B-144698, MAR. 1, 1961

B-144698: Mar 1, 1961

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TO THE SECRETARY OF AGRICULTURE: REFERENCE IS MADE TO LETTER DATED DECEMBER 23. THE PURPOSE OF TITLE IV IS SET FORTH IN SECTION 401 OF PUBLIC LAW 480 AS FOLLOWS (7 U.S.C. 1731): "THE PURPOSE OF THIS SUBCHAPTER IS TO UTILIZE SURPLUS AGRICULTURAL COMMODITIES AND THE PRODUCTS THEREOF PRODUCED IN THE UNITED STATES TO ASSIST THE ECONOMIC DEVELOPMENT OF FRIENDLY NATIONS BY PROVIDING LONG TERM CREDIT FOR PURCHASES OF SURPLUS AGRICULTURAL COMMODITIES FOR DOMESTIC CONSUMPTION DURING PERIODS OF ECONOMIC DEVELOPMENT SO THAT THE RECOURSES AND MANPOWER OF SUCH NATIONS MAY BE UTILIZED MORE EFFECTIVELY FOR INDUSTRIAL AND OTHER DOMESTIC ECONOMIC DEVELOPMENT WITHOUT JEOPARDIZING MEANWHILE ADEQUATE SUPPLIES OF AGRICULTURAL COMMODITIES FOR DOMESTIC USE.'.

B-144698, MAR. 1, 1961

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO LETTER DATED DECEMBER 23, 1960, FROM THE ACTING SECRETARY OF AGRICULTURE, REQUESTING A DECISION IN CONNECTION WITH A QUESTION WHICH HAS ARISEN WITH RESPECT TO LONG TERM SUPPLY CONTRACTS ENTERED INTO UNDER TITLE IV OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954 (PUBLIC LAW 480), AS AMENDED, 7 U.S.C. 1731 1736.

THE PURPOSE OF TITLE IV IS SET FORTH IN SECTION 401 OF PUBLIC LAW 480 AS FOLLOWS (7 U.S.C. 1731):

"THE PURPOSE OF THIS SUBCHAPTER IS TO UTILIZE SURPLUS AGRICULTURAL COMMODITIES AND THE PRODUCTS THEREOF PRODUCED IN THE UNITED STATES TO ASSIST THE ECONOMIC DEVELOPMENT OF FRIENDLY NATIONS BY PROVIDING LONG TERM CREDIT FOR PURCHASES OF SURPLUS AGRICULTURAL COMMODITIES FOR DOMESTIC CONSUMPTION DURING PERIODS OF ECONOMIC DEVELOPMENT SO THAT THE RECOURSES AND MANPOWER OF SUCH NATIONS MAY BE UTILIZED MORE EFFECTIVELY FOR INDUSTRIAL AND OTHER DOMESTIC ECONOMIC DEVELOPMENT WITHOUT JEOPARDIZING MEANWHILE ADEQUATE SUPPLIES OF AGRICULTURAL COMMODITIES FOR DOMESTIC USE.'

TITLE IV AUTHORIZES THE PRESIDENT TO ENTER INTO AGREEMENTS WITH FRIENDLY NATIONS UNDER WHICH THE UNITED STATES SHALL UNDERTAKE TO PROVIDE FOR DELIVERY ANNUALLY OF CERTAIN QUANTITIES OF SURPLUS AGRICULTURAL COMMODITIES FOR PERIODS OF NOT TO EXCEED 10 YEARS. THE AUTHORITY OF THE PRESIDENT TO ENTER INTO SUCH AGREEMENTS IS VESTED IN THE SECRETARY OF STATE UNDER E.O. 10560 (19 F.R. 5927), AS AMENDED BY E.O. 10884 (25 F.R. 8019).

PAYMENT FOR SUCH COMMODITIES IS REQUIRED TO BE IN DOLLARS WITH INTEREST AT SUCH RATE AS THE SECRETARY OF AGRICULTURE MAY DETERMINE BUT NOT MORE THAN THE COST OF THE FUNDS TO THE UNITED STATES TREASURY AS DETERMINED BY THE SECRETARY OF THE TREASURY, TAKING INTO CONSIDERATION THE CURRENT AVERAGE MARKET YIELDS ON OUTSTANDING MARKETABLE OBLIGATIONS OF THE UNITED STATES HAVING MATURITY COMPARABLE TO THE MATURITIES OF LOANS MADE BY THE PRESIDENT UNDER THIS SECTION. PAYMENT MAY BE MADE IN APPROXIMATELY EQUAL ANNUAL AMOUNTS OVER PERIODS OF NOT TO EXCEED 20 YEARS FROM THE DATE OF THE LAST DELIVERY OF COMMODITIES IN EACH CALENDAR YEAR UNDER THE AGREEMENT AND INTEREST IS COMPUTED FROM THE DATE OF SUCH LAST DELIVERY.

THE ACTING SECRETARY STATES THAT IT IS THE POSITION OF THE COMMODITY CREDIT CORPORATION (CCC) THAT THE COLLECTIONS UNDER THE NOTES GIVEN BY FOREIGN GOVERNMENTS MUST BE DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS--- IN ACCORDANCE WITH SECTION 3617, REVISED STATUTES--- AND THAT SECTION 103 (A) OF PUBLIC LAW 480 AUTHORIZES CCC TO SEEK PROMPT REIMBURSEMENT BY APPROPRIATION FOR ALL COSTS INCURRED BY CCC UNDER TITLE IV OF PUBLIC LAW 480, INCLUDING THE AMOUNTS EVIDENCED BY THE PROMISSORY NOTES GIVEN BY THE GOVERNMENTS OF THE PURCHASING COUNTRIES.

WE ARE ADVISED BY THE ACTING SECRETARY THAT IF CCC IS NOT AUTHORIZED TO SEEK PROMPT REIMBURSEMENT FOR DOLLAR CREDITS EVIDENCED BY NOTES GIVEN BY GOVERNMENTS OF PURCHASING COUNTRIES BUT MUST LOOK TO COLLECTION FROM SUCH NOTES FOR REIMBURSEMENT, THE UNPAID AMOUNT OF SUCH NOTES WILL REMAIN AS CHARGES AGAINST CCC'S BORROWING POWER FOR EXTENDED PERIODS OF TIME. ARE FURTHER ADVISED THAT IN VIEW OF THE DEMANDS ON SUCH BORROWING POWER MADE BY OTHER PROGRAMS OF THE CCC, MANY OF WHICH THE ACTING SECRETARY STATES ARE MANDATORY, THE EXTENT TO WHICH CCC MAY UNDERTAKE PROGRAMS UNDER TITLE IV MAY DEPEND IMPORTANTLY ON WHETHER CCC IS AUTHORIZED BY SECTION 103 (A) TO SEEK APPROPRIATION COVERING THE AMOUNTS EVIDENCED BY NOTES OF GOVERNMENTS OF PURCHASING COUNTRIES.

A DECISION IS REQUESTED AS TO THE VALIDITY OF CCC'S POSITION.

SECTIONS 102 AND 103 (A) OF PUBLIC LAW 480 ARE MADE APPLICABLE TO THE CARRYING OUT OF TITLE IV TO THE EXTENT THEY ARE NOT INCONSISTENT THEREWITH. UNDER SECTION 102, THE COMMODITY CREDIT CORPORATION IS DIRECTED, FOR THE PURPOSE OF CARRYING OUT AGREEMENTS CONCLUDED BY THE PRESIDENT, TO MAKE AVAILABLE FOR SALE THEREUNDER TO DOMESTIC EXPORTERS SURPLUS AGRICULTURAL COMMODITIES ACQUIRED IN THE ADMINISTRATION OF PRICE SUPPORT OPERATIONS AND TO MAKE FUNDS AVAILABLE TO FINANCE THE SALE AND EXPORTATION OF SURPLUS AGRICULTURAL COMMODITIES, WHETHER FROM PRIVATE STOCKS OR FROM STOCKS OF COMMODITY CREDIT CORPORATION. SECTION 103 (A) PROVIDES AS FOLLOWS:

"FOR THE PURPOSE OF MAKING PAYMENT TO COMMODITY CREDIT CORPORATION TO THE EXTENT THE COMMODITY CREDIT CORPORATION IS NOT REIMBURSED UNDER SECTION 105 FOR COMMODITIES DISPOSED OF AND COSTS INCURRED UNDER TITLES I AND II OF THIS ACT, THERE ARE HEREBY AUTHORIZED TO BE APPROPRIATED SUCH SUMS AS ARE EQUAL TO (1) THE CORPORATION'S INVESTMENT IN COMMODITIES MADE AVAILABLE FOR EXPORT UNDER THIS TITLE AND TITLE II OF THIS ACT, INCLUDING PROCESSING, PACKAGING, TRANSPORTATION, AND HANDLING COSTS, (2) ALL COSTS INCURRED BY THE CORPORATION IN MAKING FUNDS AVAILABLE TO FINANCE THE EXPORTATION OF SURPLUS AGRICULTURAL COMMODITIES PURSUANT TO THIS TITLE AND (3) ALL COMMODITY CREDIT CORPORATION FUNDS EXPENDED FOR OCEAN FREIGHT COSTS AUTHORIZED UNDER TITLE II HEREOF FOR PURPOSES OF SECTION 416 OF THE AGRICULTURAL ACT OF 1949, AS AMENDED. ANY FUNDS OR OTHER ASSETS AVAILABLE TO THE COMMODITY CREDIT CORPORATION MAY BE USED IN ADVANCE OF SUCH APPROPRIATION OR PAYMENTS, FOR CARRYING OUT THE PURPOSES OF THIS ACT.'

SECTION 105 IS NOT APPLICABLE TO TITLE IV SALES AND CONCERNS FOREIGN CURRENCIES.

AS INDICATED IN THE ACTING SECRETARY'S LETTER THERE IS NO SPECIFIC PROVISION IN PUBLIC LAW 480 THAT THE DOLLAR PROCEEDS RECEIVED FROM TITLE IV SALES BE PAID TO CCC OR BE DEPOSITED INTO A SPECIAL ACCOUNT. FURTHER, THERE IS NO SPECIFIC INDICATION IN PUBLIC LAW 480 OR IN ITS LEGISLATIVE HISTORY THAT THE CONGRESS INTENDED CCC TO WAIT AS LONG AS 20 YEARS TO BE FINALLY REIMBURSED FOR COSTS INCURRED IN FINANCING TRANSACTIONS UNDER TITLE IV, SINCE IT SPECIFICALLY MADE SECTION 103 (A) APPLICABLE TO TITLE IV SALES. ALSO, AS INDICATED IN THE ACTING SECRETARY'S LETTER, IF SECTION 103 (A) IS NOT TO BE CONSTRUED AS PROVIDING FOR PROMPT REIMBURSEMENT OF CCC FOR ALL COSTS INCURRED IN CONNECTION WITH TITLE IV SALES BUT MERELY FOR REIMBURSEMENT OF EXCESS COSTS WHICH CANNOT BE RECOVERED FROM COLLECTIONS UNDER PROMISSORY NOTES GIVEN BY FOREIGN GOVERNMENTS, THE LANGUAGE OF TITLE IV MAKING SECTION 103 (A) APPLICABLE THERETO MIGHT BE REGARDED AS SURPLUSAGE, SINCE THERE IS ANOTHER PROVISION OF LAW (15 U.S.C. 731A-1) UNDER WHICH THIS LATTER RESULT WOULD BE REACHED.

ON THE OTHER HAND THERE IS NOTHING IN PUBLIC LAW 480 OR ITS LEGISLATIVE HISTORY WHICH INDICATES THAT THE CONGRESS INTENDED THAT TITLE IV COLLECTIONS BE DEPOSITED INTO MISCELLANEOUS RECEIPTS. MOREOVER, WE ARE AWARE OF ONLY ONE PROGRAM ADMINISTERED BY CCC WHERE THE PROCEEDS FROM SALES ARE DEPOSITED TO MISCELLANEOUS RECEIPTS, AND IN THAT CASE THE LAW SPECIFICALLY SO PROVIDES (71 STAT. 290). IT COULD BE ASSUMED THAT THE CONGRESS WOULD HAVE SPECIFICALLY PROVIDED THAT TITLE IV COLLECTIONS BE DEPOSITED IN MISCELLANEOUS RECEIPTS OF IT HAD SO INTENDED. FURTHER, WE NOTE THAT IN THE "BUDGET" FOR FISCAL YEAR 1962 CCC INCLUDES AS "ASSETS" AMOUNTS "DUE FROM FOREIGN GOVERNMENTS UNDER LONG-TERM SUPPLY CONTRACTS.' WE NOTE ALSO FROM THE "BUDGET" THAT CCC INDICATES THAT AMOUNTS DUE FROM FOREIGN GOVERNMENTS UNDER LONG-TERM SUPPLY CONTRACTS ARE TO BE "RECOVERED OR RECOVERABLE FROM OTHER THAN SPECIAL APPROPRIATIONS.' THUS, IT DOES NOT APPEAR THAT CCC IN PREPARING ITS BUDGET FOR FISCAL YEAR 1962 FELT THAT IT WAS REQUIRED TO DEPOSIT THE DOLLAR PROCEEDS RECEIVED FROM TITLE IV SALES INTO MISCELLANEOUS RECEIPTS.

IN OUR OPINION THE MATTER IS NOT FREE FROM DOUBT AND, HENCE, WE CANNOT SAY, AS A MATTER OF LAW, THAT CCC IS REQUIRED TO DEPOSIT INTO MISCELLANEOUS RECEIPTS AMOUNTS COLLECTED UNDER THE NOTES GIVEN BY FOREIGN GOVERNMENTS IN CONNECTION WITH TITLE IV SALES, ABSENT THE RECEIPT OF ANNUAL APPROPRIATIONS REIMBURSING CCC FOR COSTS INCURRED UNDER TITLE IV SALES. HOWEVER, WE CAN PERCEIVE NO OBJECTION TO CCC BRINGING THE MATTER TO THE ATTENTION OF THE CONGRESS AND SEEKING ANNUAL APPROPRIATIONS FOR COSTS INCURRED IN FINANCING TITLE IV SALES. THE ACTION TAKEN BY THE CONGRESS IN CONNECTION WITH SUCH A REQUEST AFTER A FULL EXPLANATION OF THE MATTER WOULD ESTABLISH THE PRESENT INTENT OF THE CONGRESS.