Use of Appropriated Funds for the Solar Energy Conservation Bank

In August 1988, the Congress enacted, and the President signed, the HUD-Independent Agencies Appropriations Act for fiscal year 1989 appropriating to HUD for "assistance for solar and conservation improvements" all funds "recaptured" from the $1.5 million appropriated in fiscal year 1988, Pub. L. No. 100-404, 102 Stat, 1014, 1019-20 (1988). The House Committee on Appropriations had recommended this action. In its report on the appropriations bill, the Committee said that this language would allow "the Solar Bank program" to continue. R.R. Rep. No. 701, 100th Cong., 2d Sess. 18 (1988) . On August 19, 1988, HUD requested that OMB apportion these funds. OMB refused; OMB noted on the apportionment schedule, dated September 19, 1988, that the $1.5 million appropriated in fiscal year 1988 was no longer available because of the expiration, pursuant to law, of the Bank's authorization. In an attachment to the apportionment schedule, OMB pointed out that the fiscal year 1989 appropriations act made available only recaptured amounts, not the unobligated balance, from fiscal year 1988. Explaining its refusal to apportion the $1,5 million, OMB stated that because the Bank had not obligated any portion of this amount, there would be no recaptures; hence, no part of the $1.5 million is available for apportionment.

The term "recaptured funds" is a term of art with regard to the Solar Bank program and is not synonymous with "unobligated funds." A brief explanation of the Bank's program and the Bank's relationship to the states is necessary in order to understand the distinction. In 1983, after some early difficulties, the Bank began implementing its program by using the states and territories. as agents to provide funds to financial institutions. To participate, a state was required to enter into a cooperative agreement with the Bank. 24 C.P.R. S 1800.91. Under a cooperative agreement, the Bank would commit a specific allocation of the Bank's appropriation to the state for expenditure. 24 C.F.R. S 1800.95(a). These funds were considered obligated upon execution of the cooperative agreement, 24 C.F.R. S 1800.95(b). Each agreement required the state to expend its allocation within a year of receipt from the Bank; unexpended funds were subject to "recapture" by the Bank. 24 C.P.R, S 1800.97. The Solar Energy and Energy Conservation Act, as amended, required the Bank to reallocate to other eligible financial institutions any unexpended financial assistance recaptured by the Bank. Pub. L. No. 98-181, S 463(e), codified at 12 U.S.C. S 3618 (b)(6). Although neither the law nor regulations define the term "recaptured funds," it is clear that the term applies only to those funds which were allocated by the Bank to states and were not expended by the states within a year of allocation. HUD will recapture none of the $1.5 million appropriated in fiscal year 1988. Because no part of the fiscal year 1988 appropriation was ever allocated to the states, none of it is even potentially available for recapture. The fiscal year 1989 appropriations act, as a consequence, does not make available to HUD any part of the monies appropriated for fiscal year 1988. It follows that OMB's refusal to apportion these funds to HUD was not improper.