[Congressional Record Volume 147, Number 175 (Monday, December 17, 2001)]
[Senate]
[Pages S13354-S13355]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       CBO ESTIMATE ON H.R. 3009

  Mr. BAUCUS. Mr. President, on December 14, 2001, I filed report 107-
126 to accompany H.R. 3009, a bill to extend the Andean Trade 
Preference Act, to grant additional benefits under the act, and for 
other purposes. At the time the report was filed, the estimates of the 
Congressional Budget Office were not available.
  I wish to correct a statement made in the report as filed. At section 
VI.A, the report states that the Andean Trade Preference Expansion Act 
involves no new or increased budget authority. In fact, the wool 
provisions contained in section 201 of the bill involve $24 million in 
increased budget authority and outlays for fiscal year 2002 and $12 
million in increased budget authority and outlays for fiscal year 2003.
  I ask unanimous consent that a letter of transmittal and the CBO 
estimate 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, December 14, 2001.
     Hon. Max Baucus,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for H.R. 3009, the Andean 
     Trade Promotion and Drug Eradication Act.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Erin 
     Whitaker, who can be reached at 226-2720.
           Sincerely,
                                                Barry B. Anderson,
                                   (For Dan L. Crippen, Director).
       Enclosure.


               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

     H.R. 3009--Andean Trade Preference Expansion Act
       Summary: H.R. 3009 would extend the period during which 
     preferential treatments is provided to certain products of 
     countries under the Andean Trade Preference Act (ATPA). In 
     addition, he bill would provide preferential treatment under 
     ATPA for additional articles, including certain footware and 
     petroleum products. The bill also would provide certain 
     ceiling fans and certain steam-generating boilers.
       The Congressional Budget Office estimates that enacting the 
     bill would reduce revenues by $43 million in 2002, by $218 
     million over the 2002-2006 period, and by the same amount 
     over the 2002-2011 period. CBO also estimates that enacting 
     the bill would increase direct spending by $24 million in 
     2002 and by $12 million in 2003. Because enacting H.R. 3009 
     would affect receipts and direct spending, pay-as-you-go 
     procedures would apply.
       CBO has determined that H.R. 3009 contains no private-
     sector or intergovernmental mandates as defined in the 
     Unfunded Mandates reform Act (UMRA) and would not affect the 
     budgets of state, local, or tribal governments.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of H.R. 3009 is shown in the following 
     table.

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2000    2003    2004    2005    2006
------------------------------------------------------------------------
                           CHANGES IN REVENUES
 
Estimated Revenues..............     -43     -44     -49     -60     -23
 
                       CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority......      24      12       0       0       0
Estimated Outlays...............      24      12       0       0       0
------------------------------------------------------------------------

     Basis of estimate
       Revenues
       Andean Trade Preference Expansion (Title I). ATPA expired 
     on December 4, 2001. H.R. 3009 would extend the ATPA program 
     until February 28, 2006. Several products of beneficiary 
     countries would continue to receive preferential duty 
     treatment if the bill were enacted. Based on information from 
     the International Trade Commission and other trade sources, 
     CBO estimates the ATPA program would reduce revenues by $17 
     million in 2002 and by $101 million over the 2002-2006 
     period.
       Under current law, ATPA does not extend preferential 
     treatment to footwear that is ineligible for treatment under 
     the generalized system of preferences (GSP), tuna packed in 
     cans, petroleum and certain products derived from petroleum, 
     watches and watch parts containing material that is the 
     product of countries not receiving normal trade relations 
     (NTR) treatment, certain sugars and molasses, and certain 
     leather goods. H.R. 3009 would allow the President to extend 
     duty-free treatment to those products. CBO expects that all 
     imports of these products would receive duty-free treatment.
       Tuna packed in cans would receive duty-free treatment for 
     amounts equal to 20 percent of United States production (in 
     kilograms) for the preceding calendar year. Under current 
     law, all imports of tuna packed in cans are subject to a 
     tariff-rate quota. Global imports of tuna packed in cans are 
     subject to a rate of duty of 6 percent when imports in 
     kilograms are less than 20 percent of United States 
     production. Thereafter, imports of tuna packed in cans are 
     subject to a rate of duty of 12.5 percent. Based on 
     information from the National Marine Fisheries Service, the 
     United States Customs Service, and the International Trade 
     Commission, CBO expects that imports from the ATPA program 
     would rapidly fill the global quota for imports, and would 
     continue to receive duty-free treatment until ATPA imports 
     equaled the quantitative limit of 20 percent of U.S. 
     production. Based on information from the above sources, 
     CBO does not expect ATPA imports to exceed the global 
     quota limit. CBO estimates that the provision that would 
     alter the treatment for canned tuna would reduce revenues 
     by $2 million in 2002 and by $10 million over the 2002-
     2006 period.
       Under current law, certain apparel articles that are the 
     product or manufacture of an ATPA beneficiary country are 
     entitled to preferential treatment. The bill would allow 
     apparel articles assembled from fabrics formed or knit-to-
     shape in the United States and certain other apparel articles 
     to receive duty-free treatment. Apparel articles assembled 
     from fabrics produced in the ATPA region would also receive 
     preferential treatment if they do not exceed certain 
     percentages of imports on apparel articles. All preferential 
     treatment would expire after February 28, 2006. Based on 
     information from the International Trade Commission, the 
     Office of Textiles and Apparel in the Department of Commerce, 
     and private-sector sources, CBO estimates that if enacted, 
     all provisions that expand ATPA treatment to new products 
     (including canned tuna) would reduce revenues by $19 million 
     in 2002 and by $101 million over the 2002-2006 period.
       Miscellaneous Trade Provisions (Title II). H.R. 3009 would 
     provide temporary duty-free treatment to ceiling fans from 
     Thailand through July 30, 2002. The bill also would provide 
     duty-free treatment to certain steam or vapor generating 
     boilers used in nuclear facilities through December 31, 2006. 
     Based on information from the International Trade Commission 
     and other trade sources, CBO estimates that, if enacted, 
     these provisions would reduce revenues by $7 million in 2002 
     and by $19 million over the 2002-2006 period. H.R. 3009 also 
     would alter a program that has provided refunds of duty to 
     certain wool manufacturers. This change is detailed in the 
     section describing changes to direct spending. CBO estimates 
     that this provision would increase revenues by $1 million in 
     2002 and by $3 million over the 2002-2003 period.
       Direct spending
       Under current law, certain manufacturers of selected wool 
     articles are eligible for refunds of duties paid on those 
     articles. H.R. 3009 would change the method of which those 
     payments to manufacturers are computed and would appropriate 
     about $36 million for

[[Page S13355]]

     the payments, which must be made by April 2003. Based on 
     information from the Customs Service, CBO estimates that this 
     provision would increase direct spending by about $24 million 
     in fiscal year 2002 and by about $12 million in fiscal year 
     2003.
       Pay-as-you-go considerations: The Balanced Budget and 
     Emergency Deficit Control Act sets up procedures for 
     legislation affecting receipts or direct spending. The net 
     changes in governmental receipts that are subject to pay-as-
     you-go procedures are shown in the following table. For the 
     purposes of enforcing pay-as-you-go procedures, only the 
     effects in the current year, the budge year, and the 
     succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        By fiscal year, in millions of dollars--
                                                               -----------------------------------------------------------------------------------------
                                                                  2002     2003     2004     2005     2006     2007     2008     2009     2010     2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in receipts...........................................      -43      -44      -49      -60      -23        0        0        0        0        0
Changes in outlays............................................       24       12        0        0        0        0        0        0        0        0
--------------------------------------------------------------------------------------------------------------------------------------------------------

       Impact on state, local, and tribal governments: The bill 
     contains no intergovernmental or private-sector mandates as 
     defined in UMRA and would not affect the budgets of state, 
     local, or tribal governments.
       Previous CBO estimate: On October 10, 2001, CBO transmitted 
     a cost estimate for H.R. 3009 as ordered reported by the 
     House Committee on Ways and Means on October 5, 2001. This 
     estimate reflects changes to several provisions. The 
     alteration of the tariff-rate quota program for imports of 
     canned tuna from ATPA countries, the inclusion of 
     preferential treatment for imports of ceiling fans from 
     Thailand and certain steam or vapor generating boilers, the 
     removal of the provisions affecting the Caribbean Basin 
     Economic Recovery Act and the African Growth and Opportunity 
     Act, and the alteration of the wool import program would 
     further reduce revenues, relative to the earlier version of 
     H.R. 3009, by $2 million in 2002, would lessen the reduction 
     of revenues by $29 million over the 2002-2006 period, and 
     would lessen the reduction of revenues by $45 million over 
     the 2002-2011 period. The alteration of the wool import 
     program would increase direct spending, relative to the 
     earlier version of H.R. 3009, by $24 million in 2002, and by 
     $36 million over the 2002-2003 period.
       Estimate prepared by: Federal Revenues: Erin Whitaker (226-
     2720). Wool Refund Program: Mark Grabowicz (226-2860). Impact 
     on State, Local, and Tribal Governments: Elyse Goldman (225-
     3220). Impact on the Private Sector: Paige Piper/Bach (226-
     2940).
       Estimate approved by: G. Thomas Woodward, Assistant 
     Director for Tax Analysis. Robert A. Sunshine, Assistant 
     Director for Budget Analysis.

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