BNUMBER:  B-271607
DATE:  June 3, 1996
TITLE:  [Letter]

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B-271607

June 3, 1996

The Honorable Thad Cochran
United States Senate

Dear Senator Cochran:

In your letter of March 19, 1996, you asked that we provide our 
opinion about statutory language that is involved in a dispute between 
the Institute for Technology Development (ITD) in the State of 
Mississippi and the Economic Development Administration (EDA) 
Department of Commerce.  Specifically you asked whether the language 
"to remain available until expended," as used in an appropriation to 
EDA for the purpose of making a grant to ITD, means expended by EDA or 
expended by ITD.

Based on discussions both with a member of your staff and with the 
Chief Counsel of the EDA, we learned that EDA grants to ITD have 
spawned a number of disputes that have resulted in protracted 
litigation.  Recently, in Institute for Technology Development v. 
Brown, 63 F.3d 445 (5th Cir. 1995), the Fifth Circuit Court of Appeals 
overturned a district court decision upholding EDA's position that the 
grantee, ITD, could not substitute depreciation expenses it had 
incurred, but not initially claimed, for other disallowed costs.  We 
have been informally advised by EDA that the specific question you 
asked is not directly involved in the ongoing litigation.  

The Second Supplemental Appropriations Act, 1984, Pub. L. No. 98-369, 
98 Stat. 1369 (1984), provides:

"Economic Development Administration 
Economic Development Assistance Programs" 

     "For an additional amount for 'Economic development assistance 
     programs', $26,000,000, to remain available until expended, 
     pursuant to 42 U.S.C. 3151(f) of which $7,000,000 is for a grant 
     to the Institute for Technology Development in the State of 
     Mississippi  .  .  .  ."

98 Stat. at 1372 (emphasis added).  This language constitutes an 
appropriation to EDA for the economic development assistance program, 
including the making of a grant to ITD.  EDA is to make the grant 
under 42 U.S.C.  sec.  3151(f), which authorizes grants for demonstration 
projects designed to foster regional productivity and growth and to 
prevent outmigration.

When the Congress expressly provides that an appropriation "shall 
remain available until expended," it constitutes a no-year 
appropriation and all statutory limits on when the funds may be 
obligated and expended are removed.  43 Comp. Gen. 657, 661 (1964); 40 
Comp. Gen. 694, 696 (1961).  With one exception discussed below, these 
no-year funds remain available indefinitely until they are fully 
expended.  

The period of availability of appropriated funds is the period of time 
in which the administering agency may obligate the funds.  It is not a 
limitation on the time in which a grantee may use the funds once it 
has received them.  Thus, the no-year language in the appropriations 
act-"available until expended"-means available until obligated and 
expended by the granting agency, in this case by EDA.  

Only the account closing statute, 31 U.S.C.  sec.  1555, affects the 
perpetual availability of no-year funds.  The purpose of this 
provision is to close no-year appropriations that are no longer 
active.  See 39 Comp. Gen. 244, 245 (1959).  Until 1990 this statute 
provided that the unobligated balance of a no-year appropriation 
should be withdrawn and "returned" to the Treasury either (1) when the 
head of the administering agency decided that the purposes of the 
appropriation had already been fulfilled, or (2) when no disbursement 
was made from the appropriation for two consecutive fiscal years.  On 
November 5, 1990, the provision was amended to provide that a no-year 
appropriation account should be closed, and any remaining balance 
canceled, when both (1) the head of the agency (or the President) 
determines that the purposes of the appropriation have been carried 
out, and (2) no disbursement has been made for two consecutive fiscal 
years.

We trust that this adequately responds to your request.  Should you 
have any questions, please contact Gary Kepplinger (512-5644) or 
Bertram Berlin (512-8255) in my Office of General Counsel.

Sincerely yours,

/s/James F. Hinchman
for Comptroller General
of the United States

B-271607

June 3, 1996

DIGEST

An appropriation to the Economic Development Administration (EDA), for 
the purpose of making a grant to the Institute for Technology 
Development, that is "to remain available until expended", remains 
available for obligation until obligated and expended by the EDA.  The 
period of availability of appropriated funds is the period of time in 
which the administering agency has to obligate the funds.