producing federal agencies. The Secretary of Commerce is authorized to fix the per annum rate of basic compensation of each examiner-in-chief at not in excess of the rate for grade 17 of the General Schedule of the Classification Act of 1949, as amended. Fees for filing patent applications, issuing each original or reissue patent, filing each disclaimer, filing an appeal to the Board of Appeals and Interferences (including briefs in support of an appeal and oral hearing), petitions for revival of unintentionally abandoned applications and maintenance of a patent in force are established by law. Fees may be adjusted by the Commissioner every third year to reflect fluctuations occurring during the previous three years in the Consumer Price Index, as determined by the Secretary of Labor. Patent fees are reduced by 50 percent with respect to the application of any small business as defined under section 3 of the Small Business Act, and to any independent inventor or nonprofit organization as defined by the Commissioner. No fee established by the Commissioner shall take effect prior to sixty days following publication of notice in the Federal Register. Revenues from fees are credited to the PTO's appropriation account in the Treasury of the United States and remain available without fiscal year limitation to finance the PTO's activities to the extent provided for in appropriation acts. The FY 1988 PTO budget authorized a program level of $271,620,000 of which 56 percent was to be derived from user fees. It is estimated that by 1996 user fees will provide 85 percent of the funds needed to support PTO operations. In 1987 fees paid by non-U.S. citizens amounted to about 25 percent of the cost of the PTO's patent operations. THE GOVERNMENT CORPORATION: The government corporation as we now know it evolved as a pragmatic response to the need for an institution capable of administering effectively government programs which were intended to be financed by users, rather than the general taxpayers, and whose expenditures and revenues fluctuated with consumer demand. Experience demonstrated that government programs with such characteristics could not function effectively under administrative and financial systems designed for totally different types of activities. Such programs would be unable to respond to market forces, if expenditures were limited to amounts provided by annual appropriations and all revenues had to be deposited in the Treasury, as is the case with traditional government agencies. Governmental accounting and auditing systems had the limited purposes of preventing the over-obligation of appropriated funds and unlawful expenditures, and did not provide the information necessary to establish rates, determine income and expenses, set forth profits and losses, and evaluate results. Governmental accounting, for example, does not normally include costs such as depreciation, and accounts are maintained on a cash rather than an accrual basis. Furthermore, traditional government agencies are often hamstrung by a myriad of regulatory and prohibitory statutes in such areas as purchasing, sale of goods and property and personnel management. When it enacted the Government Corporation Control Act of 1945, the Congress recognized both the need for a special type of institution tailored to the requirements of these programs and for special types of controls which would assure appropriate accountability to Congress and the President without impairing essential flexibility. Congress expressly noted that "the corporate form loses much of its peculiar value without reasonable autonomy in its day-to-day decisions and operations." The Government Corporation Control Act is not a general incorporation law. There is no comprehensive federal statute dealing with the powers, organizational structure and legal status of government corporations. Corporations possess only those powers which Congress sees fit to include in their individual enabling acts. The government corporation is peculiarly a product of precedent, as reflected by provisions of corporate charters enacted by the Congress, judicial interpretations and traditions. While there may be significant differences among corporations, these entities commonly possess the following unique attributes: - Legal Status. As a body corporate a corporation has a separate legal personality distinct from that of the United States and can sue and be sued, acquire property and borrow money in its own name without directly pledging the credit of the United States. Functions are vested in the corporation and not in a Cabinet Secretary with supervisory responsibility, as is now the case with the PTO where the Secretary may vest in himself any of the office's functions and may assign them to other officers of the Department of Commerce. -Expenditures. A corporation is usually given the power "to determine the character and necessity for its obligations and of expenditures, and the manner in which they shall be incurred, allowed and paid, subject to provisions of law specifically applicable to government corporations." They are thus exempted from any regulatory and prohibitory statutes and from the settlement of accounts by the Comptroller General. -Financing. Corporations are authorized to retain and utilize revenues for any of the purposes of the corporation without having the revenues appropriated as is now the case with PTO. Corporations may also be authorized to borrow from the Treasury, Federal Financing Bank or the public for purposes specified by law. When Congress directs that a service be provided at less than cost, provision may be made for appropriations to reimburse the corporation for revenues lost or foregone. This could be done for any services which Congress directs a PTO corporation to provide at less than cost or without reimbursement. -Rates and Prices. Corporations normally are authorized to fix the rates and prices for goods and services in accordance with a statutory formula. Provision may be made for notice and hearing before establishing or altering such rates and prices. PTO rates are now set by law and can be adjusted only by new legislation or the application of a statutory formula based on the Consumer Price Index. -Budget. Corporations subject to the Government Corporation Control Act submit annual business-type budgets which provide for the authorization of corporate programs but do not constitute limitations on corporate expenditures, with the possible exception of administrative expenses. Corporations are subject to the sequestration provisions of the Gramm-Rudman-Hollings Act. However, several corporations, including the Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation, have been exempted from this statute, and legislation to exclude the U.S. Postal Service passed the House in the 100th Congress. -Audit and Accounts. Corporations maintain commercial accounts and are audited either by the Comptroller General or by independent auditors "in accordance with principles and procedures applicable to commercial corporate transactions." -Personnel. Employees of wholly-owned government corporations are considered to be employees of the United States. Unless specifically exempted by the corporate charter, personnel are subject to civil service laws and regulations and personnel ceilings. Congress may grant special authorities with respect to the hiring and compensation of personnel, and it has done so when warranted by the needs of a corporation. The conflict-of-interest law, are applicable to government corporation employees, as are regulations governing travel. However, corporations are rarely subject to specific limitations on travel expenditures. It should be emphasized that corporations are organized to achieve a public purpose authorized by law. Incorporation does not cause an agency to lose its public charter or to prevent it from performing governmental functions such as representing the United States in negotiations with foreign governments and promulgating and enforcing regulations. The FDIC, for example, has regulatory functions. As the Supreme Court held in the case of Cherry Cotton Mills vs. U.S., (327 U.S. 536 [1945]), "that the Congress chose to call it a corporation does not alter its characteristics so as to make it something other than what it actually is, an agency selected by the government to accomplish purely governmental purposes." The government corporation has been adopted throughout the world as the most effective form of organization for business-type and potentially self-sustaining enterprises. President Truman prescribed the criteria for the use of government corporations in his 1948 budget message when he stated: Experience indicates that the corporate form of organization is These criteria were reaffirmed by the first Hoover Commission in 19491 and the 1981 NAPA Report on Government Corporations. They remain valid today. The 1981 NAPA report said: For a number of reasons, Congress in recent years has not The 1 2 Commission on Government Operation of the Executive Branch of the Government, Report on "Federal Business Enterprises," (Washington: U.S. Government Printing Office, March 1949). National Academy of Public Administration, Report on Government Corporations, Volume I, (Washington: NAPA, August 1981). |