[Congressional Record Volume 147, Number 103 (Monday, July 23, 2001)]
[Senate]
[Pages S8055-S8056]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           ILSA EXTENSION ACT

  Mr. SARBANES. Madam President, I ask unanimous consent that the CBO 
cost estimate with respect to S. 1218, a bill to extend the authorities 
of the Iran and Libya Sanctions Act, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                    Washington, DC, July 20, 2001.
     Hon. Paul S. Sarbanes,
     Chairman, Committee on Banking, Housing, and Urban Affairs, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for the ILSA Extension 
     Act of 2001.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contacts are Joseph C.

[[Page S8056]]

     Whitehill (for federal costs) and Paige Piper/Bach (for the 
     private-sector impact).
           Sincerely,
           Barry B. Anderson
           (For Dan L. Crippen, Director).
       Enclosure.
     ILSA Extension Act of 2001
       The ILSA Extension Act of 2001 would extend the authorities 
     of the Iran and Libya Sanctions Act (ILSA) of 1996 for an 
     additional five years through 2006. The bill would lower the 
     threshold of investments in Libya that could trigger 
     sanctions under the act from $40 million to $20 million, and 
     it would revise the definition of investment to include any 
     amendment or modification of existing contracts that would 
     exceed the threshold amount. CBO estimates that implementing 
     the bill would not significantly affect discretionary 
     spending. The bill would not affect direct spending or 
     receipts; therefore, pay-as-you-go procedures would not 
     apply.
       Based on information from the Department of State, CBO 
     estimates that the ILSA Extension Act of 2001 would result in 
     a substantial increase in the number of investments in Libya 
     that could be subject to the sanctions in ILSA. CBO estimates 
     that the additional workload necessary to identify such 
     investments would increase the department's spending by less 
     than $500,000 annually, assuming the availability of 
     appropriated funds.
       By extending the Iran and Libya Sanctions Act, the ILSA 
     Extension Act of 2001 could impose a private-sector mandate 
     as defined by the Unfunded Mandates Reform Act (UMRA). The 
     President would be required to impose certain sanctions of 
     U.S. entities or foreign companies that invest over a 
     specific amount of money in developing the petroleum and 
     natural gas resources of Iran or Libya. Among the sanctions 
     available under the act, the President could impose certain 
     restrictions on U.S. offices of a sanctioned company or on 
     entities and financial institutions engaged in business 
     transactions with a sanctioned entity. The act does, however, 
     allow the President the discretion to make exceptions in 
     applying such sanctions. Since passage of ILSA, no such 
     sanctions have been imposed. Consequently, CBO expects that 
     sanctions are unlikely to be imposed under the extension and 
     that the direct cost of the mandate would fall below the 
     annual threshold established by UMRA for private-sector 
     mandates ($113 million in 2001, adjusted annually for 
     inflation).
       The ILSA Extension Act of 2001 contains no 
     intergovernmental mandates as defined in UMRA and would not 
     affect the budgets of state, local, or tribal governments.
       CBO prepared two estimates for the House companion bill, 
     H.R. 1954. The first estimate was for H.R. 1954 as ordered by 
     the House Committee on International Relations on June 20, 
     2001. The second estimate was for H.R. 1954 as ordered 
     reported by the House Committee on Ways and Means on July 12, 
     2001. The International Relations Committee versions of H.R. 
     1954 is similar to the Senate bill. The Ways and Means 
     Committee version would require the President to report to 
     the Congress on the effectiveness of actions taken under ILSA 
     within 18 months after enactment, and it would provide for 
     the early termination of that act of any time after 
     submission of the report. CBO estimated that implementing 
     either version of H.R. 1954 would not significantly affect 
     discretionary spending and that the cost of the private-
     sector mandate would fall below the annual threshold 
     established by UMRA.
       The CBO staff contact for federal costs is Joseph C. 
     Whitehill. The CBO staff contact for private-sector mandates 
     is Paige Piper/Bach. This estimate was approved by Peter H. 
     Fontaine, Deputy Assistant Director for Budget Analysis.

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