Congressional Rules and Practices Concerning User Fees and Other Nonrevenue Collections in the Federal Budget

Congressional Rules and Practices Concerning User Fees and Other Nonrevenue Collections in the Federal Budget

Congressional Rules and Practices Concerning
October 25, 2022
User Fees and Other Nonrevenue Collections
James V. Saturno
in the Federal Budget
Specialist on Congress and
the Legislative Process
The collection of funds to finance the operations of the federal government is a fundamental part

of federal budgeting and the policymaking process. Although the power to “lay and collect taxes,
duties, imposts, and excises” is one of the enumerated powers of Congress under the

Constitution, not all of the receipts of the federal government actually result from this authority.
Federal receipts may also result from various voluntary or business transactions of individuals with the government. Receipts
collected as a consequence of the taxing power, including tariffs, are considered revenues in a constitutional sense and are
subject to a number of specific rules and requirements. Receipts from voluntary or business transactions can be distinguished
from revenues in a constitutional sense. As a consequence, they are not subject to those rules and requirements that apply to
revenues but are subject to other rules and requirements.
Nonrevenue collections include many user, regulatory, and other fees, charges, and assessments levied on a class of payors
that directly avail themselves of, or are directly subject to, a governmental service, program, or activity. Nonrevenue
collections also include rents and royalties paid to the federal government and proceeds from the sale of federal assets,
because the purchase is voluntary and the payors receive something of commensurate value for their payments. Civil and
criminal penalties are similarly not generally regarded as revenue in the constitutional sense under the general premise that
malfeasance is voluntary and therefore does not involve a tax on involuntary behavior.
Although jurisdiction over revenue measures, including taxes and tariffs, is granted to the House Ways and Means and Senate
Finance Committees, jurisdiction over nonrevenue collections is dispersed among a variety of committees. In addition, while
the Constitution grants the House the prerogative to originate revenue legislation, that prerogative does not apply to
nonrevenue collections, so the Senate may originate such legislation.
Nonrevenue collections are also distinguished from revenues in the way they are recorded in the federal budget process.
Rather than being recorded as revenues, they are treated as negative amounts of budget authority and recorded as offsets to
spending.
The distinction between revenue and nonrevenue may be made at different stages in the lawmaking process for different
purposes: when a measure is referred to committee under Rule X in the House or Rule XXV in the Senate, when a measure is
considered by the House under Rule XXI, when Congress or the courts are asked to enforce the Origination Clause of the
Constitution, or when it is recorded in the federal budget. This report provides an analysis of the guidelines used for making
this distinction and how they are applied in each circumstance.

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Contents
Distinguishing Revenue and Nonrevenue Collections .................................................................... 1
Committee Jurisdiction and Referral ............................................................................................... 2
The Origination Clause ................................................................................................................... 3
Statutory Authority for Nonrevenue Collections ............................................................................. 4
Independent Offices Appropriation Act .................................................................................... 5
The Miscellaneous Receipts Act ............................................................................................... 5
Treatment of Nonrevenue Collections in the Federal Budget Process ............................................ 5
Offsetting Collections ............................................................................................................... 6
Offsetting Receipts .................................................................................................................... 6

Contacts
Author Information .......................................................................................................................... 6

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Congressional Rules and Practices Concerning Nonrevenue Collections

Distinguishing Revenue and Nonrevenue
Collections
The collection of funds to finance the operations of the federal government is a fundamental part
of federal budgeting and the policymaking process. The power to “lay and collect taxes, duties,
imposts, and excises” is one of the enumerated powers of Congress under the Constitution.1
Although this power is broad, not all of the receipts of the federal government actually result
from this authority. Federal receipts may also result from various voluntary or business
transactions of individuals with the government. The distinction between these types of receipts is
applied at several points in the legislative process. Receipts collected as a consequence of the
taxing power, including tariffs, are considered revenues in a constitutional sense and are subject
to a number of specific rules and requirements.2 Receipts from some type of voluntary or business
transaction, however, are not considered revenues in a constitutional sense. As a consequence,
they are not subject to the rules or requirements applied to revenues, although they may be
subject to other specific rules or requirements. Nonrevenue receipts include
user, regulatory and other fees, charges, and assessments levied on a class directly availing
itself of, or directly subject to, a governmental service, program, or activity, but not on the
general public, as measures to be utilized solely to support, subject to annual
appropriations, the service, program, or activity … for which such fees, charges, and
assessments are established and collected and not to finance the costs of Government
generally. The fee must be paid by a class benefitting from the service, program or activity,
or being regulated by the agency; in short, there must be a reasonable connection between
the payors and the agency or function receiving the fee.3
Similarly, rents and royalties paid to the federal government and proceeds from the sale of federal
assets constitute nonrevenue collections, because the purchase is voluntary and the payors receive
something of commensurate value for their payments. In this context, civil and criminal penalties
are not generally regarded as revenue in the constitutional sense under the general premise that
malfeasance is voluntary and therefore does not involve a tax on involuntary behavior.4
The House may also view certain legislative language as constituting revenue even if it is framed
as a nonrevenue collection—for example, when the amount of funds to be collected would (or
could) exceed the government’s costs for providing a specific service or the connection between
the payor and the beneficiary is attenuated. In such cases, these collections may be regarded as
designed, in part, to finance the cost of government operations generally, because the payor
would not derive any particular benefit associated with the payment.
Although the distinction between revenues and nonrevenue collections is applied in both the
House and Senate, it is particularly salient in the House, where it is made explicit at the beginning
of each Congress when the Speaker of the House enunciates certain policies with respect to

1 Article 1, Section 8. For a discussion of federal taxing power, see CRS Report R46551, The Federal Taxing Power: A
Primer, by Milan N. Ball.
2 See CRS Report R41408, Rules and Practices Governing Consideration of Revenue Legislation in the House and
Senate, by Megan S. Lynch.
3 “Policies of the Chair,” Congressional Record, vol. 137 (January 3, 1991), p. 66.
4 This is in contrast to an interpretation recommended in the Report of the President’s Commission on Budget
Concepts, and frequently applied in other contexts, that categorizes any receipts that are “‘governmental’ in character”
as revenues, including regulatory fees and fines. See Report of the President’s Commission on Budget Concepts
(Washington: GPO, 1967), p. 65.
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several aspects of the legislative process.5 Among these policies is guidance concerning the
application of House rules, precedents, and practices with respect to two separate but related
procedures. First, this concept is applied in connection with defining committee jurisdictions with
respect to governmental receipts and assisting committees in staying within their appropriate
jurisdictions. Second, the meaning of what receipts are considered revenues in a constitutional
sense is fundamental for understanding enforcement of the House’s constitutional prerogative to
originate revenue legislation, particularly when determining when the House may take action to
enforce that prerogative.6
Committee Jurisdiction and Referral
Jurisdiction over revenue measures, including taxes and tariffs, is granted to the House Ways and
Means and Senate Finance Committees, while jurisdiction over nonrevenue collections is
dispersed among a variety of committees.7 Unlike jurisdiction over measures concerning
revenues, jurisdiction over measures concerning nonrevenue collections is not specifically
identified in House and Senate rules. Instead, such collections are treated as an aspect of
committee jurisdiction over some underlying legislative issue or subject area. For example,
jurisdiction over agricultural inspection fees is exercised by the House and Senate Committees on
Agriculture as an aspect of their jurisdiction over agriculture and agricultural inspections
generally.
In the House, after a measure is introduced, the Speaker, acting on the advice of the Office of the
Parliamentarian, refers legislation to the appropriate committee(s) based on how its contents align
with the subject matter jurisdiction of committees established in clause 1 of House Rule X. In
addition, when a measure includes provisions under the jurisdiction of multiple committees,
House rules charge the Speaker with referring legislation
in such a manner as to ensure to the maximum extent feasible that each committee that has
jurisdiction under clause 1 of rule X over the subject matter of a provision thereof may
consider such provision and report to the House thereon.8
As a matter of practice, then, the jurisdictions of committees over particular subjects is generally
protected by the referral process. This is supplemented in the case of revenue legislation by
House Rule XXI, clause 5(a)(1) (stated below), which specifically provides that a point of order
may be raised against the consideration of a measure or amendment that includes a revenue
provision if it were reported from a committee other than the Ways and Means Committee:9
A bill or joint resolution carrying a tax or tariff measure may not be reported by a
committee not having jurisdiction to report tax or tariff measures, and an amendment in
the House or proposed by the Senate carrying a tax or tariff measure shall not be in order

5 “Announcement by the Speaker Pro Tempore,” Congressional Record, daily edition (January 4, 2021), p. H38. In this
announcement, a reference is made to a full statement of the policy announced at the beginning of the 102nd Congress
with respect to jurisdictional concepts related to clause 5(a) of Rule XXI, Congressional Record, vol. 137 (January 3,
1991), p. 66.
6 For a discussion of how the concept of revenues is interpreted for enforcing House prerogatives under Article I,
Section 7, clause 1, of the U.S. Constitution (known as the Origination Clause), see CRS Report R46558, The
Origination Clause of the U.S. Constitution: Interpretation and Enforcement, by James V. Saturno.
7 The jurisdiction of the House Ways and Means Committee and the Senate Finance Committee are specified in House
Rule X, clause 1(t), and Senate Rule XXV, paragraph 1(i), respectively.
8 House Rule XII, clause 2.
9 For more information on points of order and the enforcement of House rules, see CRS Report 98-307, Points of
Order, Rulings, and Appeals in the House of Representatives, by Valerie Heitshusen.
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during the consideration of a bill or joint resolution reported by a committee not having
that jurisdiction. A point of order against a tax or tariff measure in such a bill, joint
resolution, or amendment thereto may be raised at any time during pendency of that
measure for amendment.
Interpreting what constitutes revenues is essential for the application of House rules concerning
committee jurisdiction and the referral of legislation. The same interpretation necessarily informs
the converse and clarifies what constitutes nonrevenue collections as well, because such
collections are not revenues. In this way, House rules distinguish between revenue legislation,
which must be referred to the Ways and Means Committee, and nonrevenue legislation, which
may be referred to the committee (or committees) having jurisdiction over the subject matter
upon which the fees or charges might be based.
Senate practices similarly distinguish between revenue and nonrevenue legislation. Legislation is
referred in the Senate by the presiding officer, on the advice of the Office of the Parliamentarian,
based on the application of committee jurisdictions set forth in Senate Rule XXV. In addition,
under Senate Rule XVII, a measure is referred to the committee with “jurisdiction over the
subject matter which predominates in such proposed legislation.” In almost all cases, if a measure
includes a revenue provision, such a provision would be considered the predominant subject.
Legislation with revenue provisions is thus referred to the Finance Committee, while legislation
with nonrevenue receipts is referred to the committee having jurisdiction over the predominant
subject matter in the measure.
The Origination Clause
Article I, Section 7, clause 1, of the U.S. Constitution is known as the Origination Clause because
it requires:
All bills for raising revenue shall originate in the House of Representatives; but the Senate
may propose or concur with amendments as on other bills.
As generally understood, this clause carries two kinds of prohibitions. First, the Senate may not
originate any measure that includes a provision for raising revenue, and second, the Senate may
not propose any amendment that would raise revenue to a House-passed nonrevenue measure.
However, the Senate may generally amend a House-originated revenue measure as it sees fit.
The Constitution does not provide specific guidelines as to what constitutes a bill for raising
revenue, so the House relies on its own precedents to guide its interpretation. The House applies a
broad standard and construes its prerogatives expansively to include any “meaningful revenue
proposal.” This standard is based on a provision-by-provision review of whether a measure may
be considered to have the potential to affect revenue and not simply whether it would make
changes in the tax code directly. The precedents and practices of the House that distinguish
between revenue and nonrevenue collections inform the types of language the House considers to
be subject to its prerogative to originate bills for raising revenue. This includes not only
legislation to make changes in the tax code directly but also legislation framed as fees that would
(or could) be used to pay for government operations generally rather than as payment for
something of specific value to the payor, as well as any potential change in tariffs, including any
trade sanctions that could impose import restrictions.
As a constitutional requirement, rather than a House rule, the House may not choose to waive its
application, and so whether a Senate measure or amendment will or will not be disallowed may
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present a significant issue between the chambers.10 Although the House may enforce its
prerogative through any of several methods, the most common is through the adoption of a
privileged resolution returning the measure to the Senate. Because this resolution has historically
been printed on blue paper, this is known as blue-slipping.11
The House prerogative to originate revenue legislation, however, does not apply to nonrevenue
collections. As a consequence, the Senate may originate such legislation.
Statutory Authority for Nonrevenue Collections
Federal agencies that engage in transactions with the general public must have statutory authority
to charge a fee. In some cases, this authority may be specific to an agency and may allow it to
retain such collections. In other cases, agencies may use general authority provided under the
Independent Offices Appropriations Act, FY1952 (IOAA).12
Circular A-11, issued by the Office of Management and Budget (OMB), states that what it terms
“user charges” includes any “fee, charge, or assessment the Government levies on a class of the
public directly benefiting from, or subject to regulation by, a Government program or activity,”
with the further proviso that the authorizing law “must limit the payers of the charges to those
benefiting from, or subject to regulation by, the program or activity.”13 OMB identifies the
following as user charges:
 Collections from nonfederal sources for goods and services provided (for
example, the proceeds from the sale of goods by defense commissaries,
electricity by power marketing administrations, stamps by the Postal Service,
fees charged to enter national parks, and premiums charged for flood and health
insurance);
 Voluntary payments to social insurance programs, such as Medicare Part B
insurance premiums;
 Miscellaneous customs fees (for example, U.S. Customs Service merchandise
processing fees);
 Proceeds from asset sales (property, plant, and equipment);
 Proceeds from the sale of natural resources (such as timber, oil, and minerals);
 Outer Continental Shelf receipts;
 Spectrum auction proceeds;
 Many fees for permits and regulatory and judicial services;
 Specific taxes and duties on an exception basis; and

10 This is because a House decision not to enforce the Origination Clause would not insulate a law from challenge in
the courts. In U.S. v. Munoz-Flores, 495 U.S. 385, 391-397 (1990), the Supreme Court held, “Although the House
certainly can refuse to pass a bill because it violates the Origination Clause, that ability does not absolve this Court of
its responsibility to consider constitutional challenges to congressional enactments.” And later, “A law passed in
violation of the Origination Clause would thus be no more immune from judicial scrutiny because it was passed by
both Houses and signed by the President than would a law passed in violation of the First Amendment.”
11 For more on this enforcement procedure, see CRS Report R46556, Blue-Slipping: Enforcing the Origination Clause
in the House of Representatives, by James V. Saturno.
12 Title V of P.L. 82-137, codified at 31 U.S.C. §9701.
13 OMB, Circular A-11, Preparation, Submission, and Execution of the Budget, §20, p. 34,
https://www.whitehouse.gov/wp-content/uploads/2018/06/a11.pdf.
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 Credit program fees deposited into the credit program account and recorded in
the budget on a current basis.
Independent Offices Appropriation Act
Title V of the IOAA expressed the sense of Congress that “any work, service, publication, report,
document, benefit, privilege, authority, use, franchise, license, permit, certificate, registration, or
similar thing of value or utility performed, furnished, provided, granted, prepared, or issued by
any Federal agency … shall be self-sustaining to the full extent possible.” Further, the statute
provided that “the head of each Federal agency is authorized by regulation … to prescribe
therefor such fee, charge, or price, if any, as he shall determine.”
Because fees levied under the authority provided in the IOAA must be based on the costs to the
government or the value of the thing provided, OMB has issued Circular A-25 to establish federal
policy regarding how fees are to be assessed for government services.14 The circular provides
information on the scope and types of activities subject to user charges and the basis upon which
user charges are to be set. It also provides guidance for agency implementation of charges and the
disposition of collections.
The Miscellaneous Receipts Act
Some statutes may provide specific authority for fees to be retained by an agency when a service
is intended to be operated on a substantially self-sustaining basis. Absent such specific authority,
however, the Miscellaneous Receipts Act requires that any nonrevenue collections be credited to
the general fund of the Treasury as miscellaneous receipts.15 Fees assessed solely under the
authority of the IOAA do not include such an exception, and the proceeds of such fees are
consequently deposited in the Treasury as miscellaneous receipts. Once deposited, funds are
available to be appropriated but are not otherwise available to be used by the depositing agency
without further statutory authorization.
Treatment of Nonrevenue Collections in the Federal
Budget Process
The definition of budget authority in Section 3(2) of the Congressional Budget Act provides for
nonrevenue collections to be treated as negative amounts of budget authority rather than as
revenues.16 As a consequence, the collected funds are presented in the budget as offsets against
spending authority. A reduction of offsetting collections or receipts is correspondingly recorded as
a positive amount of budget authority. The authority to spend these funds is not automatic,
however, and they are further categorized as offsetting collections or receipts, depending on their
availability for obligation. The authority to obligate may be provided in either appropriations acts
or other laws.

14 OMB, Circular A-25, https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-025.pdf.
15 Act of March 3, 1849 (Statutes at Large, vol. 9, Thirtieth Congress, Sess. II, Chap. CX), codified at 31 U.S.C.
§3302(b).
16 P.L. 93-344, codified at 2 U.S.C. §622(2).
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Offsetting Collections
Offsetting collections are nonrevenue collections authorized by law to be credited to
appropriations or fund expenditure accounts.17 These fees are available for obligation to meet the
account’s purpose without further congressional action. Accordingly, because the receiving
agency has the authority to obligate and expend offsetting collections, offsetting collections
constitute budget authority. For example, fees charged by the U.S. Citizenship and Immigration
Services to expedite its processing of certain petitions and applications are available to carry out
those purposes.
Offsetting Receipts
In contrast, offsetting receipts are nonrevenue collections that are recorded as offsets against
gross outlays but are not authorized to be credited to a specific expenditure account.18 In some
cases they are termed undistributed offsetting receipts, because they are offset against totals for
the government as a whole rather than from a single agency or subfunction in order to avoid
presenting a distorted budgetary picture of agency or subfunction totals. Offsetting receipts may
be deposited in either specific accounts or in the general fund of the Treasury. Offsetting receipts
cannot be obligated and expended, however, without further congressional action. Because
offsetting receipts are not available for obligation, they do not constitute budget authority until
Congress takes action to appropriate them. An example of such collections is rents and royalties
paid to the federal government for offshore oil and gas leases.

Author Information

James V. Saturno

Specialist on Congress and the Legislative Process

17 For an account of how OMB presents offsetting collections in the budget, see OMB, Circular A-11, Preparation,
Submission, and Execution of the Budget, §20, p. 32.
18 For an account of how OMB presents offsetting receipts in the budget, see OMB, Circular A-11, Preparation,
Submission, and Execution of the Budget, §20, p. 33
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