B-181234, JUN 20, 1974, 53 COMP GEN 975

B-181234: Jun 20, 1974

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IS APPLICABLE ON AND AFTER JULY 1. EVEN THOUGH AMENDMENT WAS ENACTED SUBSEQUENT THERETO SINCE LATTER ACT PROVIDES AUTHORIZATIONS OF FUNDS FOR CURRENT FISCAL YEAR. 1974: THIS DECISION IS IN RESPONSE TO A REQUEST BY THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) CONCERNING THE APPLICABLE DATE OF SECTION 26 OF THE FOREIGN ASSISTANCE ACT OF 1973. THE QUESTION PRESENTED FOR DECISION IS WHETHER OR NOT SECTION 8 AS NOW AMENDED APPLIES TO EXCESS DEFENSE ARTICLES ORDERED AFTER THE BEGINNING OF FISCAL YEAR 1974 (JULY 1. BY ADDING THE LANGUAGE ITALICIZED BELOW SO THAT IT NOW READS AS FOLLOWS: (B) IN THE CASE OF EXCESS DEFENSE ARTICLES WHICH ARE GENERATED ABROAD. OR ESTABLISHMENT CERTIFIES TO THE COMPTROLLER GENERAL OF THE UNITED STATES THAT THE EXCESS DEFENSE ARTICLE WHOSE STOCK STATUS IS EXCESS AT THE TIME ORDERED.

B-181234, JUN 20, 1974, 53 COMP GEN 975

STATUTORY CONSTRUCTION - LEGISLATIVE INTENT - FOREIGN ASSISTANCE ACT OF 1973 - EFFECTIVE DATE - ENACTMENT DATE V. CURRENT FISCAL YEAR PROVISION IN FOREIGN ASSISTANCE ACT OF 1973 WHICH AMENDS EARLIER STATUTE WHICH PERMITTED SPECIFIED AMOUNT OF EXCESS DEFENSE ITEMS (DOMESTIC AND FOREIGN GENERATED) TO BE FURNISHED TO FOREIGN COUNTRIES WITHOUT CHARGE TO MILITARY AID PROGRAM (MAP) FUNDS SO AS TO, IN EFFECT, REQUIRE DOMESTIC EXCESS DEFENSE ITEMS TO BE CHARGED TO MAP FUNDS, IS APPLICABLE ON AND AFTER JULY 1, 1973, EVEN THOUGH AMENDMENT WAS ENACTED SUBSEQUENT THERETO SINCE LATTER ACT PROVIDES AUTHORIZATIONS OF FUNDS FOR CURRENT FISCAL YEAR, PROVISION CONTAINS THE WORLDS "DURING EACH FISCAL YEAR," AND SUCH EFFECTIVE DATE APPEARS CONSISTENT WITH LEGISLATIVE HISTORY OF SUCH PROVISION AND MANNER IN WHICH IT HAD BEEN APPLIED IN PRIOR FISCAL YEARS.

IN THE MATTER OF EXCESS DEFENSE ARTICLES FURNISHED FOREIGN COUNTRIES, JUNE 20, 1974:

THIS DECISION IS IN RESPONSE TO A REQUEST BY THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) CONCERNING THE APPLICABLE DATE OF SECTION 26 OF THE FOREIGN ASSISTANCE ACT OF 1973, PUBLIC LAW 93-189, APPROVED DECEMBER 17, 1973, 87 STAT. 731.

THE QUESTION PRESENTED FOR DECISION IS WHETHER OR NOT SECTION 8 AS NOW AMENDED APPLIES TO EXCESS DEFENSE ARTICLES ORDERED AFTER THE BEGINNING OF FISCAL YEAR 1974 (JULY 1, 1973) BUT BEFORE ENACTMENT OF PUBLIC LAW 93-189 (DECEMBER 17, 1973).

INSOFAR AS PERTINENT HERE SECTION 26 AMENDED SECTION 8(B) OF PUBLIC LAW 91-672 (22 U.S.C. 2321B), APPROVED JANUARY 12, 1971, 84 STAT. 2053, AS AMENDED, BY ADDING THE LANGUAGE ITALICIZED BELOW SO THAT IT NOW READS AS FOLLOWS:

(B) IN THE CASE OF EXCESS DEFENSE ARTICLES WHICH ARE GENERATED ABROAD, THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION SHALL APPLY DURING ANY FISCAL YEAR ONLY TO THE EXTENT THAT THE AGGREGATE VALUE OF EXCESS DEFENSE ARTICLES ORDERED DURING THE YEAR EXCEEDS $150,000,000.

SUBSECTION (A) REFERRED TO IN SUBSECTION (B) ABOVE PROVIDES THAT -

SUBJECT TO THE PROVISIONS OF SUBSECTION (B), THE VALUE OF ANY EXCESS DEFENSE ARTICLE GRANTED TO A FOREIGN COUNTRY OR INTERNATIONAL ORGANIZATION BY ANY DEPARTMENT, AGENCY, OR INDEPENDENT ESTABLISHMENT OF THE UNITED STATES GOVERNMENT (OTHER THAN THE AGENCY FOR INTERNATIONAL DEVELOPMENT) SHALL BE CONSIDERED TO BE AN EXPENDITURE MADE FROM FUNDS APPROPRIATED UNDER THE FOREIGN ASSISTANCE ACT OF 1961 FOR MILITARY ASSISTANCE. UNLESS SUCH DEPARTMENT, AGENCY, OR ESTABLISHMENT CERTIFIES TO THE COMPTROLLER GENERAL OF THE UNITED STATES THAT THE EXCESS DEFENSE ARTICLE WHOSE STOCK STATUS IS EXCESS AT THE TIME ORDERED, A SUM EQUAL TO THE VALUE THEREOF SHALL (LESS AMOUNTS TO BE TRANSFERRED UNDER SECTION 632(D) OF THE FOREIGN ASSISTANCE ACT OF 1961) (1) BE RESERVED AND TRANSFERRED TO A SUSPENSE ACCOUNT, (2) REMAIN IN THE SUSPENSE ACCOUNT UNTIL THE DEFENSE ARTICLE IS EITHER DELIVERED TO A FOREIGN COUNTRY OR INTERNATIONAL ORGANIZATION OR THE ORDER THEREFOR IS CANCELLED, AND (3) BE TRANSFERRED FROM THE SUSPENSE ACCOUNT TO (A) THE GENERAL FUND OF THE TREASURY UPON DELIVERY OF SUCH ARTICLE, OR (B) TO THE MILITARY ASSISTANCE APPROPRIATION FOR THE CURRENT FISCAL YEAR UPON CANCELLATION OF THE ORDER. SUCH SUM SHALL BE TRANSFERRED TO THE MILITARY ASSISTANCE APPROPRIATION FOR THE CURRENT FISCAL YEAR UPON DELIVERY OF SUCH ARTICLE IF AT THE TIME OF DELIVERY THE STOCK STATUS OF THE ARTICLE IS DETERMINED, IN ACCORDANCE WITH SUBSECTIONS (G) AND (M) OF SECTION 2403 OF THIS TITLE, TO BE NONEXCESS.

PRIOR TO ENACTMENT OF SECTION 8 OF PUBLIC LAW 91-672, EXCESS DEFENSE ARTICLES GRANTED TO FOREIGN COUNTRIES WERE NOT CHARGED AGAINST THE MILITARY AID PROGRAM (MAP) FUNDS. THE EFFECT OF SECTION 8 WAS TO REQUIRE ALL EXCESS DEFENSE ARTICLES TO BE CHARGED AGAINST MAP FUNDS EXCEPT THAT SUBSECTION (B) REQUIRES SUCH CHARGE TO MAP FUNDS ONLY AFTER A SPECIFIED CEILING HAD BEEN REACHED IN ANY FISCAL YEAR.

THE ASSISTANT SECRETARY TRANSMITTED WITH HIS REQUEST MEMORANDA OF THE DEPARTMENT OF STATE AND THE DEPARTMENT OF DEFENSE, DATED MARCH 21 AND APRIL 4, 1974, RESPECTIVELY. BOTH AGREE THAT SECTION 8(B) APPLIES TO DEFENSE ARTICLES GENERATED ABROAD EFFECTIVE JULY 1, 1974. HOWEVER, THE STATE MEMORANDUM TAKES THE FURTHER POSITION THAT SECTION 8(B) APPLIES TO EXCESS DEFENSE ARTICLES GENERATED IN THE UNITED STATES ONLY ON AND AFTER THE DATE OF ENACTMENT OF PUBLIC LAW 93-189.

AS INDICATED ABOVE, THE LANGUAGE OF SECTION 8 WAS ENACTED INTO LAW ON JANUARY 12, 1971, APPROXIMATELY 6 MONTHS FOLLOWING THE BEGINNING OF FISCAL YEAR 1971. THE CEILING THEN SPECIFIED IN SUBSECTION (B) WAS $100,000,000. SUBSECTION 8(B) SUBSEQUENTLY WAS AMENDED BY SECTION 402 OF PUBLIC LAW 92-226 APPROVED FEBRUARY 7, 1972, 86 STAT. 33, BY CHANGING THE CEILING AMOUNT TO $185,000,000 - SUCH AMENDMENT AGAIN OCCURRING MORE THAN 6 MONTHS AFTER THE BEGINNING OF THE FISCAL YEAR.

STATE DEPARTMENT, IN ITS MEMORANDUM, POINTS OUT THAT NEITHER IN 1971 NOR IN 1972 WAS THE CEILING LESS THAN THE VALUE OF EXCESS ARTICLES ORDERED PRIOR TO ENACTMENT OR AMENDMENT OF SECTION 8 AND THAT SECTION 8 THUS HAS NEVER HAD A RETROACTIVE EFFECT. FURTHER, IT IS URGED THAT -

IN THE ABSENCE OF ANYTHING TO THE CONTRARY IN ITS TERMS OF LEGISLATIVE HISTORY, THE AMENDMENT SHOULD BE CONSTRUED IN ACCORDANCE WITH NORMAL RULES OF STATUTORY CONSTRUCTION AS HAVING EFFECT ONLY FROM AND AFTER THE DATE OF ITS ENACTMENT. RETROACTIVITY SHOULD NOT BE PRESUMED.

WHILE IT MAY BE TRUE THAT SECTION 8 HAS NEVER HAD A RETROACTIVE EFFECT, IT IS ALSO TRUE THAT IN EACH OF FISCAL YEARS 1971 AND 1972, AND ALTHOUGH MORE THAN 6 MONTHS OF EACH OF THE FISCAL YEARS HAD ELAPSED AT THE TIME SECTION 8 WAS ENACTED OR AMENDED, THE CEILING WAS APPLIED TO EXCESS ARTICLES ORDERED DURING THE ENTIRE FISCAL YEAR INVOLVED.

WE SEE NO VALID BASIS TO NOW CONSTRUE SECTION 8(B) AS IT RELATES TO EXCESS DEFENSE ARTICLES GENERATED ABROAD AS BEING APPLICABLE AS AND OF JULY 1, 1973, AND AT THE SAME TIME TO CONSTRUE IT AS BEING APPLICABLE ONLY ON AND AFTER DECEMBER 17, 1973, AS NOW URGED, IN EFFECT, IN THE STATE MEMORANDUM, WITH RESPECT TO EXCESS DEFENSE ARTICLES GENERATED IN THE UNITED STATES.

EACH OF THE THREE PUBLIC LAWS MENTIONED ABOVE AUTHORIZED THE MAKING OF FOREIGN ASSISTANCE APPROPRIATIONS FOR THE APPLICABLE FISCAL YEAR, AND EITHER DELETE, LIMIT, OR EXPAND EXISTING PROGRAMS OR PROVIDE FOR ADDITIONAL ONES. THE DEPARTMENT OF DEFENSE MEMORANDUM AFTER REVIEWING THE LEGISLATIVE HISTORY OF SECTION 8 OBSERVES THAT SECTION 8 -

*** HAS BEEN PERCEIVED BY THE CONGRESS AS AN INTEGRAL PART OF THE ANNUAL AUTHORIZATION PROCESS; A PROCESS BY WHICH IT AUTHORIZES FUNDS TO BE APPROPRIATED FOR FOREIGN AID FOR A WHOLE FISCAL YEAR, EVEN THOUGH A PORTION OF SUCH FISCAL YEAR HAS GENERALLY ELAPSED PRIOR TO ENACTMENT.

WHILE A CONSTRUCTION SUCH AS THAT NOW URGED BY STATE WOULD NOT BE UNREASONABLE, WE ARE OF THE VIEW THAT THE LEGISLATIVE HISTORY OF SECTION 8 AND THE MANNER IN WHICH IT HAS HERETOFORE BEEN APPLIED, TOGETHER WITH THE WORDING OF SUBSECTION (B) STATING THAT IT "SHALL APPLY DURING ANY FISCAL YEAR," INDICATES A CLEAR INTENT BY THE CONGRESS THAT THE AMENDMENTS MADE TO SECTION 8 BY PUBLIC LAW 93-189 WERE TO APPLY DURING THE ENTIRE FISCAL YEAR TO EXCESS DEFENSE ARTICLES WHETHER GENERATED ABROAD OR IN THE UNITED STATES.