Note 15. Liabilities not Covered by Budgetary Resources

Liabilities not Covered by Budgetary Resources
(In Thousands)

	FY 2006	FY 2005
Intragovernmental
Accrued FECA Liability	$   30,954	$   28,485
Other	2,501	4,110
Total Intragovernmental	33,455	32,595
Accrued Payroll	23,584	21,359
Accrued Annual Leave	201,612	194,771
Federal Employee Benefits	589,964	569,114
Environmental and Disposal Liabilities	74,880	73,311
Contingent Liabilities	13,063	3,383
Capital Lease Liabilities	-	694
Unearned Revenue	762,463	692,922
ITA Foreign Service Nationals' Voluntary Separation Pay	9,436	9,453
Other	1,137	3,725
Total	$1,709,594	$1,601,327

Due to USPTO’s funding structure, budgetary resources do not cover a portion of its Unearned Revenue. The Unearned Revenue reported above is the portion of USPTO’s Unearned Revenue that is considered not covered by budgetary resources. USPTO’s Unearned Revenue is a liability for revenue received before the patent or trademark work has been completed. Budgetary resources derived from the current reporting period’s revenue have been partially used to cover the current reporting period’s costs associated with unearned revenue from a prior reporting period. In addition, the current patent fee structure sets low initial application fees that are followed by income from maintenance fees as a supplement in later years to cover the full cost of the patent examination and issuance processes. The combination of these funding circumstances requires USPTO to obtain additional budgetary resources to cover its liability for unearned revenue.