    [Analytical Perspectives]
    [Federal Receipts and Collections]
    [4. User Fees and Other Collections]
    [From the U.S. Government Publishing Office, www.gpo.gov]

                       4. USER FEES AND OTHER COLLECTIONS

      In addition to collecting taxes and other receipts by the exercise of
    its sovereign powers, which is discussed in the previous chapter, the
    Federal Government collects income from the public from market-oriented
    activities and the financing of regulatory expenses. Some of these
    collections are classified as user fees, which include the sale of
    postage stamps and electricity, fees for admittance to national parks,
    and premiums for deposit insurance; and some are other offsetting
    collections or receipts, such as rents and royalties for the right to
    extract oil from the Outer Continental Shelf.
      Depending on the laws that authorize the collections, the collections
    can be credited directly to expenditure accounts as ``offsetting
    collections,'' or to receipt accounts as ``offsetting receipts.''
    Usually offsetting collections are authorized to be spent for the
    purposes of the account without further action by the Congress.
    Offsetting receipts may or may not be earmarked for a specific purpose,
    depending on the legislation that authorizes them, and the authorizing
    legislation may either authorize them to be spent without further action
    by the Congress, or require them to be appropriated in annual
    appropriations acts before they can be spent.
      The budget refers to them as offsetting collections and offsetting
    receipts, because they are subtracted from gross outlays rather than
    added to taxes on the receipts side of the budget. The purpose of this
    treatment is to produce budget totals for receipts, outlays, and budget
    authority in terms of the amount of resources allocated governmentally,
    through collective political choice, rather than through the market.\1\
    ---------------------------------------------------------------------------
      \1\ Showing collections from business-type transactions as offsets on
    the spending side of the budget follows the concept recommended by the
    1967 Report of the President's Commission on Budget Concepts. The
    concept is discussed in Chapter 25: ``Budget System and Concepts and
    Glossary'' in this volume.
    ---------------------------------------------------------------------------
      Offsetting collections and receipts include most user fees, which are
    discussed below, as well as some amounts that are not user fees. Table
    4-1 summarizes these transactions. For 2002, total offsetting
    collections and receipts from the public are estimated to be $222.1
    billion, and total user fees are estimated to be $143.8 billion.
      The following section discusses user fees and the Administration's
    user fee proposals. The subsequent section displays more information on
    offsetting collections and receipts. The offsetting collections and
    receipts by agency are also displayed in Table 20-1, ``Outlays to the
    Public, Net and Gross,'' which appears in Chapter 20 of this volume.

    Table 4-1.  GROSS OUTLAYS, USER FEES, OTHER OFFSETTING COLLECTIONS AND RECEIPTS FROM THE PUBLIC, AND NET OUTLAYS
                                                (In billions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                                     Estimate
                                                                                     2000    -----------------------
                                                                                    Actual       2001        2002
    ----------------------------------------------------------------------------------------------------------------
    Gross outlays...............................................................     2,002.9     2,079.2     2,182.7
      Offsetting collections and receipts from the public:
        User fees \1\...........................................................       129.5       134.0       142.3
        Other...................................................................        84.6        88.9        79.8
                                                                                 -----------------------------------
      Subtotal, offsetting collections and receipts from the public.............       214.1       223.0       222.1
                                                                                 -----------------------------------
    Net outlays.................................................................     1,788.8     1,856.2     1,960.6
    ----------------------------------------------------------------------------------------------------------------
    \1\ Total user fees are shown below. They include user fees that are classified on the receipts side of the
      budget in addition to the amounts shown on this line. For additional details of total user fees, see Table 4-
      2. ``Total User Fee Collections.''

    Total user fees:
      Offsetting collections and receipts from the public....................        129.5        134.0        142.3
      Receipts...............................................................          1.3          1.4          1.5
                                                                              --------------------------------------
    Total user fees..........................................................        130.8        135.5        143.8
      .......................................................................

    [[Page 50]]

                                    USER FEES

                          I.  Introduction and Background

      The Federal Government may charge user fees to those who benefit
    directly from a particular activity or those subject to regulation.
    According to the definition of user fees used in this chapter, Table 4-2
    shows that user fees were $130.8 billion in 2000, and are estimated to
    increase to $135.5 billion in 2001 and to $143.8 billion in 2002,
    growing to an estimated $171.3 billion in 2006, including the user fee
    proposals that are shown in Table 4-3. This table shows that the
    Administration is proposing to increase user fees by an estimated $0.6
    billion in 2002, growing to an estimated $1.5 billion in 2006.

      Definition. The term ``user fee'' as defined here is fees, charges,
    and assessments levied on a class directly benefitting from, or subject
    to regulation by, a government program or activity, and to be utilized
    solely to support the program or activity. In addition, the payers of
    the fee must be limited to those benefitting from, or subject to
    regulation by, the program or activity, and may not include the general
    public or a broad segment of the public. The user fee must be authorized
    for use only to fund the specified programs or activities for which it
    is charged, including directly associated agency functions, not for
    unrelated programs or activities and not for the broad purposes of the
    Government or an agency.
        Examples of business-type or market-oriented user fees
              include fees for the sale of postal services (the sale of
              stamps), electricity (e.g., sales by the Tennessee Valley
              Authority), payments for Medicare voluntary supplemental
              medical insurance, life insurance premiums for veterans,
              recreation fees for parks, NASA fees for shuttle services, the
              sale of weather maps and related information by the Department
              of Commerce, the sale of commemorative coins, and fees for the
              sale of books.
        Examples of regulatory and licensing user fees include fees
              for regulating the nuclear energy industry, bankruptcy filing
              fees, immigration fees, food inspection fees, passport fees,
              and patent and trademark fees.
      User fees do not include all offsetting collections and receipts, such
    as the interest and repayments received from credit programs; proceeds
    from the sale of loans and other financial investments; interest,
    dividends, and other earnings; cost sharing contributions; the sale of
    timber, minerals, oil, commodities, and other natural resources;
    proceeds from asset sales (property, plant, and equipment); Outer
    Continental Shelf receipts; or spectrum auction proceeds. Neither do
    they include earmarked taxes (such as taxes paid to social insurance
    programs or excise taxes), or customs duties, fines, penalties, and
    forfeitures.
      There has been a growth in user fees, and some have been classified by
    law as offsetting collections when they more appropriately should have
    been classified as governmental receipts. The classification of some
    user fees as an offset to budget authority and outlays do not meet the
    guidelines established by the 1967 President's Commission on Budget
    Concepts that only business-type transactions should be classified as
    offsetting collections. To the extent these collections are
    inappropriately classified as an offset to Federal spending, they reduce
    the size of Federal spending and governmental receipts. The
    Administration plans to monitor and review the classification of user
    fees and other types of collections.

      Alternative definitions. The definition used in this chapter is useful
    because it identifies goods, services, and regulations financed by
    earmarked collections and receipts.\2\ Other definitions may be used for
    other purposes, such as establishing policy for charging prices to the
    public for goods and services regardless of whether the proceeds are
    earmarked.
    ---------------------------------------------------------------------------
      \2\ The definition used here is similar to one the House of
    Representatives uses as a guide for purposes of committee jurisdiction.
    The definition helps differentiate between taxes, which are under the
    jurisdiction of the Ways and Means Committee, and fees, which can be
    under the jurisdiction of other committees. See the Congressional
    Record, January 3, 1991, p. H31, item 8.
    ---------------------------------------------------------------------------
      One alternative definition could be the broader concept of user
    charges, as defined in OMB Circular A-25, ``User Charges,'' (July 8,
    1993). User charges are fees assessed for the provision of Government
    services and for the sale or use of Government goods or resources. The
    payers of the user charge must be limited in the authorizing legislation
    to those receiving special benefits from, or subject to regulation by,
    the program or activity beyond the benefits received by the general
    public or broad segments of the public (such as those who pay income
    taxes or customs duties). The term is broader than user fees as defined
    in this chapter because user charges encompass proceeds, whether or not
    earmarked, from the sale or use of government goods and services,
    including the sale of natural resources (such as timber, oil, and
    minerals) and proceeds from asset sales (such as property, plant, and
    equipment).
      Other alternative definitions of user fees could, for example:
        be narrower than the one used here, by excluding regulatory
              fees and analyzing them as a separate category.
        be broader than the one used here, by selecting one or more
              of the following:
         --eliminating the requirement that fees be earmarked. The
             definition would then include fees that go to the general fund
             in addition to those that are earmarked to finance the related
             activity.
         --including the sale of resources as well as goods and services,
             such as natural resources (e.g., timber, oil, or minerals) and
             property, plant, and equipment.

    [[Page 51]]

         --interpreting more broadly whether a program has private
             beneficiaries, or whether the proceeds are earmarked to benefit
             directly those paying the fee. A broader interpretation might
             include beneficiary- or liability-based excise taxes.\3\
    ---------------------------------------------------------------------------
      \3\ Beneficiary- and liability-based taxes are terms taken from the
    Congressional Budget Office, The Growth of Federal User Charges, August
    1993, and updated in October 1995. Examples of beneficiary-based taxes
    include taxes on gasoline, which finance grants to States for highway
    construction, or taxes on airline tickets, which finance air traffic
    control activities and airports. An example of a liability-based tax is
    the excise tax that helps fund the hazardous substance superfund in the
    Environmental Protection Agency. This tax is paid by industry groups to
    finance environmental cleanup activities related to the industry
    activity but not necessarily caused by the payer of the fee.
    ---------------------------------------------------------------------------

      What is the purpose of user fees? The purpose of user fees is to
    improve the efficiency and equity of certain Government activities, and
    to reduce the burden on the taxpayer to finance activities whose
    benefits accrue to a relatively limited number of people.
      User fees that are set to cover the costs of production of goods and
    services can provide efficiency in the allocation of resources within
    the economy. They allocate goods and services to those who value them
    the most, and they signal to the Government how much of the goods or
    services it should provide. Prices in private, competitive markets serve
    the same purposes.
      User fees for goods and services that do not have special social
    benefits improve equity, or fairness, by requiring that those who
    benefit from an activity are the same people who pay for it. The public
    often perceives user fees as fair because those who benefit from the
    good or service pay for it in whole or in part, and those who do not
    benefit do not pay.

      When should the Government charge a fee? Discussions of whether to
    finance spending with a tax or a fee often focus on whether the benefits
    of the activity are to the public in general or to a limited group of
    people. In general, if the benefits accrue broadly to the public, then
    the program should be financed by taxes paid by the public; in contrast,
    if the benefits accrue to a limited number of private individuals or
    groups, then the program should be financed by fees paid by the private
    beneficiaries. For Federal programs where the benefits are entirely
    public or entirely private, applying this principle is relatively easy.
    For example, according to this principle, the benefits from national
    defense accrue to the public in general and should be (and are) financed
    by taxes. In contrast, the benefits of electricity sold by the Tennessee
    Valley Authority accrue exclusively to those using the electricity, and
    should be (and are) financed by user fees.
      In many cases, however, an activity has benefits that accrue to both
    public and to private groups, and it may be difficult to identify how
    much of the benefits accrue to each. Because of this, it can be
    difficult to know how much of the program should be financed by taxes
    and how much by fees. For example, the benefits from recreation areas
    are mixed. Fees for visitors to these areas are appropriate because the
    visitors benefit directly from their visit, but the public in general
    also benefits because these areas protect the Nation's natural and
    historical heritage now and for posterity.
      As a further complication, where a fee may be appropriate to finance
    all or part of an activity, some consideration must be given to the ease
    of administering the fee.

      What should be the amount of the fee? For programs that have private
    beneficiaries, the amount of the fee should depend on the costs of
    producing the goods or services and the portion of the program that is
    for private benefits. If the benefit is primarily private, and any
    public benefits are incidental, current policies support fees that cover
    the full cost to the Government, including both direct and indirect
    costs.\4\
    ---------------------------------------------------------------------------
      \4\ Policies for setting user charges are promulgated in OMB Circular
    No. A-25: ``User Charges'' (July 8, 1993). These policies are required
    regardless of whether or not the proceeds are earmarked to finance the
    related activity.
    ---------------------------------------------------------------------------
      The Executive Branch is working to put cost accounting systems in
    place across the Government that would make the calculation of full cost
    more feasible. The difficulties in measuring full cost are associated in
    part with allocating to an activity the full costs of capital,
    retirement benefits, and insurance, as well as other Federal costs that
    may appear in other parts of the budget. Guidance in the Statement of
    Federal Financial Accounting Standards No. 4, Managerial Cost Accounting
    Concepts and Standards for the Federal Government (July 31, 1995),
    should underlie cost accounting in the Federal Government.

      Classification of user fees in the budget. As shown in Table 4-1, most
    user fees are classified as offsets to outlays on the spending side of
    the budget, but a few are classified on the receipts side of the budget.
    An estimated $1.5 billion in 2002 are classified this way and are
    included in the totals described in Chapter 3. ``Federal Receipts.''
    They are classified as receipts because they are regulatory fees
    collected by the Federal Government by the exercise of its sovereign
    powers.
      The remaining user fees, an estimated $142.3 billion in 2002, are
    classified as offsetting collections and receipts on the spending side
    of the budget. Some of these are collected by the Federal Government by
    the exercise of its sovereign powers and would normally appear on the
    receipts side of the budget, but are required by law to be classified as
    offsetting collections or receipts.
      An estimated $108.7 billion of user fees for 2002 are credited
    directly to expenditure accounts, and are generally available for
    expenditure when they are collected, without further action by the
    Congress.
      An estimated $33.7 billion of user fees for 2002 are deposited in
    offsetting receipt accounts, and are available to be spent only
    according to the legislation that established the fees.
      As a further classification, the following Tables 4-2 and 4-3 identify
    the fees as discretionary or mandatory. These classifications are terms
    from the Budget Enforcement Act of 1990 as amended and are used
    frequently in the analysis of the budget. ``Discretionary''

    [[Page 52]]

    in this chapter refers to fees generally controlled through annual
    appropriations acts and under the jurisdiction of the appropriations
    committees in the Congress. These fees offset discretionary spending
    under the discretionary caps. ``Mandatory'' refers to fees controlled by
    permanent laws and under the jurisdiction of the authorizing committees.
    These fees are subject to rules of paygo, whereby changes in law
    affecting mandatory programs and receipts cannot result in a net cost.
    Mandatory spending is sometimes referred to as direct spending.
      These and other classifications are discussed further in this volume
    in Chapter 25, ``Budget System and Concepts and Glossary.''

                              II.   Current User Fees

      As shown in Table 4-2, total user fee collections (including those
    proposed in this budget) are estimated to be $143.8 billion in 2002,
    increasing to $171.3 billion in 2006. User fee collections by the Postal
    Service and Medicare premiums are the largest and are estimated to be
    almost two-thirds of total user fee collections in 2002.
      User fee collections are used to offset outlays in both the
    discretionary and mandatory parts of the budget. User fee collections
    classified in the discretionary part of the budget are estimated to be
    $17.2 billion in 2002, and those in the mandatory part are estimated to
    be $125.1 billion in 2002.

                              III. User Fee Proposals

      As shown in Table 4-3, the Administration is proposing new or
    increased user fees that would increase collections by an estimated $0.6
    billion in 2002, increasing to $1.5 billion in 2006.

    A.  User Fee Proposals to Offset Discretionary Spending

    1.  Offsetting collections

    Department of Agriculture

      Animal and Plant Health Inspection Service (APHIS).--The
    Administration proposes to establish fees to cover the cost of providing
    animal welfare inspections to recipients of APHIS services such as
    animal research centers, humane societies, and kennels.
      Grain Inspection, Packers and Stockyards Administration (GIPSA)
    licensing fees.--The budget proposes to charge the grain industry for
    GIPSA's costs to review and maintain standards (such as grain quality
    and classification) that are used by the industry.

    Department of Health and Human Services

      User fees for Medicare providers for processing paper claims and
    duplicate or unprocessable claims.--The Administration is proposing new
    user fees for providers for submitting paper claims and duplicate or
    unprocessable claims. Under this proposal, providers would be charged
    $1.50 for every paper claim submitted for payment. The fee is necessary
    because processing paper claims is more costly than processing
    electronic claims. Paper claim fees could be waived for rural and poor
    providers.
      The Health Care Financing Administration and its contractors go to
    great lengths to ensure that providers are aware of billing requirements
    and the need to submit accurate claims. Charging a $1.50 fee for
    duplicate or unprocessable claims would heighten provider awareness of
    these issues and increase efficiency by deterring this action.
      Fees for export certification of foods and for import program
    operations.--The Administration is proposing new user fees for export
    certification of foods and for import program operations. Spending
    financed by these fees would be in addition to regular appropriations.
    The Food and Drug Administration currently assesses user fees for non-
    food regulated products when export certifications are requested by
    industry.

    2. Offsetting receipts

    Department of Housing and Urban Development

      User fees to finance inspection of manufactured housing.--The
    Administration is proposing inspection fees that would finance Federal
    formulation and enforcement of standards in manufactured housing. These
    fees are authorized by the Manufactured Housing Improvement Act of 2000
    and replace fees previously authorized by the National Manufactured
    Housing Construction and Safety Standards Act of 1974.

    Department of Justice

      Increase immigration inspection user fees.--Congress established this
    user fee to cover the full cost of air and sea passenger inspections.
    The Administration proposes to increase the per passenger inspection fee
    from $6 to $7 and phase out the exemption from the inspection fee for
    cruise ship passengers--establishing a $3 fee in 2002. The increase will
    be used to defray inspection expenses of the Immigration and
    Naturalization Service.

    Department of Transportation

      Hazardous materials transportation safety fees.--Beginning in 2002,
    hazardous materials transportation safety activities previously financed
    by general fund appropriations to the Research and Special Programs
    Administration are proposed to be financed instead by an increase in
    hazardous materials registration fees. Appropriation legislation is
    proposed to increase the fees paid by shippers and carriers of hazardous
    materials in 2002 to fund these safety activities.

    [[Page 53]]

                                         Table 4-2.  TOTAL USER FEE COLLECTIONS
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                   Estimates
                                                  2000   -----------------------------------------------------------
                                                 Actual     2001      2002      2003      2004      2005      2006
    ----------------------------------------------------------------------------------------------------------------
                     Receipts

    Agricultural quarantine inspection fees...       234       240       246       252       259       266       272
    Corps of Engineers, Harbor maintenance           678       741       781       825       865       900       946
     trust fund...............................
    Other governmental receipts user fees.....       413       469       455       457       464       474       477
                                               ---------------------------------------------------------------------
      Subtotal, governmental receipts.........     1,325     1,450     1,482     1,534     1,588     1,640     1,695

     Offsetting Collections and Receipts from
                    the Public

    Discretionary
      Department of Agriculture: Food safety         177       189       200       197       197       197       198
       inspection and other fees..............
      Department of Commerce: Patent and           1,156     1,315     1,500     1,616     1,765     1,926     2,137
       trademark, fees for weather services,
       and other fees.........................
      Department of Defense: Commissary and        7,376     7,353     7,248     7,155     7,155     7,155     7,155
       other fees.............................
      Department of Energy: Federal Energy           594       787     1,223       632       621       590       597
       Regulation Commission, power marketing,
       and other fees.........................
      Department of Health and Human Services:       337       276       413       418       428       438       448
       Food and Drug Administration, Health
       Care Financing Administration, and
       other fees.............................
      Department of the Interior: Bureau of          215       231       219       219       219       219       219
       Land Management and other fees.........
      Department of Justice: Antitrust and           328       361       548       585       585       585       585
       other fees.............................
      Department of State: Passport and other        478       485       490       490       490       490       490
       fees...................................
      Department of Transportation: Railroad         131       139       216       282       286       292       297
       safety and other fees..................
      Department of the Treasury: Sale of          1,833     1,513     1,619     1,697     1,721     1,746     1,772
       commemorative coins and other fees.....
      Department of Veterans Affairs: Medical        576       611       623       633       643       653       663
       care and other fees....................
      National Aeronautics and Space                 846       839       881       881       881       881       881
       Administration: Reimbursement for the
       use of NASA services...................
      Federal Communications Commission:             192       200       219       219       219       219       219
       Regulatory fees........................
      Federal Trade Commission: Regulatory           106       159       207       207       207       207       207
       fees...................................
      Nuclear Regulatory Commission:                 447       453       469       475       482       488       506
       Regulatory fees........................
      Panama Canal Commission: Fees for use of       220  ........  ........  ........  ........  ........  ........
       the canal..............................
      Securities and Exchange Commission:            862       974       983     1,054     1,079     1,200     1,337
       Regulatory fees........................
      All other agencies, discretionary user         133       134       175       179       180       185       187
       fees...................................
                                               ---------------------------------------------------------------------
        Subtotal, discretionary user fees.....    16,007    16,019    17,233    16,939    17,158    17,471    17,898

    Mandatory
      Department of Agriculture: Federal crop        895     1,339     1,338     1,402     1,440     1,502     1,563
       insurance and other fees...............
      Department of Defense: Commissary              279       277       283       293       277       277       277
       surcharge and other fees...............
      Department of Energy: Proceeds from the      4,078     3,703     3,831     3,960     3,907     3,921     3,984
       sale of energy, nuclear regulatory
       fees, and other fees...................
      Department of Health and Human Services:    21,916    23,442    27,044    29,905    31,503    35,029    37,951
       Medicare Part B insurance premiums, and
       other fees.............................
      Department of the Interior: Recreation         583       630       619       648       652       657       658
       and other fees.........................
      Department of Justice: Immigration and       1,480     2,036     1,972     1,906     1,814     1,818     1,823
       other fees.............................
      Department of Labor: Insurance premiums        922       951       845       835       845       843       839
       to guarantee private pensions..........
      Department of the Treasury: Customs,         1,881     1,929     1,985     2,046       666       681       693
       bank regulation, and other fees........
      Department of Veterans Affairs: Veterans     1,629     1,674     1,823     1,932     1,883     1,842     1,802
       life insurance, medical collections,
       and other fees.........................
      Corps of Engineers: Recreation and other        37        36        51        57        62        67        67
       fees...................................
      Federal Emergency Management Agency:         1,475     1,553     1,640     1,808     1,936     2,118     2,343
       Flood insurance fees...................
      Office of Personnel Management: Federal      6,694     7,278     7,974     8,612     9,308     9,987    10,684
       employee health and life insurance fees
      Federal Communications Commission:        ........  ........       200       200       200       200       200
       Analog spectrum lease fee..............
      Federal Deposit Insurance Corporation:         759       559       963     1,748     2,552     3,543     5,573
       Deposit insurance fees.................
      Postal Service: Fees for postal services    63,529    65,498    67,095    69,350    71,500    73,350    75,100
      Tennessee Valley Authority: Proceeds         6,928     6,795     7,127     7,341     7,424     7,675     7,811
       from the sale of energy................
      All other agencies, mandatory user fees.       363       324       312       328       336       347       354
                                               ---------------------------------------------------------------------
        Subtotal, mandatory user fees.........   113,448   118,024   125,102   132,371   136,305   143,857   151,722
                                               ---------------------------------------------------------------------
      Subtotal, offsetting collections and       129,455   134,043   142,335   149,310   153,463   161,328   169,620
       receipts from the public...............
                                               =====================================================================
    Total, User fees..........................   130,780   135,493   143,817   150,844   155,051   162,968   171,315
    ----------------------------------------------------------------------------------------------------------------

    [[Page 54]]

      Pipeline safety fees.--This proposal would increase the existing
    pipeline safety user fees to support increased activities in the
    Pipeline Integrity Management and the Oil Spill Prevention and Response
    programs.
      Railroad safety user fees.--This proposal would fund Federal Railroad
    Administration safety inspections and the safety component of the
    railroad research and development program. The fees would be collected
    from the primary beneficiaries of these services, the railroad carriers,
    and be based upon a calculation of their usage as established through
    regulations. The estimated 2002 collections are 50 percent of the
    anticipated cost of safety services. In subsequent years these services
    would be fully funded with user fees.

    Environmental Protection Agency

      Abolish cap on pre-manufacturing notification fees.--EPA collects fees
    from chemical manufacturers seeking to bring new chemicals into
    commerce. These fees are authorized by the Toxic Substances Control Act
    and are now subject to an outdated statutory cap. The Administration is
    proposing authorizing and appropriations language to modify the cap so
    that EPA can increase fees to fully cover the cost of the program.

    Nuclear Regulatory Commission

      Extend NRC fees at their 2005 level for 2006 and later.--The Omnibus
    Budget Reconciliation Act (OBRA) of 1990, as amended, required that the
    NRC assess license and annual fees that recover approximately 98 percent
    of its budget authority in 2001, less the appropriation from the nuclear
    waste fund. Licensees are required to reimburse NRC for its services
    because licensees benefit from such services.
      Under recent amendments to OBRA, the budget authority recovery
    requirement decreases by 2 percentage points per year until it reaches
    90 percent in 2005. After 2005, the requirement reverts to 33 percent
    per

                                             Table 4-3.  USER FEE PROPOSALS
                                     (Estimated collections in millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                2002     2003     2004     2005     2006   2002-2006
    ----------------------------------------------------------------------------------------------------------------

     A. USER FEE PROPOSALS TO OFFSET DISCRETIONARY SPENDING

    1.  Offsetting collections

    Department of Agriculture
      Animal and Plant Health Inspection Service............        5        5        5        5        6        26
      Grain Inspection, Packers and Stockyards                      4        4        4        4        4        20
       Administration.......................................
    Department of Health and Human Services
      User fees for Medicare providers for processing paper        95       90       90       90       90       455
       claims and duplicate or unprocessable claims.........
      Fees for export certification of foods and for import        20       21       22       23       24       110
       program operations...................................

    2.  Offsetting receipts

    Department of Housing and Urban Development
      User fees to finance inspection of manufactured              17       17       17       18       18        87
       housing..............................................
    Department of Justice
      Increase immigration inspection user fees.............      109      109      109      109      109       545
    Department of Transportation
      Hazardous materials transportation safety fees........       12       22       22       23       24       103
      Pipeline safety fees..................................        9        9        9        9        7        43
      Railroad safety user fees.............................       55      110      113      116      119       513
    Environmental Protection Agency
      Abolish cap on pre-manufacturing notification fees....        4        8        8        8        8        36
    Nuclear Regulatory Commission
      Extend NRC fees at their 2005 level for 2006 and later  .......  .......  .......  .......      321       321
                                                             -------------------------------------------------------
     Subtotal, user fee proposals to offset discretionary         330      395      399      405      730     2,259
     spending...............................................

       B. USER FEE PROPOSALS TO OFFSET MANDATORY SPENDING

    1.  Offsetting collections

      Federal Emergency Management Agency
        Phase out subsidized premiums for certain flood             7       26       71      167      302       573
         insurance coverage and remove repetitive loss
         properties from the flood insurance program........
      Federal Deposit Insurance Corporation
        State bank examination fees.........................       92       97      101      106      112       508

    2.  Offsetting receipts

      Department of Agriculture
        Forest Service recreation and entrance fees.........  .......       38       40       42       44       164
      Department of the Interior
        Recreation entrance fees............................  .......       75       76       74       75       300
      Corps of Engineers
        Recreation user fee increases.......................       10       15       20       25       25        95
      Federal Communications Commission
        Analog spectrum lease fee...........................      200      200      200      200      200     1,000
                                                             -------------------------------------------------------
        Subtotal, user fee proposals to offset mandatory          309      451      508      614      758     2,640
         spending...........................................
                                                             -------------------------------------------------------
          Total, user fee proposals.........................      639      846      907    1,019    1,488     4,899
    ----------------------------------------------------------------------------------------------------------------

    [[Page 55]]

    year. If the 90 percent requirement is not extended beyond 2005, fees
    would drop from an estimated $488 million in 2005 to $185 million in
    2006; with the proposed extension at 90 percent, fees would be an
    estimated $506 million in 2006, a proposed increase of $321 million.

    B.  User Fee Proposals to Offset Mandatory Spending

    1.  Offsetting collections

    Federal Emergency Management Agency

      Phase out subsidized premiums for certain flood insurance coverage.--
    The Administration proposes phasing out subsidized premium rates for
    vacation homes, rental properties, and other non-primary residences and
    businesses starting in 2002. FEMA charges many of these policy holders
    less than actuarial rates, which undermines the financial stability of
    the insurance program. Rates for primary residences, which represent a
    majority of policies in the program, would not change under this
    proposal.
      Remove repetitive loss properties from the flood insurance program.--
    The Administration proposes to remove several thousand properties from
    the program. These properties have been flooded repeatedly but
    nevertheless still benefit from subsidized premiums. Starting in 2002,
    owners of targeted properties may make one more claim for a flood loss.
    Subsequently, those properties will be ineligible to receive coverage.
    While net savings from avoided claims are estimated to be significant,
    the proposal will also generate a PAYGO cost from lost premium revenue
    as properties are removed from the program.

    Federal Deposit Insurance Corporation

      State bank examination fees.--The Administration proposes to require
    the Federal Deposit Insurance Corporation and the Federal Reserve to
    recover their respective costs for supervision and regulation of State-
    chartered banks and bank holding companies. The proposal would eliminate
    the subsidization of State banks by national banks and taxpayers, treat
    State and federally chartered financial institutions the same, and
    reduce the incentive for federally-chartered banks to convert to State
    charters solely to avoid assessments.
      Currently, the FDIC pays for its supervision and regulatory expenses
    with the deposit insurance premiums that all banks pay, including
    national banks. Additional income from the proposal would be realized as
    offsetting collections. The Federal Reserve uses its interest earnings
    to pay its supervision and regulatory costs, consequently transferring
    less money to the Treasury. Therefore, deposits of earnings by the
    Federal Reserve, which are classified as governmental receipts, would
    increase under this proposal. This estimated increase in recoveries is
    in addition to the amounts shown on Table 4-3.

    2.  Offsetting receipts

    Department of Agriculture

      Forest Service recreation and entrance fees.--The Administration
    proposes to extend for four years, for 2003 through 2006, the current
    pilot program that allows the Forest Service to collect increased
    recreation and entrance fees. These receipts would be available for use
    without further appropriation and are necessary to maintain and improve
    recreation facilities and services. A similar proposal affects
    recreation fees for the National Park Service, the Bureau of Land
    Management, and the Fish and Wildlife Service in the Department of the
    Interior.

    Department of the Interior

      Recreation entrance fees.--The Administration proposes to extend for
    four years, for 2003 through 2006, the current pilot program that allows
    the National Park Service, the Bureau of Land Management, and the Fish
    and Wildlife Service to collect increased recreation and entrance fees.
    These receipts would be available for use without further appropriation,
    and approximately 60 percent of National Park Service receipts would be
    used to reduce its deferred maintenance backlog. A related proposal
    affects recreation fees for the Forest Service in the Department of
    Agriculture.

    Corps of Engineers

      Recreation user fee increases.--The Administration proposes to phase
    in recreation user fee increases with the entire increase available
    without further legislative action for spending on operation,
    maintenance, and improvement of the recreation facilities of the Corps
    of Engineers. Some increases in fee receipts can be accomplished without
    changes to existing legislation. Other increases will require
    legislation to increase limits on existing recreation user fees,
    authorize new fees, or reclassify existing fees. In addition, the
    Administration recommends extending the recreation demonstration
    program, which allows recreation fee revenues above a baseline of $34
    million per year to be used by the Corps for operation and maintenance
    of recreation facilities. The Corps spends about $250 million per year
    on these activities.
      Recreation fee increases to boost agency expenditures on recreation
    and maintenance of facilities have been enacted in recent years for
    other agencies such as the National Park Service in the Department of
    the Interior and the Forest Service in the Department of Agriculture. A
    similar proposal affects recreation fees for these programs.

    Federal Communications Commission

      Analog spectrum lease fee.--The Administration supports establishing a
    lease fee on commercial television broadcasters' use of the analog
    spectrum until broadcasters complete the transition to digital
    broadcasting and return their analog spectrum licenses to the FCC. The
    proposal would encourage a timely transition to

    [[Page 56]]

    digital broadcasting and have television broadcasters reimburse the
    public for use of this scarce resource.

                    OTHER OFFSETTING COLLECTIONS AND RECEIPTS

      Table 4-4 shows that total offsetting collections and receipts from
    the public are estimated to be $222.1 billion in 2002. Of these, an
    estimated $143.7 billion are offsetting collections credited to
    appropriation accounts and an estimated $78.4 billion are deposited in
    offsetting receipt accounts.
      The user fees in Table 4-4 were discussed in the previous section.
    Major offsetting collections deposited in expenditure accounts that are
    not user fees are pre-credit reform loan repayments, collections from
    States to supplement payments in the supplemental security income
    program, and collections for the Federal Savings and Loan resolution
    fund. Major offsetting receipts that are not user fees include spectrum
    auction receipts, military assistance program sales, rents and royalties
    for oil and gas on the Outer Continental Shelf, and interest income.
      Table 4-5 includes all offsetting receipts deposited in receipt
    accounts. These include payments from one part of the Government to
    another, called intragovernmental transactions, and collections from the
    public. These receipts are offset (deducted) from outlays in the Federal
    budget. In total, offsetting receipts are estimated to be $428.3 billion
    in 2002--$349.9 billion are intragovernmental transactions, and $78.4
    billion are from the public, shown in the table as proprietary receipts
    and offsetting governmental receipts.
      As noted above, offsetting collections and receipts by agency are also
    displayed in Table 20-1, ``Outlays to the Public, Net and Gross,'' which
    appears in Chapter 20 of this volume.

    [[Page 57]]

        Table 4-4.   OFFSETTING COLLECTIONS AND RECEIPTS FROM THE PUBLIC
                            (In millions of dollars)
    ------------------------------------------------------------------------
                                                           Estimate
                                    2000  Actual ---------------------------
                                                      2001          2002
    ------------------------------------------------------------------------
    Offsetting collections:

       User fees:
         Postal service stamps and        63,529        65,498        67,095
         other postal fees........
        Defense Commissary Agency.         5,087         5,282         5,209
        Federal employee                   5,263         5,817         6,436
         contributions for
         employees and retired
         employees health benefits
         funds....................
        Sale of energy:
          Tennessee Valley                 6,928         6,795         7,127
           Authority..............
          Bonneville Power                 2,995         2,732         2,929
           Administration.........
        All other user fees.......
                                          17,989        18,229        19,864
                                   -----------------------------------------
          Subtotal, user fees.....       101,791       104,353       108,660

      Other offsetting
       collections:
        Pre-credit reform loan            15,864        15,563        14,847
         repayments...............
        Supplemental security              3,399         3,570         3,665
         income (collections from
         the States)..............
        Federal Savings and Loan           2,638         1,670         1,102
         Insurance Corporation
         resolution fund..........
        Other collections.........        17,672        15,935        15,423
                                   -----------------------------------------
          Subtotal, other                 39,573        36,738        35,037
           offsetting collections.
                                   -----------------------------------------
        Subtotal, offsetting             141,364       141,091       143,697
         collections..............

    Offsetting receipts:

       User fees:
        Medicare premiums and             21,907        23,433        27,014
         other charges............
        All other user fees.......
                                           5,757         6,257         6,661
                                   -----------------------------------------
          Subtotal, user fees.....
                                          27,664        29,690        33,675
       Other offsetting receipts:
        Spectrum auction receipts.           150         1,572         1,760
        Military assistance               11,362        11,340        11,450
         program sales............
        OCS rents, bonuses, and            4,580         6,931         5,884
         royalties................
        Interest income...........        13,207        13,091        13,837
        All other offsetting              15,743        19,266        11,800
         receipts.................
                                   -----------------------------------------
          Subtotal, other                 45,042        52,200        44,731
           offsetting receipts....
                                   -----------------------------------------
      Subtotal, offsetting                72,706        81,890        78,406
       receipts...................
                                   =========================================
    Total, offsetting collections        214,070       222,981       222,103
     and receipts from the public.

    Total, offsetting collections        150,497       157,439       154,964
     and receipts excluding off-
     budget.......................

    ADDENDUM:

      User fees that are                 129,455       134,043       142,335
       offsetting collections and
       receipts\1\................
      Other offsetting collections        84,615        88,938        79,768
       and receipts from the
       public.....................
                                   -----------------------------------------
        Total, offsetting                214,070       222,981      222,103
         collections and receipts
         from the public..........
    ------------------------------------------------------------------------
    \1\ Excludes user fees that are classified on the receipts side of the
      budget. For total user fees, see Table 4.1 or Table 4.2.

    [[Page 58]]

                                         Table 4-5.  OFFSETTING RECEIPTS BY TYPE
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                             Estimate
               Source                2000    -----------------------------------------------------------------------
                                    Actual       2001        2002        2003        2004        2005        2006
    ----------------------------------------------------------------------------------------------------------------
          INTRAGOVERNMENTAL
            TRANSACTIONS
    On-budget receipts:
      Federal intrafund
       transactions:
        Distributed by agency:
          Interest from the            1,974       2,035       2,136       1,830       2,160       2,387       2,535
           Federal Financing
           Bank.................
          Interest on Government       1,867       1,339       1,524       1,187       1,073       1,010         948
           capital in
           enterprises..........
          DoD retiree health      ..........  ..........  ..........       9,036       9,397       9,773      10,164
           care fund............
          Credit subsidy balance  ..........      10,637         439         482         667         861       1,059
           transfers............
          Other.................       2,383       1,974       1,988       2,077       2,183       2,280       2,362
        Undistributed by agency:
          DoD retiree health      ..........  ..........  ..........       2,943       3,072       3,211       3,355
           care fund............
                                 -----------------------------------------------------------------------------------
          Total Federal                6,224      15,985       6,087      17,555      18,552      19,522      20,423
           intrafunds...........
                                 -----------------------------------------------------------------------------------
        Trust intrafund
         transactions:
          Distributed by agency:
          Payments to railroad         3,697       3,215       3,812       3,838       3,838       3,853       3,679
           retirement...........
          Other.................           1           1           1           1           1           1           1
                                 -----------------------------------------------------------------------------------
          Total trust intrafunds       3,698       3,216       3,813       3,839       3,839       3,854       3,680
                                 -----------------------------------------------------------------------------------
        Total intrafund                9,922      19,201       9,900      21,394      22,391      23,376      24,103
         transactions...........
                                 -----------------------------------------------------------------------------------
      Interfund transactions:
        Distributed by agency:
          Federal fund payments
           to trust funds:
            Contributions to
             insurance programs:
              Military                15,302      16,089      16,653      17,235      17,839      18,463      19,110
               retirement fund..
              Supplementary           65,561      69,777      81,332      88,779      92,549     102,042     110,380
               medical insurance
                Proposed          ..........  ..........         -70         -75         -70         -70         -70
                 legislation
                 (non-PAYGO)....
              Hospital insurance       9,450       8,030       8,596       9,107       9,839      10,560      11,358
                Proposed          ..........  ..........        -106        -304        -461        -662        -821
                 legislation
                 (non-PAYGO)....
              Railroad social            141         106         113         124         134         145         152
               security
               equivalent fund..
                Proposed          ..........  ..........          -1          -3          -6          -8         -11
                 legislation
                 (non-PAYGO)....
              Rail industry              318         229         234         241         247         254         262
               pension fund.....
                Proposed          ..........  ..........          -5         -12         -15         -23         -27
                 legislation
                 (non-PAYGO)....
              Civilian                21,808      22,056      22,724      23,183      23,869      24,563      25,042
               supplementary
               retirement
               contributions....
              Unemployment               397         466         483         478         478         482         495
               insurance........
              Other                      518         574         466         443         444         444         474
               contributions....
                                 -----------------------------------------------------------------------------------
              Subtotal..........     113,495     117,327     130,419     139,196     144,847     156,190     166,344
                                 -----------------------------------------------------------------------------------
            Miscellaneous                956       1,443         819         864         876         893         912
             payments...........
              Proposed            ..........  ..........         -11         -11         -12         -12         -12
               legislation (non-
               PAYGO)...........
                                 -----------------------------------------------------------------------------------
            Subtotal............     114,451     118,770     131,227     140,049     145,711     157,071     167,244
                                 -----------------------------------------------------------------------------------
          Trust fund payments to
           Federal funds:
            Quinquennial          ..........         836  ..........  ..........  ..........  ..........  ..........
             adjustment for
             military service
             credits............
            Other...............       1,078       2,496       1,186       1,214       1,241       1,271       1,303
                                 -----------------------------------------------------------------------------------
            Subtotal............       1,078       3,332       1,186       1,214       1,241       1,271       1,303
                                 -----------------------------------------------------------------------------------
          Total interfunds           115,529     122,102     132,413     141,263     146,952     158,342     168,547
           distributed by agency
                                 -----------------------------------------------------------------------------------
        Undistributed by agency:
          Employer share,
           employee retirement
           (on-budget):
            Civil service              9,611      10,316      10,679      10,585      11,174      11,843      12,547
             retirement and
             disability
             insurance (CSRDI)..
              Proposed            ..........  ..........  ..........         469         482         449         415
               legislation (non-
               PAYGO)...........
            CSRDI from Postal          6,445       6,768       6,854       6,975       7,111       7,249       7,327
             Service............
            Hospital insurance         1,991       2,038       2,127       2,229       2,337       2,470       2,574
             (contribution as
             employer) \1\ .....
            Postal employer              639         655         682         711         742         774         807
             contributions to
             FHI................
            Military retirement       11,402      11,369      12,166      12,622      13,098      13,567      14,040
             fund...............
            Other Federal                126         130         134         138         142         147         152
             employees
             retirement.........
                                 -----------------------------------------------------------------------------------
            Total employer            30,214      31,276      32,642      33,729      35,086      36,499      37,862
             share, employee
             retirement (on-
             budget)............
                                 -----------------------------------------------------------------------------------

    [[Page 59]]

            Interest received by      69,113      73,662      76,317      80,272      84,695      88,974      93,634
             on-budget trust
             funds..............
              Proposed            ..........  ..........          -1         -76        -162        -261        -359
               legislation (non-
               PAYGO)...........
                                 -----------------------------------------------------------------------------------
          Total interfund             99,327     104,938     108,958     113,925     119,619     125,212     131,137
           transactions
           undistributed by
           agency...............
                                 -----------------------------------------------------------------------------------
        Total interfund              214,856     227,040     241,371     255,188     266,571     283,554     299,684
         transactions...........
                                 -----------------------------------------------------------------------------------
      Total on-budget receipts..     224,778     246,241     251,271     276,582     288,962     306,930     323,787
                                 -----------------------------------------------------------------------------------
    Off-budget receipts:
      Trust intrafund
       transactions:
        Distributed by agency:
      Interfund transactions:
        Distributed by agency:
          Federal fund payments
           to trust funds:
            Old-age, survivors,       13,252      12,541      13,734      14,876      16,076      17,230      18,428
             and disability
             insurance..........
              Proposed            ..........  ..........        -140        -418        -645        -921      -1,169
               legislation (non-
               PAYGO)...........
        Undistributed by agency:
            Employer share,            7,637       7,877       8,917       9,161       9,868      10,706      11,443
             employee retirement
             (off-budget).......
            Interest received by      59,796      68,886      76,086      85,421      95,855     107,348     120,111
             off-budget trust
             funds..............
                                 -----------------------------------------------------------------------------------
      Total off-budget receipts:      80,685      89,304      98,597     109,040     121,154     134,363     148,813
                                 -----------------------------------------------------------------------------------
    Total intragovernmental          305,463     335,545     349,868     385,622     410,116     441,293     472,600
     transactions...............
                                 ===================================================================================
      PROPRIETARY RECEIPTS FROM
             THE PUBLIC
    Distributed by agency:
      Interest:
        Interest on foreign              472         771         706         694         688         680         663
         loans and deferred
         foreign collections....
        Interest on deposits in        1,785       1,455       1,340       1,340       1,340       1,340       1,340
         tax and loan accounts..
        Other interest                 9,598      10,865      11,791      12,445      13,323      14,062      14,561
         (domestic--civil) \2\ .
                                 -----------------------------------------------------------------------------------
        Total interest..........      11,855      13,091      13,837      14,479      15,351      16,082      16,564
                                 -----------------------------------------------------------------------------------
      Royalties and rents.......       1,639       2,298       2,093       2,074       2,096       2,113       2,096
                                 -----------------------------------------------------------------------------------
      Sale of products:
        Sale of timber and other         293         445         440         449         439         440         440
         natural land products..
        Sale of minerals and              23          32          31          21          27          25          24
         mineral products.......
        Sale of power and other          735         775         690         722         699         681         707
         utilities..............
        Other...................          64          58          79          74          64          82          77
                                 -----------------------------------------------------------------------------------
        Total sale of products..       1,115       1,310       1,240       1,266       1,229       1,228       1,248
                                 -----------------------------------------------------------------------------------
      Fees and other charges for
       services and special
       benefits:
        Medicare premiums and         21,907      23,433      27,034      29,896      31,494      35,020      37,942
         other charges (trust
         funds).................
          Proposed legislation    ..........  ..........         -20         -25         -25         -25         -25
           (non-PAYGO)..........
        Nuclear waste disposal           702         620         640         625         612         637         621
         revenues...............
        Veterans life insurance          201         190         179         168         156         142         128
         (trust funds)..........
        Other \2\ ..............       2,349       2,750       2,757       2,875       2,926       3,001       3,056
          Proposed legislation    ..........  ..........          10         128         136         141         144
           (PAYGO)..............
                                 -----------------------------------------------------------------------------------
        Total fees and other          25,159      26,993      30,600      33,667      35,299      38,916      41,866
         charges................
                                 -----------------------------------------------------------------------------------
      Sale of Government
       property:
        Sale of land and other            45         149         458         117         114         114         113
         real property..........
        Military assistance           11,362      11,340      11,450      11,470      11,230      11,020      10,940
         program sales (trust
         funds).................
        Other...................          94         332         192         183         142         171         129
                                 -----------------------------------------------------------------------------------
        Total sale of Government      11,501      11,821      12,100      11,770      11,486      11,305      11,182
         property...............
                                 -----------------------------------------------------------------------------------
      Realization upon loans and
       investments:
        Negative subsidies and         5,007       8,054         818       3,449       3,717       3,749       3,686
         downward reestimates of
         credit subsidies.......
        Repayment of loans to            138         291          70          85          88          94         108
         foreign nations........
        Other...................          95          67         114          94          90          86          82
                                 -----------------------------------------------------------------------------------
        Total realization upon         5,240       8,412       1,002       3,628       3,895       3,929       3,876
         loans and investments..
                                 -----------------------------------------------------------------------------------

    [[Page 60]]

      Recoveries and refunds \2\       3,854       3,296       3,352       3,381       3,498       3,680       3,485
       .........................
      Miscellaneous receipt            2,876       1,955       1,878       1,884       1,893       1,896       1,906
       accounts \2\ ............
                                 -----------------------------------------------------------------------------------
      Total proprietary receipts      63,239      69,176      66,102      72,149      74,747      79,149      82,223
       from the public
       distributed by agency....
                                 -----------------------------------------------------------------------------------
    Undistributed by agency:
      Other interest: Interest         1,352  ..........  ..........  ..........  ..........  ..........  ..........
       received from Outer
       Continental Shelf escrow
       account..................
      Rents, bonuses, and
       royalties:
        Outer Continental Shelf          894         505         637         383         322         270         229
         rents and bonuses......
        Outer Continental Shelf        3,686       6,426       5,247       4,975       4,863       4,701       4,607
         royalties..............
        Arctic National Wildlife
         Refuge:
          Proposed legislation    ..........  ..........  ..........  ..........       2,402           2           2
           (PAYGO)..............
      Sale of major assets......  ..........  ..........  ..........         323  ..........  ..........  ..........
                                 -----------------------------------------------------------------------------------
      Total proprietary receipts       5,932       6,931       5,884       5,681       7,587       4,973       4,838
       from the public
       undistributed by agency..
                                 -----------------------------------------------------------------------------------
    Total proprietary receipts        69,171      76,107      71,986      77,830      82,334      84,122      87,061
     from the public............
                                 ===================================================================================
       OFFSETTING GOVERNMENTAL
              RECEIPTS
    Distributed by agency:
      Regulatory fees \2\ ......       3,310       4,134       4,310       4,306       2,432       2,439       2,454
        Proposed legislation      ..........  ..........          71         140         143         147         151
         (non-PAYGO)............
      Other.....................          75          77          79          81          84          86          88
    Undistributed by agency:
      Spectrum auction proceeds.         150       1,572       4,360       9,665       9,670       1,275         680
        Proposed legislation      ..........  ..........      -2,400        -800       5,300       2,200       4,200
         (PAYGO)................
                                 -----------------------------------------------------------------------------------
      Total offsetting                 3,535       5,783       6,420      13,392      17,629       6,147       7,573
       governmental receipts....
                                 ===================================================================================
    Total offsetting receipts...     378,169     417,435     428,274     476,844     510,079     531,562     567,234
                                 ===================================================================================

             MEMORANDUM

    Composition of proprietary
     receipts from the public
    On-budget:
      Federal funds.............      34.468      39,908      32,162      35,149      38,316      36,805      36,935
      Trust funds...............      34,651      36,115      39,740      42,594      43,928      47,223      50,029
    Off-budget..................          52          84          84          87          90          94          97
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes provision for covered Federal civilian employees and military personnel.
    \2\ Includes both Federal funds and trust funds.