Principles of Federal Appropriations Law - US Government ...

f. Loan and Loan Guarantee
Authority
Chapter 2
The Legal Framework
Second is offsetting receipts. Offsetting receipts are offsetting collections
that are deposited in a receipt account. 11 For budgetary purposes, these
amounts are deducted from budget authority by function or subfunction
and by agency. 12
The Balanced Budget and Emergency Deficit Control Act of 1985, Pub. L.
No. 99-177, 99 Stat. 1038 (Dec. 12, 1985), first addressed the budgetary
treatment of offsetting receipts by adding the authority “to collect
offsetting receipts” to the definition of budget authority. The expanded
definition in the Omnibus Budget Reconciliation Act of 1990, Pub. L.
No. 101-508, 104 Stat. 1388 (Nov. 5, 1990), is more explicit. The authority to
obligate and expend the proceeds of offsetting receipts and collections is
treated as negative budget authority. In addition, the reduction of offsetting
receipts or collections (e.g., legislation authorizing an agency to forego
certain collections) is treated as positive budget authority. 13
A loan guarantee is any guarantee, insurance, or other pledge with respect
to the payment of all or a part of the principal or interest on any debt
obligation of a nonfederal borrower to a nonfederal lender. 14 The
government does not know whether or to what extent it may be required to
honor the guarantee until there has been a default. Loan guarantees are
contingent liabilities that may not be recorded as obligations until the
contingency occurs. See 64 Comp. Gen. 282, 289 (1985); B-290600, July 10,
2002. See also Chapter 11.
Prior to legislation enacted in November 1990, loan guarantees were
expressly excluded from the definition of budget authority. Budget
authority was created only when an appropriation to liquidate loan
guarantee authority was made.
11 This usually means a general fund receipt account (miscellaneous receipts), but also
includes amounts deposited in special or trust fund accounts. See American Medical
Ass’n v. Reno, 857 F. Supp. 80 (D.D.C. 1994); B-199216, July 21, 1980.
12 H.R. Conf. Rep. No. 99-433, at 102 (1985). This is the conference report on the Balanced
Budget and Emergency Deficit Control Act of 1985.
13 This was the intent of the 1985 legislation, as reflected in the conference report, supra,
although it had not been expressed in the legislation itself.
14 Glossary at 50–51.
Page 2-10 GAO-04-261SP Appropriations Law—Vol. I