[Congressional Record Volume 142, Number 101 (Wednesday, July 10, 1996)]
[Senate]
[Pages S7646-S7649]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SUSTAINABLE FISHERIES ACT

  Mr. PRESSLER. Mr. President, on March 28, 1996, the Committee on 
Commerce, Science, and Transportation reported S. 39, the Sustainable 
Fisheries Act. A report on the bill was filed on May 23, 1996. At that 
time, the committee was unable to provide a cost estimate for the bill 
from the Congressional Budget Office. On July 8, 1996, the accompanying 
letter was received from the Congressional Budget Office, and I now 
make it available to the Senate. I ask unanimous consent that the 
letter from CBO be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
                                                    U.S. Congress,


                                  Congressional Budget Office,

                                     Washington, DC, July 8, 1996.
     Hon. Larry Pressler,
     Chairman, Committee on Commerce, Science, and Transportation, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for S. 39, the 
     Sustainable Fisheries Act.
       Enactment of S. 39 would affect direct spending and 
     receipts. Therefore, pay-as-you-go procedures would apply to 
     the bill. S. 39 contains several new private-sector mandates 
     (see the enclosed mandates statement), but it does not 
     contain any intergovernmental mandates as defined in Public 
     Law 104-4.
       If you wish further details on this estimate, we will be 
     pleased to provide them.
           Sincerely,
                                                     James L. Blum
                                            (For June E. O'Neill).
       Enclosures.


               congressional budget office cost estimate

       1. Bill number: S. 39.
       2. Bill title: The Sustainable Fisheries Act.
       3. Bill status: As reported by the Senate Committee on 
     Commerce, Science, and Transportation on May 23, 1996.
       4. Bill purpose: S. 39 would amend the Magnuson Fishery 
     Conservation and Management Act (the Magnuson Act), which 
     governs federal regulation of commercial and recreational 
     fishing within the exclusive economic zone (EEZ) of the 
     United States. The bill also would amend other marine fishery 
     and maritime laws including the Anadromous Fisheries Act, the 
     Interjurisdictional Fisheries Act, the Fish and Wildlife Act 
     of 1956, the Atlantic Coastal Cooperative Management Act, the 
     Merchant Marine Act, and the Saltonstall-Kennedy Act. 
     Programs authorized under these acts are managed locally by 
     eight regional fishery councils and

[[Page S7647]]

     at the national level by the National Oceanic and Atmospheric 
     Administration (NOAA).
     Program authorizations
       S. 39 would authorize funding through fiscal year 2000 for 
     fisheries conservation and management, information collection 
     and analysis, and state/industry assistance programs. Other 
     provisions of the will would:
       Reauthorize the Fishing Vessel Obligation Guarantee (FVOG) 
     program and provide for guarantees of up to $40 million in 
     loans annually;
       Expand the FVOG program to allow refinancing of fishing 
     vessel loans during a fishery recovery effort;
       Authorize appropriations of such sums as may be necessary 
     to rebuild failed commercial fisheries and mitigate losses of 
     participants in such fisheries;
       Make fishing observers federal employees for the purpose of 
     compensation for work injuries under the Federal Employee 
     Compensation Act; and
       Increase NOAA's flexibility in providing grants to 
     commercial fishermen who have suffered uninsured losses as a 
     direct result of a natural disaster.
     Revenues and fees
       The bill also would establish a number of new fees and 
     would affect revenues from existing fees. Major provisions 
     would:
       Direct the Secretary of Commerce (hereafter referred to as 
     the Secretary) to collect a 3 percent fee on the annual ex-
     vessel (dockside) value of fish harvested under any 
     individual fishing quota (IFQ) or community development quota 
     (CDQ) program;
       Direct the Secretary to collect fees on foreign vessels 
     that transport fish products from points within U.S. waters 
     to foreign ports;
       Authorize the Secretary of State to enter into agreements 
     to authorize foreign fishing within the EEZ adjacent to 
     Pacific Insular Areas (PIAs); such agreements would include 
     an annual determination of fees to be charged foreign 
     vessels;
       Authorize the Secretary of Commerce to collect a fee equal 
     to one-half of 1 percent of the value of limited access 
     permits;
       Authorize a 1 percent fee on the annual ex-vessel value of 
     bycatch (incidental catch of nontarget fish) targeted for 
     conservation in the North Pacific;
       In the case of American Samoa, Guam, and the Northern 
     Marina Islands, require that amounts received by the 
     Secretary from fines and penalties imposed under the Magnuson 
     Act be transferred to the treasury of the PIA adjacent to the 
     exclusive economic zone in which the violation occurred and 
     be available for spending by the Governor of that area for 
     any purposes; in the case of other PIAs, require that such 
     amounts be deposited in a newly created Western Pacific 
     Sustainable Fisheries Fund in the U.S. Treasury and spent 
     without appropriation on conservation and management 
     measures; and
       Authorize the Secretary of State to enter into 
     international agreements to reduce bycatch. The Secretary of 
     the Treasury would be required to impose trade sanctions on 
     fish and fish products from those nations that fail to enter 
     into agreements.
       Titles I and III of S. 39 would authorize NOAA to institute 
     fishing capacity reduction programs (FCRPs) to ameliorate 
     overfishing in certain areas. Such programs would enable the 
     agency to reduce permanently the number of fishing concerns 
     operating in eligible fisheries by purchasing fishing vessels 
     or federal permits from voluntary sellers or by guaranteeing 
     debt obligations issued by approved entities for that 
     purpose. NOAA would conduct the FCRP regardless of whether 
     the agency guarantees such debt obligations or provides 
     direct funding to owners of fishing vessels or permits.
       Section 118 of the bill would provide for several possible 
     funding sources for the FCRPs, including: (1) grants from the 
     Promote and Develop Fisheries Fund, (2) amounts appropriated 
     for fisheries disasters, (3) grants from any state or other 
     public source and private or nonprofit organizations, and (4) 
     industry fees paid by participants in the fishery. In 
     addition, section 302 would provide for financing of private 
     buyouts by authorizing NOAA to guarantee bonds to eligible 
     entities under Title XI of the Merchant Marine Act, 1936. 
     Such guarantees would be subject to the appropriation of the 
     necessary amounts to cover the estimated subsidy cost as 
     defined by the Federal Credit Reform Act.
       Under the bill, guarantees could only be made if the 
     participants of a fishery approve an industry fee to be used 
     to repay any debt issued. The unpaid principal outstanding at 
     any time could not exceed $100 million for each participating 
     fishery. Amounts from sources other than subsidy 
     appropriations would be deposited to individual fishing 
     capacity reduction funds. Such amounts would be available 
     without appropriation to pay program costs, including 
     payments to financial institutions for guaranteed debt 
     obligations incurred by entities to finance buyouts. Fund 
     balances would be invested in government securities, but the 
     bill makes no provision for the deposit or spending of any 
     interest that may be earned.
       5. Estimated cost to the Federal Government: Assuming 
     appropriation of the necessary amounts, CBO estimates that 
     enacting the bill will result in new discretionary spending 
     totaling about $1.4 billion over the 1997-2002 period. 
     Enacting the bill also would result in new direct spending 
     totaling $23 million over the 1997-2002 period, and new 
     revenues totaling about $26 million over the same period. 
     Additional amounts of both direct spending and revenues, each 
     at roughly $6 million a year, would continue for several 
     years after 2002. Table 1 summarizes the estimated budgetary 
     impact of S. 39.

                                  TABLE 1.--ESTIMATED BUDGETARY IMPACT OF S. 39                                 
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                                  1996   1997   1998   1999   2000   2001   2002
----------------------------------------------------------------------------------------------------------------
                                       Spending Subject to Appropriations                                       
                                                                                                                
Spending under current law:                                                                                     
    Budget authority...........................................    239     --     --     --     --     --     --
    Estimated outlays..........................................    237    122     59     17     --     --     --
Proposed changes:                                                                                               
    Estimated authorization level..............................     --    339    355    356    360      1      1
    Estimated outlays..........................................     --    197    299    329    357    151     55
Spending under S. 39:                                                                                           
    Estimated authorization level \1\..........................    239    339    355    356    360      1      1
    Estimated outlays..........................................    237    320    358    346    357    151     55
                                                                                                                
                                     Additional Revenues and Direct Spending                                    
                                                                                                                
Revenues:                                                                                                       
    Estimated revenues.........................................     --      1    (2)      6      6      6      6
Direct spending:                                                                                                
    Estimated budget authority.................................     --     --     --      6      6      6      6
    Estimated outlays..........................................     --     -1     --      6      6      6     6 
----------------------------------------------------------------------------------------------------------------
\1\ The 1996 amount is the appropriated level for that year.                                                    
\2\ Less than $500,000.                                                                                         

       The costs of this bill fall within budget function 300.
       6. Basis of estimate:
     Spending subject to appropriations
       For purposes of this estimate, CBO has assumed that S. 39 
     would be enacted by the end of fiscal year 1996 and that the 
     entire amounts authorized or estimated to be necessary would 
     be appropriated for each fiscal year. Outlays have been 
     estimated on the basis of historical spending patterns for 
     ongoing fisheries programs and information provided by NOAA.
       CBO estimates that S. 39 would authorize appropriations 
     totaling $1,412 million over the 1997-2002 period (see Table 
     2). Of this amount, $1,403 million is from authorizations 
     specified in the bill. Estimates accounting for the remaining 
     $9 million are discussed below.
       Fishing Vessel Obligation Guarantee Fund (FVOG).--CBO 
     estimates an authorization of $2.4 million (less than 
     $500,000 a year for 1997 through 2002) for appropriations to 
     subsidize the FVOG program. S. 39 would amend the Merchant 
     Marine Act to authorize the FVOG program to guarantee up to 
     $40 million in loans annually. The bill would not change the 
     guarantee fees, which along with the default rates, determine 
     the subsidy rate for the program. Hence, CBO estimates that 
     the current subsidy rate of 1 percent would continue to apply 
     so that the annual loan limitation of $40 million would limit 
     new subsidies to $400,000 a year.
       Refinancing of Fishing Vessel Loans.--This estimate also 
     includes $4 million for the projected costs of subsidizing 
     the refinancing of certain loans. S. 39 would authorize the 
     Secretary of Commerce to refinance fishing vessel loans for 
     those fishermen that lose revenues as a result of fishery 
     conservation efforts. Because the bill would authorize NOAA 
     to relax underwriting standards, CBO would expect a higher 
     default rate on the refinanced loans than under the current 
     FVOG program. The greater number of defaults would increase 
     the cost of the program to the government. CBO estimates a 
     subsidy rate of nearly 7 percent for the refinancing program, 
     as compared to the rate of 1 percent for the FVOG program. 
     The higher subsidy rate reflects the expected present value 
     of the loans to the federal government. Based on information 
     from NOAA, CBO estimates that FVOG would refinance about $10 
     million in fishing vessel loans a year or about $60 million 
     over the 1997-2002 period.

   TABLE 2.--Specified and Estimated Authorizations Contained in S. 39  
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                                 1997   1998   1999   2000   2001   2002
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATIONS             
                       (Authorization Levels Only)                      
                                                                        
Specified authorizations: \1\                                           
    Magnuson Act..............    151    160    164    168     --     --
    Fish and Wildlife Act of                                            
     1956.....................    103    106    106    106     --     --
    Interjurisdictional                                                 
     Fisheries Act............     70     70     70     70     --     --
    Anadromous Fisheries Act..      8      8      8      8     --     --
    Atlantic Coastal Fisheries                                          
     Cooperative Management                                             
     Act......................      7      7      7      7     --     --
Estimated authorizations:                                               
    FVOG......................    (2)    (2)    (2)    (2)    (2)    (2)
    Refinancing of vessel                                               
     loans....................    (2)      1      1      1      1      1
    FCRP loan guarantees......     --      3     --     --     --     --
                               -----------------------------------------
      Total estimated                                                   
       authorization level \3\    339    355    356    360      1      1
------------------------------------------------------------------------
\1\ The bill specifies authorization levels for 1996 but CBO assumes    
  that the bill would be enacted too late in the fiscal year to affect  
  1996 spending.                                                        
\2\ Less than $500,000.                                                 
\3\ The table does not show any additional amount for fisheries failures
  or workers compensation because CBO assumes that funding would come   
  from amounts authorized under other sections of the bill.             

       Fishing Capacity Reduction Program.--Finally, Table 2 shows 
     an estimated authorization for 1998 of $3 million for costs 
     of guaranteeing debt obligations to nonfederal entities under 
     Title III. This estimate is highly uncertain because it 
     depends on how the program is implemented and on how many 
     fisheries participate. Based on information provided by the 
     National Marine Fisheries Service (NFS) and several fisheries 
     councils, CBO expects that the Pacific groundfish fishery 
     would be the only area likely to adopt a program over the 
     next several years. We further

[[Page S7648]]

     expect that buyouts in this fishery would be made by a 
     fishing association or nonprofit organization that would 
     issue an estimated $20 million in federally guaranteed bonds 
     to finance the purchase of about one-third of the fishery's 
     capacity in 1998.
       CBO estimates that the subsidy rate for the debt 
     obligations would be about 15 percent, resulting in a cost to 
     the federal government of $3 million in 1998 to guarantee $20 
     million in debt for the Pacific groundfish fishery. The 
     subsidy rate of 15 percent is comparable to the subsidy rate 
     for a program in which the government guarantees debentures 
     for venture capital firms that invest in small businesses. As 
     with the small business debentures, the repayment of the 
     guaranteed bonds in the fisheries program would be uncertain. 
     The only allowable source of debt repayments would be the 
     industry fees. Because such fees would be based on a 
     percentage of the value of fish caught in the fishery, 
     repayment of the debt would be highly susceptible to market 
     fluctuations, natural disasters, and other unpredictable 
     factors. Moreover, limiting repayments to this source implies 
     that no collateral could be required on any debt.
       CBO assumes that no other fishery would adopt a capacity 
     reduction program or use this authority to expand existing 
     programs in the near future because industry participants 
     have indicated that they are unwilling to pay for the 
     program.
       Other Provisions.--The estimated authorization for 1997-
     2002 does not include any estimate of appropriations to 
     assist in dealing with failures of commercial fisheries 
     pursuant to Title I. Section 118 of this title authorizes 
     such sums as needed to mitigate such failures--through FCRPs 
     or other methods--through 2000. Based on information from 
     NOAA, CBO assumes that funding for dealing with future 
     fisheries failures would more likely be provided under other 
     authorities in the bill (namely, Title III loan subsidies for 
     FCRPs). This estimate also does not include any additional 
     amounts for the provision that makes observers federal 
     employees for the purpose of workers compensation. CBO 
     estimates that any needed amounts--which are likely to 
     average less than $1 million a year--would be paid out of the 
     authorizations specified in the bill.
     Revenues
       Enacting S. 39 would result in new revenues totaling about 
     $26 million over the 1997-2002 period and roughly $6 million 
     a year for several years after 2002. This includes about $2 
     million a year over the 2002-2018 period from fees paid by 
     participants in a capacity reduction program in the Pacific 
     groundfish fishery. Roughly $4 million a year in revenues 
     would continue indefinitely from fees collected pursuant to 
     Pacific Insular Area Fishing Agreements (PIAFAs) and from 
     individuals holding permits and paying fees in limited access 
     fisheries. Table 3 presents the estimated impact of S. 39 on 
     revenues.

             TABLE 3.--ESTIMATED IMPACT OF S. 39 ON REVENUES            
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                                 1997   1998   1999   2000   2001   2002
------------------------------------------------------------------------
                           Changes in Revenues                          
                                                                        
Estimated changes in revenues:                                          
    FCRPs.....................      0      0      2      2      2      2
    PIAFA Revenues............      0      0      4      4      4      4
    Limited Access Permits....      1  (\1\)  (\1\)  (\1\)  (\1\)  (\1\)
                               -----------------------------------------
      Total estimated revenues                                          
       \2\....................      1  (\1\)      6      6      6      6
------------------------------------------------------------------------
\1\ Less than $500,000.                                                 
\2\ The bill also could raise revenues from fees on bycatch, or reduce  
  existing revenues from duties on imported fisheries products (which   
  could be banned if a foreign nation fails to comply with future       
  international agreements to reduce bycatch), but CBO estimates that   
  these provisions would have no impact.                                

       Revenues from Fishing Capacity Reduction Programs.--CBO 
     estimates that fees associated with capacity reduction 
     programs would generate additional federal revenues of about 
     $2 million a year beginning in 1999. Section 118 would 
     require NOAA to impose an annual fee on businesses that 
     continue operating in a fishery subject to a capacity 
     reduction program. The fee would have to be approved in a 
     referendum before a buyout program could be implemented. CBO 
     expects that such fees would be imposed on entities fishing 
     for Pacific groundfish and that this would be the only 
     fishery likely to adopt a buyout program in the near future. 
     This estimate is based on a fee equal to 2.5 percent of the 
     estimated annual gross sale proceeds in that fishery (about 
     $80 million), which is the level that would be required to 
     pay the principal and interest on $20 million of bonds over 
     20 years at a rate slightly higher than the federal 
     government's cost of borrowing.
       PIAFA Revenues.--CBO estimates revenues of about $16 
     million over the 1997-2002 period from fees that might be 
     included in future PIAFAs. The bill would authorize the 
     Secretary of State, with the concurrence of the Secretary of 
     Commerce, the Western Pacific Fishery Management Council, and 
     in some cases the Governor of the PIA, to conclude three-year 
     international agreements that would permit foreign fishing in 
     the exclusive economic zone adjacent to PIAs. The agreements 
     would be required to include an annual determination of fees 
     that would be imposed on foreign vessels. Any fees charged 
     would likely be treated as revenues because a permit would 
     be compulsory for fishery participants and the 
     corresponding fees could exceed the administrative costs 
     of issuing permits. Fees collected by the Secretary of 
     Commerce pursuant to PIAFAs for American Samoa, Guam, and 
     the Northern Mariana Islands would be deposited in the 
     Treasury and then transferred to the PIA in which they 
     were collected. Funds would be available for spending by 
     the Governors of each PIA to reimburse the Western Pacific 
     Council and the Secretary of State for the costs of 
     establishing the PIAFA, for conservation and management 
     measures, and for other coastal and marine-relate uses. 
     Fees collected by the Secretary of Commerce pursuant to 
     PIAFAs for PIAs other than American Samoa, Guam, and the 
     Northern Mariana Islands would be available without 
     appropriation to the Secretary of the Western Pacific 
     Council to reimburse the Secretary of State for the costs 
     of establishing the PIAFA, for conservation and management 
     measures, and for other coastal and marine-related uses.
       CBO estimates that, beginning in 1999, about $2 million a 
     year would be collected in and transferred to American Samoa, 
     Guam, and the Northern Mariana Islands and an additional $2 
     million would be collected and spent for other PIAs. This 
     estimate is uncertain because the timing of future agreements 
     will depend on the level of interest of participating nations 
     and the complexity of negotiations. Based on information 
     provided by the Department of State, CBO assumes that PIAFAs 
     would be in place by 1999, and that collections would be 
     consistent with amounts levied by other territories in this 
     region that are currently charging fees.
       Limited Access Permit Revenues.--CBO estimates revenues of 
     about $1 million in 1997 and less than $0.2 million each year 
     after 1997 from fees on the holders of limited access 
     permits. S. 39 would direct the Secretary of Commerce to 
     collect a fee of up to one-half of 1 percent of the value of 
     limited access permits. Fees would be used to pay for a 
     national registry of permit holders and would be levied at 
     the time an individual's permit is recorded in the registry. 
     Spending of these fees would be subject to appropriations.
       The estimate of revenues assumes that a fee could be 
     charged almost exclusively in those limited-access fisheries 
     managed by individual transferable quota (ITQ) programs. 
     Because permits in these fisheries are transferable, there is 
     a secondary market that allows permit values to be 
     determined. (A nominal fee based on the administrative cost 
     of issuing permits may be charged in other limited-access 
     fisheries.) Eligible fisheries include those for halibut and 
     sablefish in the North Atlantic and the wreckfish, surf-clam, 
     and ocean quahog in the South Atlantic. The only additional 
     fishery included in our estimate is the Pacific groundfish 
     fishery where--although there is no ITQ program--a 
     secondary market exists for the limited number of permits 
     in the fishery. Information used to estimate permit values 
     was provided by NOAA. CBO assumes that the maximum fee 
     would be levied in all eligible fisheries.
       Other Provisions.--CBO estimates no additional revenues 
     from proposed fees on bycatch in the North Pacific. Based on 
     information provided by the National Marine Fisheries Service 
     and the North Pacific Fishery Management Council, CBO 
     believes that a fee system is unlikely to be proposed by the 
     council in the near future. Rather, the council will consider 
     alternative methods for reducing harvest that do not involve 
     fees. CBO also estimates no decrease in revenues from the 
     provision that would require the Secretary of the Treasury to 
     ban imports of fisheries products from those nations that 
     fail to enter into future international agreements to reduce 
     bycatch. Because few significant measures to reduce bycatch 
     are in place domestically at this time, international 
     agreements on standards comparable to those in the U.S. are 
     unlikely until more extensive domestic measures for bycatch 
     reduction have been implemented.
     Direct spending
       CBO estimates that enacting S. 39 would result in new 
     direct spending totaling $23 million over the 1997-2002 
     period and about $6 million a year for several years after 
     2002. The direct spending would be funded by revenues 
     collected pursuant to a capacity reduction program in the 
     Pacific groundfish fishery (about $2 million a year over the 
     1999-2019 period) and from future Pacific Insular Area 
     Fishery Agreements (about $4 million a year beginning in 1999 
     and continuing indefinitely). Table 4 presents the estimated 
     impact of S. 39 on direct spending.
       Fishing Capacity Reduction Program (FCRP).--CBO estimates 
     that fees collected pursuant to a capacity reduction in the 
     Pacific groundfish fishery--the only fishery likely to adopt 
     a capacity reduction program in the near future--are likely 
     to total roughly $2 million a year over the 1999-2018 period. 
     The $2 million would be spent each year without further 
     appropriation to pay off bondholders.

         TABLE 4.--ESTIMATED IMPACT OF S. 139 ON DIRECT SPENDING        
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                                 1997   1998   1999   2000   2001   2002
------------------------------------------------------------------------
                       Changes in Direct Spending                       
                                                                        
Spending of FCRP revenues:                                              
    Estimated budget authority  .....  .....      2      2      2      2
    Estimated outlays.........  .....  .....      2      2      2      2
IFQ/CDQ offsetting receipts:                                            
    Estimated budget authority     -5     -6     -6     -8     -8     -8
    Estimated outlays.........     -5     -6     -6     -8     -8     -8
Spending from IFQ/CDQ                                                   
 receipts:                                                              
    Estimated budget authority      5      6      6      8      8      8
    Estimated outlays.........      4      6      6      8      8      8
Spending of PIAFA revenues:                                             
    Estimated budget authority  .....  .....      4      4      4      4

[[Page S7649]]

                                                                        
    Estimated outlays.........  .....  .....      4      4      4      4
Total changes in direct                                                 
 spending: \1\                                                          
    Estimated budget authority  .....  .....      6      6      6      6
    Estimated outlays.........     -1  .....      6      6      6     6 
------------------------------------------------------------------------
\1\ The bill also could affect spending for disaster assistance to      
  fishermen and spending from certain fines and penalties, but CBO      
  estimates that these provisions would have no impact.                 


       Fees from Quota Programs.--CBO estimates that the proposed 
     fee on permit holders for fishing under individual fishing 
     quota (IFQ) and community development quota (CDQ) programs 
     would result in a net decrease in outlays of $1 million in 
     1997 and have no net budgetary impact in other years. S. 39 
     would direct the Secretary of Commerce to collect a fee of up 
     to 3 percent of the annual dockside value of fish harvested 
     under any eligible IFQ or CDQ program. CBO estimates that 
     this provision will result in new receipts totaling about $39 
     million over the 1997-2002 period. Fees would likely be 
     treated as offsetting receipts and would be available for 
     spending without further appropriation action. Accordingly, 
     the increase in receipts would be offset by additional direct 
     spending and the provision would have no significant 
     net impact on the federal budget, CBO estimates that NOAA 
     would be able to spend most of the receipts collected in 
     each year.
       For purposes of this estimate, CBO assumes that individuals 
     holding permits in IFQ and CDQ programs for halibut, 
     sablefish, and pollock begin paying fees in 1997 and that 
     CDQs for North Pacific groundfish, king crab, and tanner crab 
     would be implemented and participants would pay fees by 1998. 
     Individuals holding permits in the wreckfish, surf clam, and 
     ocean quahog CDQ programs would not be required to pay fees 
     until January 1, 2000. CBO assumes that the Secretary would 
     collect the full 3 percent of the annual ex-vessel value of 
     fish caught in fisheries managed by IFQs and that the 
     corresponding rate for fisheries managed by CDQs would be 
     slightly lower--about 2.75 percent--to reflect participants' 
     deductions for higher observer and reporting costs. The 
     estimate of spending from these receipts assumes, pursuant to 
     the bill, that 25 percent of the fees collected pursuant to 
     this provision would subsidize loans for fishermen who 
     purchase IFQs. The remainder would be used to pay for the 
     management and enforcement costs of IFQ and CDQ programs.
       Spending of PIAFA Revenues.--CBO estimates direct spending 
     of $16 million over the 1997-2002 period from authority to 
     spend without appropriation the revenues collected pursuant 
     to Pacific Insular Area Fishery Agreements.
       Other Provisions.--CBO estimates that the proposed changes 
     to the Interjurisdictional Fisheries Act for fishery relief 
     programs would have no cost because the changes have already 
     been incorporated into current law by Public Law 104-134, the 
     Omnibus Consolidated Rescissions and Appropriations Act of 
     1996. CBO estimates no new direct spending from authority in 
     S. 39 to spend Magnuson Act fines and penalties collected in 
     the EEZ adjacent to Pacific Insular Areas. Penalties and 
     proceeds from asset forfeitures may already be spent without 
     appropriation. The only effect of this provision would be to 
     change the parties that would be eligible to spend the funds.
       7. Pay-as-you-go considerations: Section 252 of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 
     sets up pay-as-you-go procedures for legislation affecting 
     direct spending or receipts through 1998. CBO estimates that 
     enacting S. 39 would affect both direct spending and 
     receipts; therefore, pay-as-you-go procedures would apply to 
     the bill.
       Direct Spending.--Proposed IFQ and CDQ program fees would 
     result in additional offsetting receipts and spending of 
     those fees. We estimate that spending would lag behind fee 
     collections slightly, resulting in a net reduction in outlays 
     of about $1 million in 1997. Because most receipts would be 
     spent in the year they are collected, CBO estimates that the 
     net impact of this provision on outlays after 1997 would be 
     less than $500,000 a year.
       S. 39 also would allow spending without appropriation of 
     the fees collected on participants in fishing capacity 
     reduction programs and from PIAFAs. However, CBO estimates 
     that these fees would not be collected or spent until 1999.
       Revenues.--The bill would raise new revenues from a fee on 
     limited access permits. Revenues from other new fees would 
     accrue after 1998.
       CBO's estimate of S. 39's pay-as-you-go impact is 
     summarized in the following table:

------------------------------------------------------------------------
                                                 1996     1997     1998 
------------------------------------------------------------------------
Change in outlays............................        0       -1        0
Change in receipts...........................        0        1        0
------------------------------------------------------------------------

       8. Estimated impact on State, local, and tribal 
     governments: The bill contains no intergovernmental mandates 
     as defined in Public Law 104-4, and would impose no direct 
     costs on State, local, or tribal governments. The bill would 
     authorize appropriations of at least $87 million over fiscal 
     years 1997 through 2000 for financial assistance to State and 
     local governments. This assistance would help State and local 
     governments protect and manage fishery resources. If the 
     Secretary of State enters into agreements to allow foreign 
     fishing within the exclusive economic zones adjacent to 
     Pacific Insular Areas, the bill could also result in 
     increased funding for these governments. Such funding would 
     be earmarked for managing and conserving fisheries.
       9. Estimated impact on the private sector: S. 39 contains 
     several new private-sector mandates, but the direct costs of 
     those mandates are not likely to exceed the $100 million 
     threshold established by Public Law 104-4 (see the attached 
     private-sector mandate statement).
       10. Previous CBO estimate: On July 10, 1995, CBO provided a 
     cost estimate for H.R. 39, the Fishery Conservation and 
     Management Amendments of 1995, as reported by the House 
     Committee on Resources on June 30, 1995. CBO estimated that 
     H.R. 39 would authorize new appropriations totaling $660 
     million over the 1996-2000 period, including $610 million in 
     specified authorizations and an estimated $50 million for an 
     FCRP for the Northeast. CBO also estimated that H.R. 39 would 
     result in direct spending of less than $0.5 million a year 
     from the collection of fees on foreign vessels that transport 
     fish products from United States waters to foreign ports. 
     Additional receipts of up to $5 million a year would be 
     collected from fees on IFQ permits. However, the fees would 
     be available for spending without appropriation and CBO 
     estimated that the increase in receipts would be offset by 
     additional direct spending. Finally, CBO estimated that H.R. 
     39 would result in $2 million to $4 million a year in new 
     revenues from an annual fee on holders of federal fishing 
     permits who continue operating in the Northeast FCRP. These 
     revenues would be authorized for spending without 
     appropriation for other FCRP programs, but CBO assumed that 
     no other programs would be enacted and that those revenues 
     would not be spent. Differences in CBO estimates for similar 
     provisions of H.R. 39 and S. 39 are attributable to 
     significant differences in the bills and to the availability 
     of new information since last July.
       11. Estimate prepared by: Federal Cost Estimate: Gary 
     Brown, Rachel Forward, and Deborah Reis; and for revenues, 
     Stephanie Weiner.
       State and local government impact: Pepper Santalucia.
       Private sector impact: Patrice Gordon.
       12. Estimate approved by:
                                                Robert A. Sunshine
         (For Paul N. Van de Water, Assistant Director for Budget 
     Analysis.)

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