B-117517, FEBRUARY 9, 1954, 33 COMP. GEN. 348

B-117517, FEBRUARY 9, 1954, 33 COMP. GEN. 348

INTEREST - FUNDS ADVANCED FROM REVOLVING FUND, SMALL BUSINESS ADMINISTRATION THE REQUIREMENT OF SECTION 204 (B) OF THE SMALL BUSINESS ACT OF 1953 FOR THE PAYMENT OF INTEREST ON FUNDS ADVANCED FROM THE REVOLVING FUND, SMALL BUSINESS ADMINISTRATION "WHEN REQUESTED" BY THE SMALL BUSINESS ADMINISTRATION IS APPLICABLE ONLY TO FUNDS ADVANCED FOR THE PURPOSES ENUMERATED IN SECTIONS 207 (A) (B) (C) AND (D) OF THE ACT, AND THEREFORE FUNDS AUTHORIZED BY THE SUPPLEMENTAL APPROPRIATION ACT OF 1954 TO BE TRANSFERRED FROM THE REVOLVING FUND TO THE APPROPRIATION " SALARIES AND EXPENSES, SMALL BUSINESS ADMINISTRATION" FOR ADMINISTRATIVE EXPENSES--- A SEPARATE PURPOSE--- DO NOT COME WITHIN THE PURVIEW OF SECTION 204 (B) OF THE ACT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, FEBRUARY 9, 1954:

REFERENCE IS MADE TO LETTER OF OCTOBER 23, 1953, FROM THE ACTING SECRETARY OF THE TREASURY, REQUESTING A DECISION AS TO WHETHER THE AMOUNT OF $1,575,000--- AUTHORIZED BY THE SUPPLEMENTAL APPROPRIATION ACT, 1954, PUBLIC LAW 207, 67 STAT. 418, 427, TO BE TRANSFERRED FROM THE " REVOLVING FUND, SMALL BUSINESS ADMINISTRATION" TO THE APPROPRIATION " SALARIES AND EXPENSES, SMALL BUSINESS ADMINISTRATION, 1954" FOR ADMINISTRATIVE EXPENSES IN CONNECTION WITH ACTIVITIES FINANCED UNDER SAID FUND--- IS SUBJECT TO THE PAYMENT OF INTEREST REQUIRED TO BE PAID ON ADVANCES FROM THAT FUND BY SECTION 204 (B) OF THE SMALL BUSINESS ACT OF 1953, PUBLIC 16AW 163, 67 STAT. 232, 233.

THERE WAS ENCLOSED WITH THE ACTING SECRETARY'S LETTER A COPY OF A LETTER DATED OCTOBER 6, 1953, FROM THE ACTING ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, TO YOU, CONTENDING THAT THE TRANSFER SHOULD BE MADE WITHOUT A CHARGE FOR INTEREST BECAUSE THE MAJOR PORTION OF THE FUNDS AVAILABLE FOR THE FINANCIAL ASSISTANCE PROGRAM WILL BE UTILIZED IN ENDEAVORS WHICH WILL NOT RESULT IN ANY LENDING OPERATIONS AND, AS SUCH, CANNOT BE CONSIDERED POTENTIALLY RECOVERABLE BY ANY DIFFERENTIAL IN INTEREST CHARGES. ALSO, IT IS URGED IN THE LETTER OF OCTOBER 6, THAT INTEREST IS REQUIRED TO BE CHARGED ON ONLY "ADVANCES" AS DISTINGUISHED FROM THE "TRANSFER" AUTHORIZED UNDER PUBLIC LAW 207.

SECTION 204 (B) OF THE SMALL BUSINESS ACT OF 1953, 67 STAT. 235, AUTHORIZED THE ESTABLISHMENT OF THE REVOLVING FUND IN THE TREASURY AND THE APPROPRIATION OF NOT TO EXCEED $275,000,000 THERETO FOR THE PURPOSES ENUMERATED IN SECTIONS 207 (A), (B), (C) AND (D) OF THAT ACT. ALSO, IT PROVIDED FOR ADVANCES TO THE SMALL BUSINESS ADMINISTRATION FROM THE REVOLVING FUND WHEN REQUESTED BY THE ADMINISTRATION AND REQUIRED THE PAYMENT OF INTEREST "ON THE AMOUNT OF THE ADVANCES OUTSTANDING AT THE CLOSE OF EACH FISCAL YEAR.' BY PUBLIC LAW 207, THE CONGRESS, IN ADDITION TO APPROPRIATING $2,200,000 FOR ADMINISTRATIVE EXPENSES OF THE SMALL BUSINESS ADMINISTRATION, AUTHORIZED THE TRANSFER OF NOT TO EXCEED $1,575,000 TO THE SALARIES AND EXPENSES APPROPRIATION FROM THE REVOLVING FUND FOR ADMINISTRATIVE EXPENSES IN CONNECTION WITH ACTIVITIES FINANCED UNDER THE FUND. AS STATED IN THE LETTER OF THE ACTING ADMINISTRATOR, THE LEGISLATIVE HISTORY OF THE APPROPRIATING ACT AFFORDS NO AID IN THE MATTER.

AS INDICATED ABOVE, THE PROVISIONS OF SECTION 204 (B) OF PUBLIC LAW 163 REQUIRE INTEREST TO BE PAID BY THE SMALL BUSINESS ADMINISTRATION ON AMOUNTS ADVANCED TO IT FROM THE REVOLVING FUND "WHEN REQUESTED BY THE ADMINISTRATION," WHICH ADVANCES IN TURN ARE TO BE USED ONLY FOR THE PURPOSES ENUMERATED IN SECTIONS 207 (A), (B), (C) AND (D) OF THE ACT. THE SAID PROVISIONS OF THE ACT CONTAIN NO AUTHORIZATION OR INDICATION THAT ANY PART OF THE FUNDS SO ADVANCED WERE TO BE USED FOR ADMINISTRATIVE EXPENSES. RATHER, SECTION 222 AUTHORIZES THE APPROPRIATION OF SUCH SUMS AS MAY BE NECESSARY AND APPROPRIATE FOR CARRYING OUT THE PROVISIONS AND PURPOSES OF THE ACT. THEREFORE, WHEN THE CONGRESS, BY PUBLIC LAW 207, AUTHORIZED THE TRANSFER OF $1,575,000 FROM THE REVOLVING FUND TO THE SALARIES AND EXPENSES APPROPRIATION OF THE ADMINISTRATION FOR ADMINISTRATIVE EXPENSES IN CONNECTION WITH ACTIVITIES FINANCED UNDER THE FUND, IT MUST BE CONCLUDED THAT SUCH ACTION CONSTITUTED AN AUTHORIZATION FOR THE USE OF SUCH AMOUNT FOR AN ADDITIONAL AND SEPARATE PURPOSE THAN WAS CONTEMPLATED WHEN THE BASIC LEGISLATION WAS ENACTED. ACCORDINGLY, AND SINCE THE AMOUNT SO AUTHORIZED TO BE TRANSFERRED IS NOT TO BE USED FOR ANY OF THE PURPOSES ENUMERATED IN SECTIONS 207 (A), (B), (C), AND (D), IT IS MY OPINION THAT INTEREST IS NOT PAYABLE ON SUCH AMOUNT.

IT IS NOT EXACTLY CLEAR FROM THE LETTER OF OCTOBER 6, 1953, FROM THE ACTING ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, TO YOU, AS TO THE EXTENT TO WHICH THE AMOUNT TRANSFERRED IS TO BE USED IN DEFRAYING ADMINISTRATIVE EXPENSES OF SAID AGENCY. IN SUCH CONNECTION, IT IS TO BE UNDERSTOOD THAT NO PART OF THE AMOUNT TRANSFERRED AS PROVIDED BY PUBLIC LAW 207 IS TO BE USED FOR ANY ADMINISTRATIVE EXPENSES EXCEPT THOSE WHICH MAY BE SAID TO BE REASONABLY INCIDENT AND NECESSARY TO CARRYING OUT THOSE ACTIVITIES FINANCED FROM THE REVOLVING FUND AS SET FORTH IN SECTIONS 207 (A), (B), (C), AND (D) OF THE ACT.

A COPY OF THIS DECISION IS BEING FORWARDED TO THE ACTING ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, FOR HIS INFORMATION.