Proposed Rescission by Department of Commerce of Unobligated Emergency Steel Guarantee Loan Program Appropriation, B-302335, January 15, 2004

B-302335 Jan 15, 2004 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights You asked whether the unobligated balance of the Program's appropriation is available to the Department for that purpose. We conclude that the Program's appropriation is not available to the Department for purposes of the $100 million rescission. Congress found that "a strong steel industry is necessary to the adequate defense preparedness of the United States" and that industry problems were causing a decline in the willingness of private institutions to loan money to U.S. steel companies. There is appropriated $140. 000 is appropriated to the Department of Commerce. 000 are rescinded."). That within 30 days after the date of enactment of this section the Secretary of Commerce shall submit to the Committees on Appropriations of the House of Representatives and the Senate a report specifying the amount of each rescission made pursuant to this section."). /5/ DISCUSSION At issue here is whether unobligated Program funds are "unobligated balances available to the Department of Commerce" for rescission. View Decision Proposed Rescission by Department of Commerce of Unobligated Emergency Steel Guarantee Loan Program Appropriation, B-302335, January 15, 2004 The Honorable Robert C. Byrd Ranking Minority Member Committee on Appropriations United States Senate Subject: Proposed Rescission by Department of Commerce of Unobligated Emergency Steel Guarantee Loan Program Appropriation Dear Senator Byrd: This responds to your request of December 22, 2003, for our opinion on the Department of Commerce's (Department) plan to rescind $17.711 million of the unobligated balance of amounts appropriated for the Emergency Steel Guarantee Loan Program (Program). /1/ The Department has indicated that it would draw on the unobligated balance of the Program's appropriation to help satisfy a $100 million rescission that would be required by H.R. 2673, the bill making omnibus appropriations for fiscal year 2004, if enacted. You asked whether the unobligated balance of the Program's appropriation is available to the Department for that purpose. For the reasons provided below, we conclude that the Program's appropriation is not available to the Department for purposes of the $100 million rescission. BACKGROUND In the findings section of the Emergency Steel Loan Guarantee Act of 1999 (Steel Act), Congress noted the loss of jobs and company bankruptcies in the steel industry as a consequence of increases in steel imports. Emergency Steel Loan Guarantee Act of 1999, Pub. L. No. 106-51, Sec. 101(b), 113 Stat. 252 (1999). Congress found that "a strong steel industry is necessary to the adequate defense preparedness of the United States" and that industry problems were causing a decline in the willingness of private institutions to loan money to U.S. steel companies. Id. Congress passed the Steel Act, which established the Emergency Steel Loan Guarantee Program, in order "to provide loan guarantees to qualified steel companies." Id. Sec. 101(d). /2/ To administer the program, the Steel Act created a three-member Loan Guarantee Board comprised of the Secretary of Commerce, the Chairman of the Securities and Exchange Commission, and the Chairman of the Board of Governors of the Federal Reserve System. Pub. L. No. 106-51, Sec. 101(d), (e). To fund the costs of the loan guarantees, the Steel Act appropriated $140 million. Id. Sec. 101(f)(5) ("For the additional cost of the loans guaranteed under this subsection, including the costs of modifying the loans . . . , there is appropriated $140,000,000 to remain available until expended."). Also, the Steel Act provided the Department of Commerce with an administrative support role and appropriated $5 million to the Department for that purpose. Id. Sec. 101(j) ("For necessary expenses to administer the Program, $5,000,000 is appropriated to the Department of Commerce, to remain available until expended . . . ."). /3/ The Commerce Department's fiscal year 2004 appropriation, currently before the Senate, would include a rescission of $100 million. /4/ Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2004, H.R. 2673, 108th Cong., Div. B, Sec. 215 (2003) (hereinafter Omnibus Bill) ("Of the unobligated balances available to the Department of Commerce from prior year appropriations with the exception of funds provided for coral reef activities, fisheries enforcement, the Ocean Health Initiative, land acquisition, and lab construction, $100,000,000 are rescinded."). Subject to the limitation that the rescission come from "unobligated balances available to the Department of Commerce from prior year appropriations," the law would give the Secretary discretion to identify the sources of the rescission. Id.