BPLA (Contents)
Budget Process Law Annotated (1993)
Section 401
Congressional Budget and Impoundment Control Act of 1974
TITLE IV—ADDITIONAL PROVISIONS TO IMPROVE FISCAL PROCEDURES
[PAGES 247-259]
bills providing authority new spending
Sec. 401.617 (a) Controls on Legislation Providing Spending Authority.618—It shall not be in order619 in either the House of Representatives or the Senate to consider any bill, joint resolution, amendment,620 motion,621 or conference report,622 as reported623 to its House which provides [p. 248] new spending authority624 described in subsection (c)(2)(A)625 or (B),626 unless that bill, resolution, conference report, or amendment also provides that such new spending authority as described in subsection (c)(2)(A)627 or (B)628 is to be effective for any fiscal year only to such extent or in such amounts as ore provided in appropriation Acts.629
617. Section 401 is codified as amended at 2 U.S.C. § 651 (1988 and Supp. IV 1992).
618. Note that section 401(d)[1] provides significant exceptions to these controls. See infra pp. 254-259.
619. Congressional Budget Act of 1974 prohibitions are not self-enforcing, and require points of order from the Floor for their enforcement. Cf. supra note 293 (regarding section 303(a)).
620. An amendment is subject to points of order under the Congressional Budget Act of 1974 even if the Senate has specified by unanimous consent that the amendment is one of the amendments in order and the yeas and nays have been ordered. Cf. supra note 295 (regarding section 303(a)).
621. Section 13207(a) or the Budget Enforcement Act of 1990 added the word “motion” here. For a discussion of the motivation for the addition, see supra note 235.
622. Section 13207(a)(1)(F)(i) of the Budget Enforcement Act of 1990 struck the words “bill, resolution or conference report” here and inserted “bill, joint resolution, amendment, motion, or conference report.” See infra p. 724.
623. Cf. supra note 514 (by virtue of the word “as reported”, a point of order will not lie under section 311(a) against a deficit-neutral bill that has been amended by an amendment that reduces revenues below the revenue floor).
624. The Congressional Budget Act of 1974 makes no exception for violations of negligible amounts. Cf. supra note 520 (regarding section 311(a)).
625. See infra p. 251.
626. See infra p. 251. Section 13207(a)(1)(F)(ii) of the Budget Enforcement Act of 1990 struck the parenthetical “(or any amendment which provides such new spending authority)” that used to appear here. See infra p. 724.
627. See infra p. 251.
628. See infra p. 251.
629. See e.g., 132 Cong. Rec. S10,693 (daily ed. Aug. 7, 1986) (bill providing spending authority within the jurisdiction or the Committee on Armed Services subject to section 401(a)).
On whether something is “provided in appropriation Acts”, see generally infra note 652.
Section 3(5) defines “appropriation Act” by reference to 1 U.S.C. §105. See supra p. 16. For the text of 1 U.S.C. § 105 (1988), see supra note 36.
(b) Legislation Providing Entitlement Authority.630—
(1) It shall not be in order631 in either the House of Representatives or the Senate to consider any bill, joint resolution, amendment,632 motion,633 or conference report, as reported634 to its House635 which provides new spending authority636 described in subsection (c)(2)(C)637 which is to become effective before the first day of the fiscal year which begins during the calendar year in which such bill or resolution is reported.
(2) If any committee of the House of Representatives or the Senate reports any bill or resolution which provides new spending authority described in subsection [p. 250] (c)(2)(C)638 which is to become effective during a fiscal year and the amount of new budget authority639 which will be required for such fiscal year if such bill or resolution is enacted as so reported exceeds the appropriate allocation of new budget authority reported under section 302(b)640 in connection with the most recently agreed to concurrent resolution on the budget for such fiscal year, such bill or resolution shall then be referred to the Committee on Appropriations of that House with instructions to report it, with the committee’s recommendations, within 15 calendar days (not counting any day on which that House is not in session) beginning with the day following the day on which it is so referred. If the Committee on Appropriations of either House fails to report a bill or resolution referred to it under this paragraph within such 15-day period, the committee shall automatically be discharged from further consideration of such bill or resolution and such bill or resolution shall be placed on the appropriate calendar.
(3) The Committee on Appropriations of each House shall have jurisdiction to report any bill or resolution referred to it under paragraph (2)641 with an amendment which limits the total amount of new spending authority provided in such bill or resolution.
630. Section 3(9) (see supra p. 18) defines “entitlement authority” to mean that authority described in section 401(c)(2)(C) (see infra p. 252). For a discussion of language that ensures that authority will not constitute entitlement authority, see infra note 652.
Note that section 401(d) provides significant exceptions to this subsection. See infra pp. 254-259.
Section 3(9) (see supra p. 18) defines “entitlement authority” to mean that authority described in section 401(c)(2)(C) (see infra p. 252). For a discussion of language that ensures that authority will not constitute entitlement authority, see infra note 652.
Note that section 401(d) provides significant exceptions to this subsection. See infra pp. 254-259.
631. Congressional Budget Act of 1974 prohibitions are not self-enforcing, and require points of order from the Floor for their enforcement. Cf. supra note 293 (regarding section 303(a)).
632. An amendment is subject to points of order under the Congressional Budget Act of 1974 even if the Senate has specified by unanimous consent that the amendment is one of the amendments in order and the yeas and nays have been ordered. Cf. supra note 295 (regarding section 303).
633. Section 13207(a)1(G)(i) of the Budget Enforcement Act of 1990 added the word motion here. See infra p. 723. For a discussion of the motivation for the addition, see supra note 235.
634. Cf. supra note 514 (by virtue of the words “as reported”, a point of order will not lie under section 311(a) against a deficit-neutral bill that has been amended by an amendment that reduces revenues below the revenue floor).
635. Section 13207(a)(1)(G)(i) of the Budget Enforcement Act of 1990 struck the words “bill or resolution” here and inserted “bill, joint resolution, amendment, motion, or conference report, as reported to its House.” See infra p. 724.
636. The Congressional Budget Act of 1974 makes no exception for violations of negligible amounts. Cf. supra note .520 (regarding section 311(a)).
637. See infra pp. 252-253. Section 3(9) refers to section 401(c)(2)(C) to define the term “entitlement authority”. See supra p. 18.
Section 13207(a)(1)(G)(ii) of the Budget Enforcement Act of 1990 struck the parenthetical “(or any amendment which provides such new spending authority)” that used to appear here. See infra p. 724.
638. See infra pp. 252-253. Section 3(9) refers to section 401(c)(2)(C) to define the term “entitlement authority”. See supra p. 18.
639. Section 3(2) defines “budget authority”. See supra pp. 11-130
640. See supra pp. 90-91.
641. See supra pp. 249-250.
(c) Definitions.—
(1) For purposes of this section, the term “new spending authority” means spending authority not provided [p. 251] by law on the effective date of this Act,642 including any increase in or addition to spending authority provided by law on such date.
(2) For purposes of paragraph (1), the term “spending authority”643 means authority (whether temporary or permanent)—
(A) to enter into contracts under which the United States is obligated to make outlays,644 the budget authority645 for which is not provided in advance by appropriation Acts;646
(B) to incur indebtedness (other than indebtedness incurred under chapter 31647 of title 31 of the United States Code) for the repayment of [p. 252] which the United States is liable, the budget authority for which is not provided in advance by appropriation Acts;649
(C)650 to make payments (including loans and grants), the budget authority651 for which is not provided for in advance by appropriations Acts,652 [p. 253] to any person or government if, under the provisions of the law containing such authority, the United States is obligated to make such payments to persons or governments who meet the requirements established by such law;
(D) to forgo the collection by the United States of proprietary offsetting receipts, the budget authority653 for which is not provided in advance by appropriation Acts654 to offset such forgone receipts; [p. 254] and
(E) to make payments by the United States (including loans, grants, and payments from revolving funds) other than those covered by subparagraph (A),655 (B),656 (C),657 or (D),658 the budget authority 659 for which is not provided in advance by appropriation Acts.660
Such term does not include authority to insure or guarantee the repayment of indebtedness incurred by another person or government.
642. Section 211 of the Balanced Budget and Emergency Deficit Control Act of 1985 changed this word from “section” to “Act. See infra p. 415. As originally written, the reference was clear: section 905(c) indicates that the effective date for section 401 was January 19, 1976. See infra p. 369 and note 984. As amended, however, the intent is ambiguous. Section 905(a) provides that the effective date of the Act was the date of enactment, July 12, 1974, except as provided in section 905, which bas the specific reference to (among other sections) section 401. See infra p. 369. Note that the drafters of the Balanced Budget and Emergency Deficit Control Act of 1985 made clear when they meant the date of enactment of the Balanced Budget and Emergency Deficit Control Act of 1985 instead of the date of enactment of the Congressional Budget Act of 1974. See section 401(d)(3)(A)(ii) infra p. 257.
643. Note that section 406(a), regarding off-budget agencies, programs, and activities (see infra p. 270), requires that certain items be included in spending authority.
644. Section 3(1) defines “outlays”. See supra p. 11.
645. Section 3(2) defines “budget authority”. See supra pp. 11-13.
646. For a discussion of whether something is provided in advance by appropriation Acts, see generally infra note 652.
Section 3(5) defines “appropriation Act” by reference to 1 U.S.C. § 105. See supra p. 16. For the text of 1 U.S.C. § 105 (1988), see supra note 36.
647. Chapter 31 comprises 31 U.S.C. §§ 3101-3129 (1988 & Supp. III 1991).
648 Section 3(2) defines “budget authority”. See supra pp. 11-13.
649. For a discussion of whether something is provided in advance by appropriation Acts, see generally infra note 652.
Section 3(5) defines appropriation Act by reference to 1 U.S.C. § 105. See supra p. 16. For the text of 1 U.S.C. § 105 (1988), see supra note 36.
650. Section 3(9) refers to this subparagraph to define the term “entitlement authority”. See supra p. 18. Note that section 250(c)(18) of the Balanced Budget and Emergency Deficit Control Act of 1985 defines certain mandatory appropriated accounts as entitlements for purposes of the Balanced Budget and Emergency Deficit Control Act of 1985. See infra p. 447.
651. Section 3(2) defines “budget authority”. See supra pp. 11-13.
652. In determining whether “budget authority … is … provided for in advance by appropriations Acts,” the Parliamentarian’s office will examine the likely real world consequences of legislation on a case-by-case basis, and will not rely exclusively on the form of language in the legislation.
In one case, the Presiding Officer advised that even if an amendment creates benefits for qualifying individuals, it will not create entitlement authority within the meaning of section 401(c)(2)(C) if it also provides that no payments shall be made except subject to appropriations. 130 Cong. Rec. 57070-71, 57108, 57110 (1984) (parliamentary inquiry of Sen. Cohen): Senate Precedent PRL19840613-002 (June 13, 1984) (Legis, Rules database). This is so even if the language creating the benefits says “an individual shall be entitled”. Id.
The Parliamentarian’s office has advised that the following language would ensure that a program would be subject to appropriations, and therefore not an entitlement under section 401(c)(2)(C):
In any fiscal year the administrator or this program shall limit the value or any benefits conferred by this program to an amount not in excess or the appropriation for such fiscal year and if the requirements or this program exceed the limitations set herein the benefits shall be reduced to the extent necessary to comply with the provisions of this subsection.
Senate Precedent PRL19840613-002 (June 13, 1984) (Legis, Rules database). For an example of an application of language similar to this, see, e.g., National and Community Service Act of 1989, § 250(a), S. 1430, 101st Cong. 2d Sess., 136 Cong. Rec. S1672, S1684 (daily ed. Feb. 17, 1990) (§432A(c) of the material proposed to be inserted).
To avoid a point of order caused by the creation of new entitlement authority, however, it is not necessarily sufficient to include language that the payments must come out of an appropriated account; the language must make the payments themselves subject to appropriations. See 130 Cong. Rec. 87107, 87109-10 (daily ed. June 13, 1984) (parliamentary inquiry and statement of Sen. Domenic ruling of the Vice President). Some thus refer to appropriated entitlements that fall within the meaning of section 401(c)(2)(C). (See, e.g., infra note ·1245 (listing “Appropriated Entitlements and Mandatories”).) Even though the Government pays such appropriated entitlements out of appropriated funds, annual appropriations do not truly control them. That the entitlement is paid from appropriated funds cannot, without more, move the entitlement from the definition of section 401(c)(2)(C), for, as the Constitution requires, “No Money shall be drawn from the Treasury but in consequence of Appropriation made by Law.” U.S. Const. art. I, § 9, cl. 7. Thus, all entitlements provide for appropriations, either implicitly or explicitly.
Section 3(5) defines appropriation Act by reference to 1 U.S.C. § 105. See supra p. 16. The text of 1 U.S.C. § 105 (1988) (see supra note 36) deals with regular appropriations bills. Section 401(c)(2)(C) thus refers to authority that regular appropriations acts do not control.
653. Section 3(2) defines “budget authority”. See supra pp. 11-13.
654. For a discussion of whether something is “provided in advance by appropriation Acts”, see generally supra note 652.
Section 3(5) defines appropriation Act by reference to 1 U.S.C. § 105. Set supra p. 16. For the text of 1 U.S.C. § 105 (1988), see supra note 36.
655. See supra p. 251.
656. See supra p. 251.
657. See supra pp. 252-253.
658. See supra p. 253.
659. Section 3(2) defines “budget authority”. See supra pp. 11-13.
660. For a discussion of whether something is provided in advance by appropriation Acts, see generally supra note 652.
Section 3(5) defines appropriation Act by reference to 1 U.S.C. 105. See supra p. 16. For the text of 1 U.S.C. § 105 (1988), see supra note 36.
(d) Exceptions.—
(1) Subsections (a)661 and (b)662 shall not apply to new spending authority663 if the budget authority664 for [p. 255] outlays665 which will result from such new spending authority is derived—
(A) from a trust fund666 established by the Social Security Act667 (as in effect on the date of the enactment of this Act668); or
(B) from any other trust fund,669 90 percent or more of the receipts of which consist or will consist of amounts (transferred from the general fund of the Treasury) equivalent to amounts of taxes (related to the purposes for which such outlays670 are or will be made) received in the Treasury under specified provisions of the Internal Revenue Code of 1954.671
(2) Subsections (a)672 and (b)673 shall not apply to [p. 256] new spending authority674 which is an amendment to or extension of the State and Local Fiscal Assistance Act of 1972,675 or a continuation of the program of fiscal assistance to State and local governments provided by that Act, to the extent provided in the bill or resolution providing such authority.
(3) Subsections (a)676 and (b)677 shall not apply to new spending authority 678 to the extent that—
(A) the outlays679 resulting therefrom are made by an organization which is
(i) a mixed-ownership Government corporation (as defined in section 201 of the Government Corporation Control Act), or [p. 257]
(ii) a wholly-owned Government corporation (as defined in section 101 of such Act681)[(p. 258 includes only text from Notes #680 and 681) p. 259] which is specifically exempted by law from compliance with any or all of the provisions of that Act,682 as of the date of enactment of the Balanced Budget and Emergency Deficit Control Act of 1985;683 or
(B) the outlays684 resulting therefrom consist exclusively of the proceeds of gifts or bequests made to the United States for a specific purpose.
661. See supra pp. 247-248.
662. See supra pp. 248-250.
663. Section 401(c) defines new spending authority. See supra pp. 250-254.
664. Section 3(2) defines “budget authority”. See supra pp. 11-13.
665. Section 3(1) defines outlays. See supra p. 11.
666. That is:
– the Federal Old-Age and Survivors Insurance Trust Fund,
– the Federal Disability Insurance Trust Fund,
– the Unemployment Trust Fund,
– the Federal Hospital Insurance Trust Fund, and
– the Federal Supplementary Medical Insurance Trust Fund.
667. The Social Security Act is codified as amended at 42 U.S.C. §§ 301-1397e (1988 & Supp. III 1991).
668. That date is July 12, 1974, the dale of enactment of the Congressional Budget Act of 1974. Note that the drafters of the Balanced Budget and Emergency Deficit Control Act of 1985 made clear they meant the date of enactment of the Balanced Budget and Emergency Deficit Control Act of 1985 instead of the date or enactment or the Congressional Budget Act of 1974. See section 401(d)(3)(A)(ii) infra p. 257.
669. For example, the Highway Trust Fund.
670. Section 3(1) defines outlays. See supra p. 11.
671. The Internal Revenue Code of 1954 is codified as amended at 26 U.S.C. §§ 1-9602 (1988 & Supp. III 1991).
672. See supra pp. 247-248.
673. See supra pp. 248-250
674. Section 401(c) defines new spending authority. See supra pp. 250-254.
675. The State and Local Fiscal Assistance Act of 1972, or revenue sharing. was codified as amended at 31 U.S.C. § 6701-6724 (repealed 1986). The Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L 99-272, §14001(a)(1), 100 Stat. 82, 327 (1986), repealed the State and Local Fiscal Assistance Act.
676. See supra pp. 247-248.
677. See supra pp. 248-250.
678. Section 401(c) defines new spending authority. See supra pp. 250-254.
679. Section 3(1) defines outlays. See supra p. 11.
680. Section 201 of the Government Corporation Control Act is codified as amended at 31 U.S.C. § 9101(2) (1988 & Supp. III 1991), which states:
§ 9101. Definitions
In this chapter—
[…]
(2) mixed-ownership Government corporation means—
(A) Amtrak.
(B) the Central Bank for Cooperatives.
(C) the Federal Deposit Insurance Corporation.
(D) the Federal Home Loan Bank.
(E) the Federal Intermediate Credit Bank.
(P) the Federal Land Banks.
(G) the National Credit Union Administration Central Liquidity Facility.
(H) the Regional Banks for Cooperatives.
(I) the Rural Telephone Bank when the ownership, control and operation or the Bank are converted under section 410(a) or the Rural Electrification Act or 1936 (7 U.S.C. 950(a)).
(J) the United States Railway Association.
(K) the Financing Corporation.
(L) the Resolution Trust Corporation.
(M) the Resolution Funding Corporation.
31 U.S.C. §9101(2) (1988 & Supp. III 1991).
Of these mixed-ownership Government corporations, only the Rural Telephone Bank, the Federal Intermediate Credit Banks, the Central Bank for Cooperatives, the Regional Banks for Cooperatives, and the Federal Land Banks are “specifically exempted by law from compliance with any or all of the provisions of” the Government Corporation Control Act. See 31 U.S.C. § 9108(d)(2) (1988).
681. Section 101 of the Government Corporation Control Act is codified as amended at 31 U.S.C. § 9101(3) (1988), which states:
§ 9101. Definitions
In this chapter—
[…]
(3) “wholly-owned Government corporation means—
(A) the Commodity Credit Corporation.
(B) the Export-Import Bank of the United States.
(C) the Federal Crop Insurance Corporation.
(D) Federal Prison Industries, Incorporated.
[(E) repealed]
(F) the Government National Mortgage Association.
(G) the Overseas Private Investment Corporation.
(H) the Pennsylvania Avenue Development Corporation.
(I) the Pension Benefit Guaranty Corporation.
(J) the Rural Telephone Bank until the ownership, control, and operation of the Bank are converted under Section 410(a) of the Rural Electrification Act of 1936 (7 U.S.C. 95O(a)).
(K) the Saint Lawrence Seaway Development Corporation.
(L) the Secretary of Housing and Urban Development when carrying out duties and powers related to the Federal Housing Administration Fund.
(M) the Tennessee Valley Authority.
31 U.S.C.§ 9101(3) (1988 & Supp. III 1991).
Of these wholly-owned Government corporations, only the Rural Telephone Bank is specifically exempted by law from compliance with any or all of the provisions or the Government Corporation Control Act. See 31 U.S.C. § 9108(d)(2) (1988).
682. Of the Government corporations cited, only the Rural Telephone Bank, the Federal Intermediate Credit Banks, the Central Bank for Cooperatives, the Regional Banks for Cooperatives, and the Federal Land Banks are specifically exempted by law from compliance with any or all of the provisions of” the Government Corporation Control Act. See 31 U.S.C.§9108(d)(2) (1988).
683. That is, December 12, 1985. Section 211 of the Balanced Budget and Emergency Deficit Control Act of 1985 added the words “, as of the date of enactment of the Balanced Budget and Emergency Deficit Control Act of 1985” to clarify which corporations section 401 covered.
684. Section 3(1) defines outlays. See supra p. 11.
Counsel Notes
[1] The Budget Enforcement Act of 1997 struck out subsection (c) of the section 401. It redesignated section 401(d) as section 401(c).
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