinvest compensatory, but designed to prevent, by its coercive
the courts with the discretion it had removed in the Act effect, arbitrary refusals to pay wages, and to induce prompt
of 1898. Resort to the legislative history, therefore, merely payment when payment is possible.” Collie v. Fergusson,
confirms that Congress **3252 intended the statute to mean 281 U.S., at 55–56, 50 S.Ct., at 191.
exactly what its plain language says.
*576 It is in the nature of punitive remedies to authorize
awards that may be out of proportion to actual injury;
III such remedies typically are established to deter particular
conduct, and the legislature not infrequently finds that harsh
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Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982)
102 S.Ct. 3245, 1982 A.M.C. 2377, 73 L.Ed.2d 973
consequences must be visited upon those whose conduct it to work. It made no finding, however, that respondent's
would deter. It is probably true that Congress did not precisely continuing delay in payment beyond that period was for
envision the grossness of the difference in this case between sufficient cause. Under the plain language of the statute,
the actual wages withheld and the amount of the award therefore, its decision to limit the penalty period was error.
required by the statute. But it might equally well be said that The judgment of the Court of Appeals affirming that decision
Congress did not precisely envision the trebled amount of accordingly is reversed, and the case is remanded for
some damages awards in private **3253 antitrust actions, proceedings consistent with this opinion.
see Reiter v. Sonotone Corp., 442 U.S. 330, 344–345, 99 S.Ct.
2326, 2333–2334, 60 L.Ed.2d 931 (1979), or that, because It is so ordered.
it enacted the Endangered Species Act, “the survival of a
relatively small number of three-inch fish ... would require
the permanent halting of a virtually completed dam for which
Justice STEVENS, with whom Justice BLACKMUN joins,
Congress ha[d] expended more than $1 million,” TVA v. Hill,
dissenting.
437 U.S. 153, 172, 98 S.Ct. 2279, 2290, 57 L.Ed.2d 117
In final analysis, any question of statutory construction
(1978). It is enough that Congress intended that the language
requires the judge to decide how the legislature intended its
it enacted would be applied as we have applied it. The remedy
enactment to apply to the case at hand. The language of the
for any dissatisfaction with the results in particular cases
statute is usually sufficient to answer that question, but “the
lies with Congress and not with this Court. Congress may
reports are full of cases” in which the will of the legislature is
amend the statute; we may not. See Consumer Product Safety
Comm'n v. GTE Sylvania, Inc., 447 U.S., at 123–124, 100 not reflected in a literal reading of the words it has chosen. 1
S.Ct., at 2063–2064; Reiter v. Sonotone, supra, at 344–345, In my opinion this is such a case.
99 S.Ct., at 2333–2334.
Finally, we note that our holding is consistent with Pacific
*578 **3254 Qualifying language in 46 U.S.C. § 596
Mail S. S. Co. v. Schmidt, 241 U.S. 245, 36 S.Ct. 581, 60
supports a much narrower construction than the Court adopts.
L.Ed. 982 (1916). The employer in that case challenged a
For over 50 years after the statute's most recent amendment
decision by the Court of Appeals to apply the wage penalty
in 1915, federal judges consistently construed it to avoid the
to the delay after the District Court's judgment occasioned
absurd result the Court sanctions today. Their reading of the
by the employer's appeal. The Court held that on the facts
statute was consistent with the specific purposes achieved
of that case, application of the penalty beyond the date
by the amendments in 1898 and 1915, as well as with the
of the District Court's judgment was error. Contrary to
meaning of the statute when an award for unearned wages was
respondent's assertion, however, the holding does not reflect
first authorized.
the discretionary tailoring of the penalty to the equities of the
case. Instead, the Court held that the delay pending appeal
was not “without sufficient cause,” as required by the statute I
before the penalty can attach. *577 Id., at 250, 36 S.Ct., at
On April 1, 1976, petitioner, a welder, suffered a temporarily
582. 10 As we explained earlier, a condition to the imposition disabling injury aboard respondent's vessel. On April 5, 1976,
of the wage penalty is a finding that the delay in payment is petitioner met with respondent's welding superintendent, who
“without sufficient cause.” To the extent that the equities of refused to acknowledge that respondent was responsible for
the situation are to be considered, see Collie v. Fergusson, the injury and who also refused to pay petitioner $412.50 in
supra, they bear on that finding, and not on the calculation of earned wages. Petitioner fully recovered from the injury by
the penalty period once that finding has been made. May 3, 1976, and two days later obtained comparable work
with another employer. He filed this action on February 3,
1978. It is now settled that respondent was responsible for
IV petitioner's injury and that respondent wrongfully refused to
pay him $412.50 on April 5, 1976.
The District Court found that respondent's refusal to pay
petitioner earned wages following his discharge was without The question of statutory construction that is before us is what
sufficient cause. It applied the wage penalty only for the “sum shall be recoverable as wages” to compensate petitioner
period of nonpayment during which petitioner was unable for respondent's refusal to pay him $412.50 on April 5, 1976.
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Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982)
102 S.Ct. 3245, 1982 A.M.C. 2377, 73 L.Ed.2d 973
46 U.S.C. § 596. 2 The District Court computed that sum by all subsequent delay in payment is also “without sufficient
doubling his daily wage of $101.20 and multiplying *579 cause” within the meaning of the statute.
that amount by 34—the number of days between the injury on
April 1 and petitioner's reemployment on May 5, 1976. The The controversy in Pacific Mail arose in 1913, when the
statute provided that the sum recoverable as wages was
District Court's award thus amounted to $6,881.60. 3 This
measured by one day's pay, rather than double that amount,
Court holds that the sum recoverable as wages amounts to at
for each day that the wages were withheld without sufficient
least $302,790.40. 4 cause; the statute was otherwise exactly as it is today. The
seaman was discharged on October 1, 1913, but $30.33
was withheld from his wages because he was believed
II responsible for the loss of some silverware. He filed an
action on October 20, 1913, and on November 5, 1913,
In pertinent part, § 596 provides as follows: obtained a judgment for his wages and an additional sum
of $151.59, representing the sum recoverable as wages for
“Every master or owner who refuses or neglects to make
the period between October 1 and November 5, 1913. The
payment [of a seaman's earned wages within four days after
District Court's decree established the proposition that the
the seaman's discharge] without sufficient cause shall pay
vessel owner's defenses did not constitute sufficient cause for
to the seaman a sum equal to two days' pay for each and
refusing to pay the wages and requiring the seaman to sue to
every day during which payment is delayed beyond the [4-
recover them.
day period], which sum shall be recoverable as wages in
any claim made before the court....” 5 (Emphasis added.) The vessel owner prosecuted an unsuccessful appeal. The
Court of Appeals not only affirmed the decision of the District
The text of the statute admittedly supports the construction Court, but also added an additional recovery of daily wages
given it by the Court—if there was not sufficient cause for the for the period between the entry of the original judgment
refusal to make payment within four days of the discharge, *581 on November 5 and the actual payment of the disputed
then the seaman is entitled to double wages for the entire wages. The Court of Appeals thus read the statute literally
period between the fourth day and the date the payment is and ordered the result that the District Court's finding seemed
finally made. The statute, however, is susceptible of another to dictate. This Court, however, set aside the additional
interpretation. Indeed, for a half century following its latest recovery, reaching a conclusion that cannot be reconciled with
amendment the federal courts, including this Court, *580 a wooden, literal reading of the statute. Concurrent findings
consistently exercised some discretion in determining the sum of the District Court and the Court of Appeals established that
recoverable as wages under this section. the refusal to make the wage payment when due was without
sufficient cause. Justice Holmes and his Brethren accepted
that finding for purposes of decision, but reasoned that there
A was sufficient cause for the owner's decision to appeal and his
refusal to pay while the appeal was pending.
In fixing the amount of the award of double wages, the District
Court in this case may have reasoned that respondent had The curious character of this Court's conclusion that reasons
sufficient cause for its delay in paying the earned wages after insufficient to justify the refusal to pay before the trial court's
petitioner obtained employment with another shipmaster, but decision somehow became sufficient to justify a subsequent
**3255 that there was not sufficient cause for its failure refusal to pay is not the most significant point to Justice
to make payment before that time. Although this reasoning Holmes' opinion. The case is primarily significant because
conflicts with a literal reading of § 596, it is perfectly its holding cannot be squared with a literal reading of the
consistent with this Court's contemporary construction of the statute. 6 Even though the initial refusal is without sufficient
statute in Pacific Mail S. S. Co. v. Schmidt, 241 U.S. 245, cause, statutory wages are not necessarily recoverable for the
36 S.Ct. 581, 60 L.Ed. 982 (1916). The teaching of Justice entire period until payment is made either to the seaman or to
Holmes' opinion for the Court in that case is that the wrongful
a stakeholder. 7 A subsequent event— **3256 even *582
character of the initial refusal to pay does not mean that
though not expressly mentioned in the statute itself—may
foreshorten the recovery period.
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the seaman, citing specific sections of federal legislation,
In Pacific Mail the subsequent event was the vessel owner's demanded from the shipmaster his discharge, his earned
decision to appeal. The finding that that event provided wages, and other benefits. The master was unfamiliar with the
sufficient cause for the delay after November 5, 1913, was cited sections and asked the seaman to meet with him at noon
made sua sponte by this Court. In this case the subsequent the next day for an informed discussion of the demands. The
event was the reemployment of petitioner in a comparable job seaman missed the appointment and left the country without
on May 5, 1976. The finding that that event—coupled with the contacting the master. After his return to the United States,
failure to make any additional demand for almost two years the seaman filed an action in which he claimed entitlement
thereafter—was sufficient cause for the delay after May 5, to, inter alia, his earned wages and double wages for the
1976, was made by the District Court. It is true that the judge delay in payment. The District Court, affirmed by the Court
did not expressly frame his decision in these terms, but his of Appeals, held that the owner of the ship, the United
actual decision fits precisely the mold established by Pacific States, was immune from the double-wage provision of § 596
Mail. Both cases give a flexible reading to the “sufficient because the double wages constituted *584 a penalty. This
cause” language in the statute. They differ with respect to the Court granted the seaman's petition for certiorari, but avoided
nature of the subsequent event but not with respect to their decision of the sovereign immunity question by **3257
departure from the statutory text. 8 holding that there was sufficient cause for the failure of the
shipmaster to make the wage payment within four days of
the seaman's discharge. The Court then rejected the seaman's
rather reasonable argument that even if the shipmaster had
B cause to withhold payment during those four days, there
was not sufficient cause for the continued refusal once the
The second case in which this Court construed § 596,
seaman filed his action and formally made his claim to earned
Collie v. Ferguson, 281 U.S. 52, 50 S.Ct. 189, 74 L.Ed.
wages. The Court, without citing Pacific Mail, held that if
696 (1930), also focused on the meaning of the phrase
the master's failure to pay earned wages at the time specified
“without sufficient cause.” In that case the unpaid seamen
in the statute was justified by sufficient cause, the fact that
claimed that the financial necessities of the owner could
he later refused to pay pursuant to a proper demand could
not constitute sufficient cause for delay in wage payments;
not give rise to statutory liability even though there was no
that contention was surely consistent with the plain language
sufficient cause for the subsequent refusal.
of the statute. This Court nevertheless denied recovery,
construing the statute as implicitly containing a requirement
These early interpretations of § 596 dispel any notion that the
that the refusal be “in some sense arbitrary or *583 wilful,
statute means exactly what it says. The Court has construed
or at least a failure not attributable to impossibility of
the statute “to effect its purpose,” Isbrandtsen Co. v. Johnson,
payment.” Id., at 55, 50 S.Ct., at 191. The Court adopted this
343 U.S. 779, 783, 72 S.Ct. 1011, 1014, 96 L.Ed. 1294 (1952),
nonliteral construction of the statute because it recognized
and, as the early cases demonstrate, the purpose of the statute
the significance of the provision that a seaman's double-
does not always require the award of double wages in the
wage claim “shall be recoverable as wages in any claim
amount that the statute literally specifies.
made before the Court.” See id., at 54, 50 S.Ct., at 190. In
any proceeding arising out of the insolvency of the vessel
owner, this provision accords this type of claim priority
over general creditors and various lienors who have stronger C
equitable claims on limited assets. The construction of the
words “without sufficient cause” to narrow the protection of Flexibility also has characterized the applications of the
the statute was consistent with the intent of Congress even statute rendered by the lower federal courts. For decades those
though it involved a rather flexible reading of the text of the courts consistently concluded that Congress intended to allow
judicial discretion to play a part in determining the amount of
statute itself. 9
the double-wage recovery. 10 Whether those decisions *585
This Court's third occasion to interpret § 596 was McCrea were entirely consistent with the meaning a grammarian
v. United States, 294 U.S. 23, 55 S.Ct. 291, 79 L.Ed. 735 might have placed on the statute is less significant **3258
(1935), and, once again, the Court construed the statute than the fact that they were entirely consistent with this
narrowly, this time by taking a literal approach. In that case Court's *586 decisions and with one another, 11 and the
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fact that their holdings must have come to the attention of to two different interpretations, one that would represent a
Congress. rather unremarkable change and the other that would be both
drastic and dramatic.
It was not until 1966 that a contrary reading of the statute
was adopted by the Third Circuit in Swain v. Isthmian Lines, The unremarkable change would amount to nothing more
Inc., 360 F.2d 81, 12
and another eight years before that case than a removal of the narrow 10-day limit on the scope of
the judge's discretion. The word “shall” would continue to
was followed in another Circuit. 13 I cannot deny that there
do nothing more than require some recovery in an amount
is wisdom in the rule of construction that mandates close
to be fixed by the judge, but in recognition of the reality
adherence to literal statutory text, 14 but it is also true that that seamen might be stranded for more than 10 days, the
a consistent course of judicial construction can become as recovery period could extend beyond 10 days. This sort of
much a part of a statute as words inserted by the legislature unremarkable change is consistent with the purpose of the
itself. The construction consistently followed by the federal
statute, 19 as *589 well as with a legislative history that
judiciary between 1898 and 1966 was presumably acceptable
fails to make any comment on its significance. As Justice
to Congress, and I find this more persuasive than the literal
REHNQUIST has perceptively observed in another context,
reading on which the Court places its entire reliance. 15
the fact that the dog did not bark can itself be significant. 20
Moreover, since the result that construction produces in this
case is both absurd and palpably unjust, this is one of the cases
The Court's construction of the amendment is, however,
in which the exercise of judgment dictates a departure from
both drastic and dramatic. Instead of effecting a modest
the literal text in order to be faithful to the legislative will. 16 enlargement of the judge's discretion to do justice in these
cases, the Court's construction effects a complete prohibition
of judicial discretion. Instead of permitting recoveries for
*587 III a period somewhat longer than 10 days, the amendment
is construed as a command that even when the unresolved
The construction permitting the district court to exercise some dispute persists for two or three years without any special
discretion in tailoring the double-wage award to the particular hardship to the seaman, an automatic recovery must be
equities of the case is just as consistent with the legislative ordered for the entire period regardless of the equitable
history of § 596 as the Court's new literal approach to this considerations that may arise after the shipmaster's initial
statute. In 1872, when Congress authorized the recovery of mistake has been made. Such a major change in both the
additional wages by seamen who were not paid within five potential amount of the statutory recovery and the character
days of their discharge, it used the word “shall” to make it of the judge's authority would normally be explained in the
clear that such a recovery must be awarded, but it allowed commitee reports or the debates if it had been intended. 21
the district courts a limited discretion in setting the amount
of such recovery. 17 The judge's discretion as to amount was
limited in two ways: (1) the statutory wage rate could not be
*590 **3260 IV
more than double the amount of the seaman's daily wage; and
(2) the period for which the statutory wage could be awarded It is ironic that the same seven Justices—who today are
could not exceed 10 days. transfixed by a literal reading of § 596—only a few days
ago blithely ignored the text of the Tax Injunction Act in
**3259 Subsequent amendments to the statute did not order to reach the conclusion that a federal court has no
remove the requirement that some recovery “shall” be jurisdiction to entertain a suit for a declaratory judgment
awarded, but did modify both of the limits on the judge's against the United States Secretary of Labor to determine
discretion. With respect to the wage rate, Congress first whether a federal statute violates the Federal Constitution.
specified that it should *588 equal the daily rate—rather California v. Grace Brethren Church, 457 U.S. 393, 102 S.Ct.
than double the daily rate—and later specified that the rate 2498, 73 L.Ed.2d 93 (1982). The inconsistency in the Court's
should be the double rate. 18 With respect to the period for approach to the task of statutory construction in these two
which the statutory wage was payable, the 1898 amendment cases is less troublesome, however, than its failure in each
simply removed the 10-day limit. This amendment is subject case to consider whether its conclusion could reasonably be
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thought to represent the will of Congress. I am not persuaded
that the 1898 amendment, removing the 10-day limit on the
scope of the trial judge's discretion, was intended to be read as All Citations
a command to award $302,790.40 to a seaman who was not
paid $412.50 in wages when due. 458 U.S. 564, 102 S.Ct. 3245, 73 L.Ed.2d 973, 1982 A.M.C.
2377
I respectfully dissent.
Footnotes
* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the
convenience of the reader. See United States v. Detroit Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.
1 According to respondent, petitioner was not formally discharged until June 1, 1976, but his termination was made
retroactive to April 1. Brief for Respondent 5.
2 The court also found:
“Defendant did not begin a thorough investigation of plaintiff's claim until September 30, 1976. The investigation was
not made with reasonable diligence. Defendant's failure to pay maintenance and cure, repatriation expenses, the cost
of his personal effects, and earned and unearned wages to plaintiff constituted arbitrary, unreasonable, callous, and
willful disregard of plaintiff's rights.” App. 20, ¶ 21.
3 The court found that the daily wage rate to be used in calculating the penalty was $101.20. In accordance with the statute,
the court assessed a penalty of twice this rate ($202.40) for each of the 34 days of the penalty period.
4 The Courts of Appeals for the Third and Ninth Circuits have interpreted the statute to mandate imposition of the penalty
for each day until the wages are paid and to leave no room for the district court's exercise of discretion. Swain v. Isthmian
Lines, Inc., 360 F.2d 81 (CA3 1966); Larkins v. Hudson Waterways Corp., 640 F.2d 997 (CA9 1981); Thomas v. SS Santa
Mercedes, 572 F.2d 1331 (CA9 1978). The Courts of Appeals for the First, Second, and Fourth Circuits have adopted
the interpretation followed by the Fifth Circuit. Mavromatis v. United Greek Shipowners Corp., 179 F.2d 310 (CA1 1950);
Forster v. Oro Navigation Co., 228 F.2d 319 (CA2 1955), aff'g 128 F.Supp. 113 (SDNY 1954); Southern Cross S.S. Co. v.
Firipis, 285 F.2d 651 (CA4 1960), cert. denied, 365 U.S. 869, 81 S.Ct. 903, 5 L.Ed.2d 859 (1961). We noted this conflict
in American Foreign S.S. Co. v. Matise, 423 U.S. 150, 152, n. 1, 96 S.Ct. 410, 412 n. 1, 46 L.Ed.2d 354 (1975).
5 Petitioner has not questioned the other holdings of the Court of Appeals in his case. Respondent did not appeal from the
judgment of the District Court and has not cross-petitioned for certiorari here.
6 The statute reads in full:
“The master or owner of any vessel making coasting voyages shall pay to every seaman his wages
within two days after the termination of the agreement under which he was shipped, or at the
time such seaman is discharged, whichever first happens; and in case of vessels making foreign
voyages, or from a port on the Atlantic to a port on the Pacific, or vice versa, within twenty-four hours
after the cargo has been discharged, or within four days after the seaman has been discharged,
whichever first happens; and in all cases the seaman shall be entitled to be paid at the time of his
discharge on account of wages a sum equal to one-third part of the balance due him. Every master
or owner who refuses or neglects to make payment in the manner hereinbefore mentioned without
sufficient cause shall pay to the seaman a sum equal to two days' pay for each and every day
during which payment is delayed beyond the respective periods, which sum shall be recoverable
as wages in any claim made before the court; but this section shall not apply to masters or owners
of any vessel the seamen of which are entitled to share in the profits of the cruise or voyage. This
section shall not apply to fishing or whaling vessels or yachts.”
7 The Act of 1790 and the Act of 1872 provided the basis for § 4529 of the Revised Statutes, codified in 1878. Section
4529 read as follows:
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“The master or owner of every vessel making voyages from a port on the Atlantic to a port on the
Pacific, or vice versa, shall pay to every seaman his wages, within two days after the termination
of the agreement, or at the time such seaman is discharged, whichever first happens; and, in the
case of vessels making foreign voyages, within three days after the cargo has been delivered, or
within five days after the seaman's discharge, whichever first happens; and in all cases the seaman
shall, at the time of his discharge, be entitled to be paid, on account, a sum equal to one-fourth
part of the balance due him. Every master or owner who neglects or refuses to make payment
in manner hereinbefore mentioned, without sufficient cause, shall pay to the seaman a sum not
exceeding the amount of two days' pay for each of the days, not exceeding ten days, during which
payment is delayed beyond the respective periods; which sum shall be recoverable as wages in
any claim made before the court. But this section shall not apply to the masters or owners of any
vessel the seamen on which are entitled to share in the profits of the cruise or voyage.”
8 The 1898 Act was substantially identical to legislation that had passed the House in the previous Congress, and had
been favorably reported in the Senate, but had failed to come to a vote before the end of the session. Thus, the House
Report of the legislation enacted in 1898 contained little more than a reproduction of the House Report of the previous
Congress, and the relevant Senate Report also dates from that Congress.
9 Respondent assumes that the penalty would run until September 17, 1980, since that was the date on which it finally
paid petitioner the $412.50. Brief for Respondent 17. Petitioner, on the other hand, apparently assumes that the penalty
period expired on May 6, 1980, the date of the District Court's judgment. Brief for Petitioner 19. Under our construction of
the statute, the District Court's entry of judgment will not toll the running of the penalty period unless delays beyond that
date are explained by sufficient cause. See Pacific Mail S.S. Co. v. Schmidt, 241 U.S. 245, 250–251, 36 S.Ct. 581, 582–
583, 60 L.Ed. 982 (1916) (holding that when an appeal is taken on reasonable grounds, the penalty should not apply to
delays in payment beyond the date on which the district court's decree is entered, since those delays are supported by
sufficient cause). The Court of Appeals for the Fourth Circuit, in Southern Cross S.S. Co. v. Firipis, 285 F.2d, at 660, and
the Court of Appeals for the Third Circuit in Swain v. Isthmian Lines, Inc., 360 F.2d, at 88, n. 26, have interpreted this
Court's decision in Pacific Mail to permit the employer to toll the running of the penalty period by placing in the hands
of the court the allegedly unlawfully withheld wages.
10 The Court found that the employer “had strong and reasonable ground for believing that the statute ought not to be held
to apply,” 241 U.S., at 250, 36 S.Ct., at 582, because the work for which the seaman claimed unpaid wages did not occur
during a voyage and was the result of an oral contract.
1 “It is a familiar rule, that a thing may be within the letter of the statute and yet not within the statute, because not within
its spirit, nor within the intention of its makers. This has been often asserted, and the reports are full of cases illustrating
its application. This is not the substitution of the will of the judge for that of the legislator, for frequently words of general
meaning are used in a statute, words broad enough to include an act in question, and yet a consideration of the whole
legislation, or of the circumstances surrounding its enactment, or of the absurd results which follow from giving such
broad meaning to the words, makes it unreasonable to believe that the legislator intended to include the particular act.”
Holy Trinity Church v. United States, 143 U.S. 457, 459, 12 S.Ct. 511, 512, 36 L.Ed. 226 (1892).
2 The statute is quoted in full, ante, at 3249, n. 6.
3 The Court of Appeals held that the award did not constitute an abuse of discretion. 664 F.2d 36, 40 (CA5 1981).
4 This figure is computed by reference to the period between April 1, 1976 (date of discharge), and May 6, 1980 (date of
judgment). But see ante, at 3252, n. 9.
5 The Court omits the italicized clause of the statute when it quotes the statute in the text of its opinion. Ante, at 3249 and
3251. Because wage claims, unlike penalties, have consistently been accorded a high priority in insolvency proceedings
against employers, it seems to me the clause is pertinent to our task of discerning the intent of Congress in authorizing
an award of double wages. See also infra, at 3256.
6 In a petition for rehearing, after pointing out that the Court had adopted an interpretation of the statute that had not been
urged in any of the briefs or in any of the opinions of the lower courts, the seaman argued:
“According to the grammatical, natural and unambiguous meaning conveyed by the words of section 4529, R.S.,
Congress has limited the running of penalties only by a ‘sufficient cause’ for original non-payment of earned wages
—a sufficient cause operating to prevent penalties from ever beginning to accrue; once these penalties begin to run,
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nothing short of actual payment or tender can suffice to prevent the continuous accrual of the per diem penalties.” Pet.
for Rehearing, O.T. 1915, No. 323, p. 5.
7 Petitioner argues that literal application of § 596 will not yield harsh results because the shipmaster may toll the period of
delay by tendering the disputed wage claim into the registry of the court. Brief for Petitioner 27. In petitioner's words, the
master may make a “constructive payment of wages.” Id., at 28. The Court seems to accept this argument. See ante, at
3252, n.9. Neither petitioner nor the Court seems to recognize that acceptance of this minimal tolling rule conflicts with
a literal reading of the statute. A tender of wages to the court is a “constructive payment of wages” only because a court
has added that reasonable gloss to the statute.
8 If the Court today were to read Pacific Mail as requiring that the subsequent-event finding be made expressly, I would
either follow Justice Holmes' lead by making a comparable finding in this Court or I would remand to the District Court
for additional findings on this issue.
9 The District Court's finding of arbitrariness in this case—which, in view of the holding in Collie, was necessary if any
penalty wage were to be recovered—must be read in the context of its actual award. It was not clearly erroneous to find
that the refusal to pay petitioner $412.50 was arbitrary while he was unemployed; it surely was not equally arbitrary during
the ensuing 2-year period when he was employed by a competitor and did not renew his demand.
10 See Mystic S.S. Co. v. Stromland, 20 F.2d 342, 344 (CA4) ( “The District Court, by limiting the right of recovery to 10 days
after the libel was filed, in effect placed a limitation on the amount of the recovery under the statute. Was there objection
to this? We think not”), rehearing denied, 21 F.2d 607 (1927), cert. denied, 276 U.S. 618, 48 S.Ct. 213, 72 L.Ed. 734
(1928); Mavromatis v. United Greek Shipowners Corp., 179 F.2d 310, 316 (CA1 1950) (“The language of § 596 has been
given a somewhat free reading so as to accord to the courts a considerable margin of discretion in adjusting the duration
of the penalty to the equities of the particular case”); Prindes v. S.S. African Pilgrim, 266 F.2d 125, 128 (CA4 1959) (“The
period during which the penalty accumulates is to be determined by the equities of the particular case”); Southern Cross
SS Co. v. Firipis, 285 F.2d 651, 658 (CA4 1960) (“With regard to liability for double pay, a doctrine had developed before
the McCrea case, and has continued to the present time, that the District Court has a measure of discretion through
the application of equitable principles in determining the number of days for which double wages should be assessed”),
cert. denied, 365 U.S. 869, 81 S.Ct. 903, 5 L.Ed.2d 859 (1961); Caribbean Federation Lines v. Dahl, 315 F.2d 370, 374
(CA5) ( “The time for which the penalty provision runs rests within the sound discretion of the court and depends upon the
equities of the case”), cert. denied, 375 U.S. 831, 84 S.Ct. 76, 11 L.Ed.2d 62 (1963); McConville v. Florida Towing Corp.,
321 F.2d 162, 168, n. 11 (CA5 1963) (“The Court has wide equitable discretion in fixing the time for which the penalty
provision runs”); The Chester, 25 F.2d 908, 911 (Md.1928) (“[I]n spite of the seeming rigidity of the statute, there is still left
to the courts certain discretionary power to limit the penalties”); The Victoria, 76 F.Supp. 54, 56 (SDNY 1947) (“In spite
of the seeming rigidity of the statute, the court still has discretionary power to limit the penalties”), rev'd on other grounds,
172 F.2d 434 (CA2 1949); Forster v. Oro Navigation Co., 128 F.Supp. 113, 116 (SDNY 1954) (“The number of days
for which the defendant must pay double wages rests in the discretion of the court and depends on the equities of the
particular case”), aff'd, 228 F.2d 319 (CA2 1955); Samad v. The Etivebank, 134 F.Supp. 530, 542 (ED Va.1955) ( “The
number of days for which respondents must pay double wages rests in the discretion of the Court and depends upon
the equities of the particular case”); Spero v. Steamship The Argodon, 150 F.Supp. 1, 6 (ED Va.1957) ( “It is well settled
that the number of days for which respondents must pay double wages rests in the discretion of the Court and depends
upon the equities of the particular case”); Kontos v. SS Sophie C., 236 F.Supp. 664, 674 (ED Pa.1964) (“Although the
penalty is applicable, its duration seems to be committed to the discretion of the trial judge to tailor to the equities of the
particular case”); Ventiadis v. C. J. Thibodeaux & Co., 295 F.Supp. 135, 138 (SD Tex.1968) (“ ‘The time for which the
penalty provision runs rests within the sound discretion of the court and depends upon the equities of the case’ ”); see
also Swanson v. Torry, 25 F.2d 835 (CA4 1928); The Lake Galewood, 21 F.2d 987 (Md.1927), aff'd, 25 F.2d 1020 (CA4),
cert. denied, 278 U.S. 637, 49 S.Ct. 33, 73 L.Ed. 553 (1928).
11 See Southern Cross SS Co. v. Firipis, supra, at 655–658.
12 See 360 F.2d, at 85 (“Despite this rather precise statutory directive, of those cases which we have uncovered, where
the question—whether Section 596 of the statute may still be read with a measure of judicial discretion when supposed
equitable considerations present themselves—was considered, all have found proper the balancing of the statutory
language with a judicial sense of the equities of each case.”).
13 See Escobar v. SS Washington Trader, 503 F.2d 271, 274 (CA9 1974), vacated and remanded on other grounds sub
nom. American Trading Transportation Co. v. Escobar, 423 U.S. 1070, 96 S.Ct. 852, 47 L.Ed.2d 80 (1976).
14 See, most recently, Weinberger v. Romero-Barcelo, 456 U.S. 305, 322–335, 102 S.Ct. 1798, 1808–1815, 72 L.Ed.2d
91 (1982) (STEVENS, J., dissenting).
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15 This Court based its interpretation of “sufficient cause” in Collie v. Ferguson, 281 U.S. 52, 50 S.Ct. 189, 74 L.Ed. 696
(1930), in part upon “the conclusion reached with practical unanimity by the lower federal courts.” Id., at 56, 50 S.Ct.,
at 191.
16 “The Court has had several occasions within the last few years to construe statutes in which conflicts between reasonable
intention and literal meaning occurred. We have refused to nullify statutes, however hard or unexpected the particular
effect, where unambiguous language called for a logical and sensible result. Any other course would be properly
condemned as judicial legislation. However, to construe statutes so as to avoid results glaringly absurd, has long been
a judicial function. Where, as here, the language is susceptible of a construction which preserves the usefulness of the
section, the judicial duty rests upon this Court to give expression to the intendment of the law.” Armstrong Paint & Varnish
Works v. Nu-Enamel Corp., 305 U.S. 315, 332–333, 59 S.Ct. 191, 199–200, 83 L.Ed. 195 (1938) (footnotes omitted).
17 The 1872 version of § 596 provided in pertinent part:
“[E]very master or owner who neglects or refuses to make payment [of a seaman's earned wages within five days
after the seaman's discharge] without sufficient cause shall pay to the seaman a sum not exceeding the amount of
two days' pay for each of the days, not exceeding ten days, during which payment is delayed beyond the [five-day
period]; and such sum shall be recoverable as wages in any claim made before the court ....” Act of June 7, 1872,
ch. 322, § 35, 17 Stat. 269.
18 The 1898 version of § 596 provided in pertinent part:
“Every master or owner who refuses or neglects to make payment [of a seaman's earned wages within four days of
the seaman's discharge] without sufficient cause shall pay to the seaman a sum equal to one day's pay for each and
every day during which payment is delayed beyond the [four-day period], which sum shall be recoverable as wages in
any claim made before the court ....” Act of Dec. 21, 1898, § 4, 30 Stat. 756.
The 1915 amendment substituted “two days' pay” for “one day's pay.” See Act of Mar. 4, 1915, § 3, 38 Stat. 1164–1165.
19 Justice Cardozo, while a member of the New York Court of Appeals, explained the purpose of the statute:
“The purpose, or at least the predominant one, was, not punishment of the master or owner, but compensation to the
seaman. Delay means loss of opportunity to ship upon another vessel. It means hardship during the term of waiting,
the sufferer often improvident, and stranded far from home. ‘In all fairness he should recover more than the amount
due him for wages earned’ (Calvin v. Huntley, 178 Mass. 29, 32, 59 N.E. 435).” Cox v. Lykes Brothers, 237 N.Y. 376,
379, 143 N.E. 226, 227 (1924).
The District Court's award in this case, tolling the period for computing the double wages on the date petitioner obtained
employment with another seagoing vessel, was also perfectly consistent with the statutory purpose.
20 Harrison v. PPG Industries, Inc., 446 U.S. 578, 602, 100 S.Ct. 1889, 1902, 64 L.Ed.2d 525 (1980) (dissenting opinion);
cf. A. Conan Doyle, Silver Blaze, in The Complete Sherlock Holmes 383 (1938).
21 The House Report's description of the 1898 amendment was that it “increases from one-fourth to one-third the amount
of balance of wages due the seaman, to which he is entitled immediately upon discharge, and, in general, provides for
prompter payment of wages of seamen.” H.R.Rep.No.1657, 55th Cong., 2d Sess., 3 (1898). It is noteworthy that the
first change described, respecting the part of the seaman's wages to which he is entitled at the time of his discharge in
every case, is rather trivial. See the full text of the statute, ante, at 3249, n. 6. And the description of the provision for
prompter payment of wages most likely refers to the amendment of the time period during which the shipmaster had to
pay the seaman his full wages in order to avoid the double-wage provision of § 596. In the cases of seamen of vessels
making foreign voyages, the time period was changed from five days in 1872, see n. 17, supra, to four days in 1898,
see n. 18, supra.
End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.
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KeyCite Yellow Flag - Negative Treatment West Headnotes (8)
Superseded by Statute as Stated in In re MF Global Holdings Ltd.,
Bankr.S.D.N.Y., April 24, 2020
132 S.Ct. 1882 [1] Bankruptcy Governmental claims; taxes,
Supreme Court of the United States etc
Bankruptcy Governmental Claims; Taxes
Lynwood D. HALL, et ux., Petitioners Bankruptcy Discharge
v.
Bankruptcy Contents; pre-confirmation
UNITED STATES.
modification
No. 10–875. Capital gains tax liability arising from
| postpetition sale of farmland of Chapter 12
Argued Nov. 29, 2011. debtors was not tax liability “incurred by
| the estate,” within meaning of administrative
Decided May 14, 2012. expense provision, as required for debtors to
strip federal government's corresponding tax
Synopsis claim of its priority, to pay it pro rata with
Background: Chapter 12 debtors proposed plan of other general unsecured claims, and to discharge
reorganization, under which they sought to pay off their any remaining obligation to government under
outstanding liabilities using proceeds from sale of their farm priority-stripping provision added to the Code by
and to pay capital gains tax obligation arising from the the Bankruptcy Abuse Prevention and Consumer
postpetition sale of their farm pro rata with other general Protection Act (BAPCPA); abrogating Knudsen
unsecured debts. The Bankruptcy Court, Eileen W. Hollowell, v. IRS, 581 F.3d 696. 11 U.S.C.A. §§ 503(b)(1)
J., 376 B.R. 741, sustained Internal Revenue Service's (IRS's) (B)(i), 1222(a)(2)(A).
objection to plan, and debtors appealed. The United States
District Court for the District of Arizona, David C. Bury, J., 15 Cases that cite this headnote
393 B.R. 857, reversed. Government appealed. The United
States Court of Appeals for the Ninth Circuit, Diarmuid [2] Bankruptcy Governmental claims; taxes,
F. O'Scannlain, Circuit Judge, 617 F.3d 1161, reversed. etc
Certiorari was granted.
Tax “incurred by the estate,” within meaning
of administrative expense provision, is tax for
which the estate itself is liable. 11 U.S.C.A. §
[Holding:] The Supreme Court, Justice Sotomayor, held 503(b)(1)(B)(i).
that capital gains tax liability arising from postpetition
sale of debtors' farmland was not tax liability “incurred 2 Cases that cite this headnote
by the estate,” within meaning of administrative expense
provision, as required for debtors to strip federal government's [3] Internal Revenue Receivers, trustees in
corresponding tax claim of its priority; abrogating Knudsen v. bankruptcy or assignees
IRS, 581 F.3d 696.
Internal Revenue Persons required to
make
Court of Appeals affirmed. Chapter 12 estates are not taxable entities;
petitioners, not estate itself, are required to file
Justice Breyer dissented and filed opinion, in which Justices tax return and are liable for taxes resulting from
Kennedy, Ginsburg, and Kagan joined. postpetition sale of debtors' farm. 26 U.S.C.A. §
1399.
3 Cases that cite this headnote
000263
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was not for court to rewrite statute to accomplish
[4] Statutes Prior or existing law in general that result, particularly in complex terrain
Court assumes that Congress is aware of existing of interconnected provisions and exceptions
law when it passes legislation. enacted over nearly three decades. 11 U.S.C.A.
§§ 503(b)(1)(B)(i), 1222(a)(2)(A).
13 Cases that cite this headnote
8 Cases that cite this headnote
[5] Statutes Similarity or difference
Identical words and phrases within same statute
should normally be given same meaning.
8 Cases that cite this headnote **1883 Syllabus *
Chapter 12 of the Bankruptcy Code allows farmer debtors
[6] Bankruptcy Governmental claims; taxes, with regular annual income to adjust their debts subject
etc to a reorganization plan. The plan must provide for full
Bankruptcy Governmental Claims; Taxes payment of priority claims. 11 U.S.C. § 1222(a)(2). Under §
1222(a)(2)(A), however, certain governmental claims arising
Phrase “incurred by the estate,” as used in
from the disposition of farm assets are stripped of priority
statute according administrative expense priority
status and downgraded to general, unsecured claims that are
to certain tax obligations incurred by the estate,
dischargeable after less than full payment. That exception
did not have merely a temporary meaning, as
applies only to claims “entitled to priority under [11 U.S.C. §
signifying any tax incurred postpetition, without
507]” in the first place. As relevant here, § 507(a)(2) covers
regard to whether estate was liable therefor. 11
“administrative expenses allowed under § 503(b),” which
U.S.C.A. § 503(b)(1)(B)(i).
includes “any tax ... incurred by the estate.” § 503(b)(1)(B)(i).
4 Cases that cite this headnote
Petitioners filed for Chapter 12 bankruptcy and then sold
their farm. They proposed a plan under which they would
[7] Bankruptcy Governmental claims; taxes,
pay off outstanding liabilities with proceeds from the sale.
etc
The Internal Revenue Service (IRS) objected, asserting a
Bankruptcy Governmental Claims; Taxes tax on the capital gains from the sale. Petitioners then
It was not enough, in order for taxes to be proposed treating the tax as an unsecured claim to be paid
entitled to administrative expense priority as to the extent funds were available, with the unpaid balance
taxes “incurred by the estate,” that Chapter being discharged. The Bankruptcy Court sustained an IRS
12 debtors might pay taxes using estate funds objection, the District Court reversed, and the Ninth Circuit
generated from postpetition sale of their farm, if reversed the District Court. The Ninth Circuit held that
tax debt, arising from sale of debtors' farm, was because a Chapter 12 estate is not a separate taxable entity
liability of debtors rather than of the estate. 11 under the Internal Revenue Code (IRC), 26 U.S.C. §§ 1398,
U.S.C.A. § 503(b)(1)(B)(i). 1399, it does not “incur” postpetition federal income taxes.
The Ninth Circuit concluded that because the tax was not
12 Cases that cite this headnote “incurred by the estate” under § 503(b), it was not a priority
claim eligible for the § 1222(a)(2)(A) exception.
[8] Constitutional Law Particular Issues and
Applications Held: The federal income tax liability resulting from
petitioners' postpetition farm sale is not “incurred by the
While there might be compelling policy reasons
estate” under § 503(b) of the Bankruptcy Code and thus is
for treating postpetition income tax liability
neither collectible nor dischargeable in the Chapter 12 plan.
arising from sale of Chapter 12 debtors' farmland
Pp. 1886 – 1893.
as dischargeable, it was up to Congress, if it
intended that result, to so provide in statute; it
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(a) The phrase “incurred by the estate” bears a plain and (d) None of the contrary arguments by petitioners and the
natural reading. A tax “incurred by the estate” is a tax for dissent overcomes the statute's plain language, context, and
which the estate itself is liable. Only certain estates are liable structure. There is no textual basis for giving “incurred by
for federal income taxes. IRC §§ 1398 and 1399 define the estate” a temporal meaning, such that it refers to all taxes
the division of responsibilities for the payment of taxes “incurred postpetition.” Nor does the text support deeming a
between the estate and the debtor on a chapter-by-chapter tax “incurred by the estate” whenever it is paid by the debtor
basis. Under those provisions, a Chapter 12 estate is not out of property of the estate. Section 503's legislative history
a separately taxable entity. The debtor—not the trustee—is is not inconsistent with this Court's holding, and the Court has
generally liable for taxes and files the only tax return. The cautioned against allowing ambiguous legislative history to
**1884 postpetition income taxes are thus not “incurred by muddy clear statutory language. See Milner v. Department of
the estate.” Pp. 1886 – 1887. Navy, 562 U.S. ––––, ––––, 131 S.Ct. 1259, 179 L.Ed.2d 268.
Meanwhile, any cases suggesting that postpetition taxes were
(b) Section 346 of the Bankruptcy Code and its longstanding treated as administrative expenses are inapposite because they
interplay with IRC §§ 1398 and 1399 reinforce that whether involve corporate debtors, which Congress has singled out for
an estate “incurs” taxes turns on Congress' chapter-specific responsibilities paralleling those borne by a separate taxable
guidance on which estates are separately taxable. The original entity's trustee. Finally, petitioners contend that the purpose
§ 346 established that state or local income taxes could of § 1222(a)(2)(A) was to provide debtors with robust relief
be imposed only on the estate in an individual-debtor from tax debts. There may be compelling policy reasons for
Chapter 7 or 11 bankruptcy, and only on the debtor in a treating postpetition income tax liabilities as dischargeable.
Chapter 13 bankruptcy. Congress applied the framework of But if Congress intended petitioners' result, it did not so
§ 346 to federal taxes two years later: IRC § 1398 and provide in the statute. Pp. 1891 – 1893.
1399 established that the estate is separately taxable in
individual-debtor Chapter 7 or 11 cases, and not separately 617 F.3d 1161, affirmed.
taxable in Chapter 13 (and now Chapter 12) cases. The
Bankruptcy Abuse Prevention and Consumer Protection Act SOTOMAYOR, J., delivered the opinion of the Court,
of 2005 subsequently amended § 346, expressly aligning in which ROBERTS, C.J., and SCALIA, THOMAS, and
its assignment of state or local taxes with the IRC separate ALITO, JJ., joined. BREYER, J., filed a dissenting opinion,
taxable entity rules for federal taxes. This Court assumes that in which KENNEDY, GINSBURG, and KAGAN, JJ., joined.
Congress is aware of existing law when it passes legislation,
and the existing law at the enactment of § 1222(a)(2)(A)
indicated that an estate's liability for taxes turned on separate Attorneys and Law Firms
taxable entity rules. Pp. 1887 – 1889.
Susan M. Freeman, Phoenix, AZ, for Petitioners.
(c) Chapter 13, on which Chapter 12 was modeled, further **1885 Pratik A. Shah, for Respondent.
bolsters this Court's holding. Established understandings hold
that postpetition income taxes are not “incurred by the Susan M. Freeman, Counsel of Record, Lawrence A. Kasten,
[Chapter 13] estate” under § 503(b) because they are the Justin J. Henderson, Lewis and Roca LLP, Phoenix, AZ,
liability of the Chapter 13 debtor alone. The Government Clifford B. Altfeld, Altfeld & Battaile P.C., Tucson, AZ, for
has also long hewed to this position. Section 1305(a)(1), Petitioners.
which gives holders of postpetition claims the option of
collecting postpetition taxes within the bankruptcy case, Donald B. Verrilli, Jr., Solicitor General, Counsel of Record,
would be superfluous if postpetition tax liabilities were John A. DiCicco, Principal Deputy Assistant, Attorney
automatically collectible inside the bankruptcy. It is thus General, Malcolm L. Stewart, Deputy Solicitor General,
clear that postpetition income taxes are not automatically Pratik A. Shah, Assistant to the Solicitor General, Bruce R.
collectible in a Chapter 13 plan and are not administrative Ellisen, Patrick J. Urda, Attorneys, Department of Justice,
expenses under § 503(b). To hold otherwise in Chapter 12 Washington, DC, for the United States.
would disrupt settled practices in Chapter 13 cases. Pp. 1889
– 1891.
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507, but the debt shall be treated in such manner only if the
Opinion debtor receives a discharge.” 11 U.S.C. § 1222.
Justice SOTOMAYOR delivered the opinion of the Court. Under § 1222(a)(2)(A), certain governmental claims resulting
from the disposition of farm assets are downgraded to general,
*508 Under Chapter 12 of the Bankruptcy Code, farmer
unsecured claims that are dischargeable after less than full
debtors may treat certain claims owed to a governmental unit
payment. See § 1228(a). The claims are stripped of their
resulting from the disposition of farm assets as dischargeable,
priority status.
unsecured liabilities. 11 U.S.C. § 1222(a)(2)(A). One such
claim is for “any tax ... incurred by the estate.” § 503(b)(1)
*510 That exception, however, applies only to claims in the
(B)(i). The question presented is whether a federal income
plan that are “ entitled to priority under section 507” in the
tax liability resulting from individual debtors' sale of a farm
first place. Section 507 lists 10 categories of such claims. Two
during the pendency of a Chapter 12 bankruptcy is “incurred
pertain to taxes: One category, § 507(a)(8), covers prepetition
by the estate” and thus dischargeable. We hold that it is not.
**1886 taxes, and is inapplicable in this case. The other,
§ 507(a)(2), covers “administrative expenses allowed under
section 503(b),” which in turn includes “any tax ... incurred
I by the estate.” § 503(b)(1)(B)(i). Thus, for postpetition taxes
to be entitled to priority under § 507 and eligible for the §
1222(a)(2)(A) exception, the taxes must be “incurred by the
A
estate.”
*509 In 1986, Congress enacted Chapter 12 of the
Bankruptcy Code, § 1201 et seq., to allow farmer debtors
with regular annual income to adjust their debts. Chapter 12 B
was modeled on Chapter 13, § 1301 et seq., which permits
individual debtors with regular annual income to preserve Petitioners Lynwood and Brenda Hall petitioned for
existing assets subject to a “court-approved plan under which bankruptcy under Chapter 12 and sold their farm
they pay creditors out of their future income.” Hamilton v. shortly thereafter. Petitioners initially proposed a plan of
Lanning, 560 U.S. ––––, ––––, 130 S.Ct. 2464, 2469, 177 reorganization under which they would pay off outstanding
L.Ed.2d 23 (2010). Chapter 12 debtors similarly file a plan liabilities with proceeds from the sale. The Internal Revenue
of reorganization. § 1221. To be confirmed, the plan must Service (IRS) objected, asserting a federal income tax of
provide for the full payment of priority claims. § 1222(a)(2). $29,000 on the capital gains from the farm sale.
In the Bankruptcy Abuse Prevention and Consumer Petitioners amended their proposal to treat the income tax as
Protection Act of 2005 (BAPCPA), § 1003, 119 Stat. 186, a general, unsecured claim to be paid to the extent funds were
Congress created an exception to that requirement: available, with the unpaid balance discharged. Again the IRS
objected. Taxes on income from a postpetition farm sale, the
“Contents of plan IRS argued, remain the debtors' independent responsibility
because they are neither collectible nor dischargeable in
“(a) The plan shall—
bankruptcy.
******
The Bankruptcy Court sustained the objection. The court
“(2) provide for the full payment, in deferred cash reasoned that because a Chapter 12 estate is not a separate
payments, of all claims entitled to priority under section taxable entity under the Internal Revenue Code (IRC), see 26
507, unless— U.S.C. §§ 1398, 1399, it cannot “incur” taxes for purposes of
11 U.S.C. § 503(b).
“(A) the claim is a claim owed to a governmental unit that
arises as a result of the sale, transfer, exchange, or other The District Court reversed, expressing doubt that IRC
disposition of any farm asset used in the debtor's farming provisions are relevant to interpreting § 503(b). Based
operation, in which case the claim shall be treated as an on its reading of legislative history, the District Court
unsecured claim that is not entitled to priority under section
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determined that Congress intended § 1222(a)(2)(A) to extend “incurred by the estate” is a tax for which the estate itself is
to petitioners' postpetition taxes. liable.
*511 The Court of Appeals for the Ninth Circuit reversed. As the IRC makes clear, only certain estates are liable for
617 F.3d 1161 (2010). The Court of Appeals held that the federal income taxes. Title 26 U.S.C. §§ 1398 and 1399
Chapter 12 estate does not “incur” the postpetition federal address taxation in bankruptcy and define the division of
income taxes for purposes of § 503(b) because it is not responsibilities for the payment of taxes between the estate
a separate taxable entity under the IRC, and noted that and the debtor on a chapter-by-chapter basis. Section 1398
Congress repeatedly has indicated the relevance of the IRC's provides that when an individual debtor files for Chapter 7
taxable entity provisions to the Bankruptcy Code. Although or 11 bankruptcy, the estate shall be liable for taxes. In such
“sympathetic” to the view that the postpetition tax liabilities cases, the trustee files a separate return on the estate's behalf
should be dischargeable, the Court of Appeals held that “the and “[t]he tax” on “the taxable income of the estate ... shall
operative language simply failed to make its way into the be paid by the trustee.” § 1398(c)(1); see also § 6012(b)(4)
statute.” Id., at 1167. The Court of Appeals concluded that (“Returns of ... an estate of an individual under chapter 7
because the taxes do not qualify under § 503(b), they are not or 11 ... shall be made by the fiduciary thereof”). Section
priority claims in the plan eligible for the § 1222(a)(2)(A) 1399 provides that “[e]xcept in any case to which section
exception. 1398 applies, no separate taxable entity shall result from
the commencement of a [bankruptcy] case.” In Chapter 12
Judge Paez dissented, siding with a sister Circuit that and 13 cases, then, there is no separately taxable estate. The
had concluded that Congress intended § 1222(a)(2)(A) to debtor—not the trustee—is generally liable for taxes and files
extend to such postpetition federal income taxes. We granted the only tax return. See In re Lindsey, 142 B.R. 447, 448
certiorari to resolve the split of authority. 1 564 U.S. ––––, (Bkrtcy.Ct.W.D.Okla.1992) (“It is clear that, pursuant to 26
131 S.Ct. 2989, 180 L.Ed.2d 820 (2011). U.S.C. § 1398 and 1399, the standing Chapter 12 trustee
neither files a return nor pays federal income tax”); cf. infra,
at 1892 – 1893 (discussing special trustee duties in corporate-
debtor cases).
II
[3] These provisions suffice to resolve this case: Chapter 12
A estates are not taxable entities. Petitioners, not the estate itself,
are required to file the tax return and are liable for the taxes
[1] Our resolution of this case turns on the meaning of a resulting from their postpetition farm sale. The postpetition
phrase in § 503(b) of the Bankruptcy Code: “incurred by federal income tax liability is not “incurred by *513 the
the estate.” The parties agree that § 1222(a)(2)(A) applies estate” and thus is neither collectible nor dischargeable in the
only to priority claims collectible in the bankruptcy plan and
Chapter 12 plan. 2
that postpetition federal income taxes so qualify only if they
constitute a “tax ... incurred by the estate.” § 503(b)(1)(B)(i).
**1887 [2] The phrase “incurred by the estate” bears a B
plain and natural reading. See FCC v. AT & T Inc., 562 U.S.
Our reading of “incurred by the estate” as informed by the
––––, ––––, 131 S.Ct. 1177, 1182, 179 L.Ed.2d 132 (2011)
IRC's separate taxable entity rules draws support from a
(“When a statute does not define a term, we typically ‘give the
related provision of the Bankruptcy Code, 11 U.S.C. § 346,
phrase its ordinary meaning’ ”). To “incur,” one *512 must
and its longstanding interplay with 26 U.S.C. §§ 1398 and
“ suffer or bring on oneself (a liability or expense).” Black's
1399. That relationship illustrates that from the inception
Law Dictionary 836 (9th ed.2009); see also Webster's Third
of the current Bankruptcy Code, Congress has specified
New International Dictionary 1146 (1976) ( “to ... become
on a chapter-by-chapter basis which estates are separately
liable or subject to: bring down upon oneself”); Random
taxable and therefore liable for taxes. That relationship also
House Dictionary 722 (1966) (“to become liable or subject
refutes the dissent's suggestion that applying such rules
to through one's own action; bring upon oneself”). A tax
is an incongruous importation of “tax law” unconnected
to “bankruptcy principles (as Congress understood them).”
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Post, at 1897 – 1898 (opinion of BREYER, J.). And it
reinforces the reasonableness of our view that whether an “(b) Whenever the Internal Revenue Code of 1986 provides
estate “incurs” taxes under § 503(b) turns on such chapter-by- that no separate taxable estate shall be created in a case
chapter distinctions. concerning a debtor under this title, and the income ...
of an estate shall be taxed to or claimed by the debtor,
**1888 In the original Bankruptcy Code, Congress included such income ... shall be taxed to or claimed by the debtor
a provision, § 346, that set out a chapter-specific division of under a State or local law imposing a tax on or measured
tax liabilities between the estate and the debtor. Bankruptcy by income and may not be taxed to or claimed by the
Reform Act of 1978, 92 Stat. 2565. Section 346(b)(1) estate.” (Emphasis added.)
provided that in an individual-debtor Chapter 7 or 11
Thus, whenever the estate is separately taxable under federal
bankruptcy, “any income of the estate may be taxed under a
income tax law, that “is also” the case under state or local
State or local law imposing a tax ... only to the estate, and
income tax law, § 346(a), and vice versa, § 346(b). And given
may not be taxed to such individual.” 92 Stat. 2565 (emphasis
that the Bankruptcy Code instructs that the assignment of state
added); see also 11 Collier on Bankruptcy ¶ TX12.03[5][b]
or local tax liabilities shall turn on the IRC's separate taxable
[i], p. TX12–21 (16th ed.2011) (hereinafter Collier) (§ 346(b)
entity rules, there is parity in turning to such rules in assigning
“provided that in a case under chapter 7 [or] 11 ... the estate of
federal tax liabilities.
an individual is a taxable entity”). Section 346(d) provided,
meanwhile, that in a Chapter 13 bankruptcy, “any income of
*516 [4] In the same Act, Congress added § 1222(a)(2)
the estate or the debtor may be taxed under a *514 State or
(A). Section 1222(a)(2)(A) carves out an exception to the
local law imposing a tax ... only to the debtor, and may not be
ordinary priority classification scheme. But § 1222(a)(2)(A)
taxed to the estate.” 92 Stat. 2566 (emphasis added). Congress
did not purport to redefine which claims are otherwise entitled
thus established that the estate in an individual-debtor Chapter
to priority, much less alter the underlying division of tax
7 or 11 bankruptcy is a separate taxable entity; the estate in a
liability between the estate and the debtor in Chapter 12
Chapter 13 bankruptcy is not. 3 cases. “We assume that Congress is aware of existing law
when it passes legislation,” Miles v. Apex Marine Corp., 498
Although § 346 concerned state or local taxes, 4 Congress U.S. 19, 32, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990), and the
applied its framework to federal taxes two years later. In the existing law at the enactment of § 1222(a) (2)(A) indicated
Bankruptcy Tax Act of 1980, 94 Stat. 3397, Congress enacted that an estate's liability for taxes turned on chapter-by-chapter
26 U.S.C. §§ 1398 and 1399. *515 Section 1398 of the IRC, separate taxable entity rules.
much like § 346(b) in the Bankruptcy Code, established that
the estate is separately taxable in individual-debtor Chapter 7
or 11 cases. Section 1399 of the IRC, much like § 346(d) in
C
the Bankruptcy Code, clarified that the estate is not separately
taxable in Chapter 13 (and now Chapter 12) cases. The statutory structure further reinforces our holding that
petitioners' postpetition income taxes are not “incurred by the
In 2005, Congress in BAPCPA amended § 346 and estate.” As a leading bankruptcy treatise and lower courts
crystallized the connection between the Bankruptcy Code and recognize, “[b]ecause chapter 12 was modeled on chapter 13,
the IRC. Section 346 now expressly aligns its assignment of and because so many of the provisions are identical, chapter
state or local taxes with the rules for federal taxes, providing 13 cases construing provisions corresponding to chapter 12
in relevant part: provisions may be relied on as authority in chapter 12 cases.”
8 Collier ¶ 1200.01[5], at 1200–10; In re Lopez, 372 B.R. 40,
“(a) Whenever the Internal Revenue Code of 1986 provides
45, n. 13 (Bkrtcy.App. Panel C.A.9 2007); Justice v. Valley
that a separate **1889 taxable estate or entity is created
Nat. Bank, 849 F.2d 1078, 1083 (C.A.8 1988). We agree.
in a case concerning a debtor under this title, and the
Section 1322(a)(2), like § 1222(a)(2), requires full payment
income ... of such estate shall be taxed to or claimed by the
of “all claims entitled to priority under section 507” under
estate, a separate taxable estate is also created for purposes
the plan. Both provisions cross-reference the same section of
of any State and local law imposing a tax on or measured by
the Code, § 507, and in turn, the same subsection, § 503(b).
income and such income ... shall be taxed to or claimed by
Both are treated alike by IRC §§ 1398 and 1399. Whether
the estate and may not be taxed to or claimed by the debtor.
postpetition taxes qualify under § 503(b) in Chapter 13 thus
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sheds light on whether they so qualify in petitioners' Chapter to erode past **1891 bankruptcy practice absent a clear
12 case. indication that Congress intended such a departure’ ”).
Chapter 13 filings outnumber Chapter 12 filings six-hundred-
Bankruptcy courts and commentators have reasoned that fold. See U.S. Bankruptcy Courts—Cases Commenced
postpetition income taxes are not “incurred by the estate” During the 12–Month Period Ending September 30, 2011
under § 503(b) because “a tax on postpetition income of (Table F–2), http://www.uscourts.gov/Statistics/Bankruptcy
the debtor or of the chapter 13 estate is not a liability of Statistics.aspx (estimating 676 and 417,503 annual Chapter
the chapter 13 estate; it is a liability of the debtor alone.” 12 and 13 filings, respectively) (as visited May 14, 2012,
8 *517 Collier ¶ 1305.02[1], at 1305–5 and 1305–6. 5 and available in Clerk of Court's case file). Yet adopting
For over a decade, the Government **1890 has likewise petitioners' reading of § 503(b) would mean that, in every
hewed to the position that “since post-petition tax liabilities Chapter 13 case, the Government *519 could ignore § 1305
are, in Chapter 13 cases, incurred by the debtor, rather and expect priority payment of postpetition income taxes in
than the bankruptcy estate, characterizing such liabilities as every plan.
administrative expenses is inconsistent with section 503.” IRS
Chief Counsel Advice No. 200113027, p. 6 (Mar. 30, 2001), [5] At bottom, “identical words and phrases within the same
2001 WL 307746, *4; see also Internal Revenue Manual statute should normally be given the same meaning.” Powerex
§ 5.9.10.9.2(3) (2006) (hereinafter IRM); IRS Litigation Corp. v. Reliant Energy Services, Inc., 551 U.S. 224, 232, 127
Guideline Memorandum GL–26, p. 9 (Dec. 16, 1996), 1996 S.Ct. 2411, 168 L.Ed.2d 112 (2007). Absent any indication
WL 33107107, *6. We see no reason to depart from those that Congress intended a conflict between two closely related
established understandings. To “ ‘hold the Chapter 13 estate chapters, we decline to create one. 7
liable for [a] tax when it does not exist as a taxable entity
defies common sense as well as Congress' intent.’ ” In re
Whall, 391 B.R. 1, 4 (Bkrtcy.Ct.Mass.2008). The same holds
III
true for a Chapter 12 estate.
Petitioners and the dissent advance several arguments for why
A provision in Chapter 13 confirms that postpetition income the postpetition income taxes at issue should be considered
taxes fall outside § 503(b). Section 1305(a)(1) provides “incurred by the estate,” notwithstanding the IRC's separate
that “[a] proof of claim may be filed by any entity taxable entity rules. But none provides sufficient reason to
that holds a claim against the debtor ... for taxes that overcome the statute's plain language, context, and structure.
become payable to a governmental unit while the case is
pending.” (Emphasis added.) That provision gives holders of [6] Petitioners primarily argue that “incurred by the estate”
postpetition claims the option of collecting postpetition taxes has a temporal meaning. Petitioners emphasize that the estate
within the bankruptcy case—an option that the Government only comes into existence after a bankruptcy petition is filed.
would never need to invoke if postpetition tax liabilities were Thus, they reason, taxes “incurred by the estate” refers to all
already collectible inside the bankruptcy. Accordingly, lest taxes “incurred postpetition,” regardless of whether the estate
we render § 1305 “ ‘inoperative or superfluous,’ ” Hibbs is liable for the tax and regardless of the chapter under which
v. Winn, 542 U.S. 88, 101, 124 S.Ct. 2276, 159 L.Ed.2d a case is filed. Although all taxes “incurred by the estate”
172 (2004), it is clear that postpetition income taxes are not are necessarily incurred postpetition, not all taxes incurred
automatically collectible in a Chapter 13 plan and, a fortiori, postpetition are “incurred by the *520 estate.” That an estate
are not administrative expenses under § 503(b). cannot incur liability until it exists does not mean that every
liability that arises after that point automatically becomes the
*518 It follows that postpetition income taxes are not estate's liability. And there is no textual basis to focus on when
automatically collectible in petitioners' Chapter 12 plan. 6 the liability is incurred, as opposed to whether the liability is
Because both chapters cross-reference § 503(b) in an identical incurred “by the estate.”
manner, see §§ 1222(a)(2), 1322(a)(2), we are cognizant
that any conflicting reading of § 503(b) here could disrupt [7] Alternately, petitioners contend that a tax should be
settled Chapter 13 practices. See Cohen v. de la Cruz, considered “incurred by the estate” so long as it is payable out
523 U.S. 213, 221, 118 S.Ct. 1212, 140 L.Ed.2d 341 of estate assets. Income from postpetition sales of farm assets
(1998) (the Court “ ‘will not read the Bankruptcy Code is considered property of the estate. See § 1207(a). Petitioners
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argue that even if the debtor—and not the estate—is liable for that are not separately taxable, those involving corporate
a tax, the tax is still “incurred by the estate” because the funds debtors have long been singled out by Congress for special
the debtor uses to pay the tax are property of the estate. But responsibilities. 9 See H.R. Rep., at 277 (even “[i]f the
that too strains the text beyond what it can bear. To concede estate is not *522 a separate taxable entity,” administrative
that someone other than the estate is liable for filing the return responsibility can “var[y] according to the nature of the
and paying the tax, and yet maintain that the estate is the one debtor”). Although estates of corporate debtors are not
that has “incurred” the tax, defies the ordinary meaning of separate taxable entities under 26 U.S.C. §§ 1398 and 1399,
“incur” as bringing a liability upon oneself. the IRC requires a trustee that “has possession of or holds title
to all or **1893 substantially all the property or business
The dissent, echoing both of these points, urges that we of a corporation” to “make the return of income for such
“simply ... consider the debtor and estate as merged.” Post, corporation.” § 6012(b) (3). In effect, Congress provided
**1892 at 1899. “The English language,” the dissent that the trustee in a corporate-debtor case may shoulder
reasons, “permits this reading” and “do[es] not require” our responsibility that parallels that borne by the trustee of a
reading. Post, at 1897 – 1898. But any reading of “tax ... separate taxable entity. In any event, petitioners do not deny
incurred by the estate ” that is contingent on merging the that neither the separate taxable entity provisions nor the
debtor and estate—despite Congress' longstanding efforts to special provisions for corporate debtors apply to them.
distinguish between when tax liabilities are borne by the
debtor or borne by the estate—is not a natural construction of Finally, petitioners and the dissent contend that the purpose
the statute as written. of 11 U.S.C. § 1222(a)(2)(A) was to provide debtors with
robust relief from tax debts, relying on statements by a single
Moreover, these alternative readings create a conflict between Senator on unenacted bills introduced in years preceding the
§ 503(b) and § 346(b). Petitioners consider postpetition enactment. See Brief for Petitioners 23–36. They argue that
state or local income taxes, like federal income taxes, to deeming § 1222(a)(2)(A) inapplicable to their postpetition
be “incurred by the estate” under § 503(b). See Tr. of Oral income taxes would undermine that purpose and confine
Arg. 4–5. But § 346(b) requires that such taxes be borne the exception to prepetition taxes. But we need not resolve
by the Chapter 12 debtor, not the estate. It is implausible to here what other claims, if any, are covered by § 1222(a)(2)
maintain that taxes are “incurred by the estate” when § 346(b)
(A). 10 Whatever the 2005 Congress' intent with respect to
*521 specifically prohibits such taxes from being “taxed to
§ 1222(a)(2)(A), that provision merely carved out *523 an
or claimed by the estate.”
exception to the pre-existing priority classification scheme.
The exception could only apply to claims “entitled to priority
To buttress their counterintuitive readings of the text,
under section 507” in the first place. That pre-existing
petitioners and the dissent suggest that there is a long
scheme was in turn premised on antecedent, decades-old
history of treating postpetition taxes as administrative
understandings about the scope of § 503(b) and the division
expenses entitled to priority. Both point to two legislative
of tax liabilities between estates and debtors. See Dewsnup
Reports accompanying the 1978 enactment of § 503. But
v. Timm, 502 U.S. 410, 419, 112 S.Ct. 773, 116 L.Ed.2d 903
neither snippet from which they quote is inconsistent with
(1992) (“When Congress amends the bankruptcy laws, it does
today's holding, 8 and we have cautioned against “allowing not write ‘on a clean slate’ ”). If Congress wished to alter these
ambiguous legislative history to muddy clear statutory background norms, it needed to enact a provision to enable
language.” Milner v. Department of Navy, 562 U.S. ––––, postpetition income taxes to be collected in the Chapter 12
––––, 131 S.Ct. 1259, 1266, 179 L.Ed.2d 268 (2011). plan in the first place.
Petitioners also point to cases suggesting that postpetition The dissent concludes otherwise by an inverted analysis.
taxes were treated as administrative expenses. E.g., United Rather than demonstrate that such claims were treated as §
States v. Noland, 517 U.S. 535, 543, 116 S.Ct. 1524, 507 priority claims in the first place, the dissent begins with
134 L.Ed.2d 748 (1996) (corporate Chapter 11 debtor); the single Senator's stated purpose for the exception to that
Nicholas v. United States, 384 U.S. 678, 687–688, 86 S.Ct. priority scheme. Post, at 1897. It then reasons backwards from
1674, 16 L.Ed.2d 853 (1966) (corporate Chapter XI case there, and in the process upsets background norms in both
under predecessor Bankruptcy Act). But those cases involve Chapters 12 and 13.
corporate debtors and are therefore inapposite. Among estates
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[8] Certainly, there may be compelling policy reasons for detailed Plan setting forth how he will pay his debts. That Plan
treating postpetition income tax liabilities as dischargeable. must satisfy certain statutory criteria. §§ 1221, 1222, 1225.
But if Congress intended that result, it did not so provide in
the statute. Given the statute's plain language, context, and A brief overview of these requirements helps to illuminate
structure, it is not for us to rewrite the statute, particularly what is at stake in this case. Roughly speaking, the chapter
in this complex terrain of interconnected provisions and requires that a holder of a secured claim receive the full
exceptions enacted over nearly three decades. Petitioners' amount of that claim up to the value of the collateral securing
position threatens ripple effects beyond this individual case the loan. The claim may be paid over an extended period. If
for debtors in Chapter 13 and the broader bankruptcy scheme the claim exceeds the value of the collateral, the creditor is
that we need not invite. As the Court of Appeals noted, given an unsecured claim in the remainder. §§ 506(a), 1225(a)
“Congress is entirely free to change the law by amending the (5).
text.” 617 F.3d, at 1167.
*525 The holder of a § 507 priority claim (a category that
*** includes, among other things, domestic support obligations,
debts for taxes incurred before filing the bankruptcy petition,
We hold that the federal income tax liability resulting from and administrative expenses) must receive the full amount of
petitioners' postpetition farm sale is not “incurred by the the priority claim in deferred cash payments paid over the life
*524 estate” under § 503(b) and thus is neither collectible of the Plan. § 1222(a)(2).
nor dischargeable in the Chapter 12 plan. We therefore affirm
the judgment of the Court of Appeals for the Ninth Circuit. The holder of an ordinary unsecured claim—i.e., an
unsecured claim of a kind not listed in § 507—may receive
It is so ordered. at least a partial payment from the amount left over after the
payment of the secured and § 507 priority claims. This amount
may well be more than zero, for the Plan must provide that the
farmer will devote all “disposable income” (as defined by §
**1894 Justice BREYER, with whom Justice KENNEDY,
1225(b)(2)) or property of equivalent value to the repayment
Justice GINSBURG, and Justice KAGAN join, dissenting.
of his debts over the next three years (sometimes extended
Chapter 12 of the Bankruptcy Code helps family farmers
to five years). §§ 1222(c), 1225(b)(1). And that amount must
in economic difficulty reorganize their debts without losing
prove sufficient to provide the unsecured creditor with no less
their farms. Consistent with the chapter's purposes, Congress
than that creditor would receive in a Chapter 7 liquidation. §
amended § 1222(a) of the Code to enable the debtor to treat
1225(a)(4).
certain capital gains tax claims as ordinary unsecured claims.
11 U.S.C. § 1222(a)(2)(A). The Court's holding prevents the
Once the farmer completes his Plan payments, he will
Amendment from carrying out this basic objective. I would
receive a discharge even if his payments did not fully
read the statute differently, interpreting it in a way that, in
satisfy all unsecured claims. The Code does not, however,
my view, both is consistent with its language and allows the
permit all debts to be discharged. There are categories of
Amendment better to achieve its purposes.
nondischargeable debts (including, for example, secured
claims), which creditors can pursue after bankruptcy. §
1228(a).
I
For present purposes, it is important to understand that if the
A debtor owes too much money to his § 507 priority creditors,
he may not have sufficient assets or future income to pay all
Chapter 12 of the Bankruptcy Code helps indebted family his secured creditors and his § 507 priority creditors while
farmers (and fishermen) keep their farms by making leaving enough funds over to guarantee unsecured creditors
commitments to pay those debts (in part) out of future income. the minimum amounts that Chapter 12 requires. If so, the
An eligible farmer whose debts exceed his assets may enter farmer may not be able to proceed under Chapter 12. See §§
Chapter 12 bankruptcy, at which point he must develop a 1225(a)(1), (6) (bankruptcy court will not confirm Plan unless
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it satisfies statutory criteria and debtor will be **1895 able sale ... of any farm asset”). If, as petitioners claim, that is
to make good on his commitments under the Plan). so, then it is unlikely that such a debt could stop a farmer
from proceeding under Chapter 12, since its treatment as
It is also important to understand that the same kind of an ordinary unsecured claim means that the farmer will not
insufficient-assets-and-income problem might occur where necessarily have to pay the debt in full.
*526 the debtor owes the Government a large post-petition
tax debt. In general, postpetition claims are not part of the But if the Government and the majority are right, then
bankruptcy proceedings. See 7 Norton Bankruptcy Law and the capital gains tax falls outside the category of § 507
Practice § 135:14 (3d ed.2011) (hereinafter Norton). Unless priority claims—and therefore falls outside the scope of
the Government's debt falls within an exception to this general the Amendment; in fact, it falls outside the bankruptcy
rule, bankruptcy law would leave the Government to collect proceeding altogether. And the Government then might well
its postpetition claim outside of bankruptcy as best it could. be able to collect the debt in full outside the bankruptcy
Again, the result will be to leave the farmer with fewer assets proceeding—even if doing so would reduce the farmer's
and income to devote to his Chapter 12 Plan—perhaps to the assets and future income to the point where the farmer would
point where he cannot proceed under Chapter 12 at all. not be able to proceed under Chapter 12. The question before
us is whether we must interpret the Amendment in a way that
could bring about this result.
B
With this general summary in mind, it is easier to understand C
the significance of the question this case presents. The
question arises out of an amendment to a Chapter 12
provision. The provision as amended says: 1
“Contents of plan Congress did not intend this result. In a significant number
of instances a Chapter 12 farmer, in order to have enough
“(a) The plan shall— money to pay his creditors, might have to sell farmland or
other farm assets at a price that would give rise to considerable
****** capital gains taxes (particularly if the family has held the
land or assets for many **1896 years). If the resulting tax
“(2) provide for the full payment, in deferred cash debt were treated as a § 507 priority claim, then it might
payments, of all claims entitled to priority under section well absorb much of the money raised to the point where
507, unless— (depending upon the size of his other debts) the farmer might
be unable to proceed under Chapter 12. The Amendment
“(A) the claim is a claim owed to a governmental unit that
accordingly seeks to place the tax authorities farther back in
arises as a result of the sale, transfer, exchange, or other
the creditor queue, requiring them, like ordinary unsecured
disposition of any farm asset used in the debtor's farming
*528 creditors, to seek payment from the funds that remain
operation, in which case the claim shall be treated as an
after the § 507 priority creditors (and secured claim holders)
unsecured claim that is not entitled to priority under section
have been paid.
507, but the debt shall be treated in such manner only if the
debtor receives a discharge; or
The Amendment's chief legislative sponsor, Senator Charles
“(B) the holder of a particular claim agrees to a different Grassley, explained this well when he told the Senate:
treatment of that claim.” § 1222(a) (emphasis added).
“Under current law, farmers often face a crushing tax
The Amendment consists of subparagraph (A). liability if they need to sell livestock or land in order
to reorganize their business affairs.... [H]igh taxes have
*527 At first blush, the Amendment seems to relegate caused farmers to lose their farms. Under the bankruptcy
the capital gains tax collector to the status of an ordinary code, the I.R.S. must be paid in full for any tax liabilities
unsecured creditor. See ibid. (exception applies to claims generated during a bankruptcy reorganization. If the farmer
“owed to a governmental unit that arises as a result of the can't pay the I.R.S. in full, then he can't keep his farm.
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This isn't sound policy. Why should the I.R.S. be allowed and the Government's efforts to collect them can lead to the
to veto a farmer's reorganization plan? [The Amendment] very **1897 results (blocking the use of Chapter 12) that the
takes this power away from the I.R.S. by reducing the Amendment sought to avoid.
priority of taxes during proceedings. This will free up
capital for investment in the farm, and help farmers stay in Therein lies the problem. These results are the very opposite
the business of farming.” 145 Cong. Rec. 1113 (1999). of what Congress intended. Congress did not want to
relegate to ordinary-unsecured-claim status only prepetition
See also 14A J. Mertens, Law of Federal Income Taxation tax claims, i.e., tax claims that accrued well before the Chapter
§ 54:61, p. 11 (Oct.2011 Supp.) (“This provision attempts to 12 proceedings began. Rather, Congress was concerned about
mitigate the tax expense often incurred by farmers who have the effect on the farmer of collecting capital gains tax debts
significant taxable capital gains or depreciation recapture that arose during (and were connected with) the Chapter
when their low basis farm assets are foreclosed, sold, or 12 proceedings themselves. See 145 Cong. Rec. 1113 (the
otherwise disposed of by their creditors”). Amendment will have the effect of “reducing the priority
of taxes during proceedings ” (emphasis added) (statement
of Sen. *530 Grassley during a failed attempt to enact the
2 Amendment)); Hearing on the Bankruptcy Reform Act of
2001 before the Senate Committee on the Judiciary, 107th
The majority, following the Government's suggestion, Cong., 1st Sess., 121 (statement of Sen. Grassley) (“[The
interprets the relevant language in a way that denies the Amendment] also reduces the priority of capital gains tax
Amendment its intended effect. It holds that the only income liabilities for farm assets sold as a part of a reorganization
tax claims to which § 507 accords priority are claims for plan ” (emphasis added)). The majority does not deny the
taxes due for years prior to the taxable year in which the importance of Congress' objective. Rather, it feels compelled
farmer filed for bankruptcy. (We shall call these “prepetition to hold that Congress put the Amendment in the wrong place.
tax claims.”) In the majority's view, § 507 does not *529
cover income tax liabilities that arise during the year of
filing or during the Chapter 12 proceedings. (We shall call
II
these “postpetition tax claims.”) Ante, at 1886 – 1887; see
Brief for United States 8 (the Amendment “provides farmers Unlike the majority, I believe the relevant Bankruptcy Code
relief from [only] those tax claims that are otherwise entitled language can be and is better interpreted in a way that
to priority under 11 U.S.C. 507(a)(8), namely pre-petition would give full effect to the Amendment. In particular, the
claims arising from the sale of farm assets”); Bankruptcy relevant language is better interpreted so that in the absence
Abuse Prevention and Consumer Protection Act of 2005, § of the Amendment § 507 would cover these postpetition tax
705(1)(A), 119 Stat. 126 (amending § 507(a)(8) to clarify that claims. Hence the Amendment creates an exception from
it only covers income tax claims for taxable years that end on what otherwise would amount to a § 507 priority claim. And
or before the date of the filing of the bankruptcy petition). it can take effect as written.
The majority then observes that the Amendment creates an It is common ground that subsection (a)(2) of § 507 covers,
exception only in respect to § 507 priority claims. § 1222(a) and gives § 507 priority to, “administrative expenses allowed
(“The plan shall ... provide for the full payment ... of all claims under section 503(b).” § 507(a)(2) (2006 ed., Supp. IV). It
entitled to priority under section 507, unless ....” (Emphasis is also common ground that the relevant definitional section,
added.)). Ante, at 1885. Thus, if (without the Amendment) § namely § 503(b), defines allowed “administrative expenses”
507 would not cover postpetition capital gains taxes in the as “including ... any tax ... incurred by the estate.” § 503(b)
first place, the Amendment (creating only a § 507 exception) (1)(B)(i) (2006 ed.). But after this point, we part company.
cannot affect postpetition tax claims. An exception from
nothing amounts to nothing. The majority believes that the words any tax “incurred by
the estate” cannot include postpetition taxes. It emphasizes
Consequently, the majority concludes that postpetition tax that tax law does not treat a Chapter 12 bankruptcy estate as
claims fall outside the bankruptcy proceeding entirely; the tax a “separate taxable entity,” i.e., as separate from the farmer-
authorities can collect them as if they were ordinary tax debts; debtor for federal income tax purposes. 26 U.S.C. §§ 1398,
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1399. This means that there is just one entity—the debtor— include “[t]axes incurred during the administration of
for these purposes. And § 346 of the Bankruptcy Code makes the estate ” (emphasis added)); S.Rep. No. 95–989, p.
clear that any state and local income tax liabilities incurred by 66 (1978), 1978 U.S.C.C.A.N. 5787, 5852 (“In general,
a Chapter 12 estate must also be taxed to *531 the debtor. administrative expenses include taxes which the trustee
The majority says that these provisions mean that only the incurs in administering the debtor's estate, including taxes on
debtor, and not the estate, can “ ‘incu[r]’ ” taxes within the capital gains from sales of property by the trustee and taxes
meaning of 11 U.S.C. § 503(b)(1)(B)(i). Ante, at 1886 – 1887. on income earned by the estate during the case ” (emphasis
added)); 124 Cong. Rec. 32415 (1978) (“The amendment
In my view, however, these tax law circumstances do not generally follows the Senate amendment in providing
require the majority's narrow reading of this Bankruptcy Code expressly that taxes incurred during the administration of the
provision. That is to say, the phrase tax “incurred by the estate share the first priority given to administrative expenses
[bankruptcy] estate” can include a tax incurred by the farmer generally” (emphasis added)); id., at 34014 (Senate version
while managing his estate in the midst of his bankruptcy of the joint floor statement saying exactly the same).
proceedings, i.e., between the time the farmer files for Chapter
12 bankruptcy and the time the bankruptcy court confirms the And importantly, as the majority concedes, ante, at 1892
farmer's Chapter 12 Plan. – 1893, bankruptcy law treats taxes incurred by corporate
debtors while they are in bankruptcy proceedings as “tax[es]
The bankruptcy estate is in existence during this time. incurred by the estate,” even though the Tax Code does
Cf. § 1227(b) (property of the estate vests in the debtor not treat the bankruptcy estate of a corporate debtor as a
at confirmation unless the Plan provides otherwise). The “separate taxable entity.” See, e.g., United States v. Noland,
bankruptcy court has jurisdiction over the farmer's assets 517 U.S. 535, 543, 116 S.Ct. 1524, 134 L.Ed.2d 748 (1996)
during this time. See §§ 541, 1207; 4 Norton § 61:1, at 61– (treating Chapter 11 corporate debtor's postpetition taxes
2 (§ 541's “broad definition of estate **1898 property ... as administrative expenses); In re Pacific–Atlantic Trading
centralizes all of the estate's assets under the jurisdiction of Co., 64 F.3d 1292, 1298 (C.A.9 1995) (same); In re L.J.
the bankruptcy court”). And, as a matter of both the English O'Neill Shoe Co., 64 F.3d 1146, 1151–1152 (C.A.8 1995)
language and bankruptcy principles, one can consider a tax (same); In re Hillsborough Holdings Corp., 156 B.R. 318,
liability that the farmer incurs during this period (such as a 320 (Bkrtcy.Ct.M.D.Fla.1993) (“[A]dministrative expenses
capital gains tax arising from a sale of a portion of his farm should include taxes which the trustee, and, in Chapter 11
assets to raise funds for creditors) as a liability that, in a cases, the Debtor–in–Possession, incurs in administering the
bankruptcy sense, the estate incurs. estate, including taxes based on capital gains from sales of
property and taxes on income earned by the estate during the
The English language permits this reading of the phrase tax case post-petition”).
“incurred by the estate.” When the farmer, in the midst of
Chapter 12 proceedings, sells a portion of his farm to raise *533 Even though, as the majority says, corporate
money to help pay his creditors, one can say, as a matter bankruptcies have some special features (in particular, a
of English, that the bankruptcy estate has “incurred” the trustee in a corporate bankruptcy is required to file the estate's
associated tax, even if it is ultimately taxed to the farmer, just income tax return), it is unclear why these features should
as one can say that an employee who makes purchases using have any bearing on the definition of administrative expenses.
a company credit card “incurs costs” for which his employer See ante, at 1892 – 1893 (discussing 26 U.S.C. § 6012(b)
is liable. (3)). Indeed, in many corporate Chapter 11 bankruptcies,
there is no trustee, in which case the debtor-in-possession,
As a matter of general bankruptcy principles (as Congress just like an individual Chapter 12 debtor, must file the tax
understood them), the history of the 1978 Bankruptcy return. See 11 U.S.C. §§ 1104, 1107 (2006 ed. and Supp.
Code *532 revision is replete with statements to the IV); 5 Norton §§ 91:3, 93:1 **1899 (typically, no trustee
effect that “[t]axes arising from the operation of the estate is appointed in a Chapter 11 bankruptcy, and the debtor-
after bankruptcy are entitled to priority as administrative in-possession assumes most of the duties and powers of a
expenses.” H.R.Rep. No. 95–595, p. 193 (1977), 1978 trustee, continuing in possession and managing the business
U.S.C.C.A.N. 5963, 6153 (emphasis added). See S.Rep. until the court determines, upon request of a party in interest,
No. 95–1106, p. 13 (1978) (administrative expenses that grounds exist for the appointment of a trustee); Holywell
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Corp. v. Smith, 503 U.S. 47, 54, 112 S.Ct. 1021, 117 L.Ed.2d tax liabilities incurred while the farmer is in Chapter 12
196 (1992) (“As the assignee of ‘all’ or ‘substantially all’ of bankruptcy, we must read it as excluding not only capital
the property of the corporate debtors, the trustee must file the gains taxes but also other kinds of taxes, such as an employer's
returns that the corporate debtors would have filed had the share of Social Security taxes, Medicare taxes, or other
plan not assigned their property to the trustee ” (emphasis employee taxes. But no one claims that all of these taxes
added)). fall outside the scope of the term “administrative expenses.”
See In re Ryan, 228 B.R. 746 (Bkrtcy.Ct.Ore.1999) (treating
Consequently, I can find no strong bankruptcy law reason postpetition employment taxes as administrative expenses
for treating taxes incurred by a corporate debtor differently in a Chapter 12 proceeding); IRS Chief Counsel Advice
from those incurred by an individual Chapter 12 debtor. To No. 200518002 (May 6, 2005), 2005 WL 1060956 *535
the contrary, since corporations can file for bankruptcy under (assuming that some postpetition federal taxes can be treated
Chapter 12, the majority's argument implies that the treatment as administrative expenses in a Chapter 12 bankruptcy).
of postpetition taxes in Chapter 12 proceedings turns on
whether the debtor happens to be a corporation. See § 101(18) **1900 In fact, the Government, realizing it cannot go
(B) (2006 ed.) (defining “family farmer” to include certain this far, concedes that many of these other (e.g., employer)
corporations); § 109(f) (“Only a family farmer or family taxes are “administrative expenses,” but only, it suggests,
fisherman with regular annual income may be a debtor under because they fall within a different part of the “administrative
chapter 12”); Brief for United States 26, n. 9 (“[T]he estate expenses” definition, namely 11 U.S.C. § 503(b)(1)(A),
of a corporate (as opposed to individual) Chapter 12 debtor ... which says that “administrative expenses” include “the
could be viewed as incurring post-petition income taxes ... actual, necessary costs and expenses of preserving the estate
collectible as administrative expenses ... rather *534 than including ... wages, salaries, and commissions for services
outside the bankruptcy case as required for an individual rendered after the commencement of the case.” (Emphasis
Chapter 12 debtor”). added.) See Brief for United States 27–28, n. 11. Employment
taxes, however, do not fit easily within the rubric “wages,
The majority does not point to any adverse consequences salaries, and commissions.” They may well be “necessary
that might arise were bankruptcy law to treat taxes incurred costs and expenses of preserving the estate.” But then so are
in administering the bankruptcy estate (i.e., taxes incurred the capital gains taxes at issue here.
after filing and before Plan confirmation) as administrative
expenses. The effect of doing so would simply be to consider Finally, the majority makes what I believe to be its strongest
the debtor and estate as merged for purposes of determining argument. Ante, at 1889 – 1891. Chapter 13, it points out,
which taxes fall within the Bankruptcy's Code's definition of allows individuals (typically those who are not farmers or
“administrative expenses,” i.e., determining for that purpose fishermen) to reorganize their debts in much the same way as
that the estate may “incur” tax liabilities on behalf of the does Chapter 12. And there is authority holding that taxes on
whole (with the ultimate liability assigned to the debtor), income earned between the time the Chapter 13 debtor files
much like a married couple filing jointly, 26 U.S.C. § 6013(a), for bankruptcy and the time the bankruptcy Plan is confirmed
or an affiliated group of corporations filing a consolidated are not “tax [es] incurred by the estate.” See In re Whall,
tax return, § 1501. Cf. In re Lumara Foods of America, Inc., 391 B.R. 1, 5–6 (Bkrtcy.Ct.Mass.2008); In re Brown, No. 05–
50 B.R. 809, 815 (Bkrtcy.Ct.N.D.Ohio 1985) (describing the 41071, 2006 WL 3370867, *3 (Bkrtcy.Ct.Mass.2006); In re
history of § 503(b)(1)(B)(i) and concluding that “the elevation Jagours, 236 B.R. 616, 620, n. 4 (Bkrtcy.Ct.E.D.Tex.1999);
[of a tax] to an administrative priority is dependent upon when In re Gyulafia, 65 B.R. 913, 916 (Bkrtcy.Ct.Kan.1986). Why,
the tax accrued”). In fact, the very tax provisions that separate asks the majority, should the law treat Chapter 12 taxes
the estate from the individual debtor in Chapter 7 and Chapter differently?
11 proceedings, §§ 1398 and 1399, say that the Chapter 12
estate is not separate from the debtor for tax purposes—a For one thing, the issue is less important in a Chapter 13
concept consistent, not at odds, with merging the two for this case, for the relevant time period—between filing and Plan
bankruptcy purpose. confirmation—is typically very short. Compare H.R.Rep. No.
95–595, at 276 (“most chapter 13 estates will only remain
Nor is the majority's reading free of conceptual problems. If open for 1 or 2 months until confirmation of the plan”), with
we read the phrase tax “incurred by the estate” as excluding *536 Brief for Neil E. Harl et al. as Amici Curiae 32–33
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(survey of Chapter 12 bankruptcies found the average time
from filing to confirmation in a district ranged from nearly
III
five months to over three years). See also 7 Norton § 122:14,
at 122–27 (“In Chapter 13, the plan must be filed within 15 The Government argues that, even if tax liabilities arising
days after the filing of the petition, unless the time is extended during the bankruptcy proceedings are “administrative
for cause. A Chapter 12 Plan must be filed no later than 90 expenses,” they still do not fall within the Amendment's
days after the order for relief, unless the court finds that an scope. It says that neither the Amendment nor anything else
extension is substantially justified” (footnote omitted)). in § 1222(a) provides for the payment of administrative
expenses. Rather, that section and its Amendment provide
For another, the issue arises differently in a Chapter 13 case. only for the payment of “claims.” § 1222(a)(2) (“The plan
That chapter, unlike Chapter 12, contains a special provision shall ... provide for the full payment ... of all claims entitled to
that permits the Government to seek § 507 priority treatment priority under section 507, unless ...” (emphasis added)). And
of all taxes incurred while the bankruptcy case is pending. § administrative expenses, the Government says, like all debts
1305 (Government can file proof of claim to have postpetition that are incurred postpetition, are not “claims.”
taxes treated as if they had arisen before the petition was
filed). The Government finds support for its view in the fact that
that § 1222 deals with the contents of a “plan,” while a later
Finally, if uniformity of interpretation between these two section, § 1227(a), says that the provisions of a “confirmed
chapters is critical, I do not see the serious harm in treating the plan bind the debtor, each creditor, [and certain others of no
relevant taxes as “administrative expenses” in both Chapter relevance here].” (Emphasis added.) This is because the Code
12 and Chapter 13 cases rather than in neither. The majority defines “creditor ” to include only holders of pre-petition
apparently believes that this would render § 1305 (the claims, thus excluding holders of post-petition claims, such
provision permitting the Government to seek § 507 priority as administrative expenses. § 101(10).
treatment) superfluous. Ante, at 1889 – 1891. But that is
not so. This interpretation would simply limit the scope of The Government points out that a different Code section,
operation of § 1305 to the period of time after the Chapter namely § 1226(b)(1), provides for the payment of
13 Plan is confirmed but while the Chapter 13 case is still administrative expenses. That section says that “[b]efore or
pending. And that is likely to be a significant period of time at the time of each payment to creditors under the plan, there
relative to the preconfirmation period. See H.R.Rep. No. 95– shall *538 be paid ... any unpaid claim of the kind specified
595, at 276 (“[M]ost chapter 13 estates will only remain open in section 507(a)(2),” namely “administrative expenses.” And
for 1 or 2 months until confirmation of the plan”); §§ 1325(b) Congress did not amend § 1226(b)(1); it amended the earlier
(1), (4) **1901 (debtor must commit all his projected section, § 1222(a).
disposable income over a 3–year period (sometimes extended
to five) to the Plan, unless all unsecured claims can be paid In short, the Government says, the Plan only covers those
off over a shorter period). The greatest Chapter 13 harm this § 507 priority “expenses and claims” that are described as
interpretation could cause is to require the Government to “claims” and can be held by “creditors.” Section 1226(b)(1),
pursue those tax liabilities as § 507 priority administrative not § 1222, deals with administrative expenses. The bottom
*537 expense claims (rather than allow it to choose between line of the Government's chain of logic is, once again, that
§ 507 priority treatment and pursuing those claims outside Congress put the Amendment in the wrong place.
bankruptcy) during the relatively brief period of time between
the filing of a petition and the Plan's confirmation. I concede that there is some text and legislative history that
supports the Government's view that the word “claim” in
In sum, I would treat a postpetition/preconfirmation tax § 1222(a) does not include “administrative expenses.” See,
liability as a tax “incurred by the estate,” hence as an e.g., § 507(a) (referring to “expenses and claims” as if they
“administrative expense,” hence as a “clai[m] entitled to are separate categories); S.Rep. No. 95–1106, at 20 (“The
priority under section 507, unless ...,” hence as a claim falling committee amendments contain several changes designed to
within the scope of the Amendment. Doing so would allow clarify the distinction between a ‘claim’ (which generally
the Amendment to take effect as Congress intended. relates to a debt incurred before the bankruptcy petition is
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filed) and an administrative expense (which is an expense
incurred by the trustee after the filing of the petition)”).
IV
But the language does not demand the Government's
reading. For the Code also uses the word “claim” to cover In sum the phrase tax “incurred by the estate” in § 503(b)
both prepetition **1902 and postpetition claims (such as (the “administrative expense” section) and the word “claim”
administrative expenses). E.g., § 101(5)(A) (defining a claim in § 1222(a) are open to different interpretations. Each of
as a “right to payment”); § 726(b) (2006 ed., Supp. IV) the narrower interpretations advanced by the Government or
(referring to “claims” that include administrative expenses). adopted by the Court would either exclude postpetition taxes
Indeed, the very section that the Government says permits from the phrase taxes “incurred by the estate” or exclude all
separate collection of administrative expenses, namely § postpetition debts, including administrative *540 expenses,
1226(b)(1), refers to “any unpaid claim” for administrative from the word “claim.” In these ways, these interpretations
expenses. (Emphasis added.) And one can easily read that would, as I have said, prevent the Amendment from
section as setting forth when, not whether, administrative accomplishing its basic purpose.
expenses will be paid under the Plan (i.e., as specifying
that the Plan must provide for the payment of administrative A broader interpretation of the word “claim” may allow the
expenses before payments to other creditors are made). Plan to include certain postpetition debts. This, taken together
Thus, reading *539 § 1222(a)(2)'s reference to “claims” as with a broader interpretation of the phrase tax “incurred
including administrative expenses need not render § 1226(b) by the estate,” prevents the Government from collecting
(1) surplusage. postpetition/preconfirmation tax debts outside of Chapter 12,
requiring it to assume a place in the creditor queue. Together
What about § 1227(a), which refers only to “creditor[s]”? One these broader interpretations permit the Amendment to take
must read it in conjunction with § 1228(a), which provides effect as intended.
that once the debtor has completed all payments under the
Plan, “the court shall grant the debtor a discharge of [1] all I find this last-mentioned consideration determinative. It
debts provided for by the plan[,] [2] allowed under section seems to me unlikely that Congress, having worked on
503 of this title [which describes ‘administrative expenses'] revisions of the Code for many years with the help of
or [3] disallowed under section 502 of this title....” (Emphasis Bankruptcy experts, and having considered the Amendment
added.) (The first few words of § 1227(a)—“[e]xcept as several times over a period of years, would have made
provided in section 1228(a)”—explain why I say “must”; the drafting mistake that the Government and **1903 the
the comma comes from 7 Norton § 137:2, at 137–3, n. 1, majority necessarily imply that it made. Moreover, I believe
which says that its omission was a typographical error). Thus, it important that courts interpreting statutes make significant
by here referring to “administrative expenses” (through its efforts to allow the provisions of congressional statutes to
reference to § 503), Chapter 12 makes clear that at least some function in the ways that the elected branch of Government
postpetition claims are to be discharged once the debtor has likely intended and for which it can be held democratically
completed his payments under the Plan. That fact, in turn, accountable.
suggests that the Plan may provide for their payment and that
the holders of such claims may be bound by the terms of a For these reasons, with respect, I dissent.
confirmed Plan.
All Citations
The upshot is that the Government's second argument
presents a plausible, but not the only plausible, interpretation 566 U.S. 506, 132 S.Ct. 1882, 182 L.Ed.2d 840, 109
of the Code's language. And the Government's second A.F.T.R.2d 2012-2020, 80 USLW 4357, 2012-1 USTC P
argument, like the majority's argument, has a problem, 50,345, 67 Collier Bankr.Cas.2d 459, 56 Bankr.Ct.Dec. 122,
namely that it reduces Congress' Amendment to rubble. For Bankr. L. Rep. P 82,212, 12 Cal. Daily Op. Serv. 5189, 2012
that reason I believe it does not offer the better interpretation Daily Journal D.A.R. 6225, 23 Fla. L. Weekly Fed. S 293
of the relevant language.
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Footnotes
* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the
convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50
L.Ed. 499.
1 Compare In re Dawes, 652 F.3d 1236 (C.A.10 2011), and 617 F.3d 1161 (C.A.9 2010) (case below), with Knudsen
v. IRS, 581 F.3d 696 (C.A.8 2009) (postpetition federal taxes are eligible for the § 1222(a)(2)(A) exception and thus
dischargeable).
2 Because we hold that the postpetition federal income taxes at issue are not collectible in the plan because they are not
“incurred by the estate,” we need not address the Government's broader alternative argument that Chapter 12 plans are
exclusively limited to prepetition claims.
3 For those of us for whom it is relevant, the legislative history confirms that Congress viewed § 346 as defining which
estates were separate taxable entities. See H.R.Rep. No. 95–595, p. 275 (1977), 1978 U.S.C.C.A.N. 5963 at 6232
(hereinafter H.R. Rep.) (“A threshold issue to be considered when a debtor files a petition under title 11 is whether the
estate created ... should be treated as a separate taxable entity”); id., at 334 (“Subsection (d) indicates that the estate in
a chapter 13 case is not a separate taxable entity”); accord, S.Rep. No. 95–989, p. 45 (1978), 1978 U.S.C.C.A.N. 5963
at 6291 (hereinafter S. Rep.); H.R. Rep., at 335 (noting “the creation of the estate of an individual under chapters 7 or
11 of title 11 as a separate taxable entity”); accord, S. Rep., at 46.
The Reports also tie separate taxable entity status to the responsibility to file returns and pay taxes. See H.R. Rep., at
277 (“If the estate is a separate taxable entity, then the representative of the estate is responsible for filing any income
tax returns and paying any taxes due by the estate”); id., at 278 (“When the estate is not a separate taxable entity, then
taxation of the debtor should be conducted on the same basis as if no petition were filed”).
4 A dispute over Committee jurisdiction led to the insertion of “State or local” before each mention of “law imposing a tax.”
Compare H.R. 8200, 95th Cong., 1st Sess., § 346 (1977), with § 346, 92 Stat. 2565. Nonetheless, the House Report
underscored that the policy behind § 346 applied equally to federal taxes:
“[T]here is a strong bankruptcy policy that these provisions apply equally to Federal, State, and local taxes. However,
in order to avoid any possible jurisdictional conflict with the Ways and Means Committee over the applicability of these
provisions to Federal taxes, H.R. 8200 has been amended to make the sections inapplicable to Federal taxes. The
amendment ... will obviate the need for a sequential referral of the bill to Ways and Means, which will be considering
these provisions and other bankruptcy-related tax law later in this Congress.” H.R. Rep., at 275.
5 See, e.g., In re Maxfield, No. 04–60355, 2009 WL 2105953, *5–*6 (Bkrtcy.Ct.N.D.Ind.2009); In re Jagours, 236 B.R. 616,
620 (Bkrtcy.Ct.E.D.Tex.1999); In re Whall, 391 B.R. 1, 5–6 (Bkrtcy.Ct.Mass.2008); In re Brown, No. 05–41071, 2006 WL
3370867, *3 (Bkrtcy.Ct.Mass.2006); In re Gyulafia, 65 B.R. 913, 916 (Bkrtcy.Ct.Kan.1986).
6 The dissent suggests that Chapter 12 can be distinguished from Chapter 13 because Chapter 12 bankruptcies tend to be
longer, such that the treatment of taxes is more “important.” Post, at 1900. As a practical matter, it is not clear that Chapter
12 bankruptcies are substantially longer. Compare Brief for Neil E. Harl. et al. as Amici Curiae 33 (median Chapter 12
case duration is under 8 months) with Tr. of Oral Arg. 49 (“on average we're talking about 4 months in a chapter 13 case”).
In any event, there is no indication that Congress intended any difference in duration—if it anticipated a difference at all
—to flip the characterization of postpetition income taxes from one chapter to the other. Nor does the absence of a §
1305 equivalent in Chapter 12 justify shoehorning postpetition taxes into § 503(b), as the dissent argues. That Chapter
12 lacks a provision allowing such taxes to be brought inside the plan only clarifies that such taxes fall outside of the plan.
The dissent alternatively suggests that it “do[es] not see the serious harm in treating the relevant taxes as ‘administrative
expenses' in both Chapter 12 and Chapter 13 cases.” Post, at 1900. The “harm” is to settled understandings in Chapter
13 to the contrary. The “harm” is also to § 1305; to avoid rendering § 1305 a nullity, the dissent recasts the provision as
applicable not to all “taxes that become payable ... while the case is pending,” but only those payable “after the Chapter
13 Plan is confirmed.” Post, at 1900. The dissent does not claim, however, that this was Congress' intent for § 1305, as
Congress' choice of words would be exceedingly overbroad if it were. And the dissent's novel reading contravenes ample
Chapter 13 authority recognizing no such limitation on § 1305's scope. E.g., 8 Collier ¶ 1305.02 (citing cases).
7 IRS manuals dating back to 1998 indicate that the Government did not view postpetition federal income taxes as collectible
in an individual debtor's Chapter 12 plan, even when that view was adverse to its interests. See IRM § 25.17.12.9.3
(2004); id., § 25.17.12.9.3(1) (2002); id., § 5.9, ch. 10.8(4) (1999); id., § 5.9, ch. 10.8(4) (1998). Until the enactment of
11 U.S.C. § 1222(a)(2)(A), treating such taxes as priority claims in the plan would have assured the Government of full
payment before or at the time of the plan.
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8 The House Report stated—after noting that, in addition to prepetition taxes, “certain other taxes are entitled to priority”—
that “[t]axes arising from the operation of the estate after bankruptcy are entitled to priority as administrative expenses.”
H.R. Rep., at 193. That is still true. Many taxes arising after bankruptcy, as in individual-debtor Chapter 7 or 11 cases,
remain entitled to priority as administrative expenses. The Senate Report, meanwhile, stated: “In general, administrative
expenses include taxes which the trustee incurs in administering the debtor's estate, including taxes on capital gains from
sales of property by the trustee and taxes on income earned by the estate during the case.” S. Rep., at 66 (emphasis
added). That likewise remains true. Administrative expenses still include income taxes that “the trustee,” as opposed to
the debtor, has incurred—again, as in individual-debtor Chapter 7 or 11 cases.
9 The original § 346 established that the estate of a corporate debtor is not a separate taxable entity, but nonetheless
provided that “the trustee shall make any [State or local] tax return otherwise required ... to be filed by or on behalf of
such ... corporation.” §§ 346(c)(1)–(2), 92 Stat. 2565, 2566. The current § 346 similarly states, in the same provision
deeming the debtor taxable when there is no separate taxable estate, that “[t]he trustee shall make such tax returns of
income of corporations.... The estate shall be liable for any [State or local] tax imposed on such corporation.” § 346(b).
10 The dissent opines that employment taxes must be administrative expenses “incurred by the estate” because, in its
view, they “do not fit easily” within the category of administrative expenses under § 503(b)(1)(A)(i), notwithstanding the
Government's contrary representations on both points. Post, at 1899 – 1900. Because employment taxes are not at issue
in this case, we offer no opinion on either question.
End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.
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Powerex Corp. v. Reliant Energy Services, Inc., 551 U.S. 224 (2007)
127 S.Ct. 2411, 168 L.Ed.2d 112, 75 USLW 4437, 2007-1 Trade Cases P 75,746...
[4] statutory bar on review of remand order is applicable to
KeyCite Yellow Flag - Negative Treatment suit removed under FSIA.
Declined to Extend by Beck Chevrolet Co., Inc. v. General Motors LLC,
S.D.N.Y., August 23, 2012
127 S.Ct. 2411 Vacated in part and remanded with instructions.
Supreme Court of the United States
Justice Kennedy filed concurring opinion joined by Justice
POWEREX CORP., Petitioner,
Alito.
v.
RELIANT ENERGY SERVICES, INC., et al. Justice Breyer filed dissenting opinion joined by Justice
Stevens.
No. 05–85.
|
Argued April 16, 2007.
| West Headnotes (6)
Decided June 18, 2007.
Synopsis [1] Removal of Cases Review
Background: State of California brought state-court actions Statutory bar on appellate review of federal
against wholesale energy suppliers, alleging price-fixing district court's remand order is limited to
conspiracy. Suppliers cross-claimed seeking indemnification remands based on lack of subject matter
from federal and Canadian government agencies, as well jurisdiction and defects in removal procedure. 28
as Canadian agency's wholly owned subsidiary. Agencies U.S.C.A. § 1447(c-d).
removed actions. The United States District Court for the
Southern District of California, Robert H. Whaley, J., granted 89 Cases that cite this headnote
state's motion to remand, ruling that agencies enjoyed
sovereign immunity, and that subsidiary was not foreign state
[2] Removal of Cases Review
under Foreign Sovereign Immunities Act (FSIA). The United
Statutory bar on appellate review of federal
States Court of Appeals for the Ninth Circuit, 391 F.3d 1011,
district court's subject matter jurisdiction-based
ruled that it could review substantive issues of law preceding
remand is not conditioned on absence of
remand order, and affirmed ruling as to subsidiary's status.
jurisdiction at time of removal; case can be
Certiorari was issued.
properly removed, yet suffer from failing in
subject matter jurisdiction that requires remand,
and in such case appellate review is prohibited.
Holdings: The United States Supreme Court, Justice Scalia, 28 U.S.C.A. § 1447(c-d).
held that:
159 Cases that cite this headnote
[1] statutory bar on appellate review of subject matter
jurisdiction-based remand is not conditioned on absence of [3] Removal of Cases Review
jurisdiction at time of removal;
Court of Appeals was barred from reviewing
federal district court's remand of action brought
[2] Court of Appeals was barred from reviewing remand
by state against wholesale energy suppliers,
order in instant case, given District Court's colorable
alleging price-fixing conspiracy, in which
characterization of remand as resting on lack of subject matter
suppliers cross-claimed seeking indemnification
jurisdiction;
from federal and Canadian government agencies
and Canadian agency's wholly owned subsidiary,
[3] statutory bar on review of remand order does not permit
and agencies and subsidiary removed as
review of substantive issues that may have preceded remand
“foreign states”; district court's characterization
order, absent separate order; and
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127 S.Ct. 2411, 168 L.Ed.2d 112, 75 USLW 4437, 2007-1 Trade Cases P 75,746...
of remand as resting on lack of subject matter the Foreign Sovereign Immunities Act of 1976 (FSIA); and
jurisdiction, arising from sovereign immunity petitioner Powerex, a wholly owned subsidiary of BC Hydro.
enjoyed by agencies and from subsidiary's non- The cross-defendants removed the entire case to federal court,
foreign-state status, was at least colorable. 28 with BC Hydro and petitioner relying on the FSIA. Plaintiffs-
U.S.C.A. §§ 1447(d), 1603(b)(2). respondents moved to remand, arguing that petitioner was
not a foreign state and that the cross-claims against BPA,
31 Cases that cite this headnote WAPA, and BC Hydro were barred by sovereign immunity.
The District Court agreed and remanded. As relevant here,
[4] Removal of Cases Review petitioner appealed, arguing that it was a foreign sovereign
under the FSIA, but plaintiffs-respondents rejoined that the
When, in remanding removed action, federal
appeal was jurisdictionally barred by 28 U.S.C. § 1447(d),
district court relies upon ground that is colorably
which provides that “[a]n order remanding a case to the State
characterized as subject matter jurisdiction,
court from which it was removed is not reviewable on appeal
appellate review is barred by statute. 28 U.S.C.A.
or otherwise.” The Ninth Circuit held that § 1447(d) did
§ 1447(d).
not preclude it from reviewing substantive issues of law that
59 Cases that cite this headnote preceded the remand order, but affirmed the holding as to
petitioner's foreign-state status.
[5] Removal of Cases Review
Held: Section 1447(d) bars appellate consideration of
Removal statute barring review of federal district petitioner's claim that it is a foreign state for FSIA purposes.
court's subject matter jurisdiction-based remand Pp. 2415 – 2421.
order does not permit review of substantive
issues of law that may have preceded remand (a) Appellate courts' authority to review district-court orders
order, absent order separate from unreviewable remanding removed cases to state court is substantially
remand order. 28 U.S.C.A. § 1447(d). limited by statute. Section 1447(d) is read in pari materia
with § 1447(c), so that only remands based on the grounds
41 Cases that cite this headnote
specified in the latter are shielded by the review bar mandated
by the former. Thermtron Products, Inc. v. Hermansdorfer,
[6] Removal of Cases Review 423 U.S. 336, 345–346, 96 S.Ct. 584, 46 L.Ed.2d 542. For
Removal statute barring review of federal district purposes of this case, it is assumed that the grounds specified
court's subject matter jurisdiction-based remand in § 1447(c) are lack of subject-matter jurisdiction and defects
order is applicable to suit removed under Foreign in removal procedure. Cf. Quackenbush v. Allstate Ins. Co.,
Sovereign Immunities Act (FSIA). 28 U.S.C.A. 517 U.S. 706, 711–712, 116 S.Ct. 1712, 135 L.Ed.2d 1. Given
§§ 1447(d), 1603(b)(2). the proceedings below, review of the remand order is barred
only if it was based on lack of subject-matter jurisdiction. Pp.
67 Cases that cite this headnote 2415 – 2416.
*225 b) Nothing in § 1447(c)'s text supports the claim that
a case cannot be remanded **2413 for lack of subject-
matter jurisdiction within the meaning of that provision if
**2412 *224 Syllabus * the case was properly removed in the first instance. Indeed,
statutory history conclusively refutes the argument that §
Plaintiffs-respondents filed state-court suits alleging that 1447(c) is implicitly limited in such a manner. When a district
various companies in California's energy market had court remands a properly removed case because it nonetheless
conspired to fix prices in violation of state law. Some of lacks subject-matter jurisdiction, the remand is covered by §
the defendants filed cross-claims seeking indemnity from, 1447(c) and shielded from review by § 1447(d). Pp. 2416 –
inter alios, two United States Government agencies (BPA 2417.
and WAPA); a Canadian corporation (BC Hydro) wholly
owned by British Columbia and thus a “foreign state” under
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(c) The District Court relied upon a ground that is colorably BREYER, J., filed a dissenting opinion, in which STEVENS,
characterized as subject-matter jurisdiction and so § 1447(d) J., joined, post, p. 2421.
bars appellate review. As an initial matter, it is clear from
the record that the court was purporting to remand for lack
of subject-matter jurisdiction. Even assuming that § 1447(d) Attorneys and Law Firms
permits appellate courts to look behind a district court's
David C. Frederick, Washington, D.C., for petitioner.
characterization of the basis for the remand, such review is
hereby limited to ascertaining whether the characterization Douglas Hallward–Driemeier for United States as amicus
was colorable. In this case, the only plausible explanation curiae, by special leave of the Court, supporting petitioner.
of the District Court's remand was that it believed that it
lacked the power to adjudicate the claims against petitioner Leonard B. Simon, San Diego, CA, for respondents.
once it had determined that petitioner was not a foreign
state and that the other cross-defendants had sovereign David C. Frederick, Counsel of Record, Scott H. Angstreich,
immunity. It is unnecessary to determine whether that belief **2414 Brendan J. Crimmins, Kellogg, Huber, Hansen,
was correct; it was at least debatable. Petitioner contends Todd, Evans & Figel, P.L.L.C., Washington, D.C., for
instead that the District Court was actually remanding based Powerex Corp.
on Carnegie–Mellon Univ. v. Cohill, 484 U.S. 343, 357, 108 William Bernstein, Lieff, Cabraser, Heimann & Bernstein,
S.Ct. 614, 98 L.Ed.2d 720, which authorizes remand when a LLP, San Francisco, CA, Leonard B. Simon, Counsel of
district court declines to exercise supplemental jurisdiction. Record, Pamela M. Parker, Frank J. Janecek, Jr., Lerach
This is implausible. The District Court never mentioned the Coughlin Stoia Geller Rudman & Robbins LLP, San Diego,
possibility of supplemental jurisdiction, and petitioner does CA, for Plaintiffs–Respondents.
not appear to have argued that the claims against it could be
retained based on supplemental jurisdiction. Pp. 2417 – 2419. Opinion
(d) The Ninth Circuit held that § 1447(d) does not preclude Justice SCALIA delivered the opinion of the Court.
reviewing a district court's substantive determinations that
*226 We granted certiorari to decide whether, under the
precede a remand order, a holding that appears to be premised
Foreign Sovereign Immunities Act of 1976 (FSIA), petitioner
on Waco v. United States Fidelity & Guaranty Co., 293 U.S.
is an “organ of a foreign state or political subdivision thereof.”
140, 55 S.Ct. 6, 79 L.Ed. 244. Waco, however, does not permit
28 U.S.C. § 1603(b)(2). When we granted certiorari, however,
an appeal when, as here, there is no order separate from the
we asked the parties also to address whether the Ninth Circuit
unreviewable remand order. Pp. 2418 – 2419.
had appellate jurisdiction in light of 28 U.S.C. § 1447(d).
(e) Petitioner's contention that Congress did not intend §
1447(d) to govern suits removed under the FSIA is flatly
refuted by this Court's longstanding precedent that “[a]bsent I
a clear statutory command to the contrary, [the Court]
assume[s] that Congress is ‘aware of the universality of The procedural history of this case is long and complicated;
th[e] practice’ of denying appellate review of remand orders we recount only what is necessary to resolve the writ before
when Congress creates a new ground for removal.” Things us. The State of California, along with some private and
Remembered, Inc. v. Petrarca, 516 U.S. 124, 128, 116 S.Ct. corporate citizens (hereinafter collectively referred to as
494, 133 L.Ed.2d 461. Pp. 2419 – 2420. plaintiffs-respondents), filed suits in California state courts
against various companies in the California energy market,
391 F.3d 1011, vacated in part and remanded. *227 alleging that they had conspired to fix prices in
violation of California law. Some of those defendants, in turn,
SCALIA, J., delivered the opinion of the Court, in which filed cross-claims seeking indemnity from, inter alios, the
ROBERTS, C.J., and KENNEDY, SOUTER, THOMAS, Bonneville Power Administration (BPA), the Western Area
GINSBURG, and ALITO, JJ., joined. KENNEDY, J., filed a Power Administration (WAPA), the British Columbia Hydro
concurring opinion, in which ALITO, J., joined, post, p. 2421. and Power Authority (BC Hydro), and petitioner Powerex.
(We shall sometimes refer to these entities collectively as the
cross-defendants.) BPA and WAPA are agencies of the United
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States Government. BC Hydro is a crown corporation of the California v. NRG Energy Inc., 391 F.3d 1011, 1022–1023
Canadian Province of British Columbia that is wholly owned (2004). It also found that the District Court had jurisdiction
by the Province and that all parties agree constitutes a “foreign over the case because BPA, WAPA, and BC Hydro properly
state” for purposes of the FSIA. See § 1603. Petitioner, also removed the entire action. Id., at 1023. Turning to the merits,
a Canadian corporation, is a wholly owned subsidiary of BC the Ninth Circuit affirmed the holding that petitioner was not a
Hydro. “foreign state” for purposes of the FSIA. Id., at 1025–1026. It
also upheld the District Court's conclusion that BPA, WAPA,
The cross-defendants removed the entire case to federal and BC Hydro retained sovereign immunity, id., at 1023–
court. BC Hydro and petitioner both relied on § 1441(d), 1025, but reversed its decision not to dismiss BPA and WAPA
which permits a “foreign state,” as defined by the FSIA, before remanding, id., at 1026–1027.
see § 1603(a), to remove civil actions brought against it in
state court. BPA and WAPA invoked § 1442(a), authorizing Petitioner sought certiorari review of the Ninth Circuit's
removal by federal agencies. Plaintiffs-respondents moved to determination that it was not an “organ of a foreign state or
remand, arguing that petitioner was not a foreign state, and political subdivision thereof” under § 1603(b)(2). We granted
that the cross-claims against BPA, WAPA, and BC Hydro certiorari on this question, but asked the parties to address
were barred by sovereign immunity. Petitioner opposed in addition whether the Ninth Circuit had jurisdiction over
remand on the ground that it was a foreign state under the petitioner's appeal notwithstanding § 1447(d). 549 U.S. 1178,
FSIA; the other cross-defendants opposed remand on the 127 S.Ct. 1144, 166 L.Ed.2d 910 (2007).
ground that their sovereign immunity entitled them to be
dismissed from the action outright.
*229 II
The District Court initially concluded (we assume correctly)
that § 1442(a) entitled BPA and WAPA to remove the [1] The authority of appellate courts to review district-
entire case and that BC Hydro was similarly entitled under court orders remanding removed cases to state court is
§ 1441(d). App. to Pet. for Cert. 20a. It thus believed substantially limited by statute. Title 28 U.S.C. § 1447(d)
that whether the case should be remanded “hinge[d on provides (with an exception for certain civil rights cases) that
its] jurisdictional authority to hear the removed claims, not “[a]n order remanding a case to the State court from which
whether the actions were properly removed in the first it was removed is not reviewable on appeal or otherwise.”
instance.” Ibid. The District Court held that petitioner did not Determining whether the Ninth Circuit was permitted to
qualify as a foreign sovereign under the FSIA. Id., at 33a– review the District Court's remand is, alas, not as easy as
38a. It *228 also decided that BC Hydro enjoyed sovereign one would expect from a mere reading of this text, for we
immunity under the FSIA. Id., at 21a–33a. And it concluded have interpreted § 1447(d) to cover less than its words alone
that BPA **2415 and WAPA were immune from suit in state suggest. In Thermtron Products, Inc. v. Hermansdorfer, 423
court, which the court believed deprived it of jurisdiction over U.S. 336, 345–346, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976), we
the claims against those agencies. Id., at 38a–44a. Having held that § 1447(d) should be read in pari materia with §
reached these conclusions, the District Court remanded the 1447(c), so that only remands based on the grounds specified
entire case. Id., at 44a. in the latter are shielded by the bar on review mandated by the
former. At the time of Thermtron, § 1447(c) stated in relevant
Petitioner appealed to the Court of Appeals for the Ninth part:
Circuit, arguing that it was a foreign sovereign under the
FSIA. BPA and WAPA (but not BC Hydro) also appealed, “ ‘If at any time before final judgment it appears that the
asserting that the District Court, before remanding the case, case was removed improvidently and without jurisdiction,
should have dismissed them from the action in light of their the district court shall remand the case.’ ” Id., at 342, 96
sovereign immunity. Plaintiffs-respondents, for their part, S.Ct. 584.
rejoined that both appeals were jurisdictionally barred by
§ 1447(d) and that the District Court had not erred in any Consequently, Thermtron limited § 1447(d)'s application to
event. The Ninth Circuit rejected the invocation of § 1447(d), such remands. Id., at 346, 96 S.Ct. 584. In 1988, Congress
holding that that provision did not preclude it from reviewing amended § 1447(c) in relevant part as follows:
substantive issues of law that preceded the remand order.
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removed in the first instance. Petitioner and the Solicitor
“A motion to remand the case on the basis of any defect General do not seriously dispute the absence of an explicit
in removal procedure must be made within 30 days after textual *231 limitation. Instead, relying on the statutory
the filing of the notice of removal under [28 U.S.C. §] history of § 1447(c), they make a three-step argument
1446(a). If at any time before final judgment it appears that why the provision is implicitly limited in this manner.
the district court lacks subject matter jurisdiction, **2416 First, they note that the pre–1988 version of § 1447(c)
the case shall be remanded.” § 1016(c)(1), 102 Stat. 4670. mandated remand “[i]f at any time before final judgment
it appear[ed] that the case was removed improvidently and
When that version of § 1447(c) was in effect, we thus
without jurisdiction,” 28 U.S.C. § 1447(c) (1982 ed.). That
interpreted § 1447(d) to preclude review only of remands for
version, obviously, authorized remand only for cases that
lack of subject-matter jurisdiction and for defects in removal
were removed improperly. Second, they contend that the
procedure. *230 See Quackenbush v. Allstate Ins. Co., 517
purpose of the 1988 amendment was to impose a time limit for
U.S. 706, 711–712, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996);
raising nonjurisdictional objections to removal, a contention
Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127–128,
that is certainly plausible in light of the structure of the
116 S.Ct. 494, 133 L.Ed.2d 461 (1995).
amended provision:
Although § 1447(c) was amended yet again in 1996, 110 “A motion to remand the case on the basis of any defect in
Stat. 3022, we will assume for purposes of this case that removal procedure must be made within 30 days after the
the amendment was immaterial to Thermtron's gloss on filing of the notice of removal under section 1446(a). If at
§ 1447(d), so that the prohibition on appellate review any time before final judgment it appears that the district
remains limited to remands based on the grounds specified court lacks subject matter jurisdiction, the case shall be
in Quackenbush. We agree with petitioner that the remand remanded.” § 1447(c) (1988 ed.).
order was not based on a defect in removal procedure, so
on the foregoing interpretation of Thermtronthe remand is Finally, they conclude that since the purpose of the
immunized from review only if it was based on a lack of amendment was to alter the timing rules, there is no reason
subject-matter jurisdiction. to think that Congress broadened the scope of § 1447(c)
to authorize the remand of cases that had been properly
removed. The language “lacks subject matter jurisdiction,”
**2417 which was newly added to § 1447(c), must
A
be construed to cover only cases in which removal was
[2] The principal submission of the Solicitor General and jurisdictionally improper at the outset.
petitioner is that the District Court's remand order was not
based on a lack of “subject matter jurisdiction” within the But the very statutory history upon which this creative
meaning of § 1447(c) because that term is properly interpreted argument relies conclusively refutes it. The same section of
to cover only “a defect in subject matter jurisdiction at the time the public law that amended § 1447(c) to include the phrase
of removal that rendered the removal itself jurisdictionally “subject matter jurisdiction” also created a new § 1447(e). See
improper.” Brief for United States as Amicus Curiae 8; see § 1016(c), 102 Stat. 4670. Section 1447(e), which remains on
also id., at 8–11; Brief for Petitioner 42–45. Under this the books, states:
interpretation, the District Court's remand order was not based
on a defect in subject-matter jurisdiction for purposes of §
1447(c), since the cross-defendants other than petitioner were “If after removal the plaintiff seeks
statutorily authorized to remove the whole case in light of to join additional defendants whose
their sovereign status. The Ninth Circuit appears to have joinder would destroy subject matter
relied, at least in part, on this rationale. See 391 F.3d, at 1023. *232 jurisdiction, the court may deny
joinder, or permit joinder and remand
We reject this narrowing construction of § 1447(c)'s the action to the State court.”
unqualified authorization of remands for lack of “subject
matter jurisdiction.” Nothing in the text of § 1447(c) supports
the proposition that a remand for lack of subject-matter
jurisdiction is not covered so long as the case was properly
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legal ground the District Court actually relied upon for its
This unambiguously demonstrates that a case can be properly remand in the present case. As contended by plaintiffs-
removed and yet suffer from a failing in subject-matter respondents, it was the court's lack of power to adjudicate
jurisdiction that requires remand. A standard principle of the claims against petitioner once it concluded both that
statutory construction provides that identical words and petitioner was not a foreign state capable of independently
phrases within the same statute should normally be given removing and that the claims against the other removing
the same meaning. See, e.g., IBP, Inc. v. Alvarez, 546 U.S. cross-defendants were barred by sovereign immunity. Brief
21, 34, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005). That maxim for Plaintiffs–Respondents 17–21, 25–26. Though we have
is doubly appropriate here, since the phrase “subject matter not passed on the question whether, when sovereign immunity
jurisdiction” was inserted into § 1447(c) and § 1447(e) at bars the claims against the only parties capable of removing
the same time. There is no reason to believe that the new the case, subject-matter jurisdiction exists to entertain the
language in the former provision, unlike the new language remaining claims, cf. n. 3, infra, the point is *234 certainly
simultaneously inserted two subsections later, covers only debatable. And we conclude that review of the District Court's
cases in which removal itself was jurisdictionally improper. characterization of its remand as resting upon lack of subject-
We hold that when a district court remands a properly matter jurisdiction, to the extent it is permissible at all,
removed case because it nonetheless lacks subject-matter should be limited to confirming that that characterization
jurisdiction, the remand is covered by § 1447(c) and thus was colorable. Lengthy appellate disputes about whether
shielded from review by § 1447(d). 1 an arguable jurisdictional ground invoked by the district
court was properly such would frustrate the purpose of §
1447(d) quite as much as determining whether the factfinding
underlying that invocation was correct. See Kircher, supra,
B
at 649 – 650, 126 S.Ct. 2145 (SCALIA, J., concurring in
[3] That holding requires us to determine whether the ground part and concurring in judgment). Moreover, the line between
for the District Court's remand in the present case was lack misclassifying a ground as subject-matter jurisdiction and
of subject-matter jurisdiction. As an initial matter, it is quite misapplying a proper ground of subject-matter jurisdiction
clear that the District Court was purporting to remand on is sometimes elusively thin. To decide the present case,
that ground. The heading of the discussion section of the we need not pass on whether § 1447(d) permits appellate
remand order is entitled “Subject Matter Jurisdiction Over the review of a district-court remand order that dresses in
Removed Actions.” App. to Pet. for Cert. 20a. And *233 jurisdictional clothing a patently nonjurisdictional ground
the District Court explicitly stated that the remand “issue (such as the docket congestion invoked by the District Court
hinges ... on the Court's jurisdictional authority to hear the in Thermtron, 423 U.S., at 344, 96 S.Ct. 584). We hold
removed claims.” Ibid. Were any doubt remaining, it is surely that when, as here, the District Court relied upon a ground
eliminated by the District Court's order denying a stay of the that is colorably characterized as subject-matter jurisdiction,
remand, which repeatedly stated that a lack of subject-matter appellate review is barred by § 1447(d).
jurisdiction required remand pursuant to § 1447(c). See App.
281–286. Petitioner puts forward another explanation for the remand,
which we find implausible. Petitioner claims that, because
[4] For some Members of this Court, the foregoing the entire case was properly removed, the District Court had
conclusion that the District Court purported to remand for the discretion to invoke a form of supplemental jurisdiction
lack of subject-matter jurisdiction is alone enough to bar to hear the claims against it, and that its remand rested
review under § 1447(d). See Osborn v. Haley, 549 U.S. upon the decision not to exercise that discretion. In short,
225, 264, 127 S.Ct. 881, 166 L.Ed.2d 819 (2007) (SCALIA, petitioner contends that the District Court was actually relying
J., joined by THOMAS, J., dissenting). Even assuming, on Carnegie–Mellon Univ. v. Cohill, 484 U.S. 343, 357,
however, that § 1447(d) permits appellate courts to look 108 S.Ct. 614, 98 L.Ed.2d 720 (1988), which authorized
behind the district court's characterization, see Kircher v. district courts to remand removed state claims when they
Putnam Funds Trust, 547 U.S. 633, 641, n. 9, 126 S.Ct. decide not to exercise supplemental jurisdiction. Brief for
2145, n. 9, 165 L.Ed.2d 92 (2006) (reserving the question), Petitioner 45–48; Reply Brief for Petitioner 16–20. It is far
we conclude **2418 that appellate review is barred in from clear, to begin with, (1) that supplemental jurisdiction
this case. 2 There is only one plausible explanation of what was even available *235 in the circumstances of this case; 3
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and (2) that when discretionary supplemental jurisdiction is unreviewable remand order. Here petitioner can point to no
declined the remand is not based on lack of subject- **2419 District Court order, separate from the remand, to which it
matter jurisdiction for purposes of § 1447(c) and § 1447(d). 4 objects and to which the issue of its foreign sovereign status
Assuming those points, however, there is no reason to believe is material. Thus, petitioner's invocation of Waco amounts to
that the District Court's remand was actually based on this a request for one of two impermissible outcomes: an advisory
unexplained discretionary decision. The District Court itself opinion as to its FSIA status that will not affect any order of
never mentioned the possibility of supplemental jurisdiction, the District Court, or a reversal of the remand order. Waco did
neither in its original decision, see App. to Pet. for Cert. not, and could not, authorize either form of judicial relief.
20a–44a, nor in its order denying petitioner's motion to stay
the remand pending appeal, App. 281–286. To the contrary,
as described above, it relied upon lack of subject-matter D
jurisdiction—which, in petitioner's view of things (but see n.
4, this page) would not include a Cohill remand. Moreover, [6] Finally, petitioner contends, with no textual support,
it does not appear from the record that petitioner ever even that § 1447(d) is simply inapplicable to a suit removed
argued to the District Court that supplemental jurisdiction was under the FSIA. It asserts that Ҥ 1447(d) must yield
a basis for retaining the claims against it. There is, in short, no because Congress could not have intended **2420 to
reason to believe that an unmentioned nonexercise of Cohill grant district judges irrevocable authority to decide questions
discretion was the basis for the remand. with such sensitive foreign-relations implications.” Brief for
Petitioner 49. *237 We will not ignore a clear jurisdictional
statute in reliance upon supposition of what Congress really
wanted. See Connecticut Nat. Bank v. Germain, 503 U.S.
C
249, 253–254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992).
[5] Part of the reason why the Ninth Circuit concluded it Petitioner's divination of congressional intent is flatly refuted
had appellate jurisdiction is a legal theory quite different from by longstanding precedent:
those discussed and rejected above. Petitioner, along with
“Section 1447(d) applies ‘not only to remand orders made
the other appellants, convinced the court to apply Circuit
in suits removed under [the general removal statute], but to
precedent holding that § 1447(d) does not preclude review
orders of remand made in cases removed under any other
of a district court's merits determinations that precede the
statutes, as well.’ ... Absent a clear statutory command to
remand. *236 See 391 F.3d, at 1023 (citing, inter alia,
the contrary, we assume that Congress is ‘aware of the
Pelleport Investors, Inc. v. Budco Quality Theatres, Inc.,
universality of th[e] practice’ of denying appellate review
741 F.2d 273, 276–277 (C.A.9 1984)). Petitioner has not
of remand orders when Congress creates a new ground
completely abandoned this argument before us, see Brief for
for removal.” Things Remembered, 516 U.S., at 128, 116
Petitioner 50, and it is in any event desirable to address this
S.Ct. 940 (quoting United States v. Rice, 327 U.S. 742, 752,
aspect of the Ninth Circuit's judgment.
66 S.Ct. 835, 90 L.Ed. 982 (1946); emphasis deleted and
alterations in original).
The line of Ninth Circuit jurisprudence upon which petitioner
relied appears to be invoking our decision in Waco v. United Congress has repeatedly demonstrated its readiness to exempt
States Fidelity & Guaranty Co., 293 U.S. 140, 55 S.Ct. 6, 79 particular classes of remand orders from § 1447(d) when
L.Ed. 244 (1934). There the District Court, in a single decree, it wishes—both within the text of § 1447(d) itself (which
had entered one order dismissing a cross-complaint against exempts civil rights cases removed pursuant to 28 U.S.C. §
one party, and another order remanding because there was no 1443), and in separate statutes, see, e.g., 12 U.S.C. § 1441a(l
diversity of citizenship in light of the dismissal. Id., at 142, 55 )(3)(C), § 1819(b)(2)(C); 25 U.S.C. § 487(d).
S.Ct. 6. We held that appellate jurisdiction existed to review
the order of dismissal, although we repeatedly cautioned that We are well aware that § 1447(d)'s immunization of erroneous
the remand order itself could not be set aside. Id., at 143– remands has undesirable consequences in the FSIA context. A
144, 55 S.Ct. 6. The Ninth Circuit's application of Waco to foreign sovereign defendant whose case is wrongly remanded
petitioner's appeal was mistaken. As we reiterated in Kircher, is denied not only the federal forum to which it is entitled (as
see 547 U.S., at 645 – 646, n. 13, 126 S.Ct. 2145, Waco does befalls all remanded parties with meritorious appeals barred
not permit an appeal when there is no order separate from the by § 1447(d)), but also certain procedural rights that the FSIA
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specifically provides foreign sovereigns only in federal court
(such as the right to a bench trial, see 28 U.S.C. § 1330(a);
Justice BREYER, with whom Justice STEVENS, joins,
§ 1441(d)). But whether that special concern outweighs §
dissenting.
1447(d)'s general interest in avoiding prolonged litigation on
Unlike the Court, I believe the District Court's remand order
threshold nonmerits questions, see Kircher, supra, at 640, 126
is reviewable on appeal. And, reviewing the decision below,
S.Ct. 2145, is a policy debate that belongs in the halls of
I would hold that Powerex is an organ of the Government of
Congress, not in the hearing room of this Court. As *238 far
British Columbia.
as the Third Branch is concerned, what the text of § 1447(d)
indisputably does prevails over what it ought to have done. 5
I
**2421 * * * The majority concludes that 28 U.S.C. § 1447(d) took from
the Ninth Circuit the power to review the District Court's
Section 1447(d) reflects Congress's longstanding “policy of *240 remand decision. The statutory argument is a strong
not permitting interruption of the litigation of the merits one. Section 1447(c) says that, “[i]f at any time before final
of a removed case by prolonged litigation of questions judgment it appears that the district court lacks subject matter
of jurisdiction of the district court to which the cause is jurisdiction, the case shall be remanded” to state court; and
removed.” Rice, supra, at 751, 66 S.Ct. 835. Appellate courts § 1447(d), referring to subsection (c), adds that a district
must take that jurisdictional prescription seriously, however court “order remanding a case to the State court from which
pressing the merits *239 of the appeal might seem. We it was removed is not reviewable on appeal or otherwise.”
hold that § 1447(d) bars appellate consideration of petitioner's Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336,
claim that it is a foreign state for purposes of the FSIA. We 345–346, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976).
therefore vacate in part the judgment of the Ninth Circuit
and remand the case with instructions to dismiss petitioner's Nonetheless this Court has found exceptions to § 1447's
appeal for want of jurisdiction. seemingly blanket prohibition. See, e.g., id., at 350–352, 96
S.Ct. 584; Osborn v. Haley, 549 U.S. 225, 240 – 244, 127
It is so ordered. S.Ct. 881, 893–896, 166 L.Ed.2d 819 (2007). In doing so, the
Court has recognized that even a statute silent on the subject
can create an important conflict with § 1447(d)'s “no appellate
Justice KENNEDY, with whom Justice ALITO joins,
review” instruction. And where that is so, we have, **2422
concurring.
in fact, resolved the conflict by reading a later more specific
When Congress acted through the Foreign Sovereign
statute as creating an implicit exception to § 1447(d) (though
Immunities Act of 1976, 28 U.S.C. § 1602 et seq. (2000 ed.
Osborn did not say as much). Id., at 243 – 244, 127 S.Ct. 881.
and Supp. IV), to codify certain protections and immunities
for foreign sovereigns and the entities of those sovereigns,
The subject matter of the Foreign Sovereign Immunity Act
it no doubt considered its action to be of importance for
of 1976's (FSIA) removal provision, foreign sovereigns,
maintaining a proper relationship with other nations. And so
is special. And the FSIA creates serious conflicts with §
it is troubling to be required to issue a decision that might well
1447(d)'s “no appellate review” instruction. The FSIA is later
frustrate a policy of importance to our own Government.
enacted and subject-matter specific. Consequently, I would
read into the FSIA a similar exception to § 1447(d), applicable
As the Court explains, however, the structure and wording
here.
of § 1447(d) (2000 ed.) leave us no other choice. There is
no latitude for us to reach a different result. If it is true that
Osborn illustrates my starting point: a conflict with § 1447(d).
the statute as written and the judgment we issue today are
The Westfall Act, the specific statute at issue in that case,
inconsistent with the intent and purpose Congress wanted to
provides for removal to federal court of a state-court lawsuit
express, then the immediate jeopardy that foreign sovereign
brought against a federal employee where the state-court
entities will now face should justify urgent legislative action
lawsuit attacks employee actions within the scope of federal
to enact the necessary statutory revisions.
employment. 28 U.S.C. §§ 2679(d)(2)-(3). The Westfall Act
authorizes the Attorney General to certify that the employee's
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actions at issue fall within the scope of federal employment. Patrickson, 538 U.S. 468, 479, 123 S.Ct. 1655, 155 L.Ed.2d
And the Westfall Act says that the certification “conclusively 643 (2003). In such a case, a state court likely will feel bound
establish[es]” that fact for removal purposes. §§ 2679(d)(1)- by the federal court's prior judgment on the lack of immunity
(2). In Osborn, we pointed out *241 that § 1447(d) would (under state law-of-the-case doctrine) and this Court's review
permit a district court, without appellate review, to remand (of an adverse state-court judgment) will come too late. In
in the face of a contrary Attorney General certification. such a case, the FSIA's basic objective (unrelated to choice
549 U.S., at 240 – 243, 127 S.Ct. 881. Doing so, without of forum) will have become “weightless.” Osborn, supra, at
appellate review, would thereby permit the district court to 242, 127 S.Ct. 881.
substitute its own judgment (as to whether the employee's
actions were within the federal “scope of employment”) for It is difficult to see how this conflict between the FSIA's
that of the Attorney General. And the district court would basic objective and § 1447(d) is any less serious than the
thereby have the unreviewable power to make the Attorney conflict at issue in Osborn. The statutory objective here,
General's determination non-conclusive, contrary to what the harmonious relations with foreign sovereigns, is more, not
statute says. Because § 1447(d), if applied, would render this less, important. See Ex parte Peru, 318 U.S. 578, 587, 63
statutory instruction “weightless,” we found a conflict with S.Ct. 793, 87 L.Ed. 1014 (1943) (exercising original writ to
§ 1447(d). Ibid. And we resolved the conflict in favor of the protect sovereign from erroneous District Court conclusion
later enacted, more specific Westfall Act. Id., at 243, 127 S.Ct. that it was not immune from suit). See also, e.g., Republic of
881. Mexico v. Hoffman, 324 U.S. 30, 35, 65 S.Ct. 530, 89 L.Ed.
729 (1945); Schooner Exchange v. McFaddon, 7 Cranch 116,
A similarly strong conflict exists here, albeit not with a 3 L.Ed. 287 (1812); H.R.Rep. No. 94–1487, p. 13 (1976)
separate removal provision, but rather with a comprehensive (hereinafter H.R. Rep.) (FSIA intended to avoid “adverse
statutory scheme. To understand how that is so, imagine a foreign relations consequences”).
case not now before us. Imagine that a private plaintiff brings
a lawsuit in state court against a noncommercial division of Neither is a § 1447(d) exception here likely to undermine §
a foreign nation's government, say, a branch of that nation's 1447(d)'s basic purpose: avoiding the procedural delay that
defense ministry or, for that matter, against the foreign nation an added federal appeal would create. Avoiding that delay
itself. The FSIA provides a specific guarantee that such a suit is important in a typical case where only choice of forum is
cannot continue (except in certain instances that, for purposes at issue. But that same delay is necessary, indeed, crucial, in
of my example, are not relevant). 28 U.S.C. §§ 1602–1605. It the special case where a foreign sovereign's immunity from
achieves this objective by authorizing the foreign government suit is at issue. At the same time, foreign affairs is itself
to remove the case to federal court where a federal judge will an exceptional topic, with special risks, special expertise,
determine if the defendant is indeed a foreign government and special federal authority; hence, our finding a § 1447(d)
and, if so, dismiss the case. § 1441(d). exception in the FSIA is unlikely to lead courts to create a
series of exceptions affecting more typical cases. *243 See,
What happens if the foreign sovereign removes the case e.g., Kircher v. Putnam Funds Trust, 547 U.S. 633, 640 – 641,
to federal court only to have the federal judge mistakenly 126 S.Ct. 2145, 165 L.Ed.2d 92 (2006) (avoidance of delay
remand the case to state court? As in an ordinary case, the is § 1447(d)'s basic purpose).
lawsuit may well continue in the state tribunal. But, if so,
unlike the ordinary case (say, a wrongly remanded diversity Finally, as in Osborn, the FSIA is a specific, later enacted
or “arising under” case) but like Osborn, the removing party statute. Cf. 549 U.S., at 243, 127 S.Ct. 881; see generally
will have lost considerably more than a choice of forum. The Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 170,
removing party will have lost that which a different *242 127 S.Ct. 2339, 168 L.Ed.2d 54, 2007 WL 1661472 (where
portion of the special statute sought to provide, namely, the statutory provisions are inconsistent, “normally the specific
immunity from suit that the FSIA sought to ensure. governs the general”); Morales v. Trans World Airlines, Inc.,
504 U.S. 374, 384–385, 112 S.Ct. 2031, 119 L.Ed.2d 157
That assurance forms a separate and central FSIA (1992); Simpson v. United States, 435 U.S. 6, 15, 98 S.Ct. 909,
objective. The very purpose of sovereign immunity is 55 L.Ed.2d 70 (1978).
to avoid subjecting a foreign sovereign to the rigors
and “inconvenience of suit.” **2423 Dole Food Co. v.
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Taken together, these considerations lead me to believe enacted the FSIA soon after the Court's decision in Thermtron
that, were a foreign non–commercial government entity's Products, 423 U.S., at 345, 96 S.Ct. 584, held that implicit
immunity from suit at issue, the FSIA would conflict with § 1447(d) exceptions might exist. Cf. Osborn, 549 U.S., at
§ 1447(d), leading a court properly to read the FSIA as 241 – 243, 127 S.Ct., at 894–895 (despite statutory silence,
implicitly creating an exception to § 1447(d), and thereby reading Westfall Act as overriding § 1447(d)). And, as I have
protecting the sovereign's right to appeal a wrongful remand said, the FSIA would otherwise fail to achieve Congress'
order. basic objectives. Context and purpose make clear that few
if any Members of Congress could have wanted to block
The removing defendant in this case, of course, is not appellate review here. Were the Court to pay greater attention
a foreign sovereign immune from suit. It is a foreign to statutory objectives and purposes and less attention to
governmental entity that acts in a commercial capacity a technical parsing of language, it might agree. Were it to
and consequently is subject to suit. 28 U.S.C. § 1605(a) agree, we would exercise our interpretive obligation, not
(2). But the FSIA nonetheless creates an important, though “lawmaking power,” ante, at 2420 – 2421, n. 5, with increased
different, conflict. That conflict arises because a different fidelity to the intention of those to whom our Constitution
FSIA provision says, “[u]pon removal the action shall be delegates that lawmaking power, namely, the Congress of the
tried by the court without jury.” § 1441(d) (emphasis added); United States. And, law in this democracy would be all the
see H.R. Rep., at 33 (“[O]ne effect of removing an action better for it.
under the new section 1441(d) will be to extinguish a
demand for a jury trial made in the state court”); S.Rep.
No. 94–1310, p. 32 (1976) (hereinafter S. Rep.) (same).
*245 II
A wrongful remand would destroy this statutory right. The
state-court trial would often proceed with a jury; and it is I part company with the Ninth Circuit on the merits. The
questionable whether even this Court could **2424 later set Circuit held that the District Court's remand was proper
aside an adverse state-court judgment for that reason—at least because, in its view, Powerex is not “an organ of a ...
Congress seems to have thought as much. See H.R. Rep., at 33 political subdivision” of a “foreign state.” 28 U.S.C. §
(“Because the judicial power of the United States specifically 1603(b)(2) (emphasis added). Hence, it is not an “agency or
encompasses actions between a State, or the Citizens thereof, instrumentality” of a foreign government and falls outside the
*244 and foreign States, this preemption of State court scope of the FSIA's provision authorizing removal. § 1603(a);
[jury trial] procedures in cases involving foreign sovereigns is see generally California v. NRG Energy Inc., 391 F.3d 1011,
clearly constitutional” (emphasis added; citations and internal 1025–1026 (2004).
quotation marks omitted)); S. Rep., at 32 (same).
In my view, however, Powerex is “an organ” of the Province
The conflict is important, this case is special, and we should of British Columbia, a “political subdivision” of Canada.
resolve it by reading the FSIA as implicitly pre-empting the The record makes clear that Powerex is a government-
general application of § 1447(d). Indeed, I do not see how we owned and government-operated electric power distribution
could read the FSIA differently in this respect depending upon company, not meaningfully different from ordinary municipal
whether commercial or noncommercial sovereign activity is electricity distributors, the Tennessee Valley Authority, or
at issue. For these reasons, I believe that the Ninth Circuit any foreign “nationalized” power producers and distributors,
correctly determined that it possessed legal authority to such as Britain's former Central Electricity Generating Board
review the case. or Electricite de France. See generally C. Harris, Electricity
Markets: Pricing, Structures, and Economics 15–20 (2006)
It is true, as the majority states, that Congress has in (summarizing features of electricity companies in United
other contexts carved out certain removal orders as being States and Europe, among others); J. Nelson, Marginal Cost
specifically reviewable on appeal. Ante, at 2419 – 2420. Pricing in Practice 3–6, 32, 37 (1964) (summarizing features
The majority reads these specific statutes to suggest that of **2425 France hydropower industry). See also http://
had Congress intended § 1447(d) not to apply in FSIA tva.com/ abouttva/index.htm (summarizing general features
cases, it could simply have said so. Ibid. However, in fact, of Tennessee Valley Authority) (all Internet materials as
for the reasons articulated above, I believe that Congress visited June 8, 2007, and available in Clerk of Court's
must have assumed the FSIA overrode § 1447. Congress case file); Government Corporation Control Act, § 101, 59
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Stat. 597–598 (describing Tennessee Valley Authority as Powerex's board members consist of some of BC Hydro's
“ ‘wholly owned Government corporation’ ”); Lebron v. board members and other members whom those members
National Railroad Passenger Corporation, 513 U.S. 374, appoint. App. 233–235. The government's comptroller
388–389, 115 S.Ct. 961, 130 L.Ed.2d 902 (1995) (noting that general reviews Powerex's financial operations and regulates
corporate entities in Government Corporation Control Act the terms under which it conducts business. Financial
were incorporated by other government-owned corporations); Administration Act, R.S.B. C., ch. 138, §§ 4.1, 8(2)(c)(i),
Dept. of Labor, Bureau of Labor Statistics, Career Guide 75, 79.3 (1996) (FAA), Addendum to Brief for Petitioner
to Industries, Utilities, online at http://www.bls.gov/oco/ 34–36, 40–42 (hereinafter Addendum). British Columbia's
cg/cgs018.htm (describing features of public run utilities); fiscal control statute refers to Powerex as a “ ‘government
*246 G. Rothwell & T. G & oacute;mez, Electricity body.’ ” FAA § 1, Addendum 31, 33. And other British
Economics: Regulation and Deregulation 129–241 (2003) Columbia laws refer to its employees as “ ‘public office
(comparing electricity markets and industries in California holders.’ ” Lobbyists Registration Act, S.B.C., ch. 42, § 1
and various foreign nations). (2001), Addendum 50. Powerex pays no income taxes. See
Income Tax Amendments Act, 1997, S.C. 1998, ch. 19, § 178
Powerex is itself owned and operated by BC Hydro, an entity (to be codified at R.S.C., ch. 1, §§ 149(1)(d), (d.2)), **2426
that all apparently concede is governmental in nature. Brief Addendum 45; App. to Pet. for Cert. 58a; Brief for Petitioner
for Plaintiffs–Respondents 38–40, 42. British Columbia's 31. The British Columbian government, through BC Hydro,
statutes create BC Hydro as a kind of government agency has sole beneficial ownership and control of Powerex. App.
to produce water-generated electric power. Power Measures 267. If Powerex earns a profit, that profit must be rebated
Act, S.B. C., ch. 40 (1964); App. to Pet. for Cert. 52a, 118a, directly or indirectly to British Columbia's residents. Id.,
163a–169a. BC Hydro has a board of directors, all of whom at 215, 238. I can find no significant difference between
are appointed by British Columbia's government. Id., at 58a– Powerex and the classical government entities to which I
59a. It is an “agent of the [provincial] government and its previously referred. Supra, at 2424 – 2425.
powers may be exercised only as an agent of the government.”
Hydro Power Authority Act, R.S.B.C., ch. 212, § 3(1) (1996). The Ninth Circuit noted that Powerex may earn a profit and
The District Court concluded that BC Hydro is, in fact, a that the government of British Columbia does not provide
foreign sovereign entity entitled to immunity. 391 F.3d, at financial support. And the Ninth Circuit thought these facts
1024. made a critical difference. But a well-run nationalized firm
should make a reasonable profit; nor should it have to borrow
British Columbia's Minister of Energy issued a written from the government itself. See, e.g., Nelson, supra, at 8–12;
directive ordering that BC Hydro create a subsidiary, Harris, supra, at 125, 130–132; Rothwell & Gómez, supra,
Powerex, to carry out the specialized tasks of exporting at 3–4. The relevant question is not whether Powerex earns
hydro-generated electric power and of importing power, a profit but where does that profit go? Here it does not go to
which it is then to distribute to British Columbia residents. private shareholders; it goes to the benefit *248 of the public
App. 235–239, 250–251, 267. Powerex specifically carries in payments to the province and reduced electricity prices.
out these obligations in accordance with various treaties App. 215, 238.
between Canada and the United States. Id., at 133–155; App.
to Pet. for Cert. 55a; see Treaty Between the United States of The Ninth Circuit also pointed out that certain provincial
America and Canada Relating to Cooperative Development regulations that apply to other governmental departments do
of the Water Resources of the Columbia River Basin, Jan. 17, not apply to Powerex. That fact proves little. The Tennessee
1961, [1964] 15 U.S.T. 1555, T.I.A.S. No. 5638, App. to Pet. Valley Authority, which is “perhaps the best known of the
for Cert. 61a–82a; Treaty Between Canada and the United American public corporations,” First Nat. City Bank v. Banco
States of America Relating to the Skagit River and Ross Lake, Para el Comercio Exterior de Cuba, 462 U.S. 611, 625, n.
and the Seven Mile Reservoir on the Pend d'Oreille River, 15, 103 S.Ct. 2591, 77 L.Ed.2d 46 (1983), is not subject to
Apr. 2, 1984, 1469 U.N.T.S. 309, T.I.A.S. No. 11088, App. certain federal regulations regarding hiring that apply to other
to *247 Pet. for Cert. 138a–145a; British Columbia–Seattle governmental departments. See, e.g., 16 U.S.C. § 831b.
Agreement (Mar. 30, 1984), App. 160–171.
In sum, Powerex is the kind of government entity that
Congress had in mind when it wrote the FSIA's “commercial
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activit[y]” provisions. See generally 28 U.S.C. § 1602 et seq.; All Citations
H.R. Rep., at 15; S. Rep., at 14; Banco, supra, at 624–625,
103 S.Ct. 2591. 551 U.S. 224, 127 S.Ct. 2411, 168 L.Ed.2d 112, 75 USLW
4437, 2007-1 Trade Cases P 75,746, 07 Cal. Daily Op. Serv.
For these reasons, I believe we should consider, and reverse, 6916, 2007 Daily Journal D.A.R. 8887, 20 Fla. L. Weekly
the Ninth Circuit's determination. With respect, I dissent. Fed. S 368
Footnotes
* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the
convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50
L.Ed. 499.
1 To be clear, we do not suggest that the question whether removal is proper is always different from the question whether
the district court has subject-matter jurisdiction, for the two are often identical in light of the general rule that postremoval
events do not deprive federal courts of subject-matter jurisdiction. See, e.g., Wisconsin Dept. of Corrections v. Schacht,
524 U.S. 381, 391, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998). We merely hold that when there is a divergence, such that
a district court lacks subject-matter jurisdiction to hear a claim that was properly removed, the consequent remand is
authorized by § 1447(c) and appellate review is barred by § 1447(d).
2 The Court's opinion in Osborn v. Haley, 549 U.S. 225, 127 S.Ct. 881, 166 L.Ed.2d 819 (2007), had nothing to say about
the scope of review that is permissible under § 1447(d), since it held that § 1447(d) was displaced in its entirety by
28 U.S.C. § 2679(d)(2). See 549 U.S., at 243 – 244, 127 S.Ct., at 895 (reasoning that, of the two forum-determining
provisions—§ 1447(d), the generally applicable section, and § 2679(d)(2), a special prescription governing Westfall Act
cases—“only one can prevail”).
3 Petitioner provides no authority from this Court supporting the proposition that a district court presiding over a multiparty
removed case can invoke supplemental jurisdiction to hear claims against a party that cannot independently remove
when the claims against the only parties authorized to remove are barred by sovereign immunity.
4 We have never passed on whether Cohill remands are subject-matter jurisdictional for purposes of post–1988 versions of
§ 1447(c) and § 1447(d). See Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 129–130, 116 S.Ct. 494, 133 L.Ed.2d
461 (1995) (KENNEDY, J., concurring) (noting that the question is open); cf. Cohill, 484 U.S., at 355, n. 11, 108 S.Ct.
614 (discussing the pre–1988 version of § 1447(c)).
5 The dissent's belief that there is an implicit FSIA exception to § 1447(d), see post, at 2421 – 2424 (opinion of BREYER,
J.), rests almost exclusively on our recent decision in Osborn. The dissent reads Osborn to stand for the proposition that
any “conflict” between a specific, later-enacted statute and § 1447(d) should be resolved in favor of the former. Post, at
2422 – 2423. The reason why the dissent is forced to the parenthetical admission that “Osborn did not say as much,”
post, at 2422, is because the dissent drastically overreads the case. Osborn held only that § 1447(d) was trumped by
the Westfall Act's explicit provision that removal was conclusive upon the Attorney General's certification: As between
“the two antishuttling commands,” the Court said, “only one can prevail.” 549 U.S., at 244, 127 S.Ct. 881. The opinion
was quite clear that the only statutory rivalry with which it was concerned was dueling “antishuttling commands”: “Only in
the extraordinary case in which Congress has ordered the intercourt shuttle to travel just one way—from state to federal
court—does today's decision hold sway.” Ibid. That is why Osborn repeatedly emphasized that Westfall Act certification
is “ ‘conclusiv[e] ... for purposes of removal,’ ” id., at 242, 243, 127 S.Ct., 881, an emphasis that the dissent essentially
ignores, post, at 2422 – 2423.
Osborn is no license for courts to assume the legislative role by characterizing the consequences of § 1447(d)'s bar
on appellate review as creating a conflict, leaving it to judges to suppress that provision when they think Congress
undervalued or overlooked those consequences. The dissent renders a quintessential policy judgment in concluding
that appellate “delay is necessary, indeed, crucial,” post, at 2423, when the rights of a foreign sovereign are at stake.
We have no idea whether this is a wise balancing of the various values at issue here. We are confident, however, that
the dissent is wrong to think that it would improve the “law in this democracy,” post, at 2424, for judges to accept the
lawmaking power that the dissent dangles before them.
End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.
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United Sav. Ass'n of Texas v. Timbers of Inwood Forest..., 484 U.S. 365 (1988)
108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
protection, does not include creditor's right to
immediate foreclosure, and thus Chapter 11
KeyCite Yellow Flag - Negative Treatment debtor's undersecured creditor was not entitled
Not Followed as Dicta In re Senior Care Properties, Inc., Bankr.N.D.Fla.,
to interest on its collateral as compensation for
February 25, 1992
delay caused by automatic stay in foreclosing on
108 S.Ct. 626
collateral. Bankr.Code, 11 U.S.C.A. § 362(d)(1).
Supreme Court of the United States
1352 Cases that cite this headnote
UNITED SAVINGS ASSOCIATION
OF TEXAS, Petitioner
v.
TIMBERS OF INWOOD
FOREST ASSOCIATES, LTD. **627 Syllabus *
No. 86-1602. *365 When a bankruptcy petition is filed, § 362(a) of the
| Bankruptcy Code provides an automatic stay of actions taken
Argued Dec. 1, 1987. to realize the value of collateral given by the debtor. Section
| 362(d) authorizes the bankruptcy court to grant relief from the
Decided Jan. 20, 1988. stay “(1) for cause, including the lack of adequate protection
of an interest in property of ... [a] party in interest,” or “(2)
Synopsis
with respect to a stay of an act against property,” if the
Undersecured creditor moved for relief from automatic stay
debtor does not have an equity in such property (i.e., the
or for adequate protection. The Bankruptcy Court, Wesley
creditor is undersecured) and the property is “not necessary
W. Steen, J., sitting by temporary assignment, 49 B.R. 454,
to an effective reorganization.” Section 361 provides that
required debtor to make monthly payments for adequate
adequate protection of an entity's interest in property may
protection, and appeal was taken. The United States District
be provided by granting such relief “as will result in the
Court for the Southern District of Texas, James DeAnda, J.,
realization by such entity of the indubitable equivalent of its
affirmed, and further appeal was taken. The Court of Appeals
interest.” After respondent filed a petition for reorganization
for the Fifth Circuit, 793 F.2d 1380, reversed and remanded.
under Chapter 11 of the Code, petitioner, an undersecured
On rehearing en banc, the Court of Appeals, 808 F.2d 363,
creditor, moved the Bankruptcy Court for relief from the §
again held for debtor, and creditor petitioned for certiorari.
362(a) stay on the ground that there was a lack of “adequate
The Supreme Court, Justice Scalia, held that “interest in
protection” of its interest within the meaning of § 362(d)(1).
property,” protected by Bankruptcy Code provision allowing
The court granted relief, conditioning continuance of the stay
undersecured creditor relief from stay on ground of lack
on monthly payments by respondent on the estimated amount
of adequate protection, does not include creditor's right
realizable on the foreclosure that the stay prevented. The
to immediate foreclosure, and thus Chapter 11 debtor's
District Court affirmed, but the Court of Appeals reversed.
undersecured creditor was not entitled to interest on its
collateral as compensation for delay caused by automatic stay
Held: Undersecured creditors are not entitled to
in foreclosing on collateral.
compensation under § 362(d)(1) for the delay caused by the
automatic stay in foreclosing on their collateral. Pp. 629-635.
Affirmed.
(a) The language of other Code provisions that deal
with the rights of secured creditors, and the substantive
West Headnotes (1) dispositions that those provisions effect, establish that the
“interest in property” protected by § 362(d)(1) does not
include a secured party's right to immediate foreclosure.
[1] Bankruptcy Interest
First, petitioner's contrary interpretation contradicts the
“Interest in property,” protected by Bankruptcy carefully drawn substantive disposition effected by § 506(b),
Code provision allowing undersecured creditor which codifies the pre-Code rule denying undersecured
relief from stay on ground of lack of adequate creditors postpetition interest on their claims. Had Congress
000292
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United Sav. Ass'n of Texas v. Timbers of Inwood Forest..., 484 U.S. 365 (1988)
108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
nevertheless meant to give undersecured creditors interest interest on unsecured claims when the debtor proves solvent,
on the value of their collateral, it would have said so this anomaly pertains to such a rare occurrence that it is likely
plainly in § 506(b). Moreover, the meaning of § 362(d)(1)'s the product of congressional inadvertence, and, in any case,
“interest in property” phrase is clarified by the use of similar its inequitable effects are entirely avoidable. Pp. 632-634.
terminology in § 506(a), where it must be interpreted to mean
only the creditor's security interest *366 in the property (c) General statements in the legislative history of §§
without regard to his right to immediate possession on default. 361 and 362(d)(1) that “[s]ecured creditors should not be
Second, § 552(b), which makes possession of a perfected deprived of the benefit of their bargain” are inadequate
security interest in postpetition rents or profits from collateral to overcome the plain textual indication in *367 §§ 506
a condition of having them applied to satisfy the secured and 362(d)(2) of Congress' intent, as discussed above. It
creditor's claim ahead of the claims of unsecured creditors, is most improbable that Congress would have made a
is inconsistent with petitioner's interpretation of § 362(d) major change entitling undersecured creditors to postpetition
(1), under which the undersecured creditor who lacks such interest without specifically mentioning it in the legislative
a perfected security interest in effect could achieve the same history. Petitioner's argument that pre-Code Chapter XI gave
result by demanding the “use value” of his collateral. Third, undersecured creditors the absolute right to foreclose, and
petitioner's interpretation of § 362(d)(1) makes a practical that the silence of the Code's legislative history as to the
nullity of § 362(d)(2), which on petitioner's theory would be withdrawal of that right indicates a congressional intent
of use only to a secured creditor who was fully protected both to provide interest on the collateral during the stay as a
as to **628 the value of, and interest on, its collateral, but substitute, is flawed. The authorities are far from clear that
nonetheless wanted to foreclose. Petitioner's contention that there was a distinctive Chapter XI rule of absolute entitlement
undersecured creditors will face inordinate and extortionate to foreclose, but, even assuming there was, § 362(d)(2)
delay if they are denied compensation under § 362(d)(1) is indicates that, in enacting Chapter 11 of the current Code,
also belied by § 362(d)(2), which requires relief from the Congress adopted the approach of pre-Code Chapters X and
stay unless the debtor establishes a reasonable possibility of a XII, under which the undersecured creditor did not have such
successful reorganization within a reasonable time, and under an absolute right. Pp. 634-635.
which numerous cases have provided relief within less than a
year from the filing of the bankruptcy petition. Pp. 629-633. 808 F.2d 363, affirmed.
(b) Denying petitioner compensation under § 362(d)(1) is not
inconsistent with § 361(3)'s use of the phrase “indubitable Attorneys and Law Firms
equivalent.” Although the same phrase appears in § 1129(b),
H. Miles Cohn argued the cause and filed briefs for petitioner.
under which section, as a condition for confirmation of
a reorganization plan, a secured claimant has a right to Leonard H. Simon argued the cause for respondent. With him
receive the present value of his collateral (including interest on the brief were Daphne Levey and Timothy J. Henderson.*
if the claim is to be paid over time), the source of the
right in § 1129 is not the “indubitable equivalent” language * Briefs of amici curiae urging reversal were filed for the
but the provision guaranteeing payments of a value, “as of United States by Solicitor General Fried, Assistant Attorney
the effective date of the plan,” equal to the value of the General Willard, and Deputy Solicitor General Cohen; for the
collateral. Similarly, petitioner's contention that, since general California League of Savings Institutions et al. by John A.
administrative expenses do not have priority over secured Graham; for the National Commercial Finance Association
claims, see §§ 506(c), 507(a), the Code embodies a principle by A. Bruce Schimberg, Rex E. Lee, J. Ronald Trost, Shalom
prohibiting secured creditors from bearing any of the costs L. Kohn, and Frank R. Kennedy; and for Thomas H. Jackson,
of reorganization, is without merit. Congress could not have pro se.
intended that its readoption of the pre-Code administrative
expenses rule would work a change in the also readopted Briefs of amici curiae urging affirmance were filed for Global
pre-Code rule denying undersecured creditors post-petition Marine Inc. by Harvey R. Miller, D.J. Baker, and Martin
interest. Finally, although failure to interpret § 362(d)(1) J. Bienenstock; and for the National Association of Credit
to require compensation for undersecured creditors appears Management et al. by Richard Levin and Kenneth N. Klee.
inconsistent with § 726(a)(5), which allows postpetition
000293
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Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 294 of 305
United Sav. Ass'n of Texas v. Timbers of Inwood Forest..., 484 U.S. 365 (1988)
108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
that petitioner was an undersecured creditor. Respondent
Raymond T. Nimmer, pro se, and Edward L. Ripley, pro se, had agreed to pay petitioner the postpetition rents from
filed a brief for themselves as amici curiae. the *369 apartment project (covered by the after-acquired
property clause in the security agreement), minus operating
Opinion
expenses. Petitioner contended, however, that it was entitled
Justice SCALIA delivered the opinion of the Court. to additional compensation. The Bankruptcy Court agreed
and on April 19, 1985, it conditioned continuance of the
Petitioner United Savings Association of Texas seeks review stay on monthly payments by respondent, at the market
of an en banc decision of the United States Court of rate of 12% per annum, on the estimated amount realizable
Appeals for the Fifth Circuit, holding that petitioner was on foreclosure, $4,250,000-commencing six months after
not entitled to receive from respondent debtor, which is the filing of the bankruptcy petition, to reflect the normal
undergoing *368 reorganization in bankruptcy, monthly foreclosure delays. In re Bear Creek Ministorage, Inc., 49
payments for the use value of the loan collateral which the B.R. 454 (1985) (editorial revision of earlier decision). The
bankruptcy stay prevented it from possessing. In re Timbers court held that the postpetition rents could be applied to these
of Inwood Forest Associates, Ltd., 808 F.2d 363 (1987). We payments. See id., at 460. Respondent appealed to the District
**629 granted certiorari, 481 U.S. 1068, 107 S.Ct. 2459, Court and petitioner cross-appealed on the amount of the
95 L.Ed.2d 868 (1987), to resolve a conflict in the Courts of adequate protection payments. The District Court affirmed
Appeals regarding application of §§ 361 and 362(d)(1) of the but the Fifth Circuit en banc reversed.
Bankruptcy Code, 11 U.S.C. §§ 361 and 362(d)(1) (1982 ed.
and Supp. IV). Compare Grundy Nat. Bank v. Tandem Mining We granted certiorari to determine whether undersecured
Corp., 754 F.2d 1436, 1440-1441 (CA4 1985); In re American creditors are entitled to compensation under 11 U.S.C. §
Mariner Industries, Inc., 734 F.2d 426, 432-435 (CA9 1984); 362(d)(1) for the delay caused by the automatic stay in
see also In re Briggs Transp. Co., 780 F.2d 1339, 1348-1351 foreclosing on their collateral.
(CA8 1985).
II
I
When a bankruptcy petition is filed, § 362(a) of the
On June 29, 1982, respondent Timbers of Inwood Forest Bankruptcy Code provides an automatic stay of, among other
Associates, Ltd., executed a note in the principal amount of things, actions taken to realize the value of collateral given by
$4,100,000. Petitioner is the holder of the note as well as of a the debtor. The provision of the Code central to the decision
security interest created the same day in an apartment project of this case is § 362(d), which reads as follows:
owned by respondent in Houston, Texas. The security interest
included an assignment of rents from the project. On March “On request of a party in interest and after notice and a
4, 1985, respondent filed a voluntary petition under Chapter hearing, the court shall grant relief from the stay provided
11 of the Bankruptcy Code, 11 U.S.C. § 101 et seq. (1982 ed. under subsection (a) of this section, such as by terminating,
and Supp. IV), in the United States Bankruptcy Court for the annulling, modifying, or conditioning such stay-
Southern District of Texas.
“(1) for cause, including the lack of adequate protection of
an interest in property of such party in interest; or
On March 18, 1985, petitioner moved for relief from the
automatic stay of enforcement of liens triggered by the “(2) with respect to a stay of an act against property under
petition, see 11 U.S.C. § 362(a), on the ground that there subsection (a) of this section, if-
was lack of “adequate protection” of its interest within the
meaning of 11 U.S.C. § 362(d)(1). At a hearing before *370 “(A) the debtor does not have an equity in such
the Bankruptcy Court, it was established that respondent property; and
owed petitioner $4,366,388.77, and evidence was presented
that the value of the collateral was somewhere between “(B) such property is not necessary to an effective
$2,650,000 and $4,250,000. The collateral was appreciating reorganization.”
in value, but only very slightly. It was therefore undisputed
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United Sav. Ass'n of Texas v. Timbers of Inwood Forest..., 484 U.S. 365 (1988)
108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
S.Ct. 1600, 1606, 89 L.Ed.2d 855 (1986), or because only
**630 The phrase “adequate protection” in paragraph (1) of one of the permissible meanings produces a substantive effect
the foregoing provision is given further content by § 361 of that is compatible with the rest of the law, see, e.g., Pilot
the Code, which reads in relevant part as follows: Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 107 S.Ct. 1549,
1556, 95 L.Ed.2d 39 (1987); Weinberger v. Hynson, Westcott
“When adequate protection is required under section 362
& Dunning, Inc., 412 U.S. 609, 631-632, 93 S.Ct. 2469, 2484,
... of this title of an interest of an entity in property, such
37 L.Ed.2d 207 (1973); Jarecki v. G.D. Searle & Co., 367 U.S.
adequate protection may be provided by-
303, 307-308, 81 S.Ct. 1579, 1582-83, 6 L.Ed.2d 859 (1961).
“(1) requiring the trustee to make a cash payment or That is the case here. Section 362(d)(1) is only one of a series
periodic cash payments to such entity, to the extent that the of provisions in the Bankruptcy Code dealing with the rights
stay under section 362 of this title ... results in a decrease of secured creditors. The language in those other provisions,
in the value of such entity's interest in such property; and the substantive dispositions that they effect, persuade us
that the “interest in property” protected by § 362(d)(1) does
“(2) providing to such entity an additional or replacement not include a secured party's right to immediate foreclosure.
lien to the extent that such stay ... results in a decrease in
the value of such entity's interest in such property; or Section 506 of the Code defines the amount of the secured
creditor's allowed secured claim and the conditions of his
“(3) granting such other relief ... as will result in the
receiving postpetition interest. In relevant part it reads as
realization by such entity of the indubitable equivalent of
follows:
such entity's interest in such property.”
“(a) An allowed claim of a creditor secured by a lien on
It is common ground that the “interest in property” referred to property in which the estate has an interest ... is a secured
by § 362(d)(1) includes the right of a secured creditor to have claim to the extent of the value of such creditor's interest
the security applied in payment of the debt upon completion in the estate's interest in such property, ... and *372 is an
of the reorganization; and that that interest is not adequately unsecured claim to the extent that the value **631 of such
protected if the security is depreciating during the term of the creditor's interest ... is less than the amount of such allowed
stay. Thus, it is agreed that if the apartment project in this claim....
case had been declining in value petitioner would have been
entitled, under § 362(d)(1), to cash payments or additional “(b) To the extent that an allowed secured claim is secured
security in the amount of the decline, as § 361 describes. by property the value of which ... is greater than the amount
The crux of the present dispute is that petitioner asserts, and of such claim, there shall be allowed to the holder of such
respondent denies, that the phrase “interest in property” also claim, interest on such claim, and any reasonable fees,
includes the secured party's right (suspended by the stay) to costs, or charges provided for under the agreement under
take immediate possession of the defaulted *371 security, which such claim arose.”
and apply it in payment of the debt. If that right is embraced
In subsection (a) of this provision the creditor's “interest
by the term, it is obviously not adequately protected unless
in property” obviously means his security interest without
the secured party is reimbursed for the use of the proceeds he
taking account of his right to immediate possession of the
is deprived of during the term of the stay.
collateral on default. If the latter were included, the “value of
such creditor's interest” would increase, and the proportions
The term “interest in property” certainly summons up such
of the claim that are secured and unsecured would alter, as
concepts as “fee ownership,” “life estate,” “co-ownership,”
the stay continues-since the value of the entitlement to use
and “security interest” more readily than it does the notion of
the collateral from the date of bankruptcy would rise with
“right to immediate foreclosure.” Nonetheless, viewed in the
the passage of time. No one suggests this was intended. The
isolated context of § 362(d)(1), the phrase could reasonably be
phrase “value of such creditor's interest” in § 506(a) means
given the meaning petitioner asserts. Statutory construction,
“the value of the collateral.” H.R.Rep. No. 95-595, pp. 181,
however, is a holistic endeavor. A provision that may seem
356 (1977); see also S.Rep. No. 95-989, p. 68 (1978), U.S.
ambiguous in isolation is often clarified by the remainder of
Code Cong. & Admin. News 1978, pp. 5787, 5854, 6141,
the statutory scheme-because the same terminology is used
6312. We think the phrase “value of such entity's interest” in
elsewhere in a context that makes its meaning clear, see, e.g.,
Sorenson v. Secretary of Treasury, 475 U.S. 851, 860, 106
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108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
§ 361(1) and (2), when applied to secured creditors, means 406, 412, 58 S.Ct. 612, 615, 82 L.Ed. 926 (1938). We think
the same. it unlikely that § 506(b) codified the pre-Code rule with the
**632 intent, not of achieving the principal purpose and
Even more important for our purposes than § 506's use of function of that rule, but of providing over-secured creditors
terminology is its substantive effect of denying undersecured an alternative method of compensation. *374 Moreover,
creditors postpetition interest on their claims-just as it denies it is incomprehensible why Congress would want to favor
over secured creditors postpetition interest to the extent that undersecured creditors with interest if they move for it under
such interest, when added to the principal amount of the § 362(d)(1) at the inception of the reorganization process-
claim, will exceed the value of the collateral. Section 506(b) thereby probably pushing the estate into liquidation-but not
provides that “[t]o the extent that an allowed secured claim if they forbear and seek it only at the completion of the
is secured by property the value of which ... is greater than reorganization.
the amount of such claim, there shall be allowed to the holder
of such claim, interest on such claim.” (Emphasis added.) Second, petitioner's interpretation of § 362(d)(1) is
Since this provision permits postpetition interest to be paid structurally inconsistent with 11 U.S.C. § 552. Section 552(a)
only out of the “security cushion,” the undersecured creditor, states the general rule that a prepetition security interest
*373 who has no such cushion, falls within the general rule does not reach property acquired by the estate or debtor
disallowing postpetition interest. See 11 U.S.C. § 502(b)(2). postpetition. Section 552(b) sets forth an exception, allowing
If the Code had meant to give the undersecured creditor, who postpetition “proceeds, product, offspring, rents, or profits”
is thus denied interest on his claim, interest on the value of the collateral to be covered only if the security agreement
of his collateral, surely this is where that disposition would expressly provides for an interest in such property, and the
have been set forth, and not obscured within the “adequate interest has been perfected under “applicable nonbankruptcy
protection” provision of § 362(d)(1). Instead of the intricate law.” See, e.g., In re Casbeer, 793 F.2d 1436, 1442-1444 (CA5
phraseology set forth above, § 506(b) would simply have 1986); In re Johnson, 62 B.R. 24, 28-30 (CA9 Bkrtcy.App.
said that the secured creditor is entitled to interest “on his Panel 1986); cf. Butner v. United States, 440 U.S. 48, 54-56,
allowed claim, or on the value of the property securing his 99 S.Ct. 914, 917-18, 59 L.Ed.2d 136 (1979) (same rule under
allowed claim, whichever is lesser.” Petitioner's interpretation former Bankruptcy Act). Section 552(b) therefore makes
of § 362(d)(1) must be regarded as contradicting the carefully possession of a perfected security interest in postpetition
drawn disposition of § 506(b). rents or profits from collateral a condition of having them
applied to satisfying the claim of the secured creditor ahead
Petitioner seeks to avoid this conclusion by characterizing of the claims of unsecured creditors. Under petitioner's
§ 506(b) as merely an alternative method for compensating interpretation, however, the undersecured creditor who lacks
oversecured creditors, which does not imply that no such a perfected security interest in effect achieves the same
compensation is available to undersecured creditors. This result by demanding the “use value” of his collateral under §
theory of duplicate protection for oversecured creditors is 362. It is true that § 506(b) gives the over secured creditor,
implausible even in the abstract, but even more so in light of despite lack of compliance with the conditions of § 552,
the historical principles of bankruptcy law. Section 506(b)'s a similar priority over unsecured creditors; but that does
denial of postpetition interest to undersecured creditors not compromise the principle of § 552, since the interest
merely codified pre-Code bankruptcy law, in which that payments come only out of the “cushion” in which the
denial was part of the conscious allocation of reorganization oversecured creditor does have a perfected security interest.
benefits and losses between undersecured and unsecured
creditors. “To allow a secured creditor interest where his Third, petitioner's interpretation of § 362(d)(1) makes
security was worth less than the value of his debt was nonsense of § 362(d)(2). On petitioner's theory, the
thought to be inequitable to unsecured creditors.” Vanston undersecured creditor's inability to take immediate possession
Bondholders Protective Committee v. Green, 329 U.S. 156, of *375 his collateral is always “cause” for conditioning the
164, 67 S.Ct. 237, 240, 91 L.Ed. 162 (1946). It was considered stay (upon the payment of market rate interest) under § 362(d)
unfair to allow an undersecured creditor to recover interest (1), since there is, within the meaning of that paragraph,
from the estate's unencumbered assets before unsecured “lack of adequate protection of an interest in property.”
creditors had recovered any principal. See id., at 164, 166, But § 362(d)(2) expressly provides a different standard for
67 S.Ct. at 240, 241; Ticonic Nat. Bank v. Sprague, 303 U.S. relief from a stay “of an act against property,” which of
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course includes taking possession of collateral. It provides
that the court shall grant relief “if ... (A) the debtor does
A
not have an equity in such property [i.e., the creditor is
undersecured]; and (B) such property is not necessary to an Petitioner contends that denying it compensation under §
effective reorganization.” (Emphasis added.) By applying the 362(d)(1) is inconsistent with sections of the Code other
“adequate protection of an interest in property” provision of than those just discussed. Petitioner principally relies on
§ 362(d)(1) to the alleged “interest” in the earning power of the phrase “indubitable equivalent” in § 361(3), which also
collateral, petitioner creates the strange consequence that § appears in 11 U.S.C. § 1129(b)(2)(A)(iii). Petitioner contends
362 entitles the secured creditor to relief from the stay (1) if that in the latter context, which sets forth the standards for
he is undersecured (and thus not eligible for interest under confirming a reorganization plan, the phrase has developed a
§ 506(b)), or (2) if he is undersecured and his collateral “is well-settled meaning connoting the right of a secured creditor
not necessary to an effective reorganization.” This renders to receive present value of his security-thus requiring interest
§ 362(d)(2) a practical nullity and a theoretical absurdity. If if the claim is to be paid over time. It is true that under §
§ 362(d)(1) is interpreted in this fashion, an undersecured 1129(b) a secured claimant has a right to receive under a plan
creditor would seek relief under § 362(d)(2) only if his the present value of his collateral. This entitlement arises,
collateral was not depreciating (or he was being compensated however, not from the phrase “indubitable equivalent” in §
for depreciation) and it was receiving market rate interest on 1129(b)(2)(A)(iii), but from the provision of § 1129(b)(2)
his collateral, but nonetheless wanted to foreclose. Petitioner (A)(i)(II) that guarantees the secured creditor “deferred cash
offers no reason why Congress would want to provide relief payments ... of a value, as of the effective date of the plan, of
for such an obstreperous and thoroughly unharmed creditor. at least the value of such [secured claimant's] interest in the
estate's interest in such property.” (Emphasis added.) Under
Section 362(d)(2) also belies petitioner's contention that this formulation, even though the undersecured creditor's
undersecured creditors will face inordinate and extortionate “interest” is regarded (properly) as solely the value of the
delay if they are denied compensation for interest lost during collateral, he must be rendered payments that assure him that
the stay as part of “adequate protection” under § 362(d)(1). value as of the effective date of the plan. In § 361(3), by
Once the movant under § 362(d)(2) establishes that **633 contrast, the relief pending the stay need only be such “as
he is an undersecured creditor, it is the burden of the debtor will result in the realization ... of the indubitable equivalent”
to establish that the collateral at issue is “necessary to an of the collateral. (Emphasis added.) It is obvious (since §§
effective reorganization.” See § 362(g). What this requires 361 and 362(d)(1) do not entitle the secured creditor to
is not merely a showing that if there is conceivably to be immediate payment of the principal of his collateral) **634
an effective reorganization, this property will be needed for that this “realization” is to “result” not at once, but only upon
it; but *376 that the property is essential for an effective completion of the reorganization. It is then that he must be
reorganization that is in prospect. This means, as many assured “realization ... of the indubitable equivalent” of his
lower courts, including the en banc court in this case, have collateral. To put the point differently: similarity of outcome
properly said, that there must be “a reasonable possibility of a between § 361(3) and § 1129 would be demanded only if
successful reorganization within a reasonable time.” 808 F.2d, the former read “such other relief ... as *378 will give such
at 370-371, and nn. 12-13, and cases cited therein. The cases entity, as of the date of the relief, the indubitable equivalent
are numerous in which § 362(d)(2) relief has been provided of such entity's interest in such property.”
within less than a year from the filing of the bankruptcy
petition. 1 And while the bankruptcy courts demand less Nor is there merit in petitioner's suggestion that “indubitable
detailed showings during the four months in which the debtor equivalent” in § 361(3) connotes reimbursement for the use
is given the exclusive right to put together a plan, see 11 value of collateral because the phrase is derived from In re
U.S.C. §§ 1121(b), (c)(2), even within that period lack of any Murel Holding Corp., 75 F.2d 941 (CA2 1935), where it bore
realistic prospect of effective reorganization will require § that meaning. Murel involved a proposed reorganization plan
362(d)(2) relief. 2 that gave the secured creditor interest on his collateral for 10
years, with full payment of the secured principal due at the
end of that term; the plan made no provision, however, for
amortization of principal or maintenance of the collateral's
*377 III value during the term. In rejecting the plan, Murel used
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108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
the words “indubitable equivalence” with specific reference inequitable effects, moreover, are entirely avoidable, since
not to interest (which was assured), but to the jeopardized an undersecured creditor is entitled to “surrender or waive
principal of the loan: his security and prove his entire claim as an unsecured one.”
**635 United States Nat. Bank v. Chase Nat. Bank, 331 U.S.
“Interest is indeed the common measure of the difference 28, 34, 67 S.Ct. 1041, 1044, 91 L.Ed. 1320 (1947). Section
[between payment now and payment 10 years hence], but 726(a)(5) therefore requires no more than that undersecured
a creditor who fears the safety of his principal will scarcely creditors receive postpetition interest from a solvent debtor
be content with that; he wishes to get his money or at least on equal terms with unsecured creditors rather than ahead
the property. We see no reason to suppose that the statute of them-which, where the debtor is solvent, involves no
was intended to deprive him of that in the interest of junior hardship.
holders, unless by a substitute of the most indubitable
equivalence.” Id., at 942.
Of course Murel, like § 1129, proceeds from the premise that B
in the confirmation context the secured creditor is entitled
to present value. But no more from Murel than from § 1129 Petitioner contends that its interpretation is supported by
can it be inferred that a similar requirement exists as of the legislative history of §§ 361 and 362(d)(1), relying
the time of the bankruptcy stay. The reorganized debtor is almost entirely on statements that “[s]ecured creditors should
supposed to stand on his own two feet. The debtor in process not *380 be deprived of the benefit of their bargain.”
of reorganization, by contrast, is given many temporary H.R.Rep. No. 95-595, at 339; S.Rep. No. 95-989, at 53, U.S.
protections against the normal operation of the law. Code Cong. & Admin. News 1978, pp. 5839, 6295. Such
generalizations are inadequate to overcome the plain textual
Petitioner also contends that the Code embodies a principle indication in §§ 506 and 362(d)(2) of the Code that Congress
that secured creditors do not bear the costs of reorganization. did not wish the undersecured creditor to receive interest on
It derives this from the rule that general administrative his collateral during the term of the stay. If it is at all relevant,
expenses do not have priority over secured claims. See §§ the legislative history tends to subvert rather than support
506(c), 507(a). But the general principle does not follow petitioner's thesis, since it contains not a hint that § 362(d)
*379 from the particular rule. That secured creditors do not (1) entitles the undersecured creditor to postpetition interest.
bear one kind of reorganization cost hardly means that they Such a major change in the existing rules would not likely
bear none of them. The Code rule on administrative expenses have been made without specific provision in the text of the
merely continues pre-Code law. But it was also pre-Code law statute, cf. Kelly v. Robinson, 479 U.S. 36, 47, 107 S.Ct. 353,
that undersecured creditors were not entitled to postpetition 359-360, 93 L.Ed.2d 216 (1986); it is most improbable that
interest as compensation for the delay of reorganization. it would have been made without even any mention in the
See supra, at 631; see also infra, at 635. Congress could legislative history.
hardly have understood that the readoption of the rule on
administrative expenses would work a change in the rule on Petitioner makes another argument based upon what the
postpetition interest, which it also readopted. legislative history does not contain. It contends that the
pre-Code law gave the undersecured creditor relief from
Finally, petitioner contends that failure to interpret § 362(d) the automatic stay by permitting him to foreclose; and that
(1) to require compensation of undersecured creditors for Congress would not have withdrawn this entitlement to relief
delay will create an inconsistency in the Code in the without any indication of intent to do so in the legislative
(admittedly rare) case when the debtor proves solvent. When history, unless it was providing an adequate substitute, to wit,
that occurs, 11 U.S.C. § 726(a)(5) provides that postpetition interest on the collateral during the stay.
interest is allowed on unsecured claims. Petitioner contends
it would be absurd to allow postpetition interest on unsecured The premise of this argument is flawed. As petitioner itself
claims but not on the secured portion of undersecured concedes, Brief for Petitioner 20, the undersecured creditor
creditors' claims. It would be disingenuous to deny that this had no absolute entitlement to foreclosure in a Chapter
is an apparent anomaly, but it will occur so rarely that it is X or XII case; he could not foreclose if there was a
more likely the product of inadvertence than are the blatant reasonable prospect for a successful rehabilitation within
inconsistencies petitioner's interpretation would produce. Its a reasonable time. See, e.g., In re Yale Express System,
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108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
addition that reorganization was not sufficiently likely or
Inc., 384 F.2d 990, 991-992 (CA2 1967) (Chapter X); In
was being unduly delayed. See, e.g., In re Bric of America,
re Nevada Towers Associates, 14 Collier Bankr. Cas. (MB)
Inc., 4 Collier Bankr. Cas. (MB) 34, 39-40 (Bkrtcy.Ct.MD
146, 151-156 (Bkrtcy.Ct.SDNY 1977) (Chapter XII); In re
Fla.1975); In re O.K. Motels, 1 Collier Bankr. Cas. (MB)
Consolidated Motor Inns, 6 Collier Bankr. Cas. (MB) 18,
416, 419-420 (Bkrtcy.Ct.MD Fla.1974). Moreover, other
31-32 (Bkrtcy.Ct.ND Ga.1975) (same). Thus, even assuming
Chapter XI cases held undersecured creditors not entitled
petitioner is correct that the undersecured creditor had an
to foreclosure under reasoning very similar to that used in
absolute entitlement to relief under Chapter XI, Congress
would have been faced with the choice between adopting Chapters X and XII cases. See In re Coolspring Estates,
the rule from *381 Chapters X and XII or the asserted Inc., 12 Collier Bankr. Cas. (MB) 55, 60-61 (Bkrtcy.Ct.ND
alternative rule from Chapter XI, because Chapter 11 of Ind.1977); In re The Royal Scot, Ltd., 2 Bankr.Ct. Dec. (CRR)
the current Code “replaces chapters X, XI and XII of the 374, 376-377 (Bkrtcy.Ct.WD Mich.1976); In re Mesker Steel,
Bankruptcy Act” with a “single chapter for all business Inc., 1 Bankr.Ct. Dec. (CRR) 235, 236-237 (Bkrtcy.Ct.SD
reorganizations.” S.Rep. No. 95-989, at 9; see also H.R.Rep. Ind.1974). The at best divided authority under Chapter XI
No. 95-595, at 223-224, U.S. Code Cong. & Admin. News removes *382 all cause for wonder that the alleged departure
1978, pp. 5795, 6182, 6183. We think § 362(d)(2) indicates from it should not have been commented upon in the
that Congress adopted the approach of Chapters X and XII. In legislative history.
any event, as far as the silence of the legislative history on the
point is concerned, that would be no more strange with respect The Fifth Circuit correctly held that the undersecured
to alteration of the asserted Chapter XI rule than it would be petitioner is not entitled to interest on its collateral during the
with respect to alteration of the Chapters X and XII rule. stay to assure adequate protection under 11 U.S.C. § 362(d)
(1). Petitioner has never sought relief from the stay under
Petitioner's argument is further weakened by the fact that it § 362(d)(2) or on any ground other than lack of adequate
is far from clear that there was a distinctive Chapter XI rule protection. Accordingly, the judgment of the Fifth Circuit is
of absolute entitlement to foreclosure. At least one leading
commentator concluded that “a Chapter XI court's power Affirmed.
to stay lien enforcement is as broad as that of a Chapter
X or XII court and that the automatic stay rules properly
make no distinctions between the Chapters.” Countryman, All Citations
Real Estate Liens in Business Rehabilitation Cases, 50
Am.Bankr.L.J. 303, 315 (1976). Petitioner cites dicta in 484 U.S. 365, 108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107,
some Chapter XI cases suggesting that the undersecured 17 Collier Bankr.Cas.2d 1368, 16 Bankr.Ct.Dec. 1369, Bankr.
creditor was automatically entitled to **636 relief from L. Rep. P 72,113
the stay, but the courts in those cases uniformly found in
Footnotes
* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the
convenience of the reader. See United States v. Detroit Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.
1 See, e.g., In re Findley, 76 B.R. 547, 555 (Bkrtcy.Ct.N.D.Miss.1987) (6½ months); In re Efcor, Inc., 74 B.R. 837, 843-845
(Bkrtcy.Ct.M.D.Pa.1987) (4½ months); In re Belton Inns, Inc., 71 B.R. 811, 818 (Bkrtcy.Ct.SD Iowa 1987) (1 year); In
re Louden, 69 B.R. 723, 725-726 (Bkrtcy.Ct.ED Mo.1987) (10 months); In re Playa Development Corp., 68 B.R. 549,
556 (Bkrtcy.Ct.WD Tex.1986) (7½ months); In re Cablehouse, Ltd., 68 B.R. 309, 313 (Bkrtcy.Ct.SD Ohio 1986) (11½
months); In re Pacific Tuna Corp., 48 B.R. 74, 78 (Bkrtcy.Ct.WD Tex.1985) (9 months); In re Development, Inc., 36
B.R. 998, 1005-1006 (Bkrtcy.Ct.Haw.1984) (6 months); In re Boca Development Associates, Ltd., 21 B.R. 624, 630
(Bkrtcy.Ct.SDNY 1982) (7½ months); In re Sundale Associates, 11 B.R. 978, 980-981 (Bkrtcy.Ct.SD Fla.1981) (5 months);
In re Clark Technical Associates, Ltd., 9 B.R. 738, 740-741 (Bkrtcy.Ct.Conn.1981) (9 months).
2 See, e.g., In re Anderson Oaks (Phase I) Limited Partnership, 77 B.R. 108, 109, 110-113 (Bkrtcy.Ct.WD Tex.1987)
(“immediately after the bankruptcy filings”); In re New American Food Concepts, Inc., 70 B.R. 254, 262 (Bkrtcy.Ct.ND
Ohio 1987) (3 months); In re 6200 Ridge, Inc., 69 B.R. 837, 843-844 (Bkrtcy.Ct.ED Pa.1987) (3 months); In re Park
Timbers, Inc., 58 B.R. 647, 651 (Bkrtcy.Ct.Del.1985) (2 months); In re Bellina's Restaurants II, Inc., 52 B.R. 509, 512
000299
© 2020 Thomson Reuters. No claim to original U.S. Government Works. 8
Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 300 of 305
United Sav. Ass'n of Texas v. Timbers of Inwood Forest..., 484 U.S. 365 (1988)
108 S.Ct. 626, 98 L.Ed.2d 740, 56 USLW 4107, 17 Collier Bankr.Cas.2d 1368...
(Bkrtcy.Ct.SD Fla.1985) (1 month); In re Anchorage Boat Sales, Inc., 4 B.R. 635, 641 (Bkrtcy.Ct. EDNY 1980) (4 months);
In re Terra Mar Associates, 3 B.R. 462, 466 (Bkrtcy.Ct.Conn.1980) (2 months).
End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.
000300
© 2020 Thomson Reuters. No claim to original U.S. Government Works. 9
Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 301 of 305
New York Times
Feds Suspect Vast Fraud Network Is
Targeting U.S. Unemployment
Systems
Investigators see evidence of a sophisticated international attack they said could siphon
hundreds of millions of dollars that were intended for the unemployed.
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Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 302 of 305
The attack has exploited state unemployment systems at a time when they are straining
to process a crush of claims.Credit...Patrick Semansky/Associated Press
By Mike Baker
• Published May 16, 2020Updated May 22, 2020
•
o
o
o
o
o
SEATTLE — A group of international fraudsters appears to have mounted an immense,
sophisticated attack on U.S. unemployment systems, creating a network that has already
siphoned millions of dollars in payments that were intended to avert an economic
collapse, according to federal authorities.
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Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 303 of 305
The attackers have used detailed information about U.S. citizens, such as social security
numbers that may have been obtained from cyber hacks of years past, to file claims on
behalf of people who have not been laid off, officials said. The attack has exploited
state unemployment systems at a time when they are straining to process a crush of
claims from an employment crisis unmatched since the Great Depression.
With many states rushing to pay claims, payments have gone straight to direct-deposit
accounts. In Washington State, the agency tasked with managing unemployment claims
there began realizing the extent of the problem in recent days when still-employed
people called to question why they had received confirmation paperwork in the mail.
“This is a gut punch,” said Suzi LeVine, the commissioner of Washington State’s
Employment Security Department.
In a memo obtained by The New York Times, investigators from the U.S. Secret Service
said they had information suggesting that the scheme was coming from a well-organized
Nigerian fraud ring and could result in “potential losses in the hundreds of millions of
dollars.” Roy Dotson, a special agent who specializes in financial fraud at the Secret
Service, said in an interview investigators were still working to pinpoint who was
involved and exactly where they were.
”We are actively running down every lead we are getting,” Mr. Dotson said.
Mr. Dotson said it appeared the fraud was being aided by a substantial number of
“mules” — people, often in the United States, who were used as intermediaries for
money laundering after making connections with fraudsters online. He warned people
to be wary of quick-money job offers or other suspicious financial arrangements.
The Secret Service memo said Washington State had emerged as the primary target thus
far, but there was also evidence of attacks in Florida, Massachusetts, North Carolina,
Oklahoma, Rhode Island and Wyoming. The agency warned that every state was
vulnerable and could be targeted, noting that the attackers appeared to have extensive
records of personally identifiable information, or P.I.I.
“It is assumed the fraud ring behind this possess a substantial P.I.I. database to submit
the volume of applications observed thus far,” the memo said.
Rhode Island State Police reported on Monday that it had received “numerous reports of
suspected fraud” related to unemployment benefits.
Scott Jensen, the director of Rhode Island Department of Labor and Training, said
Saturday that it could be hard to distinguish between a legitimate claim and a fraudulent
one when impostors provided the proper information. He said the fraudulent cases that
were emerging seemed to have their paperwork in order without the hallmarks of other
times when claims might have mistakes or other indicators that they were not genuine.
“Whoever it is seems to be fairly sophisticated and good at what they are doing,” Mr.
Jensen said. He did not know whether it was a group of international actors but was
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Case 4:20-cv-03215-YGR Document 52-3 Filed 09/23/20 Page 304 of 305
hopeful investigators would get to the bottom of the fraud. In the meantime, he said, the
state is clamping down and taking a closer look at claims surrounding specific banks.
Ms. LeVine said she did not want to put a number on the losses so far in Washington
State but believed it was in the millions of dollars. The state is working with law
enforcement agencies to try and reclaim some of the funds.
Some workplaces have been hit particularly hard. At Western Washington University in
Bellingham, Wash., more than 400 out of about 2,500 total employees have been
targeted with fraudulent claims, Paul Cocke, the university’s spokesman, said.
The state has been inundated with calls from people and businesses asking about
unemployment notifications that have been sent to them. They have flooded a hotline
and have forced the state to hire more people to answer the phones.
One of those who filed a complaint, Anna Zivarts, a Seattle resident who works at the
nonprofit Disability Rights Washington, said she found a series of official envelopes
from the government in her mail on May 8. At first, she worried that she might owe
taxes. Then, when she opened the mail, she had another worry.
“I called my boss and said, ‘Am I getting laid off and I just don’t know about it?’” Ms.
Zivarts said. But her boss assured her that she was still employed.
Ms. Zivarts said she called and emailed to flag the issue for the state but did not hear
back. Her employer has also notified the state.
More than one million people in Washington State have filed unemployment claims
amid the economic turmoil brought by the coronavirus pandemic. Around the country,
the numbers have reached more than 36 million in the past two months.
Unemployment programs have delivered billions of dollars in payments.
States may be particularly vulnerable as they work to rush payments to people who have
lost their jobs. Many states have long built in lengthy reviews to help weed out
fraudulent claims, but as more people have suddenly become eligible and the need for
speedy payments becomes urgent, some states have tried to eliminate those delays.
As with many other states, Washington’s typical weeklong waiting period before
unemployment payments are paid has been reduced. Federal funding has expanded
unemployment benefits to workers who were not previously qualified.
“There’s a dire need to get money out quickly,” Ms. LeVine said. “This makes us an
attractive target for fraudsters.”
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People who need jobless benefits have reported delays and challenges in getting their
applications approved. Ms. LeVine said the state was working to resolve delayed claims
while trying to strike a balance between scrutiny and streamlining.
Washington State has some of the highest weekly benefit amounts. Federal law has
provided an additional $600 a week for the next few months. Unemployed workers can
also get retroactive payments.
U.S. Attorney Brian T. Moran in Seattle said his office was working with other agencies
to track down and prosecute the people submitting false claims. But he also said the
state needed to “address and fix vulnerabilities in their system.”
Ms. LeVine said the unemployment agency was monitoring trends and using them to try
and identify suspicious cases before payments were issued. The state has also
implemented a two-day delay in payments to give workers more time to vet the claims.
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