B-142011, APR 30, 1971

B-142011, APR 30, 1971

COMMODITY CREDIT CORPORATION - UPLAND COTTON ADVISING THAT THE LEGISLATIVE HISTORY OF SECTION 610 OF THE AGRICULTURAL ACT OF 1970 MAKES CLEAR THAT $10,000,000 MAY BE MADE AVAILABLE EACH YEAR BY THE COMMODITY CREDIT CORP., PURSUANT TO THAT SECTION TO FINANCE A PROGRAM FOR THE MARKET AND DEVELOPMENT OF UPLAND COTTON WITHOUT PROOF OF ACTUAL SAVINGS OF THAT AMOUNT RESULTING FROM THE APPLICATION OF THE PAYMENT LIMITATION UNDER THAT ACT ON PAYMENTS TO COTTON PRODUCERS.

TO MR. SECRETARY:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 5, 1971, REQUESTING OUR DECISION AS TO WHETHER $10,000,000 MAY BE MADE AVAILABLE EACH YEAR BY THE COMMODITY CREDIT CORPORATION, PURSUANT TO THE SECOND SENTENCE OF SECTION 610 OF THE AGRICULTURAL ACT OF 1970, TO FINANCE A PROGRAM FOR MARKET, DEVELOPMENT, RESEARCH, AND SALES PROMOTION FOR UPLAND COTTON UNDER SUCH SECTION, WITHOUT PROOF OF ACTUAL SAVINGS OF THAT AMOUNT RESULTING FROM THE APPLICATION OF THE PAYMENT LIMITATION UNDER THAT ACT ON PAYMENTS TO COTTON PRODUCERS.

SECTION 610 OF THE AGRICULTURAL ACT OF 1970, PUBLIC LAW 91-524, APPROVED NOVEMBER 30, 1970, 84 STAT. 1378, READS AS FOLLOWS:

"SEC. 610. THE COMMODITY CREDIT CORPORATION, IN FURTHERANCE OF ITS POWERS AND DUTIES UNDER SUBSECTIONS (E) AND (F) OF SECTION 5 OF THE COMMODITY CREDIT CORPORATION CHARTER ACT, SHALL, THROUGH THE COTTON BOARD ESTABLISHED UNDER THE COTTON RESEARCH AND PROMOTION ACT, AND UPON APPROVAL OF THE SECRETARY, ENTER INTO AGREEMENTS WITH THE CONTRACTING ORGANIZATION SPECIFIED PURSUANT TO SECTION 7(G) OF THAT ACT FOR THE CONDUCT, IN DOMESTIC AND FOREIGN MARKETS, OF MARKET DEVELOPMENT, RESEARCH OR SALES PROMOTION PROGRAMS AND PROGRAMS TO AID IN THE DEVELOPMENT OF NEW AND ADDITIONAL MARKETS, MARKETING FACILITIES AND USES FOR COTTON AND COTTON PRODUCTS, INCLUDING PROGRAMS TO FACILITATE THE UTILIZATION AND COMMERCIAL APPLICATION OF RESEARCH FINDINGS. EACH YEAR THE AMOUNT AVAILABLE FOR SUCH AGREEMENTS SHALL BE THAT PORTION OF THE FUNDS (NOT EXCEEDING $10,000,000) AUTHORIZED TO BE MADE AVAILABLE TO COOPERATORS UNDER THE COTTON PROGRAM FOR SUCH YEAR BUT WHICH IS NOT PAID TO PRODUCERS BECAUSE OF A STATUTORY LIMITATION ON THE AMOUNTS OF SUCH FUNDS PAYABLE TO ANY PRODUCER. THE SECRETARY IS AUTHORIZED TO DEDUCT FROM FUNDS AVAILABLE FOR PAYMENTS TO PRODUCERS UNDER SECTION 103 OF THE AGRICULTURAL ACT OF 1949, AS AMENDED, ON EACH OF THE 1972 AND 1973 CROPS OF UPLAND COTTON SUCH ADDITIONAL SUMS FOR USE AS SPECIFIED ABOVE (NOT EXCEEDING $10,000,000 FOR EACH SUCH CROP) AS HE DETERMINES DESIRABLE; AND THE FINAL RATE OF PAYMENT PROVIDED IN SECTION 103 IF HIGHER THAN THE RATE OF THE PRELIMINARY PAYMENT PROVIDED IN SUCH SECTION SHALL BE REDUCED TO THE EXTENT NECESSARY TO DEFRAY SUCH COSTS. NO FUNDS MADE AVAILABLE UNDER THIS SECTION SHALL BE USED FOR THE PURPOSE OF INFLUENCING LEGISLATIVE ACTION OR GENERAL FARM POLICY WITH RESPECT TO COTTON."

THE LEGISLATIVE HISTORY OF THIS PROVISION DISCLOSES THAT WHEN H.R. 18546 (THE BILL SUBSEQUENTLY ENACTED AS PUBLIC LAW 91-524) WAS PASSED BY THE HOUSE OF REPRESENTATIVES IT CONTAINED NO PROVISIONS SUCH AS THOSE IN SECTION 610. HOWEVER, AS PASSED BY THE SENATE, SECTION 610 CONTAINED LANGUAGE IDENTICAL TO THAT NOW CONTAINED IN THE FIRST TWO AND THE LAST SENTENCES OF SECTION 610.

THE COMMITTEE OF CONFERENCE INSERTED A NEW SENTENCE IMMEDIATELY FOLLOWING THE SECOND, AND, WHILE INCLUDED IN SECTION 610 AS SET FORTH ABOVE, IS REPEATED BELOW AS FOLLOWS:

"THE SECRETARY IS AUTHORIZED TO DEDUCT FROM FUNDS AVAILABLE FOR PAYMENTS TO PRODUCERS UNDER SECTION 103 OF THE AGRICULTURAL ACT OF 1949, AS AMENDED, ON EACH OF THE 1972 AND 1973 CROPS OF UPLAND COTTON SUCH ADDITIONAL SUMS FOR USE AS SPECIFIED ABOVE (NOT EXCEEDING $10,000,000 FOR EACH SUCH CROP) AS HE DETERMINES DESIRABLE; AND THE FINAL RATE OF PAYMENT PROVIDED IN SECTION 103 IF HIGHER THAN THE RATE OF THE PRELIMINARY PAYMENT PROVIDED IN SUCH SECTION SHALL BE REDUCED TO THE EXTENT NECESSARY TO DEFRAY SUCH COSTS."

THE STATEMENT OF MANAGERS ON THE PART OF THE HOUSE ACCOMPANYING THE CONFERENCE REPORT ON THE AGRICULTURAL ACT OF 1970, HOUSE REPORT NO. 91 1594, PAGE 33, IN EXPLAINING THE PROVISIONS OF SECTION 610 STATED AS FOLLOWS:

"IT IS THE INTENT OF THE CONFEREES THAT UNDER SECTION 610 OF THE CONFERENCE SUBSTITUTE THE COMMODITY CREDIT CORPORATION SHALL DIVERT TO THE COTTON BOARD NOT MORE THAN $10,000,000 ANNUALLY IN 1971, 1972, AND 1973, FROM THOSE SUMS WHICH WOULD OTHERWISE BE PAID TO COTTON PRODUCERS, BUT FOR THE OPERATION OF PAYMENT LIMITATIONS, IN ORDER TO DEVELOP AND EXPAND BOTH DOMESTIC AND FOREIGN MARKETS FOR UPLAND COTTON. THE ONLY DISCRETION INTENDED FOR THE SECRETARY IN THIS REGARD IS OVER THE APPROVAL OR DISAPPROVAL OF VARIOUS RESEARCH AND PROMOTION PROJECTS, AS IS THE CASE UNDER THE COTTON RESEARCH AND PROMOTION ACT.

"IT IS THE CONFEREES INTENT THAT THE SECRETARY BE GIVEN DISCRETION TO USE AN ADDITIONAL $10,000,000 ANNUALLY DURING 1972 AND 1973 FOR THE SAME PURPOSES."

YOU STATE IN YOUR LETTER THAT IT IS YOUR BELIEF THAT THE PURPOSE OF THE UNDERSCORED LANGUAGE IN THE ABOVE STATEMENT - TO THE EFFECT THAT THE ONLY DISCRETION INTENDED FOR THE SECRETARY OF AGRICULTURE IN REGARD TO THE MARKET DEVELOPMENT, RESEARCH, AND SALES PROMOTION PROGRAM FOR COTTON WAS OVER THE APPROVAL OR DISAPPROVAL OF THE VARIOUS RESEARCH AND PROMOTION PROJECTS - WAS TO MAKE CLEAR THE INTENTION OF THE CONFEREES THAT IN ALL OTHER RESPECTS THE SECRETARY WAS TO HAVE NO DISCRETION WHATSOEVER IN MAKING AVAILABLE $10,000,000 EACH YEAR FOR THE CARRYING OUT OF APPROVED PROJECTS. THIS, YOU STATE, WOULD INCLUDE NO DISCRETION TO WITHHOLD FUNDS FOR SUCH APPROVED PROJECTS PENDING PROOF OF ACTUAL SAVINGS FROM THE APPLICATION OF THE PAYMENT LIMITATION ON PAYMENTS TO COTTON PRODUCERS.

WHILE THE LANGUAGE OF SECTION 610 REASONABLY COULD BE CONSTRUED AS MEANING THAT THE CONTEMPLATED CONTRACTS COULD NOT BE ENTERED INTO EXCEPT AS SAVINGS WERE EFFECTED, WE AGREE WITH YOUR VIEW THAT THE CONFEREES INTENDED THAT THE SECRETARY HAVE NO DISCRETION TO WITHHOLD FUNDS FOR APPROVED PROJECTS PENDING PROOF OF ACTUAL SAVINGS.

AS INDICATED ABOVE THE COMMITTEE OF CONFERENCE ADDED TO SECTION 610 AUTHORITY FOR THE SECRETARY IN HIS DISCRETION, TO USE AN ADDITIONAL $10,000,000 FOR PROGRAM PURPOSES, AND, RELATIVE TO SUCH PROVISION, STATED IN ITS REPORT (AS QUOTED ABOVE) THAT - "IT IS THE CONFEREES INTENT THAT THE SECRETARY BE GIVEN DISCRETION TO USE AN ADDITIONAL $10,000,000 ANNUALLY *** FOR THE SAME PURPOSES."

IN ADDITION TO THAT PART OF THE CONFERENCE REPORT RELIED ON BY YOU IT SEEMS CLEAR FROM THIS LAST STATEMENT THAT THE $10,000,000 THERE INVOLVED WAS INTENDED AS A SUM IN ADDITION TO THE INITIAL $10,000,000 AND IT SEEMS TO IMPLY THAT NO PART THEREOF WOULD BE USED UNTIL THE INITIAL $10,000,000 HAD BEEN OBLIGATED. IT ALSO SEEMS CLEAR THAT THE CONFEREES INTENDED THAT THE INITIAL $10,000,000 BE SPENT FOR THESE PROGRAMS, THE AMOUNT OF THE SAVINGS NOT BEING AN ISSUE DURING ANY PART OF THE CONGRESSIONAL CONSIDERATION.

IN VIEW OF THE FOREGOING, AND SINCE THE CONGRESS SUBSEQUENTLY ADOPTED THE LEGISLATION RECOMMENDED BY THE CONFEREES AND NO QUESTION APPARENTLY WAS RAISED REGARDING THE PURPOSE OF SECTION 610 AS DESCRIBED IN THE CONFERENCE REPORT, WE SEE NO OBJECTION TO YOUR ENTERING INTO AGREEMENTS AUTHORIZED BY SECTION 610 EVEN THOUGH THERE MAY BE NO PROOF THAT SAVINGS HAVE BEEN EFFECTED.