I

104TH CONGRESS

1ST SESSION H. R. 1233

To improve budgetary information by requiring that the unified budget presented by the President contain an operating budget and a capital

budget, distinguish between general funds, trust funds, and enterprise

funds, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 14, 1995

Mr. WISE introduced the following bill; which was referred to the Committee

on Government Reform and Oversight, and in addition to the Committees

on Rules and Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such

provisions as fall within the jurisdiction of the committee concerned

A BILL

To improve budgetary information by requiring that the unified budget presented by the President contain an operating budget and a capital budget, distinguish between

general funds, trust funds, and enterprise funds, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Capital Budgeting Act

5 of 1995’’.
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1 SEC. 2. STATEMENT OF FINDING AND PURPOSE.

2 (a) STATEMENT OF FINDING.—The Congress finds

3 that the existing budget obscures the distinctions between

4 capital activities and operating activities, and between

5 general funds, trust funds, and enterprise funds, so as to

6 hinder identification of the resources needed to meet the

7 needs of the Government and the investment needs of the

8 economy that are necessary for sustained economic

9 growth.

10 (b) PURPOSE.—It is the purpose of this Act that the

11 unified budget present a capital budget and an operating

12 budget, and distinguish between general funds, trust

13 funds, and enterprise funds, in order to provide better and

14 more relevant information on the revenues, expenses, and

15 financing requirements of Government programs and

16 activities.

17 SEC. 3. CAPITAL AND OPERATING BUDGETS.

18 Title 31, United States Code, is amended by inserting

19 after section 1105 the following new section:

20 ‘‘§ 1105a. Capital and operating budgets

21 ‘‘(a)(1) The budget of the United States submitted

22 by the President under section 1105 of this title shall be

23 a unified budget composed of an operating budget and a

24 capital budget.
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1 ‘‘(2) Operating and capital budgets shall be presented

2 separately for unified funds, general funds, trust funds,

3 and enterprise funds.

4 ‘‘(b)(1) Actual, estimated, and proposed amounts

5 shall be presented for unified funds, general funds, trust

6 funds, and enterprise funds, and, at a minimum, shall con7 tain—

8 ‘‘(A) for the operating budget the following: (i)

9 operating revenues, (ii) operating expenses, (iii) op10 erating surplus/deficit before interfund transfers,

11 (iv) interfund transfers, (v) operating surplus/deficit,

12 and (vi) Federal expenditures financing the operat13 ing expenses of State and local governments;

14 ‘‘(B) for the capital budget the following: (i)

15 capital revenues, (ii) capital investments, (iii) capital

16 financing requirements before interfund transfers,

17 (iv) interfund transfers, and (v) capital financing

18 requirements; and

19 ‘‘(C) unified budget financing requirements.

20 ‘‘(2) The capital budget shall represent only the

21 major activities, projects, and programs which support the

22 acquisition, construction, alteration, and rehabilitation of

23 capital assets. All other activities, projects, and programs

24 shall be represented in the operating budget.
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1 ‘‘(c) In addition to the unified budget submitted by

2 the President as required by subsections (a) and (b) of

3 this section, the President shall present information in the

4 form required by subsection (b)(1) for accounts, agencies,

5 and functions, to the extent applicable, the capital invest6 ments by State and local governments not financed by the

7 Federal Government.

8 ‘‘(d) In this section—

9 ‘‘(1) ‘unified budget’ means a budget in which

10 revenues and expenses for general funds, trust

11 funds, and enterprise funds are consolidated to dis12 play totals for the Federal Government as a whole;

13 ‘‘(2) ‘trust funds’ means—

14 ‘‘(A) the Federal Old-Age and Survivors

15 Insurance Trust Fund,

16 ‘‘(B) the Federal Hospital Insurance Trust

17 Fund,

18 ‘‘(C) the Civil Service Retirement and Dis19 ability Fund,

20 ‘‘(D) the Military Retirement Fund,

21 ‘‘(E) the Federal Supplementary Medical

22 Insurance Trust Fund,

23 ‘‘(F) the Unemployment Trust Fund,

24 ‘‘(G) the Federal Disability Insurance

25 Trust Fund,
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1 ‘‘(H) the Highway Trust Fund,

2 ‘‘(I) the Airport and Airway Trust Fund,

3 and

4 ‘‘(J) such other funds or accounts of the

5 Government that the Director of the Office of

6 Management and Budget, in consultation with

7 the Comptroller General, determines should be

8 classified as trust funds in order to fulfill the

9 purpose of this section;

10 ‘‘(3) ‘enterprise funds’ means—

11 ‘‘(A) the Postal Service,

12 ‘‘(B) the Resolution Trust Corporation,

13 ‘‘(C) the Federal Deposit Insurance Cor14 poration Fund,

15 ‘‘(D) the Federal Housing Administration,

16 ‘‘(E) the Tennessee Valley Authority

17 Fund,

18 ‘‘(F) the Bonneville Power Administration

19 Fund,

20 ‘‘(G) the Rural Electrification and Tele21 phone Revolving Loan Fund,

22 ‘‘(H) the Export-Import Bank of the

23 United States,

24 ‘‘(I) the Southeastern Power Administra25 tion,
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1 ‘‘(J) the Southwestern Power Administra2 tion,

3 ‘‘(K) the Western Area Power Administra4 tion,

5 ‘‘(L) the Alaska Power Administration,

6 ‘‘(M) the Overseas Private Investment Cor7 poration,

8 ‘‘(N) the St. Lawrence Seaway Develop9 ment Corporation,

10 ‘‘(O) the Rural Telephone Bank,

11 ‘‘(P) the Pension Benefit Guaranty Cor12 poration, and

13 ‘‘(Q) such other funds or accounts of the

14 Government that the Director of the Office of

15 Management and Budget, in consultation with

16 the Comptroller General, determines should be

17 classified as enterprise funds in order to fulfill

18 the purpose of this section;

19 ‘‘(4) ‘general funds’ includes all accounts of the

20 Government that are not trust funds or enterprise

21 funds;

22 ‘‘(5) ‘unified funds’ means general funds, trust

23 funds, and enterprise funds and represents the

24 unified budget;
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1 ‘‘(6) ‘capital assets’ means physical assets and

2 financial assets, but does not include consumable

3 inventories;

4 ‘‘(7) ‘physical assets’ means tangible assets

5 (other than assets used for national defense or

6 security)—

7 ‘‘(A) the ownership of which is or will be

8 in the public domain;

9 ‘‘(B) that produce services or benefits for

10 more than 5 years;

11 ‘‘(C) that have an initial cost equal to or

12 more than $500,000; and

13 ‘‘(D) including—

14 ‘‘(i) roadways and bridges;

15 ‘‘(ii) airports and airway facilities;

16 ‘‘(iii) mass transportation systems;

17 ‘‘(iv) waste water treatment, water

18 distribution delivery, and related facilities;

19 ‘‘(v) water resource projects;

20 ‘‘(vi) medical facilities;

21 ‘‘(vii) resource recovery facilities;

22 ‘‘(viii) public structures;

23 ‘‘(ix) space and communication facili24 ties; and
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1 ‘‘(x) strategic petroleum reserves and

2 mineral stockpiles;

3 ‘‘(8) ‘financial assets’ means interests of the

4 Federal Government in, and claims of the Federal

5 Government against, foreign governments, States

6 and their political subdivisions, corporations, asso7 ciations, and individuals and their resources which

8 are represented by a legal instrument (such as

9 bonds, debentures, notes, and other securities), less

10 any credit subsidy costs attributable to such finan11 cial assets;

12 ‘‘(9) ‘credit subsidy costs’ means the losses in13 curred by the Federal Government as a result of its

14 direct and guaranteed loans, including such costs as

15 interest and default;

16 ‘‘(10) ‘consumable inventories’ means tangible

17 assets of the Federal Government, including stock18 piles, supplies, and inventories, which typically are

19 consumed within 5 years or which have an initial

20 price less than $500,000;

21 ‘‘(11) ‘operating revenues’ means all receipts of

22 the Federal Government, other than those identified

23 in paragraph (17), including profits and interest

24 earned on financial assets;
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1 ‘‘(12) ‘operating expenses’ means all expenses

2 of the Federal Government, other than those identi3 fied in paragraph (18), including interest payments

4 on debts, asset consumption charge, and credit

5 subsidy costs;

6 ‘‘(13) ‘the operating surplus/deficit before

7 interfund transfers’ means the difference between

8 operating revenues and operating expenses before

9 interfund transfers;

10 ‘‘(14) ‘interfund transfers’ means the flow of

11 revenues between general and enterprise funds and

12 trust funds accounts that are expenses from the

13 account making the payments and revenues to the

14 account receiving the payments;

15 ‘‘(15) ‘operating surplus/deficit’ means the op16 erating surplus/deficit before interfund transfers

17 plus or minus interfund transfers;

18 ‘‘(16) ‘asset consumption charge’ means the

19 systematic and rational allocation of the cost—his20 torical, replacement, or current value—of a physical

21 asset (having a useful life of more than 5 years) fi22 nanced by the appropriation accounts for which the

23 capital budget required by this section applies;

24 ‘‘(17) ‘capital revenues’ means receipts of the

25 Federal Government derived from taxes, collections,
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1 and receipts dedicated by statute, for the rehabilita2 tion of capital assets which relate to the activities,

3 functions, and programs represented by the capital

4 budget;

5 ‘‘(18) ‘capital investments’ means expenditures

6 of the Federal Government, including those under

7 grants, contracts, and leases, which are for the ac8 quisition, construction, and rehabilitation of capital

9 assets; and Federal expenditures (including tax ex10 penditures) which are for the acquisition, construc11 tion, and rehabilitation of the physical assets of

12 State and local governments;

13 ‘‘(19) ‘capital financing requirements before

14 interfund transfers’ means the difference between

15 capital revenues and capital investments before

16 interfund transfers;

17 ‘‘(20) ‘capital financing requirements’ means fi18 nancing requirements before interfund transfers plus

19 or minus interfund transfers; and

20 ‘‘(21) ‘unified budget financing requirements’

21 means the total of the operating surplus/deficit and

22 the capital financing requirements; and

23 SEC. 4. CONFORMING AMENDMENTS.

24 Section 1112 of title 31, United States Code, is

25 amended—
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1 (1) in subsection (c)(1) by inserting ‘‘criteria,

2 principles, and standards for determining the con3 tents of the operating and capital budgets required

4 under section 1105a of this title, and’’ after ‘‘includ5 ing’’; and

6 (2) by adding the following subsection at the

7 end thereof:

8 ‘‘(g) The Comptroller General shall review and report

9 to the Congress on the implementation of section 1105a

10 of this title as the Comptroller General deems necessary.

11 A review by the Comptroller General may include deter12 mining whether—

13 ‘‘(1) the actual, estimated, and proposed appro14 priations, receipts, and investments presented in the

15 capital budget represent activities, functions, and

16 programs which support the acquisition, construc17 tion, alteration, and rehabilitation of capital assets;

18 and

19 ‘‘(2) the classifications made by the Director of

20 the Office of Management and Budget under section

21 1105a(d)(2)(H) of this title further the purposes of

22 section 1105a.’’.

23 SEC. 5. REPORT BY THE COMMITTEE ON THE BUDGET.

24 Not later than September 30, 1996, the Committee

25 on the Budget shall submit to the House of Representa-
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1 tives proposed legislation which shall establish additional

2 deficit targets under the Balanced Budget and Emergency

3 Deficit Control Act of 1985 beginning in fiscal year 1997

4 which would require the eventual elimination of deficits

5 in the operating account as set forth in the amendments

6 made by this Act in accordance with the Committee on

7 the Budget’s proposed deficit targets.

8 SEC. 6. REPORT BY THE COMMITTEE ON GOVERNMENT RE9 FORM AND OVERSIGHT.

10 Not later than September 30, 1996, the Committee

11 on Government Reform and Oversight of the House of

12 Representatives shall report legislation directing the

13 Comptroller General to evaluate—

14 (1) on an annual basis, the value and useful15 ness of capital investments in the capital account as

16 set forth in the amendments made by this Act; and

17 (2) the value and usefulness of proposed capital

18 investments submitted to the House of Representa19 tives after the enactment of this Act.

20 SEC. 7. REPORT BY THE COMMITTEE ON RULES.

21 Not later than September 30, 1996, the Committee

22 on Rules of the House of Representatives shall report leg23 islation establishing rules to facilitate the enforcement of

24 the amendments made by this Act to title 31, United

25 States Code.
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1 SEC. 8. PUBLIC WORKS FINANCING INFORMATION.

2 Title VII of the Public Works and Economic Develop3 ment Act of 1965 (42 U.S.C. 3211–3226) is amended by

4 adding at the end the following new section:

5 ‘‘SEC. 717. PUBLIC WORKS FINANCING INFORMATION.

6 ‘‘(a) TRANSPORTATION REPORTS.—Not later than

7 12 months after the date of enactment of the Capital

8 Budgeting Act of 1995, and annually thereafter, the Sec9 retary of Transportation shall report to the House Com10 mittee on Transportation and Infrastructure and the Sen11 ate Committee on Environment and Public Works, at the

12 account, function, and agency levels, the actual, estimated,

13 and proposed appropriations, receipts, and expenditures

14 for capital activities and operating activities associated

15 with the following:

16 ‘‘(1) roadways and bridges;

17 ‘‘(2) airports and airway facilities; and

18 ‘‘(3) mass transportation systems.

19 ‘‘(b) WATER POLLUTION REPORTS.—Not later than

20 12 months after the date of enactment of the Capital

21 Budgeting Act of 1995 and annually thereafter, the Ad22 ministrator of the Environmental Protection Agency shall

23 report to the House Committee on Transportation and In24 frastructure and the Senate Committee on Environment

25 and Public Works, at the account and function levels, the

26 actual, estimated, and proposed appropriations, receipts,
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1 and expenditures for capital activities and operating ac2 tivities associated with waste water treatment, water dis3 tribution delivery, and related facilities.

4 ‘‘(c) WATER RESOURCES REPORTS.—Not later than

5 12 months after the date of enactment of the Capital

6 Budgeting Act of 1995 and annually thereafter, the As7 sistant Secretary of the Army for Civil Works shall report

8 to the House Committee on Transportation and Infra9 structure and the Senate Committee on Environment and

10 Public Works, at the account and function levels, the ac11 tual, estimated, and proposed appropriations, receipts,

12 and expenditures for capital activities and operating ac13 tivities associated with water resource projects.

14 ‘‘(d) PUBLIC BUILDINGS REPORTS.—Not later than

15 12 months after the date of enactment of the Capital

16 Budgeting Act of 1995 and annually thereafter, the Ad17 ministrator of the General Services Administration shall

18 report to the House Committee on Transportation and In19 frastructure and the Senate Committee on Environment

20 and Public Works, at the account and function levels, the

21 actual, estimated, and proposed appropriations, receipts,

22 and expenditures for capital activities and operating ac23 tivities associated with public buildings.’’.

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