H.R. 1947, Agriculture Reform and Risk Management Act of 2013

Cost Estimate
June 7, 2013

As ordered reported by the House Committee on the Judiciary on June 5, 2013

Estimated Budgetary Effects

CBO estimates that direct spending stemming from the program authorizations in H.R. 1947 would total $939 billion over the 2014-2023 period. That 10-year total reflects the bill’s authorization of expiring programs through 2018 and an extension of those authorizations through 2023, consistent with the rules governing baseline projections that are specified in the Balanced Budget and Emergency Deficit Control Act of 1985.

Relative to spending projected under CBO’s May 2013 baseline, CBO estimates that enacting the bill would reduce direct spending by $33.4 billion over the 2014-2023 period. The estimated budgetary effects of H.R. 1947 are summarized in Table 1.

Assuming appropriation of the specified and necessary amounts, CBO also estimates that implementing the bill would result in discretionary spending of $27.3 billion over the 2014-2018 period and $33.2 billion over the 2014-2023 period. Further details of that estimate for discretionary spending are displayed in Table 3.

Intergovernmental Mandates

H.R. 1947 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA). In general, state, local, and tribal governments would benefit from the continuation of existing agricultural assistance and the creation of new grant programs.

Private-Sector Mandates

The bill would impose private-sector mandates as defined in UMRA. The aggregate cost of those mandates could exceed the annual threshold established in UMRA for private-sector mandates ($150 million in 2013, adjusted annually for inflation), depending on the extent of regulations that might be implemented by the Department of Agriculture. Specifically:

  • The bill would impose mandates on dairy handlers that purchase milk from dairy producers participating in the Dairy Market Stabilization Program (DMSP). Under the DMSP, certain handlers would be required to report information to the Department of Agriculture under some circumstances. According to information from industry sources, the cost for handlers to collect and report information under the DMSP could amount to $100 million or more annually, depending on regulations to be issued by the department.
  • The bill would require imports of olive oil to meet the same standards as olive oil produced in the United States if a marketing order for olive oil is established. Imports would have to be inspected to ensure compliance with the standards of such a marketing order. Because 15,000 to 20,000 lots of olive oil are imported annually, the costs of those inspections could amount to tens of millions of dollars per year, if a marketing order is established.

Previous CBO Cost Estimate

On May 23, 2013, CBO transmitted a cost estimate for H.R. 1947, as ordered reported by the House Committee on Agriculture on May 15, 2013. The version of H.R. 1947 ordered reported by the Judiciary Committee is different than the Agriculture Committee’s version. CBO estimates that the Judiciary Committee’s version of H.R. 1947 would:

  • Not affect federal revenues, whereas the Agriculture Committee’s version would increase revenues by $64 million over the 2014-2023 period;
  • Result in $85 million less in direct spending over the 2014-2023 period than the Agriculture Committee’s version of the bill; and
  • Authorize $129 million less in spending subject to appropriation over the 2014-2023 period than the Agriculture Committee’s version of the legislation.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. Enacting H.R. 1947 would affect direct spending; therefore, pay-as-you-go procedures apply. The net change in outlays that are subject to those pay-as-you-go procedures are shown in Table 4.