B-205053 L/M, DEC 31, 1981

B-205053 L/M, DEC 31, 1981

DIGESTS: 1. CONTINUING RESOLUTIONS APPROPRIATE SUM OF MONEY RATHER THAN PROGRAM LEVEL. REGARDLESS OF THEIR PERIOD OF DURATION, THEY APPROPRIATE FULL ANNUAL AMOUNT OF APPROPRIATION. SEE CASE CITED. 2. WHEN CONTINUING RESOLUTION EXPIRES AND NO OTHER FUNDING HAS BEEN PROVIDED, AUTHORITY TO USE UNOBLIGATED BALANCES CEASES, REGARDLESS OF REASON WHY FUNDS WERE UNOBLIGATED. BECAUSE SUBSEQUENT CONTINUING RESOLUTION OR APPROPRIATION ACT WOULD AGAIN APPROPRIATE FULL ANNUAL AMOUNT, UNOBLIGATED FUNDS ARE PERMANENTLY LOST ONLY IF FUNDING PROVIDED IN CONTINUING RESOLUTION IS NOT CONTINUED IN SUBSEQUENT FUNDING MEASURE. 3. IMPOUNDMENT CONTROL ACT DOES NOT REQUIRE THAT IMPOUNDMENT OF FUNDS PROVIDED UNDER TEMPORARY CONTINUING RESOLUTIONS BE SUBMITTED AS RESCISSION, EVEN IF IMPOUNDMENT IS FOR DURATION OF CONTINUING RESOLUTION. SECTION 1012(B) REQUIREMENT APPLIES TO FUNDS PROVIDED FOR FISCAL YEAR WHICH ARE RESERVED FROM OBLIGATION FOR SUCH FISCAL YEAR. BY ITS TERMS, SECTION 1012(B) DOES NOT APPLY TO CONTINUING RESOLUTION THAT RUNS FOR ONLY PART OF YEAR. 4. REQUIRING PRESIDENT TO SUBMIT ALL IMPOUNDMENTS UNDER CONTINUING RESOLUTIONS AS RESCISSION WOULD MEAN THAT CONGRESS WOULD BE FACED WITH DECIDING MERITS OF RESCISSION AT SAME TIME IT IS DEBATING PROPER LEVEL OF APPROPRIATIONS FROM WHICH RESCISSION WOULD COME. FURTHERMORE, SUCH REQUIREMENT COULD FORCE ADMINISTRATION TO OBLIGATE FUNDS AT SAME TIME CONGRESS IS DEBATING PROPER FUNDING LEVEL FOR PROGRAMS INVOLVED.

JAMES R. JONES, HOUSE OF REPRESENTATIVES:

THIS RESPONDS TO A LETTER FROM MR. WENDELL BELEW, CHIEF COUNSEL FOR THE COMMITTEE, DATED NOVEMBER 19, 1981. MR. BELEW ASKED WHETHER DEFERRED FUNDS WOULD BE AVAILABLE FOR OBLIGATION AFTER THE FIRST CONTINUING RESOLUTION FOR FISCAL YEAR 1982, PUB.L. 97-51, EXPIRED, AND, IF NOT, WHETHER IT WAS PROPER TO PROPOSE DEFERRALS FOR THE DURATION OF A CONTINUING RESOLUTION.

FUNDS MADE AVAILABLE UNDER THE FIRST CONTINUING RESOLUTION FOR FISCAL YEAR 1982 EXPIRED (TEMPORARILY) ON NOVEMBER 20, 1981. NEVERTHELESS, IT WAS PROPER UNDER THE IMPOUNDMENT CONTROL ACT FOR THE ADMINISTRATION TO PROPOSE DEFERRALS (RATHER THAN RESCISSIONS) FOR THESE FUNDS SINCE THE FUNDS WERE NOT TO BE WITHHELD THROUGH THE FISCAL YEAR. WE HAVE LONG RECOGNIZED THAT THE SUBMISSION OF DEFERRALS UNDER PART YEAR CONTINUING RESOLUTIONS COMPLIES WITH BOTH THE LETTER AND SPIRIT OF THE IMPOUNDMENT CONTROL ACT.

OUR ANALYSIS OF THE ISSUES RAISED BY MR. BELEW'S LETTER FOLLOWS.

AVAILABILITY OF DEFERRED BUDGET AUTHORITY AFTER EXPIRATION OF CONTINUING RESOLUTIONS

CONTINUING RESOLUTIONS GENERALLY PROVIDE THAT THE BUDGET AUTHORITY FOR AN ACTIVITY SHALL REMAIN AVAILABLE UNTIL (A) ENACTMENT INTO LAW OF A REGULAR APPROPRIATION FOR THE ACTIVITY, (B) ENACTMENT OF THE APPLICABLE APPROPRIATION WITHOUT PROVISION FOR THE ACTIVITY, OR (C) A FIXED CUTOFF DATE, WHICHEVER FIRST OCCURS. ONCE EITHER OF THE FIRST TWO CONDITIONS OCCURS FN1, OR THE CUTOFF DATE PASSES FN2, FUNDS APPROPRIATED BY THE CONTINUING RESOLUTION ARE NO LONGER AVAILABLE FOR OBLIGATION.

AN AGENCY MAY OBLIGATE FUNDS ONLY IF BUDGET AUTHORITY IS AVAILABLE UNDER A LEGISLATIVELY ENACTED FUNDING MEASURE. THEREFORE, THE AUTHORITY TO OBLIGATE FUNDS EXISTS AFTER THE EXPIRATION OF A CONTINUING RESOLUTION ONLY IF A REGULAR APPROPRIATION BILL OR CONTINUING RESOLUTION IS ENACTED, OR IF THE TERMINATION DATE OF THE EXPIRED CONTINUING RESOLUTION IS EXTENDED.

THE FIRST CONTINUING RESOLUTION FOR FISCAL YEAR 1982, PUB.L. NO. 97 51, PROVIDED FOR A CUTOFF DATE OF NOVEMBER 20, 1981. 95 STAT. 961. WHEN THAT DATE OCCURRED WITHOUT THE ENACTMENT OF REGULAR APPROPRIATION BILLS, THE AUTHORITY TO USE FUNDS PROVIDED IN THE CONTINUING RESOLUTION FOR ENTERING INTO NEW OBLIGATIONS EXPIRED.

THE CONTINUING RESOLUTION ULTIMATELY WAS EXTENDED ON NOVEMBER 23, 1981, BY PUB.L. NO. 97-85, WHICH PROVIDED FOR CONTINUING APPROPRIATIONS UNTIL DECEMBER 15, 1981. THIS SECOND CONTINUING RESOLUTION HAD THE EFFECT OF REAPPROPRIATING THE BUDGET AUTHORITY THAT EXPIRED ON NOVEMBER 20.

CONTINUING RESOLUTIONS APPROPRIATE A SUM OF MONEY RATHER THAN A PROGRAM LEVEL. 58 COMP.GEN. 530, 533 (1979); B-194362, MAY 1, 1979; B-152554, DECEMBER 6, 1968. FURTHER, REGARDLESS OF THEIR PERIOD OF DURATION, THEY APPROPRIATE THE FULL ANNUAL AMOUNT OF THE APPROPRIATION. SEE B-152554, NOVEMBER 4, 1974.

AS AN ADMINISTRATIVE MATTER, THE LIMITED PERIOD OF AVAILABILITY RESULTING FROM THE DURATION DATE SPECIFIED IN THE CONTINUING RESOLUTION IS RELEVANT IN DETERMINING THE AMOUNT OF THE ANNUAL APPROPRIATION TO BE APPORTIONED. FOR EXAMPLE, THE FIRST CONTINUING RESOLUTION COVERED 14 PERCENT OF THE FISCAL YEAR; THEREFORE, 14 PERCENT OF THE APPROPRIATION NORMALLY WOULD BE APPORTIONED. UNDER THE PROCEDURES AGREED TO BY OMB, THE DEPARTMENT OF THE TREASURY, AND GAO, SUCH AN AMOUNT WOULD BE CONSIDERED AUTOMATICALLY APPORTIONED, IN THAT AGENCIES WOULD GO DIRECTLY TO THE DEPARTMENT OF TREASURY TO HAVE THE FUNDS "WARRANTED" TO THEM WITHOUT AN OMB APPORTIONMENT. HOWEVER, IN SITUATIONS WHEN THE AGENCY DETERMINES THAT SUCH AN AMOUNT IS INADEQUATE BECAUSE A PROGRAM REQUIRES ADDITIONAL FUNDS DUE TO NORMAL SPENDING PATTERNS, OMB REQUIRES THE AGENCY TO SEEK AN APPORTIONMENT APPROVING THE LARGER AMOUNT.

WHEN THE CONTINUING RESOLUTION EXPIRES AND NO OTHER FUNDING HAS BEEN PROVIDED, THE AUTHORITY TO USE UNOBLIGATED BALANCES CEASES, REGARDLESS OF THE REASON WHY THE FUNDS WERE UNOBLIGATED. SEE DISCUSSION OF THE LEGAL AND PROGRAMMATIC RAMIFICATIONS FROM THE EXPIRATION OF A CONTINUING RESOLUTION IN OUR AUDIT REPORT ENTITLED "FUNDING GAPS JEOPARDIZE FEDERAL GOVERNMENT OPERATIONS" PAD-81-31, MARCH 3, 1981. HOWEVER, EVEN THOUGH THE AVAILABILITY OF THE FUNDS TECHNICALLY MAY EXPIRE BECAUSE THEY ARE UNOBLIGATED WHEN A CONTINUING RESOLUTION ENDS, THEY MAY NOT BE PERMANENTLY LOST. WHEN A SUBSEQUENT CONTINUING RESOLUTION OR APPROPRIATION ACT IS PASSED WHICH AGAIN APPROPRIATES THE FULL ANNUAL AMOUNT, THE TOTAL AMOUNT OF FUNDS PROVIDED IN THE FUNDING MEASURE AGAIN BECOMES AVAILABLE. (OF COURSE, THIS AMOUNT IS REDUCED BY THE AMOUNT OF FUNDS OBLIGATED DURING THE PERIOD THE PREVIOUS CONTINUING RESOLUTION WAS IN EFFECT.) ONLY IF THE FUNDING PROVIDED IN THE CONTINUING RESOLUTION IS ELIMINATED OR REDUCED IN THE SUBSEQUENT FUNDING MEASURE ARE ALL OR A PORTION OF THE UNOBLIGATED FUNDS PERMANENTLY LOST.

CLASSIFICATION OF WITHHOLDING DURING A CONTINUING RESOLUTION

CONTINUING RESOLUTIONS SPECIFY REFERENCE BILLS, RATES OF OPERATION OR BUDGET ESTIMATES AGAINST WHICH AN APPROPRIATION LEVEL CAN BE DETERMINED. THE STATUTORY LANGUAGE OFTEN PROVIDES THAT THE AMOUNT PROVIDED SHALL NOT BE IN EXCESS OF THE REFERRED AMOUNT. THESE AMOUNTS ALSO PROVIDE A REFERENCE POINT AGAINST WHICH THE PROVISIONS OF THE IMPOUNDMENT CONTROL ACT CAN BE MEANINGFULLY APPLIED.

IT IS POSSIBLE THAT FUNDS MAY BE SPENT UNDER A RESOLUTION AT A RATE HIGHER THAN THAT LATER PROVIDED BY CONGRESS. THEREFORE, COMMITTEE REPORTS OFTEN INSTRUCT THE ADMINISTRATION TO TAKE ONLY THE LIMITED ACTION NECESSARY FOR THE ORDERLY CONTINUATION OF PROJECTS AND ACTIVITIES, PRESERVING TO THE MAXIMUM EXTENT POSSIBLE CONGRESS' FLEXIBILITY IN ARRIVING AT FINAL DECISIONS IN THE REGULAR APPROPRIATION BILLS, E.G., REPORT BY THE COMMITTEE ON APPROPRIATIONS ON THE FIRST CONTINUING RESOLUTION FOR FISCAL YEAR 1982, H.R.REP. NO. 97-223, P. 3, SEPTEMBER 14, 1981.

THE APPORTIONMENT PROCESS DESCRIBED PREVIOUSLY IMPLEMENTS THIS TYPE OF COMMITTEE DIRECTIVE. THE ADMINISTRATION ALSO MAY WISH TO WITHHOLD FROM OBLIGATION SOME OF THE FUNDS PROVIDED IN THE CONTINUING RESOLUTION. UNDER OUR INTERPRETATION OF THE SPENDING LEVELS CONTAINED IN CONTINUING RESOLUTIONS, DISCUSSED ABOVE, SUCH A WITHHOLDING WOULD CONSTITUTE AN IMPOUNDMENT. IN A LETTER TO FORMER CHAIRMAN MAHON, HOUSE COMMITTEE ON APPROPRIATIONS, B-115398, MAY 9, 1975, WE STATED THAT:

"DURING THE EARLY PART OF A FISCAL YEAR WE DO NOT BELIEVE THAT RESCISSION MESSAGES ARE REQUIRED UNDER CONTINUING RESOLUTIONS IN CIRCUMSTANCES WHERE THE PRESIDENT IS DEFERRING EXPENDITURES WHILE AWAITING CONGRESSIONAL ACTION ON HIS APPROPRIATION REQUESTS. AT THE POINT, HOWEVER, WHERE THERE WOULD BE INSUFFICIENT OPPORTUNITY REMAINING TO UTILIZE FUNDS PROVIDED, A RESCISSION MESSAGE REFLECTING THAT SITUATION SHOULD BE SENT."

THUS WE HAVE TAKEN THE POSITION THAT THE IMPOUNDMENT CONTROL ACT DOES NOT REQUIRE THAT IMPOUNDMENT MESSAGES SUBMITTED FOR THE DURATION OF A TEMPORARY CONTINUING RESOLUTION BE CLASSIFIED AS RESCISSIONS. IN FACT, WE BELIEVE THAT THE ACT SUGGESTS THE OPPOSITE. SECTION 1012(A) OF THE ACT REQUIRES A RESCISSION MESSAGE WHEN "BUDGET AUTHORITY PROVIDED FOR ONLY ONE FISCAL YEAR IS TO BE RESERVED FROM OBLIGATION FOR SUCH FISCAL YEAR."

BY ITS TERMS, THE REQUIREMENT IN SECTION 1012(A) DOES NOT APPLY TO A CONTINUING RESOLUTION THAT RUNS FOR ONLY PART OF A YEAR. FURTHERMORE, WE BELIEVE THAT DISTINGUISHING BETWEEN RESERVING FUNDS FOR THE LIFE OF A REGULAR FISCAL YEAR APPROPRIATION AND RESERVING FUNDS DURING A TEMPORARY CONTINUING RESOLUTION IS FULLY CONSISTENT WITH THE SPIRIT OF THE IMPOUNDMENT CONTROL ACT. IN THE LATTER CASE, THE PASSAGE OF A TEMPORARY CONTINUING RESOLUTION NECESSARILY MEANS THAT CONGRESSIONAL DELIBERATIONS OVER FUNDING LEVELS HAVE NOT BEEN COMPLETED. REQUIRING THE PRESIDENT TO SUBMIT ALL IMPOUNDMENTS UNDER CONTINUING RESOLUTIONS AS RESCISSIONS WOULD MEAN THAT CONGRESS WOULD BE FACED WITH DECIDING THE MERITS OF A RESCISSION PROPOSAL AT THE SAME TIME THAT IT IS DEBATING THE PROPER LEVEL OF APPROPRIATIONS FROM WHICH THE RESCISSION WOULD COME.

FURTHERMORE, CONGRESS MAY FAIL EITHER TO ENACT THE RESCISSION PROPOSAL OR TO PASS A FINAL APPROPRIATIONS MEASURE DURING THE PRESCRIBED 45-DAY PERIOD FOR WITHHOLDING FUNDS PURSUANT TO A RESCISSION REQUEST. IN SUCH A SITUATION, THE ADMINISTRATION WOULD BE FORCED TO OBLIGATE FUNDS AT THE SAME TIME THAT CONGRESS IS DEBATING THE PROPER FUNDING LEVEL FOR THE PROGRAMS INVOLVED.

BASED ON THE ABOVE, WE BELIEVE THAT DEFERRALS SUBMITTED UNDER TEMPORARY CONTINUING RESOLUTIONS NEED NOT BE CLASSIFIED AS RESCISSIONS AS A GENERAL RULE, EVEN IF THE DEFERRALS ARE PROPOSED FOR THE DURATION OF THE CONTINUING RESOLUTION. THE DEFERRALS SUBMITTED BY THE PRESIDENT DURING THE FIRST QUARTER OF FISCAL YEAR 1982, IN LARGE MEASURE, WERE SUBMITTED FOR EXACTLY THE REASON CONTAINED IN OUR 1975 LETTER; NAMELY, TO DELAY EXPENDITURES UNTIL CONGRESS ACTED ON THE PRESIDENT'S APPROPRIATIONS REQUEST. AS PREVIOUSLY DISCUSSED, THE DEFERRED FUNDS ARE NOT PERMANENTLY LOST EVEN WHEN A CONTINUING RESOLUTION EXPIRES IF A SUBSEQUENT FUNDING MEASURE IS PASSED. ONLY IF CONGRESS FAILS TO PROVIDE FUNDING FOR A PARTICULAR PROGRAM IN THE SUBSEQUENT FUNDING MEASURE WOULD THE DEFERRED FUNDS BE LOST PERMANENTLY. HOWEVER, THAT CONSEQUENCE WOULD BE CONSISTENT WITH CONGRESS' INTENT.

FN1 THE SECOND CONDITION WILL BE CONSIDERED TO HAVE OCCURRED ONLY WHEN IT IS CLEAR THAT CONGRESS INTENDED TO TERMINATE THE ACTIVITY. WHEN AN APPROPRIATION ACT WAS ENACTED WITHOUT PROVISION FOR A PROGRAM, BUT THE LEGISLATIVE HISTORY SHOWED THAT CONGRESS WAS PROVIDING FUNDING FOR ONLY SOME PROGRAMS NORMALLY FUNDED BY THE ACT AND WAS DEFERRING CONSIDERATION OF OTHER PROGRAMS, INCLUDING THE PROGRAM IN QUESTION, THE SECOND CONDITION WAS NOT APPLICABLE. THEREFORE, FUNDS STILL WERE AVAILABLE UNDER THE CONTINUING RESOLUTION. B-164031(1), MARCH 14, 1974.

FN2 IN CASES WHERE A SPECIFIC STATUTE PROVIDES THAT APPROPRIATIONS SHALL REMAIN AVAILABLE FOR A PERIOD DIFFERENT FROM THAT PROVIDED IN THE CONTINUING RESOLUTION, THE SPECIFIC STATUTE WILL GOVERN AND THE APPROPRIATION WILL REMAIN AVAILABLE BEYOND THE DURATION PERIOD CONTAINED IN THE CONTINUING RESOLUTION. B-194063, MAY 4, 1979; B-115398.33, MARCH 20, 1979.