B-127611, MAY 18, 1956

B-127611: May 18, 1956

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PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL BE CONSIDERED NULL AND VOID AND MATERIALS AND SERVICES OF AN EQUIVALENT AMOUNT SHALL BE DELIVERED OR PERFORMED BY THE AIR FORCE FOR MILITARY ASSISTANCE PURPOSES WITHOUT REIMBURSEMENT: ***" THE QUESTION PRESENTED IS WHETHER THE $302. 000 REFERRED TO IN SECTION 108 CONSTITUTES A PART OF THE "FUNDS MADE AVAILABLE BY THIS ACT" AS THOSE WORDS ARE USED IN SECTION 106 AND THUS MAY BE INCLUDED IN COMPUTING THE MAXIMUM AMOUNT WHICH MAY BE OBLIGATED AND/OR RESERVED IN MAY AND JUNE 1956. THE ITEMS PROCURED THEREWITH WERE USED BY THE UNITED STATES AIR FORCE IN THE EMERGENCY SITUATION CREATED BY THE WAR. 68 STAT. 1225 RECOGNITION WAS GIVEN TO THIS SITUATION AND REIMBURSEMENT WAS MADE.

B-127611, MAY 18, 1956

PRECIS-UNAVAILABLE

SECRETARY OF DEFENSE:

BY LETTER OF APRIL 16, 1956, FILE REFERENCE I-3296/6, MR. MARKLEY SHAW, INTERNATIONAL SECURITY AFFAIRS COMPTROLLER, REQUESTED THE DECISION OF OUR OFFICE ON A QUESTION INVOLVING SECTIONS 106 AND 108 OF THE MUTUAL SECURITY APPROPRIATION ACT, 1956, PUBLIC LAW 208, 84TH CONGRESS, APPROVED AUGUST 2, 1955, 69 STAT. 435.

SECTION 106 OF THE MUTUAL SECURITY APPROPRIATION ACT, 1956, 69 STAT. 438, PROVIDES AS FOLLOWS:

"NOT MORE THAN 20 PER CENTUM OF ANY FUNDS MADE AVAILABLE BY THIS ACT SHALL BE OBLIGATED AND/OR RESERVED DURING THE LAST TWO MONTHS OF THE FISCAL YEAR."

SECTION 108 OF THAT ACT PROVIDES IN PERTINENT PART:

"*** PROVIDED, HOWEVER, THAT NOT TO EXCEED $302,000,000 OF ANY REIMBURSEMENT HERETOFORE MADE BY THE AIR FORCE TO MILITARY ASSISTANCE APPROPRIATIONS AS OF JUNE 30, 1955, PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL BE CONSIDERED NULL AND VOID AND MATERIALS AND SERVICES OF AN EQUIVALENT AMOUNT SHALL BE DELIVERED OR PERFORMED BY THE AIR FORCE FOR MILITARY ASSISTANCE PURPOSES WITHOUT REIMBURSEMENT: ***"

THE QUESTION PRESENTED IS WHETHER THE $302,000,000 REFERRED TO IN SECTION 108 CONSTITUTES A PART OF THE "FUNDS MADE AVAILABLE BY THIS ACT" AS THOSE WORDS ARE USED IN SECTION 106 AND THUS MAY BE INCLUDED IN COMPUTING THE MAXIMUM AMOUNT WHICH MAY BE OBLIGATED AND/OR RESERVED IN MAY AND JUNE 1956. THE LETTER FURTHER REQUESTS A SPECIFIC ENUMERATION OF THE AMOUNTS WHICH MAY BE INCLUDED FOR PURPOSES OF CALCULATING THE 20 PERCENT OBLIGATIONAL CEILING.

AN EXAMINATION OF THE LEGISLATIVE HISTORY OF THE PROVISO IN SECTION 108 DISCLOSES THAT THE $302,000,000 REPRESENTS PART OF THE MONEYS APPROPRIATED FOR MILITARY ASSISTANCE UNDER THE MUTUAL SECURITY PROGRAM AT THE TIME THE KOREAN WAR STARTED. THE ITEMS PROCURED THEREWITH WERE USED BY THE UNITED STATES AIR FORCE IN THE EMERGENCY SITUATION CREATED BY THE WAR. IN THE COURSE OF BALANCING OF ACCOUNTS RESPECTING MILITARY ASSISTANCE BY JUNE 30, 1955, AS CONTEMPLATED BY SECTION 110 OF THE MUTUAL SECURITY APPROPRIATION ACT, 1955, 68 STAT. 1225 RECOGNITION WAS GIVEN TO THIS SITUATION AND REIMBURSEMENT WAS MADE. HOWEVER, SUCH REIMBURSEMENT APPARENTLY WAS MADE TOO LATE TO PERMIT EXPENDITURE OR OBLIGATION OF THOSE FUNDS FOR MILITARY ASSISTANCE PRIOR TO THEIR LAPSING ON JUNE 30, 1955. THE PROVISO IN QUESTION WAS INSERTED IN SECTION 108 OF THE ACT IN ORDER TO PERMIT THE MILITARY ASSISTANCE PROGRAM TO OBTAIN FROM THE AIR FORCE SERVICES AND MATERIALS TO THE EXTENT THEY HAD PREVIOUSLY BEEN PAID FOR BUT NOT RECEIVED, WITHOUT USING THE FUNDS OTHERWISE APPROPRIATED BY THE ACT. THE FOLLOWING EXCERPTS FROM THE DISCUSSION OF THIS PROVISO ON THE FLOOR OF THE SENATE ON JULY 28, 1955, APPEARING IN THE CONGRESSIONAL RECORD, VOLUME 101, ON PAGE 10167 OF NO. 128 OF THE DAILY EDITION, APPEAR TO GIVE A CLEAR EXPRESSION OF THE INTENT OF THE CONGRESS IN ENACTING THIS PROVISO.

"MR. LONG. CAN THE SENATOR TELL ME WHETHER I AM CORRECT IN MY UNDERSTANDING THAT THE CONFEREES DISCOVERED THERE WAS A CERTAIN AMOUNT OF MONEY ON HAND OF WHICH WE HAD NOT BEEN INFORMED PREVIOUSLY?

"MR. HAYDEN. THAT IS CORRECT. THE CONFEREES MADE THAT MONEY AVAILABLE BY AN AMENDMENT TO THE BILL, WHICH AMENDMENT IS AS FOLLOWS:

(PROVISO QUOTED ABOVE.)

"WHAT HAPPENED WAS THAT AT THE OUTBREAK OF THE KOREAN WAR CERTAIN AIR FORCE ITEMS INTENDED FOR FOREIGN AID HAD TO BE USED IN KOREA. THOSE FUNDS WERE PAID BY AIR FORCE, AND JUST NOW REIMBURSED. WE ARE RESTORING THE MONEY TO ITS ORIGINAL PURPOSE, AND IT WILL BE AVAILABLE FOR MILITARY ASSISTANCE PURPOSES.

"IT DEVELOPED THAT $300 MILLION HAD BEEN DIVERTED FOR OUR OWN AIR FORCE IN KOREA, ALTHOUGH IT WAS INTENDED FOR AID TO VARIOUS FOREIGN GOVERNMENTS. THAT AMOUNT HAS NOW BEEN RESTORED TO ITS ORIGINAL PURPOSE.

"MR. LONG. WILL THE SENATOR EXPLAIN WHICH CATEGORY IS MORE CORRECT WITH REFERENCE TO THIS $300 MILLION. IS IT MONEY WHICH THEY HAD BUT DID NOT KNOW THEY HAD, OR IS IT $300 MILLION WHICH THEY SHOULD HAVE HAD BUT DID NOT HAVE?

"MR. HAYDEN. THEY KNEW THEY HAD IT, BUT WHEN THE KOREAN WAR STARTED IT WAS EXPENDED IN KOREA, AND, IN ORDER TO MAKE IT AVAILABLE, IT IS NECESSARY TO ADOPT THE PROVISO WHICH I HAVE READ.

"MR. LONG. IT IS NOW IN THE BILL FOR THE FIRST TIME?

"MR. HAYDEN. THE SITUATION WITH REFERENCE TO THESE FUNDS WAS BUT RECENTLY DISCLOSED, AND THE CONFEREES DECIDED TO MAKE THEM AVAILABLE BY THIS PROVISION.

"MR. HUMPHREY. WE ARE ACTUALLY APPROPRIATING BACK THE $300 MILLION; ARE WE NOT?

"MR. HAYDEN. THAT IS WHAT IT AMOUNTS TO.

"MR. SALTONSTALL. I WOULD NOT WISH TO DISAGREE WITH MY CHAIRMAN, BUT I MOST RESPECTFULLY SUGGEST THAT WE ARE NOT APPROPRIATING THE MONEY. WE ARE PERMITTING THE MUTUAL SECURITY ADMINISTRATION TO USE THE FUNDS INSTEAD OF LETTING THEM LAPSE AND MAKING A NEW APPROPRIATION.

"MR. HAYDEN. THE SENATOR IS CORRECT. IT IS NOT A NEW APPROPRIATION."

THE ABOVE EXCERPTS INDICATE THAT EMPHASIS WAS PLACED UPON THE FACT THAT IT DID NOT CONSTITUTE AN APPROPRIATION OF MONEY BUT MERELY PERMITTED THE MILITARY ASSISTANCE PROGRAM TO OBTAIN THE BENEFIT OF PREVIOUSLY APPROPRIATED MONEYS WHICH HAD LAPSED. IN OTHER WORDS, THE NET RESULT OF THE PROVISO WAS MERELY TO AUTHORIZE AN ADJUSTMENT OF EXPENDITURES AND TO REESTABLISH A CREDIT AGAINST WHICH DELIVERIES MADE BY THE AIR FORCE COULD BE CHARGED WITHOUT REQUIRING SUCH DELIVERIES TO BE CHARGED AGAINST THE AMOUNTS APPROPRIATED IN THE ACT FOR MILITARY ASSISTANCE, WHICH BUT FOR THE PROVISO WOULD HAVE BEEN NECESSARY. IT IS UNDERSTOOD THAT THERE WERE SUFFICIENT OUTSTANDING ORDERS TO COVER $302,000,000 SO THAT FOR ALL INTENTS AND PURPOSES THAT AMOUNT ALREADY WAS LEGALLY RESERVED AT THE TIME THE PROVISO WAS ENACTED. THE CANCELLATION OF THE REIMBURSEMENT WAS TREATED IN ALL OF THE RELATED ACCOUNTS INCLUDING THOSE ON THE BOOKS OF THE TREASURY AS AN ADJUSTMENT OF EXPENDITURES. THE FACT THAT ADDITIONAL FUNDS ARE MADE AVAILABLE RESULTS FROM THE NO-YEAR AVAILABILITY AUTHORITY OF THE AIR FORCE APPROPRIATION RECEIVING THE CREDIT AND NOT FROM ANY AUTHORITY CONTAINED IN THE MUTUAL SECURITY APPROPRIATION ACT, 1956. UNDER THE CIRCUMSTANCES, THE AMOUNT IN QUESTION COULD NOT BE CONSIDERED AS NEW OBLIGATIONAL AUTHORITY. SECTION 106 IS FOR APPLICATION ONLY TO NEW OBLIGATIONAL AUTHORITY GRANTED, THAT IS, THE FUNDS ACTUALLY APPROPRIATED OR REAPPROPRIATED IN SECTION 101 OF THE ACT. HENCE, THE $302,000,000 ITEM IN SECTION 108 IS NOT FOR CONSIDERATION IN COMPUTING THE LIMITATION IMPOSED BY SECTION 106.

WITH REGARD TO A SPECIFIC ENUMERATION OF THE AMOUNTS TO BE INCLUDED IN THE CALCULATION OF THE 20 PERCENT LIMITATION, IT IS OBVIOUS THAT SUCH LIMITATION APPLIES TO EACH ITEM APPROPRIATED OR CONTINUED AVAILABLE BY THE ACT. WITH RESPECT TO THE FUNDS AVAILABLE FOR MILITARY ASSISTANCE, $705,000,000 WAS APPROPRIATED BY THE ACT FOR THAT PURPOSE AND THE AMOUNT OF $33,900,000 OF UNOBLIGATED AND UNRESERVED FUNDS PREVIOUSLY APPROPRIATED FOR MILITARY ASSISTANCE WAS CONTINUED AVAILABLE BY THE ACT. HENCE, SAID ITEMS CONSTITUTE THE AMOUNTS WHICH MAY BE USED FOR PURPOSES OF CALCULATING THE 20 PERCENT CEILING APPLICABLE TO MILITARY ASSISTANCE OPERATIONS BY YOUR DEPARTMENT.