BNUMBER:  B-265734
DATE:  February 13, 1996
TITLE:  Securities and Exchange Commission-Retention of
Rebate Resulting from Participation in Energy Savings
Program

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Matter of:Securities and Exchange Commission-Retention of Rebate 
          Resulting from Participation in Energy Savings Program

File:     B-265734

Date:     February 13, 1996
         
DIGEST

Unless otherwise authorized, an agency must deposit into the General 
Fund of the Treasury any funds it receives from sources outside the 
agency.  31 U.S.C.  sec.  3302 (1994).  Section 625 of the Treasury, Postal 
Service, and General Government Appropriations Act, 1996, Pub. L. No. 
104-52, provides the statutory authority for the Securities and 
Exchange Commission (SEC) to credit 50 percent of an energy efficiency 
rebate received from a local utility company in fiscal year 1996 to 
the accounts that fund its energy and water conservation activities.  
The credited amounts remain available until expended for statutorily 
prescribed purposes.  The SEC should deposit the remaining 50 percent 
of the rebate into the Treasury at the end of fiscal year 1996. 
  
DECISION 

This responds to a request from the Acting Comptroller of the United 
States Securities and Exchange Commission (SEC) for an advance 
decision concerning the proper treatment of a rebate the SEC received 
from a local utility company.  The SEC received the rebate under the 
company's Custom Rebate Program by installing energy efficient 
equipment.  For the reasons discussed below, we conclude that the SEC 
may credit 50 percent of the rebate to the accounts that fund the 
energy and water conservation activities at SEC's facilities.  The 
credited amount shall remain available until expended for additional 
specific energy efficiency or water conservation projects.  The SEC 
should deposit the remaining 50 percent of the rebate to the General 
Fund of the Treasury at the end of fiscal year 1996.  

Background

The SEC participated in the Potomac Electric Power Company's (PEPCO) 
Custom Rebate Program pursuant to its authority to enter utility 
incentive programs under section 152(f)(3), (4) of the Energy Policy 
Act of 1992, codified at 42 U.S.C.  sec.  8256(c).  The PEPCO Custom Rebate 
Program offers its customers "rebates" based upon installation of 
qualified energy savings equipment.[1]  According to PEPCO's program 
brochure, upon application to this program, PEPCO will visit the 
customer's site and determine if their equipment qualifies for more 
energy efficient equipment.  If it does, PEPCO will estimate the 
amount of rebate that the customer would receive based on a fixed 
dollar amount per item installed.  The customer then has 1 year to 
install the new equipment and submit a request for payment of the 
rebate.  Once PEPCO verifies the actual installation, it will make a 
one-time lump sum payment to the customer in one of three ways: check, 
third party payment, or credit to a monthly utility bill.
         
In fiscal year 1995, the SEC contracted with a private third party to 
retrofit about 4,950 existing lamps and fixtures with more energy 
efficient ones at an approximate cost of $247,000.  The SEC submitted 
to PEPCO its request for payment and chose to received its rebate in 
the form of a credit on its monthly utility bill which it received in 
fiscal year 1996 in the amount of $118,000. 

Analysis

We agree with the SEC that it is authorized to accept the financial 
incentive provided by the PEPCO Custom Rebate Program.  The question 
becomes how to account for the "rebate" once received.  As a general 
proposition, an agency must deposit into the General Fund of the 
Treasury any funds it receives from sources outside of the agency 
unless the receipt constitutes an authorized repayment or unless the 
agency has statutory authority to retain the funds for credit to its 
own appropriations.  31 U.S.C.  sec.  3302.  Violation of this 
miscellaneous receipts statute constitutes an illegal "augmentation" 
of the agency's appropriation and funds must be returned to the 
Treasury so they can be appropriated as the Congress sees fit.  65 
Comp. Gen. 600, 602 (1986); 62 Comp. Gen. 678, 679 (1983); 39 Comp. 
Gen. 647, 649 (1960). 

Section 152(f)(3), (4) of the Energy Policy Act of 1992, codified at 
42 U.S.C.  sec.  8256(c), authorizes and encourages agencies to participate 
in programs to increase energy efficiency and to accept any financial 
incentive, goods, or services from the utility companies for such 
increase in energy efficiency or management of energy demand.  The act 
further provides that if an agency satisfies the criteria which 
generally apply to other customers of a utility incentive program, 
such agency may not be denied collection of rebates or other 
incentives.  Finally, the act addresses an agency's treatment of a 
utility efficiency rebate by providing that 50 percent of the rebate 
"shall, subject to appropriation, remain available for expenditure by 
such agency for additional energy efficiency resources . . . ."  42 
U.S.C.  sec.  8256(c)(5)(A) (emphasis added).  

Subsequent to your submission, Congress passed and the President 
signed the Treasury, Postal Service, and General Government 
Appropriations Act for 1996.  Pub. L. No. 104-52, 109 Stat. 468, 502 
(1995).  This law, under the Governmentwide General Provisions, 
provides the necessary statutory authority for federal agencies, 
beginning in fiscal year 1996 and thereafter, to retain certain energy 
savings for the credit to its own appropriations.[2]  Section 625 
provides in pertinent part that 

     "[b]eginning in fiscal year 1996 and thereafter, for each Federal 
     agency, . . . an amount equal to 50 percent of (1) the amount of 
     each utility rebate received by the agency for energy efficiency 
     and water conservation measures, which the agency has implemented 
     . . . may be retained and credited to the accounts that fund 
     energy and water conservation activities at the agency's 
     facilities, and shall remain available until expended for 
     additional specific energy efficiency or water conservation 
     projects or activities, . . . as authorized by section 152(f) of 
     the Energy Policy Act (Public Law 102-486).  (b) The remaining 50 
     percent of each rebate, . . . shall be transferred to the General 
     Fund of the Treasury at the end of the fiscal year in which 
     received." 

Therefore, beginning in 1996, an agency would retain 50 percent of the 
rebate without any fiscal year limitations, and the remaining 50 
percent would be deposited into the Treasury.

Conclusion

Section 625 of the Treasury, Postal Service, and General Government 
Appropriations Act, 1996, provides the authority necessary for the SEC 
to retain and credit 50 percent of the utility rebate it receives in 
fiscal year 1996 to the accounts that fund energy and water 
conservation activities, without any fiscal year limitations.  As 
provided in section 625, SEC should transfer the remaining 50 percent 
of the rebate to the General Fund of the Treasury at the end of the 
fiscal year.

/s/Robert Murphy
for Comptroller General
of the United States 

1. The rebates addressed in 65 Comp. Gen. 600 (1986) and 72 Comp. Gen. 
109 (1993) constituted a recovery by the government of a portion of 
the commissions travel agents received from commercial establishments 
when the agents booked reservations for federal agencies.  In 
substance, the rebates represented a portion of the travel expense 
paid to the commercial establishments and returned to the government 
through the travel agent.  Accordingly, we treated the rebate as a 
refund for purposes of appropriation law.  See, GAO, Policy and 
Procedures Manual for Guidance of Federal Agencies, title 7,  sec.  5.4 (TS 
7-42, May 1993).  We agree with the SEC that while using the same 
terminology the PEPCO rebates are not like the travel rebates and are 
not governed by the cases cited.

2. Section 625 explicitly excludes the Department of Defense (which 
has separate authority), and situations provided in 40 U.S.C.  sec.  490g 
with respect to the Fund established pursuant to 40 U.S.C.  sec.  490(f) 
and administered by the General Services Administration, both 
inapplicable to the instant situation.