[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.