B-221498.53, NOV 28, 1986

B-221498.53: Nov 28, 1986

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DIRECTOR: THIS IS IN RESPONSE TO YOUR LETTER DATED OCTOBER 30.

B-221498.53, NOV 28, 1986

PRECIS-UNAVAILABLE

MR. D. CRAIG BELL, DIRECTOR:

THIS IS IN RESPONSE TO YOUR LETTER DATED OCTOBER 30, 1986, IN WHICH YOU ENCLOSE A RESOLUTION OF THE WESTERN STATES WATER COUNCIL REGARDING THE APPLICABILITY OF THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT (POPULARLY KNOWN AS GRAMM-RUDMAN-HOLLINGS) TO THE STATE-FUNDED SHARE OF FEDERAL/STATE COOPERATIVE PROGRAMS. YOU ASK THAT THIS OFFICE ISSUE A RULING EXCLUDING SUCH FUNDS FROM SEQUESTRATION. YOU SPECIFICALLY QUESTION THE SEQUESTRATION OF FUNDS IN A FEDERAL/STATE COOPERATIVE PROGRAM CARRIED OUT BY THE U.S. GEOLOGICAL SURVEY, DEPARTMENT OF THE INTERIOR (USGS).

WE RECENTLY EXAMINED THE ISSUE RAISED IN YOUR LETTER IN CONNECTION WITH A REQUEST BY THE DIRECTOR OF THE USGS. IN A LETTER DATED OCTOBER 7, 1986 (COPY ENCLOSED), WE INFORMED HIM OF OUR VIEW THAT THE AUTHORITY OF THE USGS TO EXPEND FUNDS COLLECTED FROM STATE GOVERNMENTS UNDER COOPERATIVE PROGRAMS CONSTITUTED A BUDGETARY RESOURCE OF THE AGENCY, SUBJECT TO SEQUESTRATION UNDER GRAMM-RUDMAN-HOLLINGS. WE STATED, HOWEVER, THAT TO THE EXTENT THAT REDUCTIONS IN THE FEDERALLY-FUNDED PORTIONS OF SUCH PROGRAMS AUTOMATICALLY RESULT IN REDUCTIONS IN STATE MATCHING PAYMENTS, FURTHER REDUCTIONS IN THE STATE-FUNDED PORTION OF THE PROGRAMS WOULD BE UNNECESSARY.

YOUR LETTER ALSO EXPRESSES CONCERN ABOUT THE TREATMENT OF FEDERAL/STATE COOPERATIVE PROGRAMS IN THE FISCAL YEAR 1987 SEQUESTRATION PROCESS. THE CONGRESS, HOWEVER, DID NOT ENACT A SEQUESTRATION ORDER FOR FISCAL YEAR 1987.