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B-66927 1 (1978-02-28)

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B-66927


DATE:   Februay 28, 1978


F6lATTER OF:   WStategic Petroleum Reserve Program


DIGEST:      1. Energy Policy and Conservation Act
               ebtab liheu Strategic Petroleum Reserve
             -  (BPR) Program. All authority under any
               provision relating to SPR Program expires
               June 30, 1985. Department of Energy may
               enter into leases for storage space which
               extend beyond June 30, 1085, if such leases
               are found to be necee&ary for Program and
               in best interests of United States.

             2. 40 J. S, C. $ 278a (1970)(rection 322, Economy
               Act of 1932), prohibits paying more than 25
               percent of first year's rent for improvements
               to leased premises or more than 15 percent of
               %Jue of premises for annual reat. However,
               Energy Policy tnd Cocaervatioa Act provides
               authority, fo. purposes ol Strategic Petroleum
               Reserve Program,  to locate and con'struct
               storage facilities on leased property. GAO
               will not object to expenditures for rent and
               improvements incurred in creation of Strategic
               Petroleum Reserve which may exceed Economy
               Act fiscal limits if disclosed to Congress in
               Strategic Petroleum Reserve Plan and not
               disapproved.

      This decision is in response co a letter from the Administrator,
  Federal Energy Adr'inistraticn (FEA), requesting our opinion on
  several questions of importance to the Strategic Petroleum Reserve
  Program.   (Since submission of these questions, the functions of
  the Administrator which gave rise to these questions, have been
  transferred to the Secretary of Energy (section 301, Pub. L. No.
  95-91., 91 Stat. 577). References hereafter to the Department of
  Energy are in.recognition of that transfer.)
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