OMB Circular A-25 User Charges.txt

0:'circular no. a 25 revised transmittal memorandum no. 1 memorandum for heads of executive departments and establishments subject: user charges',
1:'1. purpose 2. rescission 3. authority 4. coverage 5. objectives 6. general policy 7. implementation 8. agency repsonsibility 9. disposition',
2:'of collections 10. new activities 11. inquiries 1. purpose: the circular establishes federal policy regarding fees assessed for government services',
3:'and for sale or use of government goods or resources. it provides information on the scope and types of activities',
4:'subject to user charges and on the basis upon which user charges are to be set. finally, it provides guidance',
5:'for agency implementation of charges and the disposition of collections. 2. rescission: this rescinds office of management and budget circular',
6:'no. a25, dated september 23, 1959, and transmittal memoranda 1 and 2. 3. authority: title v of the independent offices',
7:'appropriations act of 1952 31 u.s.c. 9701; 31 u.s.c. 1111; and executive orders no. 8248 and no. 11,541. 4. coverage:',
8:'a. the provisions of this circular cover all federal activities that convey special benefits to recipients beyond those accruing to',
9:'the general public. the circular does not apply to the activities of the legislative and judicial branches of government, or',
10:'to mixedownership government corporations, as defined in 31 u.s.c. 9701. b. the provisions of the circular shall be applied by',
11:'agencies in their assessment of user charges under the ioaa. in addition, this circular provides guidance to agencies regarding their',
12:'assessment of user charges under other statutes. this guidance is intended to be applied only to the extent permitted by',
13:'law. thus, where a statute prohibits the assessment of a user charge on a service or addresses an aspect of',
14:'the user charge e.g., who pays the charge; how much is the charge; where collections are deposited, the statute shall',
15:'take precedence over the circular. in such cases e.g., sale or disposal under federal surplus property statutes; or fringe benefits',
16:'for military personnel and civilian employees, the guidance provided by the circular would apply to the extent that it is',
17:'not inconsistent with the statute. the same analysis would apply with regard to executive orders that address user charges. c.',
18:'in any case where an office of management and budget circular provides guidance concerning a specific user charge area, the',
19:'guidance of that circular shall be deemed to meet the requirements of this circular. examples of such guidance include the',
20:'following: omb circular no. a45, concerning charges for rental quarters; omb circular no. a130, concerning management of federal information resources;',
21:'and omb circular no. a97, concerning provision of specialized technical services to state and local governments. top of page 5.',
22:'objectives: it is the objective of the united states government to: a. ensure that each service, sale, or use of',
23:'government goods or resources provided by an agency to specific recipients be selfsustaining; b. promote efficient allocation of the nations',
24:'resources by establishing charges for special benefits provided to the recipient that are at least as great as costs to',
25:'the government of providing the special benefits; and c. allow the private sector to compete with the government without disadvantage',
26:'in supplying comparable services, resources, or goods where appropriate. top of page 6. general policy: a user charge, as described',
27:'below, will be assessed against each identifiable recipient for special benefits derived from federal activities beyond those received by the',
28:'general public. when the imposition of user charges is prohibited or restricted by existing law, agencies will review activities periodically',
29:'and recommend legislative changes when appropriate. section 7 gives guidance on drafting legislation to implement user charges. a. special benefits',
30:'1. determining when special benefits exist. when a service or privilege provides special benefits to an identifiable recipient beyond those',
31:'that accrue to the general public, a charge will be imposed to recover the full cost to the federal government',
32:'for providing the special benefit, or the market price. for example, a special benefit will be considered to accrue and',
33:'a user charge will be imposed when a government service: a enables the beneficiary to obtain more immediate or substantial',
34:'gains or values which may or may not be measurable in monetary terms than those that accrue to the general',
35:'public e.g., receiving a patent, insurance, or guarantee provision, or a license to carry on a specific activity or business',
36:'or various kinds of public land use; or b provides business stability or contributes to public confidence in the business',
37:'activity of the beneficiary e.g., insuring deposits in commercial banks; or c is performed at the request of or for',
38:'the convenience of the recipient, and is beyond the services regularly received by other members of the same industry or',
39:'group or by the general public e.g., receiving a passport, visa, airmans certificate, or a customs inspection after regular duty',
40:'hours. 2. determining the amount of user charges to assess. a except as provided in section 6c, user charges will',
41:'be sufficient to recover the full cost to the federal government as defined in section 6d of providing the service,',
42:'resource, or good when the government is acting in its capacity as sovereign. b except as provided in section 6c,',
43:'user charges will be based on market prices as defined in section 6d when the government, not acting in its',
44:'capacity as sovereign, is leasing or selling goods or resources, or is providing a service e.g., leasing space in federally',
45:'owned buildings. under these business type conditions, user charges need not be limited to the recovery of full cost and',
46:'may yield net revenues. c user charges will be collected in advance of, or simultaneously with, the rendering of services',
47:'unless appropriations and authority are provided in advance to allow reimbursable services. d whenever possible, charges should be set as',
48:'rates rather than fixed dollar amounts in order to adjust for changes in costs to the government or changes in',
49:'market prices of the good, resource, or service provided as defined in section 6d. 3. in cases where the government',
50:'is supplying services, goods, or resources that provide a special benefit to an identifiable recipient and that also provide a',
51:'benefit to the general public, charges should be set in accordance with paragraph 2 of section 6a. therefore, when the',
52:'public obtains benefits as a necessary consequence of an agencys provision of special benefits to an identifiable recipient i.e., the',
53:'public benefits are not independent of, but merely incidental to, the special benefits, an agency need not allocate any costs',
54:'to the public and should seek to recover from the identifiable recipient either the full cost to the federal government',
55:'of providing the special benefit or the market price, whichever applies. 4. no charge should be made for a service',
56:'when the identification of the specific beneficiary is obscure, and the service can be considered primarily as benefiting broadly the',
57:'general public. b. charges to the direct recipient. charges will be made to the direct recipient of the special benefit',
58:'even though all or part of the special benefits may then be passed to others. c. exceptions 1. agency heads',
59:'or their designee may make exceptions to the general policy if the provision of a free service is an appropriate',
60:'courtesy to a foreign government or international organization; or comparable fees are set on a reciprocal basis with a foreign',
61:'country. 2. agency heads or their designee may recommend to the office of management and budget that exceptions to the',
62:'general policy be made when: a the cost of collecting the fees would represent an unduly large part of the',
63:'fee for the activity; or b any other condition exists that, in the opinion of the agency head or his',
64:'designee, justifies an exception. 3. all exceptions shall be for a period of no more than four years unless renewed',
65:'by the agency heads or their designee for exceptions granted under section 6c1 or the office of management and budget',
66:'for exceptions granted under section 6c2 after a review to determine whether conditions warrant their continuation. 4. requests for exceptions',
67:'and extensions under paragraphs 2 and 3 of section 6c shall be submitted to the director of the office of',
68:'management and budget. d. determining full cost and market price 1. full cost includes all direct and indirect costs to',
69:'any part of the federal government of providing a good, resource, or service. these costs include, but are not limited',
70:'to, an appropriate share of: a direct and indirect personnel costs, including salaries and fringe benefits such as medical insurance',
71:'and retirement. retirement costs should include all funded or unfunded accrued costs not covered by employee contributions as specified in',
72:'circular no. a11. b physical overhead, consulting, and other indirect costs including material and supply costs, utilities, insurance, travel, and',
73:'rents or imputed rents on land, buildings, and equipment. if imputed rental costs are applied, they should include: i depreciation',
74:'of structures and equipment, based on official internal revenue service depreciation guidelines unless better estimates are available; and ii an',
75:'annual rate of return equal to the average long term treasury bond rate on land, structures, equipment and other capital',
76:'resources used. c the management and supervisory costs. d the costs of enforcement, collection, research, establishment of standards, and regulation,',
77:'including any required environmental impact statements. e full cost shall be determined or estimated from the best available records of',
78:'the agency, and new cost accounting systems need not be established solely for this purpose. 2. market price means the',
79:'price for a good, resource, or service that is based on competition in open markets, and creates neither a shortage',
80:'nor a surplus of the good, resource, or service. a when a substantial competitive demand exists for a good, resource,',
81:'or service, its market price will be determined using commercial practices, for example: i by competitive bidding; or ii by',
82:'reference to prevailing prices in competitive markets for goods, resources, or services that are the same or similar to those',
83:'provided by the government e.g., campsites or grazing lands in the general vicinity of private ones with adjustments as appropriate',
84:'that reflect demand, level of service, and quality of the good or service. b in the absence of substantial competitive',
85:'demand, market price will be determined by taking into account the prevailing prices for goods, resources, or services that are',
86:'the same or substantially similar to those provided by the government, and then adjusting the supply made available and/or price',
87:'of the good, resource, or service so that there will be neither a shortage nor a surplus e.g., campsites in',
88:'remote areas. top of page 7. implementation: a. the general policy is that user charges will be instituted through the',
89:'promulgation of regulations. b. when there are statutory prohibitions or limitations on charges, legislation to permit charges to be established',
90:'should be proposed. in general, legislation should seek to remove restraints on user charges and permit their establishment under the',
91:'guidelines provided in this circular. when passage of this general authority seems unlikely, more restrictive authority should be sought. the',
92:'level of charges proposed should be based on the guidelines in section 6. when necessary, legislation should: 1. define in',
93:'general terms the services for which charges will be assessed and the pricing mechanism that will be used; 2. specify',
94:'fees will be collected in advance of, or simultaneously with, the provision of service unless appropriations and authority are provided',
95:'in advance to allow reimbursable services; 3. specify where collections will be credited see section 9. legislative proposals should not',
96:'normally specify precise charges. the user charge schedule should be set by regulation. this will allow administrative updating of fees',
97:'to reflect changing costs and market values. where it is not considered feasible to collect charges at a level specified',
98:'in section 6, charges should be set as close to that level as is practical. c. excise taxes are another',
99:'means of charging specific beneficiaries for the government services they receive. new user charges should not be proposed in cases',
100:'where an excise tax currently finances the government services that benefit specific individuals. agencies may consider proposing a new excise',
101:'tax when it would be significantly cheaper to administer than fees, and the burden of the excise tax would rest',
102:'almost entirely on the user population e.g., gasoline tax to finance highway construction. excise taxes cannot be imposed through administrative',
103:'action but rather require legislation. legislation should meet the same criteria as in section 7b; however, it is necessary to',
104:'state explicitly the rate of the tax. agency review of these taxes must be performed periodically and new legislation should',
105:'be proposed, as appropriate, to update the tax based on changes in cost. any excise tax proposals must be approved',
106:'by the assistant secretary for tax policy at the department of the treasury. d. when developing options to institute user',
107:'charges administratively, agencies should review all sources of statutory authority in addition to the independent offices appropriations act that may',
108:'authorize implementation of such charges. e. in proposing new charges or modifications to existing ones, managers of other programs that',
109:'provide special benefits to the same or similar user populations should be consulted. joint legislative proposals should be made, and',
110:'joint collection efforts designed to ease the burden on the users should be used, whenever possible. f. every effort should',
111:'be made to keep the costs of collection to a minimum. the principles embodied in circular no. a76 performance of',
112:'commercial activities should be considered in designing the collection effort. g. legislative proposals must be submitted to the office of',
113:'management and budget in accordance with the requirements of circular no. a19. to ensure the proper placement of user fee',
114:'initiatives in the budget account structure, agencies are encouraged to discuss proposals with omb at an early stage of development.',
115:'top of page 8. agency responsibility: agencies are responsible for the initiation and adoption of user charge schedules consistent with',
116:'the policies in this circular. each agency will: a. identify the services and activities covered by this circular; b. determine',
117:'the extent of the special benefits provided; c. apply the principles specified in section 6 in determining full cost or',
118:'market price, as appropriate; d. apply the guidance in section 7 either to institute charges through the promulgation of regulations',
119:'or submit legislation as appropriate; e. review the user charges for agency programs biennially, to include: 1 assurance that existing',
120:'charges are adjusted to reflect unanticipated changes in costs or market values; and 2 a review of all other agency',
121:'programs to determine whether fees should be assessed for government services or the user of government goods or services. agencies',
122:'should discuss the results of the biennial review of user fees and any resultant proposals in the chief financial officers',
123:'annual report required by the chief financial officers act of 1990; f. ensure that the requirements of omb circular no.',
124:'a 123 internal control systems and appropriate audit standards are applied to collection; g. maintain readily accessible records of: ',
125:'the services or activities covered by this circular;  the extent of special benefits provided;  the exceptions to the',
126:'general policy of this circular;  the information used to establish charges and the specific methods used to determine them;',
127:'and  the collections from each user charge imposed.  maintain adequate records of the information used to establish charges',
128:'and provide them upon request to omb for the evaluation of the schedules and provide data on user charges to',
129:'omb in accordance with the requirements in circular no. a11. top of page 9. disposition of collections: a. unless a',
130:'statute provides otherwise, user charge collections will be credited to the general fund of the treasury as miscellaneous receipts, as',
131:'required by 31 u.s.c. 3302. b. legislative proposals to permit the collections to be retained by the agency may be',
132:'appropriate in certain circumstances. proposals should meet the guidelines in section 7b. proposals that allow agency retention of collections may',
133:'be appropriate when a fee is levied in order to finance a service that is intended to be provided on',
134:'a substantially selfsustaining basis and thus is dependent upon adequate collections. 1. generally, the authority to use fees credited to',
135:'an agencys appropriations should be subject to limits set in annual appropriations language. however, it may be appropriate to request',
136:'exemption from annual appropriations control, if provision of the service is dependent on demand that is irregular or unpredictable e.g.,',
137:'a fee to reimburse an agency for the cost of overtime pay of inspectors for services performed after regular duty',
138:'hours. 2. as a normal rule, legislative proposals that permit fees to be credited to accounts should also be consistent',
139:'with the fullcost recovery guidelines contained in this circular. any fees in excess of full cost recovery and any increase',
140:'in fees to recover the portion of retirement costs which recoups all funded or unfunded accrual costs not covered by',
141:'employee contributions should be credited to the general fund of the treasury as miscellaneous receipts. 10. new activities: whenever agencies',
142:'prepare legislative proposals for new or expanded federal activities that would provide special benefits, the policies and criteria set forth',
143:'in this circular will apply. 11. inquiries: for information concerning this circular, consult the office of management and budget examiner',
144:'responsible for the agencys budget estimates. top of page',