Section 401, As Enacted
Congressional Budget Act of 1974
Bills providing new spending authority
Sec. 401. (a) Legislation Providing Contract or Borrowing Authority.—It shall not be in order in either the House of Representatives or the Senate to consider any bill or resolution which provides new spending authority described in subsection (c)(2)(A) or (B) (or any amendment which provides such new spending authority), unless that bill, resolution, or amendment also provides that such new spending authority is to be effective for any fiscal year only to such extent or in such amounts as are provided in appropriation Acts.
(b) Legislation Providing Entitlement Authority.—
(1) It shall not be in order in either the House of Representatives or the Senate to consider any bill or resolution which provides new spending authority described in subsection (c)(2)(C) (or any amendment which provides such new spending authority) which is to become effective before the first day of the fiscal year which begins during the calendar year in which such bill or resolution is reported.
(2) If any committee of the House of Representatives or the Senate reports any bill or resolution which provides new spending authority described in subsection (c) (2) (C) which is to become effective during a fiscal year and the amount of new budget authority which will be required for such fiscal year if such bill or resolution is enacted as so reported exceeds the appropriate allocation of new budget authority reported under section 302(b) in connection with the most recently agreed to concurrent resolution on the budget for such fiscal year, such bill or resolution shall then be referred to the Committee on Appropriations of that House with instructions to report it, with the committee’s recommendations, within 15 calendar days (not counting any day on which that House is not in session) beginning with the day following the day on which it is so referred. If the Committee on Appropriations of either House fails to report a bill or resolution referred to it under this paragraph within such 15-day period, the committee shall automatically be discharged from further consideration of such bill or resolution and such bill or resolution shall be placed on the appropriate calendar.
(3) The Committee on Appropriations of each House shall have jurisdiction to report any bill or resolution referred to it under paragraph (2) with an amendment which limits the total amount of new spending authority provided in such bill or resolution.
(1) For purposes of this section, the term “new spending authority” means spending authority not provided by law on the effective date of this section, including any increase in or addition to spending authority provided by law on such date.
(2) For purposes of paragraph (1), the term “spending authority” means authority (whether temporary or permanent) —
(A) to enter into contracts under which the United States is obligated to make outlays, the budget authority for which is not provided in advance by appropriation Acts;
(B) to incur indebtedness (other than indebtedness incurred under the Second Liberty Bond Act) for the repayment of which the United States is liable, the budget authority for which is not provided in advance by appropriation Acts; and
(C) to make payments (including loans and grants), the budget authority for which is not provided for in advance by appropriation Acts, to any person or government if, under the provisions of the law containing such authority, the United States is obligated to make such payments to persons or governments who meet the requirements established by such law.
Such term does not include authority to insure or guarantee the repayment of indebtedness incurred by another person or government.
(1) Subsections (a) and (b) shall not apply to new spending authority if the budget authority for outlays which will result from such new spending authority is derived—
(A) from a trust fund established by the Social Security Act (as in effect on the date of the enactment of this Act); or
(B) from any other trust fund, 90 percent or more of the receipts of which consist or will consist of amounts (transferred from the general fund of the Treasury) equivalent to amounts of taxes (related to the purposes for which such outlays are or will be made) received in the Treasury under specified provisions of the Internal Revenue Code of 1954.
(2) Subsections (a) and (b) shall not apply to new spending authority which is an amendment to or extension of the State and Local Fiscal Assistance Act of 1972, or a continuation of the program of fiscal assistance to State and local governments provided by that Act, to the extent so provided in the bill or resolution providing such authority.
(3) Subsections (a) and (b) shall not apply to new spending authority to the extent that—
(A) the outlays resulting therefrom are made by an organization which is (i) a mixed-ownership Government corporation (as defined in section 201 of the Government Corporation Control Act), or (ii) a wholly owned Government corporation (as defined in section 101 of such Act) which is specifically exempted by law from compliance with any or all of the provisions of that Act; or
(B) the outlays resulting therefrom consist exclusively of the proceeds of gifts or bequests made to the United States for a specific purpose.
JOINT EXPLANATORY STATEMENT OF CONFERENCE COMMITTEE
The managers on the part of the House and the Senate of the conference of the two Houses on the amendments of the Senate to the bill (H.R. 7130) issued an explanatory statement of the legislation. This was included in a House Budget Committee print in 1975 after the bill’s enactment. It included the following description of this section:
Section 401(a). Contract and Borrowing Authority
The House and Senate version provided that new contract or borrowing authority legislation must contain a provision that such new authority is to be effective only to the extent or in such amounts as are provided in appropriation acts.
The conference substitute adopts this procedure for contract and borrowing authority. These forms of “new spending authority” are defined in section 401(c)(2)(A) and (B). The new procedure does not apply to contract or borrowing authority in effect prior to the effective date of this section. Nor does it apply to certain type of spending authority exempted under section 401(d) such as social security and 90 percent self-financed trust funds or outlays of government corporations.
Section 401(b). Entitlement Authority
The House bill provided that new entitlements could be effective only as provided in appropriation acts (the same procedure as for contract and borrowing authority). The Senate amendment established a procedure for the referral of entitlement legislation to the Appropriations Committees under a 10-day time limit.
The conference substitute, like the Senate amendment, provides that it shall not be in order to consider entitlement legislation which would have an effective date before the start of the new fiscal year. The purpose of this procedure is to make entitlements effectively subject to the reconciliation process. As provided in the conference substitute entitlement legislation would be ref erred to the Appropriations Committee only if it would generate new budget authority in excess of the allocation made subsequent to the latest budget resolution (as specified in section 302). The Managers intend the Budget Committees shall provide background information as to such allocations. Such referral would have a 15-day limit, with the Appropriations Committee automatically discharged if it has not reported during this period. The Appropriations Committee may report the bill with an amendment limiting the total amount of new entitlement authority. The managers emphasize that the jurisdiction of the Appropriations Committees shall relate to the cost of the program and not to substantive changes in the legislation.
As provided in section 401(d), social security and 90 percent self-financed trust funds and government corporations would not be subject to the referral procedure for entitlement authority.
Section 401 (c) and (d). Definitions and Exceptions
The House and Senate versions had comparable definitions for contract, borrowing, and entitlement authority. The Senate amendment stipulated that insured and guaranteed loans would not be covered by the new procedures. The House bill had catchall provision to reach all types of spending authority. The House and Senate versions also contained various exemptions from the new procedures. The House bill subjected existing spending authority to the new procedures after October 1, 1978, while the Senate amendment would have applied only to new spending authority.
The conference substitute defines three categories of new spending authority: contract authority—to enter into contract in advance of appropriations; borrowing authority—to incur indebtedness in advance of appropriations; and entitlement authority—to obligate the United States to make payment in advance of appropriations, but it does not include insured or guaranteed loans. The conference substitute exempts certain types of programs from the new procedures for contract, borrowing, and entitlement authority. These are: all existing social security trust funds; 90 percent self-financed trust funds; general revenue sharing (to the extent provided in subsequent legislation); the outlays of certain government corporations; and gifts to the United States. The Managers note that these exemptions relate only to the procedures in section 406 and that the programs are fully subject to the congressional budget process.
[Joint Explanatory Statement on the Committee of Conference on H.R. 7130; (Committee Print), Committee on the Budget, House of Representatives, 93d Congress, 2d Session, Washington D.C. 1975.]
Sec. 401. Budget-Related Legislation Not Subject To Appropriations. (CBA, current law as Amended)
Classification to the U.S. Code
This section was formerly classified to 31 U.S.C. 1351.
Legislative History Notes
Pub. L. 93–344, §401, July 12, 1974, 88 Stat. 317) The Congressional Budget and Impoundment Control Act of 1974 enacted this section into law.
Revision of title 31 of the u.s. code
Most of the Congressional Budget Act of 1974 was classified to Title 31 of the U.S. Code but has since been transferred either to title 2 (The Congress) or to a revised Title 31. See the following for more information:
- Pub. L. 97–258, §1, Sept. 13, 1982, 96 Stat. 877
- Title 31 Revision and Codification Law of 1982
- Revision of Title 31
- Table on the House Law Revision Counsel Website.
[BCR § 100a]