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 of 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 amended the Federal Property and Administrative Services Act. Section 

3(d) relates only to personal property. Accordingly, 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.

2The text of § 3(d) reads, in pertinent part, as follows:

Notwithstanding any other provisions o f law, Federal agencies are prohibited from 

obtaining excess personal property for purposes of furnishing such property to grantees

o f such agencies except as follows:

(1) Under such regulations as the Administrator (of General Services] may 

prescribe, any Federal agency may 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 

made for a specific purpose with a specific termination 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 amount equal to 25 percentum of 

the original acquisition cost (except for costs of care and handling) of the 

excess property furnished, such funds to be covered into the Treasury as 

miscellaneous receipts.

*****

(2) Under such regulations and restrictions as the Administrator [of General 

Services] may prescribe, the provisions o f this subsection shall not apply to the 

following:

(A) property furnished under section 608 o f the Foreign Assistance Act of

1961, as amended, where and to the extent that the Administrator of 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 of this Act;

*****

This 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 administration, rehabilitation of the property, handling, etc. See, Hearings on AlD's

Excess Property Program before a Subcommittee of 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, 1970Hearing 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 a r y C . L a w t o n

Deputy Assistant Attorney General

Office of Legal Counsel

4See also. Recommendations o f the Ad 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 of the House

Committee on Government Operations, 94th C ong., 1st sess. 397 et seq. (1975). These 

recommendations led to the excess property provisions o f Pub. L. No. 94-519. The Ad Hoc 

Interagency Study Group studied the practice o f grantor Agencies loaning excess property to 

grantees. Thus, it is not unreasonable to assume that this is the problem with which § 3(d) sought to 

deal.

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