Federal Capital Revolving Fund
sec. 2. findings and purpose.
(a) Findings.—The Congress makes the following findings:
(1) State and local governments maintain a capital budget separate from their operating budget and successfully use the capital budget to evaluate, rank, and fund investments in capital assets.
(2) The Federal Government’s failure to budget for capital acquisitions separately from operating expenses puts investment in federally-owned capital assets at a disadvantage in the current Federal budget process.
(3) Spikes in funding for purchases of federally-owned capital assets are difficult to fit within funding available under discretionary spending limits.
(4) Failure to recapitalize or replace Federal capital assets on a regular schedule ultimately increases the cost to taxpayers of delivering services.
(5) The Office of Management and Budget (Circular A-11, Appendix J, Principles of Budgeting for Capital Asset Acquisitions) recommends combining assets in capital acquisition accounts to accommodate spikes in funding capital acquisitions.
(6) The Congressional Budget Office (Capital Budgeting, May 2008) identifies capital acquisition funds as a potential option for reflecting capital costs in agencies’ budgets while retaining full, up-front recognition of cost in the budget.
(7) The Government Accountability Office (GAO-14-239) found that budgeting for federally-owned capital could be improved by creating a government-wide capital acquisition fund with up-front mandatory funding to pay for projects estimated to exceed a certain total cost threshold, to be repaid by annual discretionary funding provided by agencies’ subcommittee appropriators.
(b) Purpose.—The purpose of this legislation is to improve how the Federal Government budgets for expensive federally owned civilian facilities by making two basic innovations to traditional budgeting—
(1) create a mandatory revolving fund to pay the up-front cost of acquiring expensive facilities so that the acquisition costs do not compete with smaller purchases and operating expenses for funding under the discretionary spending limits; and
(2) require agencies to use discretionary appropriations to replenish the revolving fund over several years as they use facilities to meet their Federal mission needs.
The Federal Capital Revolving Fund Act of 2018 is proposed legislation that would reform the way the Federal Government purchases capital assets.
Section-by-Section for the Federal Capital Revolving Fund Act of 2018
Sec. 2. Findings and Purpose. This section states the Congress’ findings and the purpose of the Act.
[From the Budget Process section of the Analytical Perspectives volume of the President’s Fiscal Year 2020 Presidential Submission; pp. 138-140.]