                                                                                  August 22, 1978


78-47         MEMORANDUM OPINION FOR THE GENERAL
              COUNSEL, GENERAL SERVICES
              ADMINISTRATION

              Federal Excess Personal Property— Disposition Under
              § 608 of the Foreign Assistance Act o f 1961 (22 U .S.C .
              § 2358)— Effect of 40 U .S.C . § 483(d)


   This responds to your request for our opinion as to how § 3(d) of Pub. Law
No. 94-519,1 90 Stat. 2454, 40 U.S.C. § 483(d), affects Federal excess
personal property disposition under § 608 of the Foreign Assistance Act of
 1961, 75 Stat. 442, as amended, 22 U.S.C. § 2358. You contend that § 3(d)
governs the disposition of such property in connection with both grants and
loans made by the Agency for International Development (AID) under § 608.
AID contends that § 3(d) governs only grants. We conclude that AID’s
contention is correct.
   The Federal Property and Administrative Services Act of 1949, 63 Stat. 377,
as amended, 40 U.S.C. § 471 et seq., regulates the use and disposal of Federal
excess and surplus property. Excess property is property not required by a
Federal Agency for its needs and the discharge of its responsibilities. 40 U.S.C.
§ 472(e). General Services Administration (GSA) is required to make an
Agency’s excess property known to other Agencies for possible further use
within the Federal Government. If no Agency requests the property it becomes
surplus, i.e ., “ excess property not required for the needs and discharge of the
responsibilities of all Federal agencies.” 40 U.S.C. § 472(g).




   'Public Law No. 94-519 am ended the Federal Property and A dm inistrative Services Act. Section
3(d) relates only to personal property. A ccordingly, all references to property herein are to personal
property, not real property.
   Section 3(d) provides that Federal Agencies may not furnish excess personal
property to their grantees except pursuant to its provisions.2 It allows Agencies
to furnish such property only to public agencies and nonprofit tax-exempt
organizations under the conditions set forth therein.
   Excess property furnished pursuant to § 608 is exempted from these
conditions. However, such transfers may be made only insofar as the
Administrator of General Services determines that the property is not needed
for donation pursuant to § 203(j) of the Federal Property and Administrative
Services Act, 40 U.S.C. § 484(j).3
   Section 608 authorizes establishment of a $5 million revolving fund for AID
to acquire excess Government property for use in “ United States-assisted
projects and programs.” Regarding the nature of the assistance to be provided
under this fund, § 635(a), 22 U.S.C. § 2395(a), reads, in pertinent part, as
follows:
     Except as otherwise specifically provided in this Act [the Foreign
     Assistance Act], assistance under this Act may be furnished on a
     grant basis or on such terms, including cash, credit, or other terms of
     repayment . . . as may be determined to be best suited to the
     achievement of the purposes of this Act, and shall emphasize loans
     rather than grants wherever possible.



  2T he text o f § 3(d) reads, in pertinent part, as follows:
         Notw ithstanding any other provisions o f law , Federal agencies are prohibited from
     obtaining excess personal property for purposes o f furnishing such property to grantees
     o f such agencies except as follows:
            (1) U nder such regulations as the A dm inistrator (of G eneral Services] may
         prescribe, any Federal agency m ay obtain excess personal property for purposes of
         furnishing it to any institution or organization which is a public agency or is
         nonprofit and exem pt from taxation under section 501 o f the Internal Revenue Code
         o f 1954, and which is conducting a federally sponsored project pursuant to a grant
         m ade for a specific purpose w ith a specific term ination made: Provided, that—
                 (A) such property is to be furnished for use in connection with the grant; and
                 (B) the sponsoring Federal agency pays an am ount equal to 25 percentum of
              the original acquisition cost (except for costs o f care and handling) o f the
              excess property furnished, such funds to be covered into the Treasury as
              m iscellaneous receipts.
                                                   *****
            (2) U nder such regulations and restrictions as the A dm inistrator [of General
         Services] m ay prescribe, the provisions o f this subsection shall not apply to the
         follow ing:
                (A) property furnished under section 608 o f the Foreign Assistance Act of
              1961, as amended, where and to the extent that the Administrator o f General
              Services determines that the property to be furnished under such Act is not
              needed fo r donation pursuant to section 203(j) [40 U.S.C. § 484(j)j o f this Act;
                                                   *****
    T his paragraph shall not preclude any Federal agency [from] obtaining property and
    furnishing it to a grantee o f that agency under paragraph (1) o f this subsection. [Emphasis
    added.]
  ■’This provision regulates the donation o f surplus property to the States, territories, and
possessions.

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The use of excess property is encouraged in foreign assistance programs.
Section 102(a) of the Foreign Assistance Act, 22 U.S.C. § 2151(a), reads in
pertinent part, “ . . . to the maximum extent practicable . . . disposal of excess
property . . . undertaken pursuant to this or any other Act, shall complement
and be coordinated with [international development] assistance . . ..’’ Thus, the
use of excess property is sanctioned in § 608 loan and grant programs. Further,
the legislative history of § 608 states that as excess property is used, the
revolving fund is to be “ replenished from the appropriation applicable to the
particular purpose of the assistance, i.e., development loans, development
grants, supporting assistance, etc.” S. Rept. No. 612, 87th Cong., 1st sess.
30 (1961). [Emphasis added.]
   AID informs us that foreign countries acquire excess property under § 608 by
paying part of the moneys they receive under the foreign assistance- programs
into the revolving fund. Thus, in those cases, the amount of monetary
assistance is decreased depending on the cost of the excess property acquired.
The acquisition of excess property by this method is particularly beneficial to
foreign countries because they are only charged with the costs of administra­
tion, rehabilitation of the property, handling, etc. See, Hearings on AlD 's
Excess Property Program before a Subcommittee o f the House Committee on
Government Operations, 91st Cong., 2d sess. 13-16 (1970) (1970 Hearing).
Thus, since excess property can be acquired for substantially less than new
property, foreign assistance spending power is increased. This has been
referred to as “ stretching the foreign aid dollars.” See, 1 970Hearing at 14, 24.
As indicated above, both foreign loan and grant programs may use excess
property.
    Under § 608(b) excess property not exceeding $45 million (acquisition cost)
may be transferred to AID each fiscal year without GSA approval. However,
with respect to property exceeding that amount, GSA must first determine that
it is not needed for donation pursuant to § 203(j).
   The difference between AID’s and GSA’s interpretations of § 3(d) is that
under GSA’s view AID may transfer excess property under either § 608’s loan
or grant programs only if GSA first determines that the property is not needed
for donation pursuant to § 203(j). While AID agrees with regard to § 608
grants, it contends that GSA has no role in excess property transfers in § 608
loan transactions unless these transactions involve more than $45 million
(original acquisition cost) of excess property in any fiscal year.
   GSA advances two arguments to support its interpretation. First, it asserts
that a principal purpose of § 3(d) is to provide as much property as possible for
use by the States. Therefore, it concludes, it would be inconsistent with this
purpose to read the law as not controlling excess'property disposition in § 608
loan transactions. It further argues that:
      It is difficult to discern whether there is any difference between
      AID’s grant program and their development loan program in the use
      of excess property because in both instances the property is given to
      the foreign recipients.


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   However, GSA ignores the plain language and the legislative history of
§ 3(d). That provision expressly deals only with excess property transfers to
grantees of Federal Agencies. Section 608’s loan program deals with borrowers,
not grantees. Moreover, § 3(d)’s legislative history shows that it was primarily
intended to regulate the Agency’s practice of lending excess property to
organizations receiving grants. H. Rept! No. 94-1429, 94th Cong., 2d sess. 3-4
(1976); S. Rept. No. 94-1323, 94th Cong., 2d sess. 4-6 (1976). The foregoing
reports expressed concern that this practice withdrew from circulation property
that otherwise would have been eventually used in surplus property programs.
H. Rept. No. 94-1429, supra , at 7; S. Rept. No. 94-1323, supra, at 7. Plainly,
Congress was concerned about property diverted from the surplus property
program, but only insofar as this resulted from grantor Agencies lending excess
property to their grantees. The excess property provisions of § 3(d) were
primarily designed to meet this problem.4
   There is no evidence in § 3(d)’s legislative history that Congress intended to
abolish § 608’s mechanism covering both loans and grants, and replace it with a
mechanism for utilizing excess property in connection with loans. It is a
familiar principle of statutory construction that repeals by implication are
disfavored. When two statutes are capable of coexistence, both must be
regarded as effective absent a clearly expressed congressional intention to the
contrary. Administrator, FAA v. Robertson, 422 U.S. 255 (1975); Morton v.
Mancari, 417 U.S. 535 (1974). An intention to repeal a statute must be clear
and manifest. Morton v. Mancari, supra, at 551. This rule applies to partial
repeals as well as to complete ones. Regional Rail Reorganization Act Cases,
419 U.S. 102, 134 (1974). Although Congress expressly restricted § 608’s
disposition of excess property in grant programs, there is no evidence that it
also intended to so restrict excess property use in § 608’s loan programs. Rather
the language of § 3(d) and its legislative history point to a contrary intention. It
must be assumed that Congress did not intend to alter § 608 as it applied to the
use of excess property in loan programs,
   We conclude that § 3(d) must be construed as affecting only the use of excess
property in § 608 grant programs.

                                                             M   ary   C. Law    ton

                                                 Deputy Assistant Attorney General
                                                               Office o f Legal Counsel




   4See also. Recommendations o f the A d Hoc Interagency Study Group on Utilization o f Excess
Federal Property (1974). reprinted in Distribution o f Federal Surplus Property to State and Local
Organizations: Hearings on H.R. 9152 and H.R. 9593 Before a Subcommittee o f the House
C om m ittee on G overnm ent O perations, 94th C o n g ., 1st sess. 397 et seq. (1975). T hese
recom m endations led to the excess property provisions o f Pub. L. No. 94-519. The Ad Hoc
Interagency Study G roup studied the practice o f grantor Agencies loaning excess property to
grantees. Thus, it is not unreasonable to assum e that this is the problem with w hich § 3(d) sought to
deal.

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