nonbasic agricultural commodities other than those receiving price support under title II of the Agriculture Act of 1949, as amended. It has been determined that this provision can be legally satisfied by reserving the principal portion of section 32 funds for the use of perishable nonbasic agricultural commodities when the occasion arises warranting their use for such purpose.

The major activities conducted during recent years under these authorities include (1) programs to encourage the exportation of agricultural commodities through payments to exporters to enable them to purchase on the domestic market and sell on a world market at competitive prices; (2) diversion of agricultural commodities to byproducts or new uses by payments to processors to enable them to purchase surplus commodities on the domestic market and divert them into byproducts or new markets and sell them at prices comparable to competing products thus creating new domestic markets for surplus commodities (The principal program in recent years has been diversion of potatoes to starch, flour and livestock feed); (3) increasing utilization of agricultural commodities through direct purchase of such commodities and donating them to school lunches, charitable institutions, serving needed persons, and persons certified by welfare agencies to be in need; (4) increasing domestic consumption and utilization of agricultural commodities under the food stamp program through issuance of food coupons to persons in low-income groups; (5) production payments to producers in an effort to help reestablish purchasing power in connection with the normal production of an agricultural commodity. (The only program of this type in recent years was the cranberry program in 1960); (6) operating expenses for the administration of purchase, exportation, diversion, food stamp, and production payment programs, and including the distribution of section 32 and CCC commodities to eligible outlets and encouraging increased consumption of foods in abundant supply through current issuances of plentiful food lists and cooperation in food promotional activities with food trades; and (7) Federal administration of marketing agreements and orders under the Marketing Agreement Act of 1937 and the utilization of advisory committees and the conduct of referendums in connection with such agreements and orders as authorized in the Agricultural Act of 1961.

Section 32 of the Act of August 24, 1935, as amended, and as currently contained in 7 United States Code 612c is as follows:

"§ 612c. Appropriation to encourage exportation and domestic consumption of agricultural products.

"There is appropriated for each fiscal year beginning with the fiscal year ending June 30, 1936, an amount equal to 30 per centum of the gross receipts from duties collected under the customs laws during the period January 1 to December 31, both inclusive, preceding the beginning of each such fiscal year. Such sums shall be maintained in a separate fund and shall be used by the Secretary of Agriculture only to (1) encourage the exportation of agricultural commodities and products thereof by the payment of benefits in connection with the exportation thereof or of indemnities for losses incurred in connection with such exportation or by payments to producers in connection with the production of that part of any agricultural commodity required for domestic consumption; (2) encourage the domestic consumption of such commodities or products by diverting them, by the payment of benefits or indemnities or by other means, from the normal channels of trade and commerce or by increasing their utilization through benefits, indemnities, donations or by other means, among persons in low income groups as determined by the Secretary of Agriculture; and (3) reestablish farmers' purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption. Determinations by the Secretary as to what constitutes diversion and what constitutes normal channels of trade and commerce and what constitutes normal production for domestic consumption shall be final.

"The sums appropriated under this section shall be expended for such one or more of the above-specified purposes, and at such times, in such manner, and in such amounts as the Secretary of Agriculture finds will effectuate substantial accomplishment of any one or more of the purposes of this section. Notwithstanding any other provision of this section, the amount that may be devoted, during any fiscal year after June 30, 1939, to any one agricultural commodity or the products thereof in such fiscal year, shall not exceed 25 per centum of the funds available under this section for such fiscal year. The sums appropriated under this section shall be devoted principally to perishable nonbasic agricultural

commodities (other than those receiving price support under section 1446 of this title) and their products. The sums appropriated under this section shall, notwithstanding the provisions of any other law, continue to remain available for the purposes of this section until expended; but any excess of the amount remaining unexpended at the end of any fiscal year over $300,000,000 shall, in the same manner as though it had been appropriated for the service of such fiscal year, be subject to the provisions of sections 712 and 713 of Title 31. (Aug. 24, 1935, ch. 641, § 32, 49 Stat. 774; Feb. 29, 1936, ch. 104, § 2, 49 Stat. 1151; Feb. 16, 1938, 3 p.m. ch. 30, § 203, 52 Stat. 38; June 30, 1939, ch. 253, title I, 53 Stat. 975; July 3, 1948, ch. 827, title III, § 301, 62 Stat. 1257; Oct. 31, 1949, ch. 792, title IV, § 411, 63 Stat. 1057; Jan. 30, 1954, ch. 2, § 5 (b), 68 Stat. 7.)"

HISTORY OF SECTION 32 CHANGES

A number of other laws enacted since 1935 have limited, broadened, restricted or otherwise impinged upon the basic section 32 statute and the use of the funds appropriated thereunder. Some of these laws were applicable for limited periods of time. Others were in the nature of permanent legislation and are currently applicable in the use of section 32 funds.

These laws reflect the continuing interest in and surveillance over section 32 funds and programs by the Congress. This is further reflected in the records of hearings and reports by the Appropriation Committees and the Legislative Committees in both House and Senate.

A brief chronological history of these laws from the original Act in the 74th Congress to the latest action by the 87th Congress follows:

CHRONOLOGICAL LEGISLATIVE HISTORY OF SECTION 32

SECTION 32-ORIGINAL ACT

(Public Law 320, 74th Cong., Aug. 24, 1935, 49 Stat. 774)

Section 32 of an act to amend the Agricultural Adjustment Act, as amended, approved August 24, 1935, was the original authority making available 30 percent of the annual customs receipts "to encourage the exportation and domestic consumption of agricultural commodities."

"There is hereby appropriated for each fiscal year beginning with the fiscal year ending June 30, 1936, an amount equal to 30 per centum of the gross receipts from duties collected under the customs laws during the period January 1 to December 31, both inclusive, preceding the beginning of each such fiscal year. Such sums shall be maintained in a separate fund and shall be used by the Secretary of Agriculture only to (1) encourage the exportation of agricultural commodities and products thereof by the payment of benefits in connection with the exportation thereof or of indemnities for losses incurred in connection with such exportation or by payments to producers in connection with the production of that part of any agricultural commodity required for domestic consumption; (2) encourage the domestic consumption of such commodities or products by diverting them, by the payment of benefits or indemnities or by other means, from the normal channels of trade and commerce; and (3) finance adjustments in the quantity planted or produced for market of agricultural commodities. The amounts appropriated under this section shall be expended for such of the above specified purposes, and at such times, in such manner, and in such amounts as the Secretary of Agriculture finds will tend to increase the exportation of agricultural commodities and products thereof, and increase the domestic consumption of agricultural commodities and products thereof: Provided, That no part of the funds appropriated by this section shall be expended pursuant to clause (3) hereof unless the Secretary of Agriculture determines that the expenditure of such part pursuant to clauses (1) and (2) is not necessary to effectuate the purposes of this section: Provided further. That no part of the funds appropriated by this section shall be used for the payment of benefits in connection with the exportation of unmanufactured cotton."

PURCHASE OF AGRICULTURAL COMMODITIES FOR DONATION TO FSCC

(Public Law 440, 74th Cong., Feb. 11, 1936, 49 Stat. 1117)

The Comptroller General of the United States did not at first view the purchase of commodities for distribution to relief families as a proper use of section 32 funds, and, accordingly, this supplemental legislation was sought and granted.

"During the fiscal years 1936 and 1937, in carrying out clause (2) of said section 32, the Secretary of Agriculture may, if he finds that the purposes of said section will be accomplished thereby, purchase without regard to section 3709, Revised Statutes, agricultural commodities and products thereof, including purchases for donation to the Federal Surplus Commodities Corporation." SECTION 32 FUNDS AVAILABLE FOR COTTON PRICE ADJUSTMENT PAYMENT PLAN, 1935

(Public Law 440, 74th Cong., Feb. 11, 1936, 49 Stat. 1117)

A portion of the section 32 funds appropriated for the fiscal year 1936 was used to finance the cotton price adjustment program of 1935.

"The 1935 cotton price adjustment payment plan: So much as may be necessary of the amount appropriated for the fiscal year ending June 30, 1936, by section 32 of the Act approved August 24, 1935 (49 Stat. 774), is hereby made available, to remain available until expended, to enable the Secretary of Agriculture to make the payments provided for in the 1935 cotton price adjustment payment plan (set forth in the printed forms issued by the Secretary of Agriculture, designated forms numbered C.A.P. 1 to 5 and forms supplementary thereto) to the persons and in the amounts and in the manner prescribed in said plan, except that the provisions of said plan which condition the making of payments upon the producer undertaking to cooperate in the 1936 cotton adjustment program formulated under the Agricultural Adjustment Act shall be of no force and effect, and to pay the necessary administrative expenses incurred and to be incurred in connection with the making and auditing of the payments hereby authorized by the Department of Agriculture, the Treasury Department, and the General Accounting Office, including the employment of persons and means in the city of Washington and elsewhere, in accordance with said plan: Provided, That applications for and the payments thereon are hereby authorized and such forms may be employed without alteration and payments made without regard to any references to any undertaking to comply with the 1936 cotton adjustment program formulated under the Agricultural Adjustment Act, as amended: Provided further, That payments payable hereunder to cotton producers who in 1935 operated on a farm which was not in 1935 covered by a 1934 and 1935 cotton acreage reduction contract or which in 1935 was covered by such a contract which was not complied within in 1935 shall be made as soon as may be without delaying payments to producers who in 1935 operated on a farm covered by such a contract which was complied with in 1935."

SECTION 32 ADMINISTRATIVE FUNDS, FISCAL YEAR 1936

(Public Law 440, 74th Cong., Feb. 11, 1936, 49 Stat. 1118)

In the absence of substantive legislation making section 32 funds available for carrying its own administrative expenses, Congress made provision for this expense through various appropriation acts.

"Administrative expenses, exportation and domestic consumption of agricultural commodities: Not to exceed $300,000 of the appropriation made available for the fiscal year 1936 in section 32 of the Act entitled "An Act to amend the Agricultural Adjustment Act, and for other purposes,” approved August 24, 1935, is hereby made available for administrative expenses, including the employement of persons and means in the city of Washington and elsewhere, other than administrative expenses in connection with the 1935 cotton price adjustment payment plan.

SECTION 32, ADDITIONAL AUTHORITIES FOR THE SECRETARY

(Public Law 461, 74th Cong., Feb. 29, 1936, 49 Stat. 1151)

The Comptroller General took issue with the Department in several of the initial programs as to what constituted a diversion from the normal channels of trade and commerce. This conflict was clarified when the Congress provided the Secretary of Agriculture with the authority to determine finality concerning such matters.

"Sec. 2. Section 32 of the Act to amend the Agricultural Adjustment Act, and for other purposes, approved August 24, 1935, is amended by striking out clause (3) and inserting in lieu thereof, (3) reestablish farmers' purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption. Determinations by the Secretary as to what constitutes diversion and what constitutes normal channels of trade and commerce and what constitutes normal production for domestic consumption shall be final. The sums appropriated under this section shall be expended for such one or more for the above-specified purposes, and at such times, in such manner, and in such amounts as the Secretary of Agriculture finds will effectuate substantial accomplishment of any one or more of the purposes of this section."

SECTION 32, TRANSFER TO TREASURY OF 1936 UNOBLIGATED
BALANCE FOR REFUND OF PROCESSING TAX

(Public Law 740, 74th Cong., June 22, 1936, 49 Stat. 1755)

"Funds made available to the Secretary of Agriculture by the appropriation for the fiscal year 1936 in section 32 of Public Law Numbered 320, 74th Congress, approved August 24, 1935, to the extent of the unobligated balance thereof; and by the appropriation in section 12(a) of the Agricultural Adjustment Act, in an amount not in excess of $15,000,000; shall be available until June 30, 1937, for transfer to the Treasury Department for salaries and administrative expenses in carrying out the provisions of this title and of title IV, including necessary investigative work, and for refunds and payments under title IV. Such funds shall be available for expenditure by the Secretary of the Treasury for personal services and rent in the District of Columbia and elsewhere, for lawbooks, books of reference, press releases, trade journals, periodicals, and newspapers, for contracting reporting services, printing and paper in addition to allotments under the existing law, travel expenses, for mileage and per diem of witnesses, in lieu of payment of which mileage and per diem may be made in advance upon certification of such officer as the Commissioner or the Secretary may designate, and such certification shall be conclusive. In addition to the foregoing, the administrative expenses provided for in this section shall include such miscel laneous expenses as may be authorized or approved by the Commissioner or the Secretary for carrying out the provisions of this title, including witness fees and mileage for experts, notarial fees, or like services, and stenographic work for taking depositions."

DONATION OF SECTION 32 COMMODITIES TO FSCC

(Public Law 165, 75th Cong., June 28, 1937, 50 Stat. 323 as amended July 2, 1958, 72 Stat. 287)

This law continued the Federal Surplus Commodities Corporation as an agency of the Government, authorized its use in carrying out the purposes of clause (2) of section 32 (primarily for relief purposes).

"Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in carrying out the provisions of clause (2) of section 32 of the act approved August 24, 1935 (49 Stat. 774), as amended, the Secretary of Agriculture may transfer to the Federal Surplus Commodities Corporation, which corporation is hereby continued, until June 30, 1939, as an agency of the United States under the direction of the Secretary of Agriculture, such funds, appropriated by said section 32, as may be necessary for the purpose of effectuating said clause (2) of section 32: Provided, That such transferred funds, together with other funds of the corporation, may be used for purchasing, exchanging, processing, distributing, disposing, transport

ing, storing, and handling of agricultural commodities and products thereof and inspection costs, commissions, and other incidental costs and expenses, without regard to the provisions of existing law governing the expenditure of public funds and for administrative expenses, including rent, printing and binding, and the employment of persons and means, in the District of Columbia and elsewhere, such employment of persons to be in accordance with the provisions of law applicable to the employment of persons by the Agricultural Adjustment Administration.

"In carrying out clause (2) of section 32, the funds appropriated by said section may be used for the purchase, without regard to the provisions of existing law covering the expenditure of public funds, of agricultural commodities and products thereof, and such commodities, as well as agricultural commodities and products thereof purchased under the preceding paragraph hereof, may be donated for relief purposes, and for use in the nonprofit summer camps for children."

TRANSFER OF SECTION 32 FUNDS TO CONSERVATION AND USE

(Public Law 173, 75th Cong., June 29, 1937, 50 Stat. 430)

On occasions (Agriculture Appropriation Act, fiscal year 1938 and 1947) when a surplus of section 32 funds have existed Congress has made a portion of such funds available for agricultural conservation payments.

"To enable the Secretary of Agriculture to carry into effect the provisions of sections 7 to 17, inclusive, of the Soil Conservation and Domestic Allotment Act, approved February 29, 1936 (U.S.C., supp. II, title 16, secs. 590g-590q), including the employment of personal services and rent in the District of Columbia and elsewhere; printing and binding; purchase of law books, books of reference, periodicals, and newspapers; and other necessary expenses, $340,000,000, together with not to exceed $10,000,000 of the funds made available for the fiscal years 1937 and 1938 by Section 32 of the Act entitled "An Act to amend the Agricultural Adjustment Act, and for other purposes,” approved August 24, 1935 (U.S.C., supp. II, title 7, sec. 612):

SECTION 32 ADMINISTRATIVE FUNDS, FISCAL YEAR 19381

(Public Law 173, 75th Cong., June 29, 1937, 50 Stat. 430)

"Provided further, That the funds provided by section 32 of the Act entitled 'An Act to amend the Agricultural Adjustment Act, and for other purposes,' approved August 24, 1935 (U.S.C., supp. II, title 7 sec., 612c), shall be available during the fiscal year 1938 for administrative expenses in such sums as the President may direct in carrying out the provisions of said section, including the employment of persons and means in the District of Columbia and elsewhere, in accordance with the provisions of law applicable to the employment of persons and means by Agricultural Adjustment Administration."

SECTION 32 FUNDS AVAILABLE FOR PRICE ADJUSTMENT PAYMENT TO COTTON

PRODUCERS

(Public Law 354, 75th Cong., Aug. 25, 1937, 50 Stat. 762)

A large part of the funds appropriated for both the fiscal years 1936 and 1937 was used to finance the 1937 cotton adjustment program. Specific legislative directions to carry out these cotton price adjustment programs may have stemmed in part from the fact that section 32 as originally enacted prohibited the use of funds in connection with exportation of unmanufactured cotton. "Notwithstanding any other provisions of section 32 of Public Law Numbered 320, Seventy-fourth Congress, as amended, not to exceed $65,000,000 of the funds available under said section 32 in each of the fiscal years 1938 and 1939 shall be available (at such times and in such amounts as the Secretary of Agriculture may determine) until expended for a price-adjustment payment, upon such terms and conditions as the Secretary of Agriculture may determine, with respect to the 1937 cotton crop to cotton producers who have complied with the

1 Since no legislation provided for sec. 32 administrative funds, fiscal year 1937, these expenses were paid from the $100,000,000 appropriation provided in sec. 12(a) of the Agricultural Adjustment Act.