B-198430, JUN 30, 1980

B-198430, JUN 30, 1980

DIGEST: THE LIMITATION ON NEW SPENDING AUTHORITY IN SECTION 409 OF PUBLIC LAW 480, AS AMENDED, 7 U.S.C. SEC. 1736C (SUPP. I 1977), APPLIES ONLY TO TITLE I, OF THAT LAW, 7 U.S.C. SECS. 1701 ET SEQ. THE COMMODITY CREDIT CORPORATION HAS AUTHORITY TO SPEND MONIES FOR TITLE II PROGRAMS UNDER PUBLIC LAW 480 IN EXCESS OF APPROPRIATIONS UP TO THE SPENDING CEILING PROVIDED IN THE DEPARTMENT OF AGRICULTURE, RURAL DEVELOPMENT AND RELATED AGENCIES APPROPRIATIONS ACT FOR FISCAL YEAR 1980, 93 STAT. 821, 839-40. ABSENT A SPENDING CEILING IN A FUTURE APPROPRIATION ACT, PROVISIONS AND LIMITATIONS SET FORTH IN SECTION 204 OF PUBLIC LAW 480, AS AMENDED, 7 U.S.C. SEC. 1724 (SUPP. I 1977), WOULD BE APPLICABLE TO TITLE II PROGRAMS.

LIMITATIONS ON SPENDING FOR TITLE II OF PUBLIC LAW 480:

THE PRESIDENTIAL COMMISSION ON WORLD HUNGER (COMMISSION) HAS ASKED WHETHER THE LIMITATION ON NEW SPENDING AUTHORITY IN SECTION 409 OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954 (POPULARLY KNOWN AS PUBLIC LAW 480), AS AMENDED, 7 U.S.C. SEC. 1736C (SUPP. I 1977), APPLIES TO TITLE II AS WELL AS TITLE I OF THAT ACT. IF THE LIMITATION DOES NOT APPLY TO TITLE II, THE COMMISSION THEN ASKS WHETHER THE COMMODITY CREDIT CORPORATION (CORPORATION) CAN SPEND FUNDS FOR TITLE II PROGRAMS IN EXCESS OF APPROPRIATED LEVELS.

THE COMMISSION IS SCHEDULED TO TERMINATE ON OR BEFORE JUNE 30, 1980, EXEC. ORDER NO. 12078, 43 F.R. 39741 (SEPTEMBER 5, 1978). BECAUSE OF THIS TIME CONSTRAINT, WE HAVE NOT SOUGHT THE VIEWS OF THE PRIMARY AGENCIES CHARGED WITH ADMINISTERING PUBLIC LAW 480, NAMELY, THE DEPARTMENTS OF AGRICULTURE AND STATE, THE COMMODITY CREDIT CORPORATION AND THE AGENCY FOR INTERNATIONAL DEVELOPMENT. SEE EXEC. ORDER NO. 10900, AS AMENDED, 7 U.S.C. SEC. 1691, NOTE.

NEVERTHELESS, WITH THAT CAVEAT, WE CONCLUDE THAT THE LIMITATION ON NEW SPENDING AUTHORITY IN SECTION 409 APPLIES ONLY TO TITLE I AND NOT TO TITLE II. IN ADDITION, WE FIND THAT THE COMMODITY CREDIT CORPORATION CAN SPEND FUNDS FOR TITLE II PROGRAMS IN EXCESS OF APPROPRIATIONS UP TO THE SPENDING CEILING SET FORTH IN THE DEPARTMENT OF AGRICULTURE, RURAL DEVELOPMENT AND RELATED AGENCIES APPROPRIATIONS ACT FOR FISCAL YEAR 1980, 93 STAT. 821, 839-840. ABSENT SUCH A SPENDING CEILING IN A FUTURE APPROPRIATION ACT, THE PROVISIONS AND LIMITATIONS SET FORTH IN SECTION 204 OF PUBLIC LAW 480, AS AMENDED, 7 U.S.C. SEC. 1724 (SUPP. I 1977), WOULD BE APPLICABLE TO TITLE II PROGRAMS.

TITLE I OF PUBLIC LAW 480, AS AMENDED, 7 U.S.C. SECS. 1701 ET SEQ., AUTHORIZES THE PRESIDENT TO CARRY OUT AGREEMENTS WITH FREINDLY COUNTRIES PROVIDING FOR SALES OF AGRICULTURAL COMMODITIES FOR CONVERTIBLE FOREIGN CURRENCIES AND FOR DOLLARS ON CREDIT TERMS. THE CORPORATION IS AUTHORIZED TO FINANCE THE SALE AND EXPORTATION OF THESE AGRICULTURAL COMMODITIES. U.S.C. SEC. 1702. SECTION 110 OF PUBLIC LAW 480, 7 U.S.C. SEC. 1710, ESTABLISHES A SPENDING LIMIT FOR ANY ONE CALENDAR YEAR FOR TITLE I PROGRAMS OF THE SUM OF $1.9 BILLION FOR REIMBURSEMENTS TO THE CORPORATION PLUS CARRYOVER BALANCES OF UNUSED AUTHORIZED SPENDING FROM PRIOR YEARS.

UNDER TITLE II, 7 U.S.C. SECS. 1721 ET SEQ., COMMODITIES ARE SUPPLIED WITHOUT COST TO FRIENDLY NATIONS AND FRIENDLY PEOPLES TO MEET FAMINE OR OTHER EMERGENCY RELIEF REQUIREMENTS, TO COMBAT MALNUTRITION, AND TO PROMOTE ECONOMIC AND COMMUNITY DEVELOPMENT IN UNDERDEVELOPED COUNTRIES. ALTHOUGH THE AGENCY FOR INTERNATIONAL DEVELOPMENT, BY SUCCESSIVE DELEGATIONS, IS RESPONSIBLE FOR ADMINISTERING TITLE II, THE CORPORATION MAKES AVAILABLE THE COMMODITIES OR PRODUCTS REQUESTED FOR DISPOSITION. SECTION 204 OF PUBLIC LAW 480, AS AMENDED, 7 U.S.C. SEC. 1724 (SUPP. I 1977), ESTABLISHES A SPENDING LIMIT FOR ANY ONE CALENDAR YEAR FOR TITLE II PROGRAMS OF $750 MILLION FOR REIMBURSEMENTS TO THE CORPORATION PLUS THE CARRYOVER BALANCE OF UNUSED AUTHORIZED SPENDING FROM THE PRECEDING YEAR. IN ADDITION, $7.5 MILLION MAY BE USED FOR THE PURCHASE OF FOREIGN CURRENCIES IN ORDER TO MEET SPECIFIED COSTS.

THE FOOD AND AGRICULTURE ACT OF 1977, 91 STAT. 913, 957, AMENDED SECTION 409 OF PUBLIC LAW 480, 7 U.S.C. SEC. 1736C (SUPP. I 1977), TO EXTEND THE TIME IN WHICH AGREEMENTS TO FINANCE SALES AND IMPLEMENT PROGRAMS OF ASSISTANCE COULD BE ENTERED INTO FOR TITLES I AND II, RESPECTIVELY, TO DECEMBER 31, 1981. IN ADDITION, THE AMENDMENT STATED:

"*** NEW SPENDING AUTHORITY PROVIDED FOR TITLE I OF THIS ACT (PUBLIC LAW 480) BY THE AMENDMENT TO THIS SECTION MADE BY THE FOOD AND AGRICULTURE ACT OF 1977 SHALL BE EFFECTIVE FOR ANY FISCAL YEAR ONLY TO SUCH EXTENT OR IN SUCH AMOUNTS AS ARE PROVIDED IN APPROPRIATION ACTS."

THE NEW SPENDING AUTHORITY REFERRED TO MEANS THAT RESULTING FROM THE EXTENSION OF THE TIME WITHIN WHICH AGREEMENTS MAY BE ENTERED INTO.

THE PLAIN LANGUAGE OF THE AMENDMENT INDICATES THAT THE LIMITATION ON THE USE OF THE NEW SPENDING AUTHORITY WAS TO BE APPLIED TO TITLE I. NOTHING IN THE AMENDMENT OR ITS LEGISLATIVE HISTORY INDICATES THAT THE LIMITATION APPLIES OR WAS INTENDED TO APPLY TO TITLE II. ITS APPARENT PURPOSE WAS TO MAKE PUBLIC LAW 480 CONFORM TO SUBSECTION 401(A) OF THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974, 31 U.S.C. SEC. 1351(A). H.R. REP. NO. 95-348, 95TH CONG., 1ST SESS. 101 AND 161 (1977).

WE NOTE THAT TITLE II OF PUBLIC LAW 480, AS WELL AS TITLE I, WAS NOT IN CONFORMITY WITH SUBSECTION 401(A) OF THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974 TO THE EXTENT IT INCLUDED NEW SPENDING AUTHORITY NOT SUBJECT TO APPROPRIATON ACT CONSTRAINTS. HENCE, EVEN THOUGH SECTION 409 OF PUBLIC LAW 480 DOES NOT APPLY TO TITLE II, CONGRESS IN APPROPRIATION ACTS HAS SPECIFICALLY PLACED A CEILING ON FUNDS AVAILABLE FOR FISCAL YEAR EXPENSES FOR TITLE II, AS WELL AS FOR TITLE I. SEE THE DEPARTMENT OF AGRICULTURE, RURAL DEVELOPMENT AND RELATED AGENCIES APPROPRIATIONS ACT FOR FISCAL YEAR 1980, 93 STAT. 821, 839-840; THE DEPARTMENT OF AGRICULTURE, RURAL DEVELOPMENT AND RELATED AGENCIES APPROPRIATIONS ACT FOR FISCAL YEAR 1979, 92 STAT. 1073, 1091; CONFERENCE REPORT, H.R. REP. NO. 95-1579, 95TH CONG., 2D SESS. 27 (1978).

WHETHER THE COMMODITY CREDIT CORPORATION CAN SPEND MONIES IN EXCESS OF AMOUNTS APPROPRIATED FOR TITLE II IS A SEPARATE QUESTION FROM THE APPLICATION OF SECTION 409 OF PUBLIC LAW 480. THE CORPORATION IS AUTHORIZED TO BORROW AN AGGREGATE AMOUNT NOT EXCEEDING $25 BILLION UNDER SUBSECTION 4(I) OF THE COMMODITY CREDIT CORPORATION CHARTER ACT, AS AMENDED, 15 U.S.C. SEC. 714BI) (SUPP. I 1977). SEE ALSO, 15 U.S.C. SEC. 713A-4 (SUPP. I 1977). IN ADDITION, IT IS AUTHORIZED TO MAKE SUCH EXPENDITURES, WITHIN THE LIMITS OF ITS AVAILABLE FUNDS AND BORROWING AUTHORITY AND IN ACCORD WITH LAW, AS MAY BE NECESSARY TO CARRY OUT THE PROGRAMS SET FORTH IN THE BUDGET FOR THE CORPORATION. 93 STAT. 821, 829, CLASSIFIED TO 15 U.S.C. SEC. 713A-10. THE CORPORATION IS SPECIFICALLY AUTHORIZED TO FINANCE THE SALE AND EXPORTATION OF AGRICULTURAL COMMODITIES UNDER PUBLIC LAW 480 (7 U.S.C. SEC. 1702), AND TO MAKE AVAILABLE THE COMMODITIES OR PRODUCTS REQUESTED FOR DISPOSITION UNDER TITLE II (7 U.S.C. SEC. 1721(A)).

"PRIOR TO FISCAL YEAR 1962, THE CORPORATION WAS REIMBURSED FOR THE COSTS OF (PUBLIC LAW 480) ACTIVITIES BY APPROPRIATIONS SUBSEQUENT TO INCURRENCE OF THE COSTS. BEGINNING IN THE FISCAL YEAR 1962, THE CONGRESS ADDED FUNDS TO PLACE THESE ACTIVITIES ON A PAY-AS-YOU-GO BASIS, APPROPRIATING FOR ESTIMATED COSTS." H. R. REP. NO. 96-242, 96TH CONG., 1ST SESS. 96 (1979). EVEN SO, THE CONGRESS HAS NOT RESTRICTED THE CORPORATION TO ITS APPROPRIATIONS FOR THE FISCAL YEAR. FOR EXAMPLE, FOR FISCAL YEAR 1979 CONGRESS APPROPRIATED ONLY $466.5 MILLION IN NEW BUDGET AUTHORITY FOR TITLE II, WHILE SETTING A SPENDING CEILING FOR THE FISCAL YEAR FOR TITLE II OF $573 MILLION, 92 STAT. 1073, 1091; AND FOR FISCAL YEAR 1980, CONGRESS APPROPRIATED $438.7 MILLION IN NEW BUDGET AUTHORITY FOR TITLE II, WHILE SETTING A SPENDING CEILING FOR THE FISCAL YEAR FOR TITLE II OF $556 MILLION, 93 STAT. 821, 839-840.

ANY MONIES REQUIRED FOR THE FISCAL YEAR IN EXCESS OF THOSE APPROPRIATED IN NEW BUDGET AUTHORITY WERE TO COME FROM CORPORATION FUNDS, FINANCING, AND FROM CARRYOVER APPROPRIATION BALANCES. "IF THE AMOUNTS APPROPRIATED ARE GREATER THAN ACTUAL NEEDS, THE EXCESS IS USED TO REDUCE FUTURE APPROPRIATION REQUESTS. IF THE APPROPRIATIONS ARE LESS THAN ACTUAL NEEDS, OTHER CORPORATION FUNDS MAY BE USED TEMPORARILY TO FINANCE THE BALANCE OF THE COSTS UP TO ANY STATUTORY PROGRAM CEILING." S. REP. NO. 96-246, 96TH CONG., 1ST SESS. 94 (1979).

THE CEILINGS ON SPENDING IN THE APPROPRIATION ACT FOR BOTH TITLES I AND II ARE FOR EXPENSES FOR THE FISCAL YEAR. NEVERTHELESS, FOR A NUMBER OF YEARS THE APPROPRIATION ACTS HAVE PROVIDED THAT "NEW OBLIGATIONAL AUTHORITY" PROVIDED FOR PUBLIC LAW 480 SHALL REMAIN AVAILABLE UNTIL EXPENDED. SEE, E.G., 92 STAT. 1078, 1092; 93 STAT. 821, 841. IN OTHER WORDS, IT APPEARS THAT IF THE SPENDING CEILING (OR SOME OTHER FACTOR) PREVENTS THE OBLIGATION OF THAT YEAR'S APPROPRIATIONS, THE UNUSED BALANCES MAY BE CARRIED OVER UNTIL OBLIGATED.

THUS THE CONGRESS AND THE APPROPRIATIONS COMMITTEES HAVE EXPLICITLY ALREADY RECOGNIZED THE AUTHORITY OF THE CORPORATION TO SPEND FUNDS FOR TITLE II PROGRAMS IN EXCESS OF APPROPRIATIONS, EVEN WITHIN THE CONTEXT OF A PROGRAM CEILING ON FISCAL YEAR SPENDING IN THE APPROPRIATION ACT. BUT SUCH AUTHORITY IS PERMISSIBLE ONLY UP TO THE STATUTORY PROGRAM CEILING IN THE APPROPRIATION ACT. IN THE ABSENCE OF A STATUTORY PROGRAM CEILING IN THE APPROPRIATION ACT, THE PROVISIONS AND LIMITATIONS SET FORTH IN SECTION 204 OF PUBLIC LAW 480, 7 U.S.C. SEC. 1724 (SUPP. I 1977), WOULD BE APPLICABLE TO TITLE II PROGRAMS.