B-141610, MARCH 23, 1960, 39 COMP. GEN. 647

B-141610, MARCH 23, 1960, 39 COMP. GEN. 647

AGRICULTURE - CONSERVATION REFUNDS - MISCELLANEOUS RECEIPTS V. APPROPRIATION THE DEPOSIT OF UNEARNED CONSERVATION PAYMENTS WHICH ARE REFUNDED TO THE GOVERNMENT BY FARM PRODUCERS FOR FAILURE TO CARRY OUT THEIR GREAT PLAINS CONSERVATION CONTRACTS EXECUTED UNDER SECTION 16 (B) OF THE SOIL CONSERVATION AND DOMESTIC ALLOTMENT ACT, AS AMENDED, 16 U.S.C. 590P, TO THE TREASURY AS MISCELLANEOUS RECEIPTS PURSUANT TO SECTION 3617, REVISED STATUTES, 31 U.S.C. 484, WOULD TO SUCH EXTENT, DEPLETE THE AMOUNT APPROPRIATED BY THE CONGRESS FOR THE GREAT PLAINS CONSERVATION PROGRAM AND DEFEAT ITS PURPOSES; THEREFORE, SUCH UNEARNED REFUNDS--- AS DISTINGUISHED FROM REFUNDS OF EARNED PAYMENTS WHICH BENEFITED THE PROGRAM--- ARE FOR CREDIT TO THE APPROPRIATION FROM WHICH MADE AND ARE AVAILABLE FOR THE PURPOSES OF THE PROGRAM.

TO THE SECRETARY OF AGRICULTURE, MARCH 23, 1960:

A LETTER DATED DECEMBER 30, 1959, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY OF AGRICULTURE, REQUESTS A DECISION AS TO WHETHER AMOUNTS REFUNDED "TO THE UNITED STATES" BECAUSE OF CONTRACT VIOLATIONS UNDER THE ACT OF AUGUST 7, 1956, AS AMENDED, 16 U.S.C. 590P MAY LEGALLY BE CREDITED AS ,APPROPRIATION REFUNDS" AND THUS BECOME AVAILABLE FOR USE FOR FURTHERING THE GREAT PLAINS CONSERVATION PROGRAM, OR WHETHER THEY MUST BE DEPOSITED INTO THE TREASURY AS GENERAL FUND RECEIPTS, I.E., MISCELLANEOUS RECEIPTS.

SECTION 3617, REVISED STATUTES, 31 U.S.C. 484, REQUIRES THAT THE GROSS AMOUNT OF ALL MONEYS RECEIVED BY THE UNITED STATES FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES (WITH CERTAIN EXCEPTIONS NOT INVOLVED HERE) SHALL BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

THE ADMINISTRATIVE ASSISTANT SECRETARY SAYS THAT APPLICATION OF THE ABOVE REQUIREMENT TO FUNDS RECOVERED FROM PRODUCERS UNDER THE GREAT PLAINS CONSERVATION PROGRAM BECAUSE OF CONTRACT VIOLATIONS IS OF CONSIDERABLE IMPORTANCE TO YOUR DEPARTMENT, PARTICULARLY IF THE REFUNDS WERE TO DEVELOP INTO A RELATIVELY LARGE AMOUNT. HE STATES THAT 3,652 COST-SHARING CONTRACTS THAT HAD BEEN ENTERED INTO AS OF NOVEMBER 30, 1959, AVERAGED SLIGHTLY OVER $5,100 EACH.

THE PURPOSE OF THE ACT OF AUGUST 7, 1956, AS AMENDED, WHICH AUTHORIZES THE ESTABLISHMENT OF A GREAT PLAINS CONSERVATION PROGRAM IS TO IMPLEMENT THE PROGRAM FOR REHABILITATION OF AGRICULTURE IN THAT AREA. THE ACT PROVIDES THAT A PRODUCER UNDER CONTRACT WITH THE GOVERNMENT TO CARRY OUT A CONSERVATION PROGRAM ON HIS FARM OR RANCH MUST AGREE IN THE CONTRACT TO "* * * TO FORFEIT ALL RIGHTS TO FURTHER PAYMENTS OR CREDITS UNDER THE CONTRACT AND REFUND TO THE UNITED STATES ALL PAYMENTS OR GRANTS RECEIVED THEREUNDER UPON HIS VIOLATION OF THE CONTRACT AT ANY STAGE DURING THE TIME HE HAS CONTROL OF THE FARM IF THE SECRETARY DETERMINES THAT SUCH VIOLATION IS OF SUCH A NATURE AS TO WARRANT TERMINATION OF THE CONTRACT, OR TO MAKE REFUNDS OR ACCEPT SUCH PAYMENT ADJUSTMENTS AS THE SECRETARY MAY DEEM APPROPRIATE IF HE DETERMINES THAT THE PRODUCER'S VIOLATION DOES NOT WARRANT TERMINATION OF THE CONTRACT * * *.' THE ACT ALSO AUTHORIZES NECESSARY APPROPRIATIONS WITHOUT FISCAL YEAR LIMITATIONS BUT PROVIDES THAT THE TOTAL COST OF THE PROGRAM SHALL NOT EXCEED $150,000,000 AND THAT PAYMENTS FOR ANY PROGRAM YEAR SHALL NOT EXCEED $25,000,000. A TOTAL OF $30,000,000 ($10,000,000 IN EACH OF THE FISCAL YEARS 1958, 1959, AND 1960) HAS BEEN APPROPRIATED TO DATE.

THE ADMINISTRATIVE ASSISTANT SECRETARY SAYS THAT---

IT APPEARS CONSISTENT WITH THE ACT AND WITH THE LEGISLATIVE HISTORY TO URGE THAT IT WAS THE INTENT OF CONGRESS THAT MAXIMUM CONSERVATION EFFORTS BE ACCOMPLISHED WITHIN THE AMOUNT APPROPRIATED AND TO FURTHER THIS OBJECTIVE BY REQUIRING THAT REFUNDS UNDER THE PROGRAM BE DEPOSITED TO THE CREDIT OF THE FUNDS APPROPRIATED FOR THIS PURPOSE. THE PROVISION OF THE ACT SPECIFYING THAT THE TOTAL PROGRAM "SHALL NOT EXCEED $150,000,000" (16 U.S.C. 590 (P) (B) (, THE AUTHORIZATION TO APPROPRIATE FUNDS WITHOUT FISCAL YEAR LIMITATION, AND THE SPECIFIC PROVISIONS FOR REFUNDS AS A PART OF THE PROGRAM TEND TO SUGGEST THAT THE TOTAL AMOUNT SHOULD BE USED TO SECURE ESTABLISHMENT OF CONSERVATION PRACTICES AND THAT CONDITIONAL PAYMENT AND RECOVERY SHOULD NOT CHANGE ITS INTENDED USE. FURTHERMORE, IT IS CLEAR THAT THE CONTRACT WITH THE PRODUCER SHOULD BE TREATED AS INDIVISIBLE AND IT IS, THEREFORE, SUGGESTED THAT THE FAILURE TO PERFORM WHICH OCCASIONS THE REFUND TO THE GOVERNMENT CONSTITUTES A FAILURE OF CONSIDERATION AND THE REFUND IS RESTORATION TO THE GOVERNMENT OF THE CONSIDERATION WHICH ORIGINALLY WAS AVAILABLE TO IT FOR USE IN CARRYING OUT THE PROGRAM, THUS BRINGING THE CASE WITHIN THE PRINCIPLE APPLIED IN 27 COMP. GEN. 117.

THE STATEMENT BY THE ADMINISTRATIVE ASSISTANT SECRETARY THAT THE FAILURE TO PERFORM WHICH OCCASIONS THE REFUND TO THE GOVERNMENT CONSTITUTES A FAILURE OF CONSIDERATION IMPLIES THAT IN ADMINISTERING THE FORFEITURE PROVISION, REFUNDS WILL BE REQUIRED ONLY WHERE THERE IS A FAILURE OF CONSIDERATION AND THAT THE REFUND OF PAYMENTS FOR PRACTICES WHICH HAVE BENEFITED THE GREAT PLAINS CONSERVATION PROGRAM WILL NOT BE REQUIRED. OTHER WORDS, ONLY UNEARNED PAYMENTS FOR PRACTICES WHICH DID NOT BENEFIT THE PROGRAM WILL BE REQUIRED TO BE REFUNDED. TO CREDIT THE APPROPRIATION WITH REFUNDS OF EARNED PAYMENTS FOR PRACTICES WHICH BENEFITED THE PROGRAM WOULD CONSTITUTE AN AUGMENTATION OF THE APPROPRIATION. SUCH REFUNDS ARE MORE IN THE NATURE OF CIVIL PENALTIES AND PROPERLY FOR DEPOSIT INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. WE, THEREFORE, ASSUME THAT YOUR LETTER REFERS ONLY TO UNEARNED PAYMENTS, THAT IS, PAYMENTS FOR PRACTICES WHICH, DUE TO THE VIOLATION, HAVE NOT BENEFITED THE PROGRAM.

IT HAS BEEN UNIFORMLY HELD BY ACCOUNTING OFFICERS OF THE GOVERNMENT UNDER SECTION 3617, REVISED STATUTES, 31 U.S.C. 484, THAT MONEYS COLLECTED FOR THE USE OF THE GOVERNMENT MUST BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS IN THE ABSENCE OF AN EXPRESS STATUTORY PROVISION TO THE CONTRARY. WE HAVE STATED, HOWEVER, THAT ADMITTEDLY THE TERMS OF THE ABOVE-CITED CODE PROVISION ARE GENERAL IN NATURE AND SHOULD RECEIVE A REASONABLE CONSTRUCTION WITH RESPECT TO ANY PARTICULAR FORM OF INCOME OR RECEIPT.

THE PAYMENTS MADE TO PRODUCERS UNDER THE GREAT PLAINS CONSERVATION PROGRAM ARE MADE PURSUANT TO CONTRACTS BETWEEN THE PRODUCER AND THE UNITED STATES. HOWEVER, THERE DOES NOT EXIST BETWEEN THE PARTIES THE USUAL CONTRACTUAL RELATIONSHIP EXISTING BETWEEN THE UNITED STATES AND A CONTRACTOR WHO FURNISHES SUPPLIES OR SERVICES FOR A PROFIT. RATHER, THE PAYMENTS UNDER THE CONSERVATION CONTRACTS ARE MORE IN THE NATURE OF GRANTS -IN-AID, ALTHOUGH MADE PURSUANT TO CONTRACTS REQUIRING THE PRODUCER TO ESTABLISH CERTAIN CONSERVATION PRACTICES ON FARMLAND WHICH HE CONTROLS.

PRESUMABLY, THE CONGRESS INTENDED THAT THE TOTAL AMOUNT APPROPRIATED FOR THE GREAT PLAINS CONSERVATION PROGRAM BE USED FOR THAT PURPOSE. UNLESS THE UNEARNED AMOUNTS REFUNDED BY THE PRODUCERS ARE CREDITED TO THE APPROPRIATION AGAINST WHICH THE PAYMENT WERE CHARGED, THE RESULTS SOUGHT TO BE ACCOMPLISHED BY THE ACT INVOLVED HERE MAY BE DEFEATED TO THAT EXTENT, SINCE THE AMOUNT OF THE PAYMENTS REQUIRED TO BE REFUNDED BY THE SECRETARY FOR VIOLATION OF CONTRACTS WOULD INDICATE A FAILURE ON THE PART OF THE PRODUCERS TO CARRY OUT FULLY THE CONSERVATION MEASURES AND PRACTICES AGREED TO UNDER THE CONTRACTS.

IN LIGHT OF THE FOREGOING, AND CONSIDERING IN PARTICULAR THE PURPOSE OF THE ACT OF AUGUST 7, 1956, IT IS OUR VIEW THAT ANY UNEARNED AMOUNTS REFUNDED TO THE UNITED STATES BECAUSE OF VIOLATIONS OF THE GREAT PLAINS CONSERVATION PROGRAM CONTRACTS MAY BE CREDITED TO THE APPROPRIATION FROM WHICH SUCH AMOUNTS ORIGINALLY WERE PAID, AND THUS BE AVAILABLE FOR USE IN FURTHERING PROGRAM.