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Official Opinion 93-13

Official Opinion 93-13

July 9, 1993
To: 

Superintendent of Schools

Georgia Department of Education

Re: 

The Fair and Open Grants Act ("FOGA")

You have asked for my official opinion as to whether the "Fair and Open Grants Act of 1993" ("FOGA") applies to all expenditures from appropriations for "per diem fees and contracts".  This replies and at the same time answers additional questions which your staff and others have raised about this new Act.                               

FOGA imposes new requirements of notice, criteria, independence and reporting in state grant programs.  O.C.G.A. §§ 28-5-120 et seq. In pertinent part, FOGA defines "grant" as follows:

(1) 'Grant' means any line item appropriation of funds that will be disbursed for a public purpose of which such amount, purpose, and recipient is not identified in the Appropriation Act . . . (but) 'grant' shall not include . . . (c)ommon object classes excluding per diem, fees and contracts. . . .

O.C.G.A. § 28-5-121 (D) (paraphrasing added).

The definition is unclear in that "grant" literally is said [*2]  to "mean" "appropriation".  In ordinary usage, "appropriation" signifies an authorization to disburse, O.C.G.A.  § 45-12-70 (1), and "grant" signifies a disbursement in the form of gift or aid.  See Webster's 3d New International Dictionary 1398 (1961).  It is clear from the remainder of FOGA that the General Assembly intended for "grant" to signify the disbursement of aid, not its funding authorization. E.g., O.C.G.A. §§ 28-5-121(1)(A)(B)(E)(F) (". . . 'grant' shall not include . . . Disbursements made" etc.); 28-5-127 ("Any funding for grants in an Appropriations Act. . . ." does not mean, obviously, "Any funding for appropriations in an Appropriations Act. . . .")

Therefore, when FOGA defines "grant" to "mean" an "appropriation", it should not be read literally but instead should be understood to indicate that "grant" is used only "in connection with" appropriations of a certain kind, those which are "for a public purpose" but do not specify an intended "amount, purpose, and recipient".  This same meaning continues in the exception: "Grant" is not used in connection with appropriations for "common object classes," even if there is no specification of "amount, purpose,  [*3]  and recipient," unless the appropriation is for "per diem, fees, and contracts."

In other words, the whole latter part of the definition of "grant", the exceptions, and the exception to the exceptions, are concerned with limiting the application of the word, "grant".  "Grant" itself must be understood according to its ordinary meaning in the context in which it is used.  O.C.G.A. § 1-3-1 (b).  Consequently, in partial response to your question, in defining "grant" as it does, FOGA does not indicate that all expenditures from appropriations for "per diem, fees, and contracts" are regulated.  FOGA regulates only those expenditures which conform to the ordinary meaning of grant, i.e. those which are in the nature of a gift or aid for a particular purpose.  See Webster's 3d New International Dictionary 1398 (1961).

Second, in context, this meaning may be further refined.  As just stated it would embrace state aid to private persons and to public entities.  Although the Georgia Constitution prohibits "gratuities," it contains exceptions which allow certain kinds of "grants" to private citizens, e.g., for welfare, school lunches, and relief from sales tax on prescription drugs.  [*4]  Ga. Const. 1983, Art. VII, Sect. III, Para. I, incorporating Ga. Const. 1976, Art. VII, Sect. II, Para. I (7) (12).  Most such grants are apportioned entirely by formula and would be exempt from FOGA under O.C.G.A. § 28-5-121 (1) (C).  However, FOGA's internal provisions and applicable rules of statutory construction negate any intent to regulate even non-formula grants to private persons and limit FOGA's application to grants "by which one level of government, i.e., the state, which owes no duty to support a function (of another level of government) . . . undertakes to contribute to it financially." Oakland County v. State of Michigan, 410 N.W.2d 812, 816 (1987) (construing state law authorizing funds for road patrol grants) (paraphrasing added).

Thus, FOGA defines "grant" as pertaining to an appropriation for a public purpose".  Since any appropriation must be for a "public purpose", the language is redundant unless it has some special meaning.  The logical, special meaning is a grant for a "public" entity rather than a grant for a "private" citizen.

Further, a cardinal rule of statutory interpretation is stated in the Code as follows:

In all interpretation of statutes,  [*5]  the courts shall look diligently for the intention of the General Assembly, keeping in view at all times the old law, the evil, and the remedy.

O.C.G.A. § 1-3-1 (b).

Prior to FOGA there was an absence of law with respect to its subject matter.  The "evil" FOGA was enacted to address was the way "special projects" appropriations were disbursed to local boards of education and library trustees. n1 FOGA then is an implementation of the following power of the General Assembly to regulate the making of grants to local governments.

n1 The original version of FOGA was prepared by my staff as part of my response to a request by the Lieutenant Governor for legal inquiry and advice in connection with "special projects" grants being made by the Department of Education to local boards of education and libraries.  The original version did not contain a definition of "grant." One was added in the Senate.  The measure with the present definition passed ultimately as a last-minute House amendment to the bill containing the "Budget Accountability and Planning Act of 1993."

State funds may be granted to counties and municipalities within the state.  The grants authorized by this Paragraph [*6]  shall be made in such manner and form and subject to the procedures and conditions specified by law.

Ga. Const. 1983, Art. VII, Sect. III, Par. III. (emphasis added).

Finally, each state agency or authority making grants is required to file "a list of grants awarded . . . reporting the recipient. . . ." O.C.G.A. § 28-5-124.  While in certain cases, the identity of private recipients of grants in aid may be publicly disclosed, the normal expectation of a recipient who complies with program requirements is one of privacy. See Op. Att'y Gen. 91-33.  In certain cases, the privacy is expressly protected by law, e.g. O.C.G.A. §§ 49-4-14 (public assistance administered by the Department of Human Resources); O.C.G.A. §§ 49-5-150 (medical assistance administered by the Department of Medical Assistance).  It may be presumed that had FOGA been intended to regulate grants to private persons, it would have dealt expressly with the privacy issue in connection with its reporting requirements.

Several other questions have been asked informally in connection with FOGA.  Because of their general importance, they are answered here.

Appropriations for certain grants are made in  [*7]  general terms, but the Legislative Budget Office sometimes publishes in its "Comparative Summary" or "Track Sheet," a listing of anticipated recipients, amounts and purpose.  It has been suggested that a listing in the "Summary" suffices to satisfy FOGA's exclusion of grant appropriations which list recipient, amount and purpose.  However, the "Comparative Summary" is an administrative document only and does not have the force of law or a binding expression of legislative intent.  See Op. Att'y Gen. 91-26.  Even if this were not always so, in this instance the express terms of FOGA would still prevail.  FOGA requires that the language be in the Appropriations Act and does not mention the "Track Sheet".

Several questions concern the following provision:

Before any state agency may make any grant of public funds or of funds otherwise within its power of disposition, the state agency must public a description of the grant program in the Official Compilation of the Rules and Regulations of the State of Georgia and the Secretary of State shall make such descriptions available for convenient public inspection.

O.C.G.A. § 28-5-122.

This section makes clear that FOGA applies [*8]  to grants from federal funds, with the possible exception, hypothetically, of federal funds granted to the State under terms and conditions which preclude application of FOGA under the Supremacy Clause of the United States Constitution, but where state participation in the federal program is otherwise clearly authorized.

This same section also has given rise to the question whether the description of the grant program under FOGA is subject to the Administrative Procedure Act.  The APA applies to "rules" and excludes from the definition of "rule" those relating to "loans, grants, and benefits".  O.C.G.A. § 50-13-2.  Therefore, the APA does not apply to FOGA's requirement of submitting a description of a program to the Secretary of State and, while the Secretary of State must publish the program descriptions in the Rules, a state agency has complied sufficiently when it has filed the description with the Secretary.  Although FOGA uses the words "publish . . . in the Official Compilation," the Code deems sufficient a "substantial compliance with any statutory requirement, especially on the part of public officers." O.C.G.A. § 1-3-1 (c).  The purpose of FOGA is effectively accomplished [*9]  as soon as the Secretary has the material in order to put it in the Rules and to make it available "for convenient public inspection".  O.C.G.A. § 28-5-122.

 

Finally, the General Assembly made FOGA "effective on July 1, 1993." Therefore, when the current General Appropriations Act for Fiscal Year 1993-1994 was enacted, FOGA's requirement that appropriations intended for "grants" be identified as such by use of the word "grant", O.C.G.A. § 28-5-127, was not in effect, and that requirement may not be applied to present appropriations. However, it is one thing to say that a FOGA provision regulating the legislative process may not be applied to a legislative process which occurred before FOGA's effective date.  It would be another matter, and incorrect, to say that a FOGA provision regulating the executive expenditure of appropriations may not be applied to expenditures of appropriations which took effect on the same day as FOGA (the first day of the fiscal year).  The General Assembly is presumed to know it made both acts effective at the same time and applied FOGA to "any grant of public funds." O.C.G.A. § 28-5-122.

Therefore, it is my official opinion that the Fair and Open  [*10]  Grants Act does not apply to all expenditures from appropriations for "per diem, fees, and contracts" but only applies to disbursements for "grants" to local governments.  It is my further opinion that the Act should be interpreted in accord with each of my answers to the questions discussed above.

Prepared by:

JOHN B. BALLARD, JR.,

Senior Assistant Attorney General