, B-300167, November 15, 2002

B-300167 Nov 15, 2002 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Your letter asks whether OMB appropriately determined that the applicable obligation limitation under the continuing resolution for the federal-aid highway program of the Department of Transportation (DOT) for fiscal year 2003 was $27.7 billion. We disagree with OMB's determination that the obligation limitation for the federal highway program was $27.7 billion under the Continuing Resolution. Two provisions of the Continuing Resolution that OMB has cited as the basis for its determination to reduce the level of spending for the highway program below the current rate are sections 110 and 111. We agree in principle with OMB that sections 110 and 111 of the Continuing Resolution are relevant in determining the initial distribution of budget authority for the highway program. View Decision Current Rate in Continuing Resolution, Public Law 107-229, as Extended by Public Law 107-235, for Fiscal Year 2003 Highway Spending, B-300167, November 15, 2002 The Honorable Robert C. Byrd Chairman Committee on Appropriations United States Senate The Honorable Patty Murray Chairman, Subcommittee on Transportation and Related Agencies Committee on Appropriations United States Senate This responds to your letter of October 17, 2002, requesting our views regarding the level of highway spending set by the Office of Management and Budget (OMB) under the "Joint Resolution making continuing appropriations for the fiscal year 2003, and for other purposes," Public Law 107-229, 116 Stat. 1465 (2002)(Continuing Resolution), as extended by Public Law 107-235, 116 Stat. 1482 (2002), through October 11, 2002. Your letter asks whether OMB appropriately determined that the applicable obligation limitation under the continuing resolution for the federal-aid highway program of the Department of Transportation (DOT) for fiscal year 2003 was $27.7 billion. This opinion provides our interpretation of section 101 of the Continuing Resolution as it applies to highway spending. /1/ As explained below, we disagree with OMB's determination that the obligation limitation for the federal highway program was $27.7 billion under the Continuing Resolution. Under section 101(11) of the Continuing Resolution, the "current rate" for highway spending for fiscal year 2003 relates back to the $31.8 billion obligation limitation established for the highway program for fiscal year 2002 under the Department of Transportation and other Related Agencies Appropriations Act, 2002, Pub. L. No. 107-87, 115 Stat. 833, 841 (2001). Two provisions of the Continuing Resolution that OMB has cited as the basis for its determination to reduce the level of spending for the highway program below the current rate are sections 110 and 111. Section 110 provides that for programs that had a complete distribution of appropriations at the beginning of the previous fiscal year, "similar distributions" shall not be made under the Continuing Resolution that would impinge on [Congress'] final funding prerogatives." Pub. L. No. 107-229, Sec. 110, 116 Stat. 1465, 1467 (2002). Section 111 provides that "only the most limited funding action" authorized by the Continuing Resolution shall be taken to continue programs. Pub. L. No. 107-229, Sec. 111, 116 Stat. 1465, 1467 (2002). We agree in principle with OMB that sections 110 and 111 of the Continuing Resolution are relevant in determining the initial distribution of budget authority for the highway program. However, for the reasons explained in detail below, we do not agree with OMB's application of section 110 to reduce the obligation limitation for the program from $31.8 billion to $27.7 billion. During a continuing resolution, the Federal Highway Administration (FHWA) distributes highway funds to the states on a pro-rata basis, rather than making a complete distribution for the program at the beginning of the fiscal year, as is its normal practice. Thus, FHWA's distribution of highway funds under the Continuing Resolution is not "similar" to the distributions made during the prior fiscal year under the regular Department of Transportation appropriations act and hence section 110 is not applicable. Further, FHWA's pro-rata distribution of available contract authority satisfies section 111. Factual Background At the start of fiscal year 2003, the Federal-Aid Highway Program was funded by the "Joint Resolution Making Continuing Appropriations for Fiscal Year 2003," Pub. L. No. 107-229, 116 Stat. 1465 (2002)(Continuing Resolution), as extended by Pub. L. No. 107-235, 116 Stat. 1482 (2002). The Continuing Resolution provided that for all federal programs for which appropriations acts for fiscal year 2003 had not yet been enacted, there was appropriated out of the Treasury such amounts at a "rate for operations not exceeding the current rate" (current rate) as may be necessary for continuing projects and activities. Pub. L. No. 107-229, Sec.