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Appropriations Law & Real Estate

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Appropriations Law & Real Estate
FIMS/Real Estate Annual TrainingMay 10, 2017
Principles of Appropriations LawPurpose: Necessary Expense DoctrineTime: Bona Fide Needs RuleAmount: Anti-Deficiency Act
Appropriations Law Principles
Constitution: Congress has “Power of the Purse”“no Money shall be drawn form the Treasury, but in Consequence of Appropriations made by Law.” (Art. I, sec. 9, cl. 7)Supreme Court: “The established rule is that the expenditure of public funds is proper only when authorized by Congress, not that public funds may be expended unless prohibited by Congress.”
The Purpose Law
“Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.” 31 USC 1301Necessary Expense Doctrine=necessary for, or contributes materially to, authorized purposeLogically connected (to appropriation, or agency function)Not prohibited (by other law)Not otherwise provided for (in another appropriation)
Purpose & Real Estate
Appropriation available forproposed realty action?Review language of appropriationSpecific?General? (more agency discretion)Lease rent from operating funds, e.g.Apply necessary expense doctrine testConsult GC, CFOSimilar to confirming authority for proposed action
Current: Incur obligation during time period of appropriation (FY, e.g.)Obligate = sign contractExpiredRemains “available” beyond FY for:AdjustmentsMaking paymentsAvailability lasts 5 years, usuallyClosed/Cancelled– no new obligations or adjustments
Bona Fide Needs RulePay expenses properly incurred during period of availability (FY)Or complete contracts properly made during the period of availabilityNo “stocking up” for future needsTime & Real Estate5-year limit on some lease termsDOE multi-year/no-year appropriations provide flexibility when available
Anti-Deficiency Act (ADA), prohibits:Spending/obligating in advance or appropriationsSpending in excess of amounts availableVoluntary servicesSpending/obligations in excess of OMB apportionmentAdministrative & criminal penalties for violationsSuspension/removalFines/imprisonment
ADA & Real Estate
Termination clauses in leasesLimitation on lease term lengthsAvoid indemnification provisions (generally)Disposal via Quit-Claim Deed (no warranties)
Other Issues
Augmentation of AppropriationsMisc. Receipts Statute (31 USC 3302)Sale/out-lease proceeds to TreasuryExceptions require legislation“EUL” authorityRetention of proceeds authorityEconomy ActReimbursements subject to FY limitationsReceiving agency must reimburse performing agency for all costsPerforming agency must return unspent advances
Appropriations Law & Real Estate
QUESTIONS?David SteinauSenior Realty [email protected]





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Appropriations Law & Real Estate